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A new report jointly issued by the World Bank, World Food Programme (WFP), and Food and Agriculture Organisation (FAO) warns that assigning too many roles to strategic grain reserves like Zambia’s Food Reserve Agency (FRA) risks financial strain, resource diversion, and threatens fiscal sustainability.
Titled “Strengthening Strategic Grain Reserves to Enhance Food Security,” the report draws lessons from countries including Bangladesh, India, the Philippines, Ghana, Ethiopia, Zambia, and others.
Released this month, it highlights how public grain stocks often juggle overlapping goals—from stabilising prices to emergency food aid—which complicates management and leads to inefficient public spending.
The report points out frequent confusion between food self-sufficiency and food security, the latter emphasizing consistent access to safe, sufficient, and nutritious food for all.
It criticised the common practice of “buying high and selling low,” where grain is purchased at higher prices to support farmers but sold at lower prices to protect consumers. This approach results in high fiscal costs, subsidy dependence, discourages private sector involvement, and distorts markets, ultimately weakening food security.
“The more objectives a grain reserve has, the more financially demanding it becomes, diverting funds from other priorities and risking fiscal sustainability,” the report stated.
Using Zambia as an example, it noted the FRA’s broad mandate to respond to emergencies, stabilise prices, and support farmers and consumers led to the agency consuming 17 percent of the Ministry of Agriculture’s budget in 2021.
The report also flags high financing costs, noting that in Zambia these made up 11 percent of total expenditure, with some countries reporting even higher figures.
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