17.Tackling the Ongoing Food Crisis

7 September 2009

The G-8 is investing in it, UN agencies are holding international symposia on it and civil society is struggling with it. Food insecurity is on everyone's mind, not least of all those experiencing it.

Promises made at the height of the 2008 food price crisis are coming due and helping spur the discussion on food security. Just this summer, the G-8 committed US$20 billion to ‘sustainable agriculture development', while the UN Special Rapporteur on the Right to Food made his case before the WTO.

The Food Crisis Is Not Over

The world grows enough food to feed itself but not everyone has access to it. The proportion of the world population that is undernourished has been declining for as long as data have been available. However, many in developing countries are trapped: they grow crops that have been declining in value for the last few decades and therefore cannot afford the food they need or cannot grow enough food to feed themselves. Sub-Saharan Africa typifies this problem. There, the hike in prices between 2002 and 2008 coincided with the first increase in rates of undernourishment since 1990.

Rising incomes and increased meat consumption in India and China were roundly blamed for the peaks in prices in 2008, even though demand in those countries did not surge as steeply as prices did. Some experts have indicated that fluctuations in food stocks and a relatively limited market in the trade of food may be more plausible culprits - not just an emerging market taste for meat.

Only 25 percent of global agricultural output is traded, and agricultural goods account for only 10 percent of global trade. Some commodities, such as rice, prices for which peaked last year, illustrate this trend. Less than 8 percent of rice consumed is traded. The small proportion of agricultural output that is traded has been blamed on a system of subsidies, quotas and other non-transparent measures that restrict market access for many exports. Real reforms are need in the farm sector to achieve the efficiency gains achieved in the trade of manufactured goods.

Some have warned that the painfully high prices of 2008 are a harbinger of greater volatility to come, a result of thin markets in a changing climate. Historically low stocks, particularly for wheat, at the beginning of 2008 deprived markets of the kind of cushion that they could rely upon in the case of poor harvests. That year, some of the largest exporters faced a series of harvest failures, stocks went unreplenished and prices exploded. Many expect these patterns to repeat as precipitation patterns change with the climate.

Funding for Sustainable Agriculture

This July in L'Aquila, G-8 leaders committed to provide US$20 billion to sustainable agricultural development, emphasising the importance of growing food rather than receiving it through emergency food aid. The Group's statement on food security, a radical step forward, is full of the right language, including the need for ‘country-owned' outcomes, the importance of small-holder agriculture, the need for sustainable management of natural resources and the critical nature of investment in agriculture - from infrastructure to seeds. Although the L'Aquila statement echoes earlier ones and some of the financial commitments may be a reallocation of existing funding, it is clear that food security can no longer be ignored.

Viewing the role of open trade flows as strengthening food security, the G-8 leaders called for the Doha Round to be brought to a timely, balanced and successful conclusion. The group committed itself to reducing trade distortions and pledged to refrain from engaging in WTO inconsistent measures to stimulate exports (although there is plenty of space for such action within current disciplines, see page 4). However, the G-8 statement failed to mention the role of subsidies in maintaining food insecurity. With OECD domestic farm payments well in excess of a billion dollars a day, what effect will 20 days' worth of such support - spread over three years - have on reforming the ills of a system that has generated 1 billion people in developing countries facing hunger?

The Right to Food

When Olivier De Schutter, the UN Special Rapporteur on the right to food, presented a study at the WTO in July, his words fell flat. He attempted to outline trade policies that needed reform and criticised developing countries' increased dependence on food imports, stressing that they should be allowed to protect their farmers from imports until domestic investment succeeded in increasing output. Many WTO delegates were critical or even scathing of De Schutter's grasp of trade issues.

In framing the issue of food as a human right, De Schutter attempted to bridge the gap between trade and human rights law. If the aim of trade negotiations were to help establish food security, rather than to ensure freer markets, it could contribute to the emerging consensus in development policy that trade liberalisation is merely part of a set of policies that can help facilitate development. Moreover, instead of justifying protectionism, a WTO faux pas, De Schutter's objectives might have been better served by addressing issues such as rich country subsidies.

After hearing De Schutter's presentation and in light of the flexibilities enjoyed by developed countries in the current round, a WTO delegate insisted that the Membership "should remove ‘development' from the title of Doha Round." This would be an unfortunate outcome after years of negotiations. Although focused funding from the G-8 will help address food security woes, greater leadership from economic powers is sorely needed. Moreover, placing the right to food at the core of future trade agreements could help focus negotiations on outcomes that eliminate distortions from agricultural trade.

Ammad Bahalim is Programme Officer for Agriculture at ICTSD.

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