U.N. urges effort to boost food production in developing world
Posted on June 3rd, 2008By Nathanial Gronewold
UNITED NATIONS — The United Nations called on governments today to commit billions of dollars to boost agricultural production in the developing world as a three-day summit on the global food-price crisis began in Rome.
At the outset of Food and Agriculture Organization (FAO) talks that are likely to feature acrimonious debate over biofuels, subsidies, export controls and other factors contributing to rising food prices and growing world hunger, U.N. Secretary-General Ban Ki-moon pressed for increased food aid and greater investment in agriculture.
“The world’s population will reach 7.2 billion by 2015,” Ban said. “Today’s problems will only grow larger tomorrow unless we act now.”
A task force on the food crisis assembled by Ban also released their proposals for a “comprehensive framework for action” that they hope world leaders will adopt this week. Chief among the recommendations: an immediate end to export restrictions and food stockpiling that many countries have implemented in an attempt to control domestic prices, steps that FAO and others believe is only contributing to further price escalation.
“Beggar-thy-neighbor food policies cannot work,” Ban said. “They only distort markets and force prices even higher.”
Beyond that, what the task force and U.N. system have in mind is nothing less than an initiative that amounts to the largest humanitarian and developmental aid plan in history.
Estimates of the total price tag for international aid agencies, developing world governments and developed world donors could top $15 billion to $20 billion annually over the next several years, dwarfing by far the massive relief operations in war-torn parts of Sudan and the Democratic Republic of Congo.
Reversing period of neglect
Despite the sticker shock, the amounts being proposed are necessary, the United Nations insists, to reverse the long period of neglect that global agriculture has suffered as the World Bank and others encouraged greater urban development and industrialization in the Third World.
“Agriculture’s share in ODA [official development assistance] dropped from around 20 percent twenty years ago to approximately 3 percent in 2007, or approximately US$3 billion,” notes the food crisis task force in its report issued to the conference. “In most of the countries, the agriculture share in the government budget has also dropped, to a level of only 4.5 percent for African countries, or about US$13 billion.”
But governments will have to first focus on immediately boosting food aid to countries in need. The World Food Programme says that it has successfully obtained the extra $755 million in food aid it had earlier requested but warns that more funds will be necessary if food prices do not fall. The task force estimates that $1 billion to $3 billion per year in emergency food assistance may be necessary.
The United Nations is also asking for governments to finance a boosting of agricultural yields in smaller developing-world farms during the current 2008 planting cycle to the tune of $3 billion and to “scale up” financing to somewhere between $8 billion and $10 billion by 2010.
Significant hurdles
Aid dollars for emergency assistance and funding for increased food production are issues that have proven noncontroversial as governments debate what to do about soaring food costs. It will be far more difficult to resolve disputes over agricultural subsidies and trade barriers in the United States, the European Union and other rich nations and what to do about food diverted for biofuel production.
“We don’t expect any ground-breaking decisions,” admitted Jill Ersner, an FAO spokeswoman in Washington.
Speaking to reporters in Rome yesterday to preview the summit, U.S. Agriculture Secretary Ed Schafer insisted that subsidies will not be on the table over the next three days. Rather, he said, they will be discussed as the Doha round of World Trade Organization talks resumes.
The United States will focus this week on “promoting market-based principles” to boost production in the developing world and will press nations to let in genetically modified crop varieties and other technology that can enhance yields, he said.
“The effort for the United States’ subsidies of course is in relation to market access, and as we look at the market access and availability opening up, then we will deal with our current farm legislation with the United States Congress to confirm the agreements that we made on subsidies during that Doha round,” Schafer said.
Meanwhile, the European Union this morning sent out a strong signal to developing world leaders that it is prepared to move toward seriously reducing or outright abolishing subsidies in much of its agricultural sector, but not immediately.
Speaking on behalf of the economic bloc, Slovenian President Danilo Turk told delegates that the European Union is considering phasing out milk quotas and even abolishing subsidies that Brussels pays to farmers not to grow food.
“In the context of an overall agreement in the WTO [Doha] negotiations, the E.U. has already indicated a willingness to eliminate export subsidies by 2013,” Turk added.
Ethanol mandates at issue
Nevertheless, the U.N. task force called on wealthy nations today to adjust their agriculture policies; in particular, to undertake a serious review of their biofuel policies.
FAO argues that U.S. ethanol mandates have contributed significantly to higher global corn prices. The agency estimates that about 30 percent of the total U.S. corn crop for 2008, or 12 percent of the world’s total corn supply, will be diverted to ethanol use. The agency also says that European production of rape seed oil for biofuel use diverted 25 percent of the world’s supply of that commodity in 2007.
But both Europe and the United States are defending their governments’ promotion of biofuels, which have become more popular as oil prices reached record highs. Schafer said his agency calculates that biofuel production accounts for about 3 percent of recent price increases. High oil prices and greater consumption demand from rapidly growing economies like China and India are by far the greatest factors, he said.
The European Union is also downplaying the role of biofuels in price increases. Turk told the gathering today that European biofuel production diverts 1 percent of the continent’s cereal crop, and that the 27-nation bloc will stick to its plan to boost biofuel production until it reaches 10 percent of total transportation fuel consumption by 2020.
Brazil, another major biofuel producer, also demonstrated its unwillingness to significantly adjust its ethanol policies. Traveling to the Rome summit in large part to press for greater agriculture trade concessions from the developed world in the Doha trade talks, Brazilian President Luiz Inácio Lula da Silva said progress in the food crisis talks will only be made once governments “clear away smokescreens raised by powerful lobbies who try to blame ethanol production for the recent inflation in food prices.”
“More than an oversimplification, this is an affront, which does not stand up to a serious discussion,” he told delegates this morning, insisting that the principal blame for high global food prices falls on “the maintenance of absurdly protectionist farm policies in rich countries.”
Addressing long-term issues
Conference attendees this week not only will have to overcome these disputes if they are to reach agreement on a coordinated plan of action, but also face the prospect that the presence of the presidents of Iran, Zimbabwe and Venezuela and other controversial attendees could upset the progress of negotiations.
Meanwhile, prices of many food commodities continue to rise to or stay at historical high levels. The effects of price increases have been relatively light for the United States, the European Union and other major food exporters but are proving to be a significant burden on extremely poor countries and other net food importers.
The FAO food price index, an instrument it uses to track where average global food commodity prices head, rose 9 percent in 2006 but then surged 54 percent in the 12 months prior to April 2008. Prices for such staples as rice and wheat have doubled in many parts of the world, causing panic and rioting.
“Many of the causes of the current crisis are beyond the influence of the conference — drought, poor harvests, etc. — but we hope the conference can turn to the long-term causes of hunger,” said Lurma Rackley, spokeswoman for the aid organization CARE.