Wed, Jun 04, 2008 page9

• A ‘New Deal’ for food security is urgently needed

  • By Jomo Kwame Sundaram
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  Lack of food is rarely the reason people go hungry. Even now, there is enough food in the world, with a bumper harvest this year, but more people cannot afford to buy the food they need. Addressing this growing crisis is the aim of the Global Conference on Food Security in Rome that started yesterday and ends tomorrow.

  Even before the recent food price spikes, an estimated 1 billion people were suffering from chronic hunger, while another 2 billion were experiencing malnutrition, bringing the total number of food-insecure people to around 3 billion, or almost half the world’s population. Roughly 18,000 children died daily as a direct or indirect consequence of malnutrition. Obviously, the recent increases in food prices are likely to drive the number of people vulnerable to food stress even higher.

  There is now an urgent need to finance existing food aid programs to address mounting food demands, avert further social unrest, and ensure that farmers get the costlier farm inputs they need for the next planting season. But, as we respond to the current humanitarian emergency due to higher food prices, we must not lose sight of the longer-term problems that have undermined food security in recent decades. Clearly, a “New Deal” for food security is urgently needed.

  The major increases in food production associated with the Green Revolution in the 1960s — with considerable government and international not-for-profit support — gave way to new policy priorities in the 1980s. As food supply growth slowed, demand continued to grow, and not only due to population increase. With higher incomes, rising meat consumption requires more grain for animal feed.

  Since the 1980s, governments have been pressed to promote exports to earn foreign exchange and import food. But food cannot be treated as just another commodity, and governments should develop appropriate policies, infrastructure, and institutions to ensure food security (not to be equated with total self-sufficiency) at the national or regional level.

  The problem is that, having neglected food security and the productive sectors of their economies for several decades, many developing countries’ governments now lack the fiscal capacity to increase public spending in order to increase food production and agricultural productivity. Moreover, growing urbanization and other non-agricultural uses of land have reduced acreage available for food production, while agricultural land is increasingly used to produce commodities other than food, such as bio-fuels.

  But we should not rush to abandon bio-fuels, despite some undoubtedly poor policies in recent years. Some bio-fuels are far more cost-effective and energy-efficient than others, and different bio-fuel stocks have very different opportunity costs for food agriculture (sugar has not experienced any significant price increase).

  Another problem is that fewer and fewer transnational agro-businesses now dominate marketing, production, and inputs. This comes largely at the expense of small farmers and consumers, particularly the poor. Moreover, with less government support, rural credit has often become prohibitively expensive.

  In addition, more securitization, easier online trading, and other financial market developments in recent years have facilitated greater speculative investments, especially in commodity futures and options markets, including those affecting food. Falling asset prices in other financial market segments, following the sub-prime mortgage meltdown in the US, may be more important for explaining the recent surge in food prices than supply constraints or other factors underlying longer-term gradual upward price trends.

  Meanwhile, rich countries’ agricultural subsidies and tariffs have undoubtedly undermined food production in developing countries. However, cutting farm subsidies will increase food prices, at least initially, while reducing agricultural tariffs alone will not necessarily lead to an increase in food production in poor countries without complementary support.

  Instead, some food security advocates have called for wealthier countries to compensate for the adverse consequences of their own agricultural subsidies and protectionism by providing additional foreign aid to the developing world, targeting production efforts that enhance food security.

  To avoid catastrophe, the world community must also meet the urgent emergency food and planting requirements mentioned above, including more generous budget and balance-of-payments support for low-income food-importing countries.

  Finally, as world leaders gather in Rome, the international community must secure a meaningful global commitment to food security that will not be undermined by contradictory policies.

  Jomo Kwame Sundaram is UN assistant secretary-general for economic development and was awarded the 2007 Wassily Leontief Prize for Advancing the Frontiers of Economic Thought.

  Copyright: Project Syndicate
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