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THE
current global food crisis afflicting developing
countries—and often leading to violence—due to high
inflation rates, widespread hunger and deepened poverty
is likely to persist if governments do not deal with
ineffective and, by now, inappropriate policies,
according to the United Nations Conference on Trade and
Development (Unctad).
The
Unctad policy brief titled “Tackling the Global Food
Crisis” said several factors are the culprit behind the
situation, but singled out policy failures which
continue to endanger food supply and increase global
food demand unlike at any other time in history.
“By now,
the constellation of these contributing factors is well-
known. Some analysis is, however, essential, especially
of how the factors interact. Without it, not only is the
crisis likely to recur in one form or another, but the
policy failure that underpins it will be with us for
decades,” said Unctad.
The
policy brief stated that while it was true the global
food crisis was borne out of the rapid increase in
population growth, urbanization and rapid economic
development, particularly in East and Southeast Asian
countries, there were more deep-seated and long-term
factors.
These
factors include the low and declining agricultural
productivity in many developing countries. In the
Philippines, agriculture, fishery and forestry (AFF)
sector roughly accounts for 20 percent of growth in
gross domestic product (GDP) in recent years, but 30
years ago, the country’s AFF sector was the largest
contributor to GDP.
Low
productivity has its own contributing factors, which are
physical, policy-related, institutional and financial in
nature. The availability of arable land is dwindling and
more farmers work on diminishing sizes of farms, where
land is also becoming ecologically fragile due to more
intense cultivation with the use of petroleum-based
fertilizers and insecticides.
“This
worrying trend is only being accelerated by climate
change and, paradoxically, attempts to mitigate climate
change, such as the increasing use of arable land for
afforestation.”
It added
that the low productivity of agriculture was due to
underinvestment in the sector by governments and the
lack of supporting international aid to developing
countries, because of the new emphasis made by
donor-countries on social sectors and emergency aid—such
has meant less aid resources for productive
sectors like agriculture.
The
policy brief said multilateral institutions had
continually diminished Official Development Assistance
(ODA) for agriculture: it was only at $500 million in
2002 from the $3.4 billion in 1980, which was
exacerbated by a parallel reduction by bilateral donors
that reduced spending to $1.7 billion in 2002 from $2.8
billion in 1980.
These
problems, said the Unctad brief, were made worse by
droughts, slow supply response, the drop in the value of
the United States dollar, high energy prices, and
concerns over increased demand for biofuels.
The
Unctad brief said the effects of these factors on food
commodity prices were heightened by food-exporting
governments’ restrictions on trade abroad and market
speculation.
As a
result, the policy brief observed, world food prices
have roughly doubled over the past three years, and
between April 2007 and April 2008 alone they increased
by 85 percent.
This
price rise has been broad-based, led by wheat, the price
of which almost doubled; corn, up 67 percent since July
2007; and rice, prices of which have tripled since
September 2007 and worsened by 160 percent between
January and April 2008 alone. Further, prices for
vegetable, oilseeds and oils also shot up by about 2.5
times since early 2006.
The
Unctad said the global food crisis can be addressed in
the short term by crafting programs to boost
agricultural production such as helping farmers expand
their access to seeds, fertilizers and other farm
inputs.
Governments can also step in if there is a strong
indication that speculation is driving food prices. The
policy brief highlighted the importance of international
coordination that helps minimize the effects of
hoarding, restrictions or bans on food exports.
In the
medium term, solutions must include addressing
undercapitalization that limits food production and
productivity in many developing countries.
Cheap
and reliable credit for small farmers and enhanced
public investment in infrastructure and irrigation are
important, Unctad said.
“With
greater public and private investment in agriculture and
rural development, and especially in agricultural R&D,
the world’s 400 million smallholders could mobilize
their potential, improving not only their own nutrition
and incomes but national food security and economic
growth as well.”
There is
also a need, it said, for developed countries to reduce
“long-standing” agricultural export subsidies and
domestic support policies that hurt the agriculture
sector in most developing countries.
In the
long term, the Unctad said, governments must consciously
exert efforts and include agriculture production
improvement as a priority in development strategies. The
strategies must include incentives for agricultural
investments and determination of the right mix between
food for internal consumption and for export, and
adequate support for infrastructure and extension
services.
Developing countries should calibrate their national
trade policies to promote agricultural production,
eliminate tariffs on agricultural inputs, and provide
better training and knowledge to farmers if they are to
maintain long-term food security, the brief said. |
