RESPONSE: IMPACT OF RISING FOOD/COMMODITY PRICES -

UNCLAS DUSHANBE 000550 SIPDIS SENSITIVE SIPDIS DEPT FOR EEB/TPP/ABT/ATP (SPECK) AND SCA/CEN E.O. 12958: N/A TAGS: EAGR EAID ETRD ECON PGOV PREL TI SUBJECT: RESPONSE: IMPACT OF RISING FOOD/COMMODITY PRICES - IS GOD MAD AT TAJIKISTAN? REF: A. STATE 39410 ¶B. DUSHANBE 522 ¶C. DUSHANBE 490 ¶D. DUSHANBE 219 ¶E. 2007 DUSHANBE 1760 ¶F. 2007 DUSHANBE 1753 ¶1. The following responds to Ref A's request to provide a short summary of the impact of food and agricultural commodity price increases and to catalogue previous reporting on the subject. ¶2. Rising food prices are having a direct and detrimental impact on all of Embassy Dushanbe's central strategic objectives: economic growth and development, good governance and democracy, and peace and stability. As reported in Refs B through E, Tajikistan is suffering from a complex emergency whose central elements include food insecurity, a collapsing agricultural sector, financial sector crisis, and quickly deteriorating energy infrastructure. Although Tajikistan is not yet a "failed state," its status as the poorest country in the former Soviet Union, its history of civil war, and its strategic location on the porous northern border of Afghanistan mean that we need to consider early interventions to address threats to security, including food security. The Embassy has recommended in referenced reports, our Mission Strategic Plan, and other documents that the PL-480 Food For Peace program, scheduled to expire after fiscal year 2008, receive continued funding. This program has been our most effective tool to address emergency and humanitarian food needs in the short run and to contribute to longer term economic growth, democratic process, and stability in Tajikistan's most affected areas. Post is also working with the Department and USAID to develop a proposal for Section 1210 funding for a complementary community development program, and requests favorable consideration. ¶3. Following is a catalogue of recent Embassy Dushanbe reporting on food security and related problems in Tajikistan. The reporting should be read in the context of post's Mission Strategic Plan which went through a senior interagency review on April 10. -- Dushanbe 522: Feed the People; Starve Extremism: Continuing Needs for Food Aid in Tajikistan; -- Dushanbe 490: Tajikistan Cotton Sector Heading for More Trouble, as is Banking Sector; -- Dushanbe 219: Complex and Chronic -- Tajikistan's Emerging Emergency; -- 2007 Dushanbe 1760: Rural Tajiks Face Cold and Hunger; -- 2007 Dushanbe 1753: Tajikistan Misreported $325 Million in Cotton Debt to International Monetary Fund. ¶4. Since the most recent reporting cable on April 15 (ref B),there have been some additional developments. Early reports of a serious locust infestation in southern Tajikistan's main agricultural belt have been characterized as "the worst in decades" by Food and Agriculture Organization officials. The extent of the damage to Tajik crops is not yet known. The local and regional press has carried stories over the past week about a suspension of exports of wheat from Kazakhstan. Wheat is Tajikistan's major food staple and since Tajikistan imports approximately 60% of all wheat consumed from Kazakhstan, such a suspension would lead to a sharp decline in food supplies with unknown consequences in terms of governance and security. This barrage of bad news, high prices, and scarce food has sparked a sense of panic among Tajik consumers, prompting questions Qa sense of panic among Tajik consumers, prompting questions such as, "Is God mad at Tajikistan?" HUSHEK