With the concerns rising over high food and commodity prices, and now spilling over into protests and tensions in different parts of the world, a recent policy brief from the International Food Policy Research Institute (IFPRI) suggests a number of measures that should be taken by governments and international institutions.
The IFPRI policy brief, Urgent Actions Needed to Prevent Recurring Food Crises, was released at the end of March 2011. The authors, Shenggen Fan, Maximo Torero and Derek Heady, point out that the elements of the global food crisis, experienced three to four years ago, are present in the current trends though not yet to the same levels. “Although many parallels exist, certain aspects of today’s world food situation differ from the situation in 2007–2008. Overall grain production and stock levels, particularly in developing countries, are higher compared with the levels then.”
In addition, they acknowledge that the previous crisis and present situation are caused by a complex web of factors which include the development of biofuels from maize, soya beans, sugarcane and other food crops, depreciation of the US dollar, rising oil prices, and extreme weather in major producing countries, as well as events such as drought and wildfires in Russia and floods in Australia. These in turn triggered responses like panic purchases, export restrictions and market speculation.
They observe that studies carried out since then show there are several lessons to learn, which should be used to inform current actions. So, they argue that “to prevent a repeat of the 2007–2008 food price crisis, proactive steps must be taken by governments of developed and developing countries, as well as interested institutions and organisations.”
The first of these actions is to formulate policies and make technology investments in the US and European Union (EU) countries that would encourage the use of non-food inputs, instead of maize and other grains, for the production of alternative fuels. “Reduction of the non-food demand for grains can also relieve some of the pressure on food markets,” assert Fan and his co-authors.
In developing countries, governments are advised to put in place social protection programmes to protect the most vulnerable groups against the effects of food crises. They cite that many countries failed or neglected to do this following the 2007-2008 crisis. In those countries, with no established programmes, it is suggested governments should begin with focusing on geographic areas with extreme hunger, and should draw on best practices from other countries. “Combined social protection and agricultural support interventions can lead to greater impacts on food security than either intervention alone”.
Governments should institute policies and support investments that promote agricultural growth, especially targeted at smallholder farmers. These should increase access to seeds fertiliser and agricultural technologies, lower costs in transport and marketing, improve rural infrastructure, and enable support services like research, extension and insurance. The policy brief notes that “the occurrence of the global food crisis has renewed attention to agriculture and spurred increased investment in the sector”.
Also, the aspect of climate change has implications for agricultural productivity and human welfare. So investments in adaptation and mitigation on top of the political will and commitment are vital things that governments should do to avert future food signs.
At the global level, the suggested measures include the establishment of an emergency grain reserve that would be managed by an institution such as the World Food Programme and stocked with donations from large food exporters as well as producers like US, Canada, France, India and China. While admitting that there would be challenges, the brief says “such a grain reserve system should be started on an experimental scale with relatively small reserves”. It is noted discussions on this kind of initiative have begun among countries of south-east Asia plus China, Japan, and South Korea on an emergency rice reserve.
The publication advocates for a transparent, fair and open global trade to enhance the efficiency of global agricultural markets. It calls for governments to eliminate barriers to trade. The argument is “although export bans may help to secure domestic food supply, they lead to tighter markets for other exporting countries and induce panic purchases by food-importing countries, both of which lead to further price increases and volatility.”
Also proposed is a working group of international institutions that will monitor food production, consumption (including for biofuels), trade, stocks, prices, and policies, as well as energy prices, input prices and financial market speculation. This group will respond in a coordinated way to trigger action against volatile prices and trends that would lead to a crisis.
Global food prices can have substantial impacts on domestic prices in many parts of the world. In Sub-Saharan Africa, for example, between June 2007 and June 2008, the average increases in staple food prices exceeded 60 per cent. Sharp increases in the prices of staple foods and uncertainty are particularly harmful for the world’s poorest consumers, who cannot adjust quickly to rapid price increases. “The research-based initiatives described,” the policy brief concludes, “should be a guide for a coordinated effort to stabilise food markets and thereby continue the reduction of hunger and malnutrition worldwide.”
--MWESIGYE GUMISIRIZA
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