The Financial Times carries an interesting article by Dominique Strauss-Khan, the French politician now heading the International Monetary Fund, on the current food crisis.
In the article he calls for:
We must not stand idly by. Unless we act now, the world faces a downward spiral of trade restrictions, higher prices for staples and starvation. The World Food Programme urgently needs additional funds and supporting its well-run programmes to feed the poor is a moral and economic imperative.
Although aid is the first step, we must be bolder in tackling the long-term challenges of food supply.
Then later he writes:-
We must not lose sight of longer-term solutions. This calls for a more global approach to policies. Agricultural policies must change. Higher food prices over the past few years in part reflect well-intentioned, yet misguided policies in advanced economies, which attempt to stimulate biofuels made from foodstuffs through subsidies and protectionist measures.
High food prices also reflect imprudent agricultural pricing policies in some developing countries, and these too need to be improved.
No one should forget that all countries rely on open trade to feed their populations. But we are already seeing actions at the national level, such as curbs on food exports, that have a damaging global impact. Completing the Doha round would play a critically helpful role in this regard, as it would reduce trade barriers and distortions and encourage agricultural trade.
A French politician calling for completion of Doha and a reduction in protectionist policies, though he seems to imply such protectionism in advanced economies is linked to biofuel issues.
He concludes with this statement:-
We have a moral responsibility to get food into the hands of poor people. The world can afford it and global co-operation can deliver the macro-economic framework and incentives needed to address the problem in a lasting manner.
It is to be hoped that this article and more importantly what the writer does behind the scenes has an effect.
Peter Mandelson, the EU Trade Commissioner has also commented on this recently, as this article from The Times makes clear.
Europe’s trade chief gave warning of “a spiral of protectionism” in the grain trade as the price of rice soared to a new record and grain-producing countries stopped exports to prevent further outbreaks of food rioting.
Leading grain exporters in the developing world are shutting off supplies in an attempt to curb domestic food price inflation, but Peter Mandelson, the European Trade Commissioner, said that the export curbs were aggravating food shortages.
He said: “By chasing an illusion of food security these policies throttle domestic production, choke off supplies and risk leading to a spiral of protectionism and dwindling production.”
This is of course the same Peter Mandelson who on behalf of the EU has been a major impediment to achieving resolution of the Doha Round. Perhaps at last he may mean what he doth protest he does, and translate attractive spin into deeds of substance, but see my comment on the perfidious French later.
The same article noted this also:-
Hoarding is the main cause of the rice crisis, according to the International Rice Research Institute (IRRI). “It’s an understandable reaction by governments but it is not necessary. Southeast Asia is entering a harvest period,” said an IRRI spokesman.
In the longer term the Manila institute sees severe problems with rice supply in Asia. “In the past three to four years, Asia is eating more rice than it produces. World stocks have come down substantially,” said IRRI. The main causes are shrinking cropland, dwindling water supplies, inadequate investment in agriculture and a shortage of labour, all consequences of Asia’s rapid industrialisation.
New varieties of rice, hybrids and bio-engineered strains could improve output but funds for research and development have been cut.
Yet again the causes are identified as including factors Adam has noted in prior articles on this issue.
The problem will not be solved by everyone becoming vegetarians, or eating less meat as some who comment on blogs and write letters to newspapers seem to think. Nor will it be solved by people ceasing to reproduce as others seem to think.
The answer lies in amongst other factors:-
- investment in agriculture science
- Changing farming practices
- Both the above will assist yield improvement and combating disease and insect damage, plus in the longer term improving drought resistance
- Eliminating artificial barriers to trade
- Enabling farmers to obtain greater reward for their labour
- Improved governance
- Ceasing to grow crops inappropriate to a given geography
- Reconsidering the nature and composition of biofuels
- Reducing subsidies
- Seeking to increase the percentage of livestock fed on grass rather than grains
- Bringing presently unproductive, but suitable land into an appropriate and sustainable form of production
This will all be for nothing, however, if the kind of attitude foreshadowed in this article again from The Times is allowed to prevail:-
France has launched a political campaign to restore food protectionism at the heart of Europe’s agriculture policy as food riots erupt in poor countries and global leaders give warning of the dire consequences of soaring grain prices.
At a high-level EU agriculture meeting in Luxembourg, Michel Barnier, the French Agriculture Minister, called on Europe to establish a food security plan and to resist further cuts in Europe’s agriculture budget.
Mr Barnier said that the EU should not bow to pressure from the World Trade Organisation to reduce further its agricultural subsidies but instead should increase aid to farmers in developing countries.
The French initiative at the EU Agriculture and Fisheries Council follows a week in which food riots toppled the Government of Haiti and the President of the World Bank voiced concerns about the consequences of food price escalation.
It also coincides with Gordon Brown’s calling for concerted international action to tackle rising food prices, including a world trade deal that cuts subsidies to richer countries.
In a speech at Goldman Sachs in London today, the Prime Minister is to raise questions about the effect that the rapid move towards biofuels is having on food production and prices.
The Times article says later:-
With deft political timing, the French Agriculture Minister blamed economic liberalism and “too much trust in the free market” for the soaring cost of food.
He said: “We must not leave the vital issue of feeding people to the mercy of market laws and international speculation.”
The unwinding of the financial subsidies and quotas in the EU’s Common Agriculture Policy is vigorously opposed by France but supported by Britain and the Nordic countries. The French Government is expected to push forward its arguments in favour of greater food security when it assumes the EU presidency in July.
France has resisted calls for big cuts in the Common Agricultural Policy (CAP) budget demanded by emerging market countries and Mr Barnier’s intervention comes as global trade talks that would free up trade in agriculture reach a key juncture in Geneva.
The French push for greater support for European farmers is likely to be resisted by Mariann Fischer Boel, the EU Agriculture Commissioner who has argued for further CAP reforms.
Diplomatic sources in Brussels said that the Commission believed higher food prices would stimulate farming output.
“Our policy is to liberate production,” said one Commission source.
It is to be hoped that the French, arch protectionists do not get their way. This issue is far too important to allow their views to prevail.
Tags: Financial Times, Free Trade, EU, Governance, Food Security, Protectionism, Food Prices, Food Supply, Rice, Food Riots, World Bank, The Times, Grain production, Food Shortages, France, Common Agricultural Policy, International Monetary Fund, Doha, Food Supplies
