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Securing Food and Agriculture Worldwide

By Donald G.M. Coxe, chair, Coxe Advisors LLC

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The G20 has the opportunity to tackle global food security and make historic changes to the very politics of food supply

The global financial crisis and economic recession pushed the world food crisis off the world’s front pages only months after the United Nations High-Level Conference on World Food Security in Rome sought to marshal resources for the food crisis in June 2008.

Unfortunately, the food crisis has not gone away. More than 1 billion people suffer from serious malnutrition. World grain carryovers relative to consumption remain at marginal levels, even though consumption of high-protein foods – meat, milk and oils – is reduced because of the recession, and grain prices have sharply retreated. Nevertheless, grains remain at higher prices than prevailed before the global food crisis began, even if, among foodstuffs, only sugar is now at near-record highs. The emerging economic recovery will assuredly send grain and oilseed prices skyward, exacerbating the problems of the poorest people of the world.

Why is there a world food crisis when global grain, meat and milk production has been growing throughout the decade? The answer lies in the longer-term effects of the food policies of the major food¬ producing members of the Organisation for Economic Co-operation and Development (OECD).

Since the 1950s, the farm programmes of the United States, Canada and Europe have been driven by the seemingly endless surpluses of grains, particularly feed grains. President John F. Kennedy introduced the feed grain programme in 1961 to deal with what he called the challenge of abundance. That legislation, and its successors and imitators across most of the OECD in later decades, sought to control grain production and provided for aggressive export programmes aimed at what were called emerging economies, funded by loans at low rates. What ‘rich people’ could not consume would be sent to the ‘poor people’ to prevent starvation. The policies were the awkward spawns of the intimate relationships between farmers and agribusiness, on the one hand, and the deeply felt charitable impulses of the majority of OECD voters, on the other.

Those policies were, in effect, backed by the World Bank and the International Monetary Fund (IMF), which structured their long-range programmes to strengthen economies throughout the developing world by building viable urban industrialised societies along developed market models. They ignored the insights of such intellectual giants as Mohandas Gandhi that most of the poor lived in rural areas and that the sustained dumping of grains meant that most farmers in the developing world could never achieve the earnings needed to support their families and generate surpluses for urban dwellers. Only in recent years has the World Bank begun to reshape its strategies to provide the irrigation, technology and fertilisers needed to produce adequate food supplies in emerging economies. Today, roughly two thirds of India’s population still live on farms and in villages, and most families have plots so tiny that they can barely meet their own needs – let alone supply bourgeoning urban demands.

The European Union’s Common Agricultural Policy, which consumes roughly 40 per cent of the EU’s budget, has been conspicuously successful in protecting its own farmers’ incomes. But the advent of genetically engineered (GE) seeds threatened to disrupt this tenuous balance by expanding grain outputs, creating even greater surpluses that must somehow be funded to protect price levels. While there is a legitimate debate about the potential longer-range risks of using new technologies to expand food output, the experience of the US, Canada and other GE-using food giants has forced the overwhelming majority of scientists to endorse their supervised use. The US has been so successful in expanding corn production through GE seeds that it has decided to deal with its surpluses by mandating the allocation of one third of its corn output for ethanol production. The EU’s biofuels programme has been so successful that it was recently blamed by a coalition of Asian countries for driving up the prices of soybean and palm oil to levels that threaten their urban poor.

When Keynes was challenged for changing his mind on a policy issue, he replied, “Sir, the facts have changed. How do you respond when the facts change?”

When the new middle class in China, India and southeast Asia, collectively responsible for soaring oil and metals prices, began to change its diet of subsistence levels of bread and rice to include meats and milk, the arithmetic of protein conversion began to change the global supply and demand ratio for grains. It takes roughly seven units of vegetable protein to produce a unit of beef protein, five units for pork and milk, and nearly three for poultry. But the number of hectares of grain production worldwide has been growing by only 1.5 per cent in the last decade, whereas consumption was rising at 3.5 per cent until the global recession hit. Industrialisation, urbanisation, pollution and overdrawn aquifers have limited the growth of reliable arable land worldwide. What is needed now is a swift, sustained increase in per-hectare yields worldwide, particularly in the emerging economies.

That means permanent changes in the politics of food worldwide.

As the world emerges from this recession, the Asian economies leading the recovery must not be stopped by food shortages and soaring grain prices. Already, some wealthy countries are engaged in large-scale ventures – such as offshore farming – designed to ensure their food security. They fear that in the next food crisis, they might not be able to buy adequate supplies of food at almost any price.

Technology and reasonably good governance were at the core of the industrialisation that made North America and Europe wealthy – and reduced the percentage of farmers in the population to single digits, while continuing to expand food output to help drive the growth of cities and prosperity. The G20 has a historic opportunity to launch that model across the world.

Time could be running out. Weather conditions have been generally favourable – compared with long-term historical records – across most of the world’s major food-producing regions in recent decades. Recent erratic weather conditions, which have triggered late planting seasons in temperate zones, may signal climate change conditions that could have catastrophic effects on global food supplies.

The world can no longer take cheap, readily available food for granted.

This article is drawn in part from the keynote address to the 78th annual conference of the Couchiching Institute of Public Affairs on ‘The Politics of Global Food’ on 6 August 2009.

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