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Looking Beyond the Current Food Price Crisis
Global food prices are up almost 30 percent over this time last year. The World Bank says that sugar and wheat prices have risen 20 percent, while fats and oils used in cooking jumped 22 percent. An increasing number of severe droughts, floods, fires, and storms are causing serious damage to farming and agricultural production in a widespread area that includes major food producers and exporters: Russia, Ukraine, Canada, the United States, Germany, Australia, Pakistan, Argentina, and the countries of Southeast Asia. Elsewhere, floods in Sri Lanka destroyed more than 30 percent of the country's rice harvest, according to a recent United Nations report. Above-average amounts of rain in Southern Africa pose food insecurity risks as well. Recently, the FAO issued an alert that a severe winter drought in the North China plain—China’s wheat belt--may put wheat production at risk. In a statement last week, World Bank President Robert Zoellick reported more price increases: "In just six months, prices for wheat rose by more than 50 percent in Kyrgyzstan, 45 percent in Bangladesh, and 33 percent in Mongolia." These realities illustrate our complex global agricultural matrix. The good news: there are opportunities to improve the situation.
What we already know
The Population Reference Bureau projects that the world population will surpass 9 billion by the year 2050. In order to meet the food and nutritional needs of this larger population, agricultural productivity will need to increase by 50 percent to 70 percent. Yet at the same time, other estimates indicate that global agricultural production could drop by 50 percent by 2020 because of climate change--the greatest threat to the very basic foundation of human existence. Regions classified as low-income and likely vulnerable to food insecurity are among the areas expected to have the greatest increases in population-- so the world’s most vulnerable people are at risk of bearing the brunt of extreme and erratic climatic conditions. This is even more true because their livelihoods depend largely on subsistence farming.
With global food prices skyrocketing, the production of biofuels increasing, and the amount of arable land static, we must shift our attention to more integrated investment platforms that deliver increased productivity, nutritional value, market access, and environmental management. The momentum for economic growth and re-investing in agriculture has already been set. As a result of commitments made at the L’Aquila G8 Summit in 2009, the Global Food Security Program (GAFSP) was set up at the World Bank to help developing countries expand their agricultural production, build access to markets, and make their food supplies more resistant to shocks such as those currently sweeping the world markets. To date, however, only a fraction of the pledges of resources for GAFSP have been fulfilled.
GAFSP: Amount Pledged Per Contributor Vs. Amount Received
The lack of fulfillment of pledges and commitments leads to unpredictable financial resource-flows. It disrupts every aspect of the food chain, from production to income availability to nutrition. Yet it is abundantly clear that it is much more cost-effective to invest in building agricultural and economic systems that are sustainable in the long run and prevent calamities than it is to respond to emergency food shortage crises.
To respond effectively to today’s price spikes and tomorrow’s growing demand for food, national governments must put in place the necessary infrastructure. A top priority is building institutions to boost agricultural research. New technologies to develop improved and fast-maturing seed varieties and livestock breeds that are resistant to drought, pests, and diseases will help increase productivity. Food diversification should be encouraged, emphasizing indigenous foods that are often well adapted to the climate. We must also remember that the agriculture sector is one of the most water-intensive sectors, and water delivery in agriculture is increasingly important. This means that farming practices must provide for soil replenishment and water management to prevent further loss of already limited arable land.
Knowledge-sharing platforms and strategic partnerships mong smallholder farmers must also be strengthened. Extension services play a powerful role by passing on new ideas to farmers on the ground. These, coupled with supportive national policy environments to catalyze private sector investment and fair commodity prices in the global markets, should work to reduce levels of hunger and malnutrition while also increasing the incomes and well-being of populations, in order to achieve the Millennium Development Goal 1.
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