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May 16, 2008
By Joachim von Braun
Director General, International
Food Policy Research Institute (IFPRI)
The world’s poorest people will be
hardest hit by the global rise in food prices. Poor people in
developing countries typically spend more than half of their
overall budget on food. For the 160 million people worldwide who
survive on less than fifty cents a days, food price inflation
can spell disaster.
This global food crisis is a complex problem that cannot be
solved with simplistic approaches. More effective and coherent
action is needed now to help the most vulnerable populations
cope with the drastic hikes in their food bills and to assist
developing countries with strategies to increase agricultural
productivity.
We call for a short term “emergency package” to stem the tide of
the humanitarian crisis. We also call for a “resilience package”
to strengthen the capacity of poor people and developing
countries to meet their own needs in the long run.
Emergency Package
Enhance food assistance. Donor governments need to provide
increased support for poor people’s food and nutrition security.
The focus should be on the most vulnerable, including children.
Improve biofuels policies. Governments should revoke biofuel
subsidies and excessive blending quotas (such as the requirement
to use a certain percentage of ethanol in gasoline). Political
leaders should consider a range of additional measures,
including freezing biofuel production at current levels,
reducing production, or enacting a moratorium on the use of
grains and oil seeds for biofuels. At the same time, there needs
to be support for development of bio-energy technologies that do
not rely on food crops. A moratorium on grain-based biofuels
would quickly unlock these commodities for use as food. This
measure might bring corn prices down globally by about 20
percent and, as a consequence, decrease wheat prices by about 10
percent.
Stop export bans. A country that enacts measures such as
agricultural export bans, high export tariffs, and price
controls may reduce its risks of food shortages in the
short-term. However, these measures are likely to backfire by
making the international market smaller and more volatile.
Export restrictions have harmful effects on import-dependent
trading partners. For example, export restrictions on rice in
India affect Bangladeshi consumers adversely and also dampen the
incentives for rice farmers in India to invest in agriculture.
Price controls reduce farmers’ incentives to produce more food.
On the other hand, the elimination of export bans would
stabilize grain prices fluctuations, reduce price levels by as
much as 30 percent, and enhance the efficiency of agricultural
production.
Empower small-scale farmers. Providing improved seeds,
fertilizer, credit, and other resources for small-scale farmers
in developing countries would quickly improve production,
increase incomes, and lower prices.
Resilience package
Invest in people. For longer term impact, developing countries
need to invest in social protection measures, such as cash
transfer programs, pension systems and employment programs.
Preventative health and nutrition programs targeted to
vulnerable groups (e.g. mothers, young children, and people
living with HIV/AIDS) should be scaled up to ensure universal
coverage. In addition, school feeding programs can play an
important role in increasing school enrollment and in retaining
children in school and enhancing their academic achievement.
These programs would reduce the vulnerability of poor people and
enhance their long-term productive capacity.
Reduce market volatility. Improving grain stocks and enacting
regulatory measures to curb excessive speculation in
agricultural commodities would help to stabilize markets in
times of crisis.
Complete Doha round. World leaders need to complete the Doha
Development Round, so that we have a global system that promotes
agricultural trade on a fair and equitable basis.
Support agriculture. Long term relief from rising food prices
can only be possible with increased agricultural production.
Industrialized nations should revitalize their support for
research, innovation, and extension to transform small farm
agriculture. African heads of state need to deliver on their
commitment to allocate 10 percent of their national budgets to
agriculture. These investments not only have high returns in
terms of agricultural growth, but also have a major impact in
reducing poverty.
Implementation of both the short-term emergency response and the
long-term solutions must begin now. Together, action in these
areas would go a long way to stem the tide of rising food prices
and reduce the threat of hunger and poverty.
The International Food Policy Research Institute (IFPRI)
seeks sustainable solutions for ending hunger and poverty. IFPRI
is one of 15 centers supported by the Consultative Group on
International Agricultural Research, an alliance of 64
governments, private foundations, and international and regional
organizations. |
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