resolving the food crisis: assessing global policy reforms since 2007

© Global Development and Environment Institute, Tufts University

Resolving the Food Crisis:Assessing Global Policy Reforms Since 2007

Timothy A. WiseGlobal Development and Environment Institute

Tufts University

© Global Development and Environment Institute, Tufts University

Policy Reportby

Timothy A. WiseSophia MurphyJanuary 2012

Published by:Institute for Agriculture and

Trade Policy (IATP)

Tufts University’sGlobal Development and

Environment Institute (GDAE)

Available at:http://www.ase.tufts.edu/gdae/policy_research/resolving_food_crisis.html

© Global Development and Environment Institute, Tufts University

Assessing Global Policy Reforms Since 2007

• Research question: What has truly changed in policy and practice since 2007 price spikes?

• Assessed progress in five institutions:• International Donors• World Bank and Multilateral Development Banks• United Nations (FAO, Committee on Food Security)• G-20 Countries• UN Special Rapporteur on the Right to Food

• Main conclusions:• Progress in funding, some policy priorities, but…• Key reforms still urgently needed• Underlying causes of food crisis not yet addressed

© Global Development and Environment Institute, Tufts University

© Global Development and Environment Institute, Tufts University

© Global Development and Environment Institute, Tufts University

Challenged Neoliberal Assumptions

• Even with growing global population, we have the land and technology to feed everyone.

• The market will allocate resources most efficiently.

• State involvement will only distort those market efficiencies.

• Small-scale farmers are outmoded, unimportant, an anachronism.

• No need for a country to grow its own food – you can just trade for it.

© Global Development and Environment Institute, Tufts University

LDC’s Soaring Food Import Bills

0

5

10

15

20

25

30

1961 1965 1969 1973 1977 1981 1985 1989 1993 1997 2001 2005 2009

valu

e (U

SD b

illio

ns)

Agricultural Trade Balance of Least Developed Countries, 1961-2009

Source: FAO (2011), TradeSTAT

Net deficit

Exports

Imports

© Global Development and Environment Institute, Tufts University

Declining Growth in Agricultural R&D, 1976-2000

© Global Development and Environment Institute, Tufts University

© Global Development and Environment Institute, Tufts University

Some new wine, in mostly old bottles:• Only $6.1 b of $22 b L’Aquila pledges represent new money, over three years• Barely returns to levels of early 1990s• Austerity budgets threaten even those gains

© Global Development and Environment Institute, Tufts University

Progress, but inadequate to crisisEncouraging signs:• Growing commitment to Agric and Rural Development• Recognition that smallholders and women are important• Respect for “country-led programs”, less top-down, e.g.

CAADP, GAFSP• Acceptance of strong state role in agric development• Acknowledgment of resource constraints, climate changeBut problematic policies persist:• Heavy reliance on market-based solutions• Bias toward private capital, “public-private partnerships”• Bias toward external technologies, high-input agriculture; • Limited priority to domestic food production• Little concrete action on climate change, esp. adaptation

© Global Development and Environment Institute, Tufts University

Structural Changes:

Integration of:• food• fuel• finance

© Global Development and Environment Institute, Tufts University

.

© Global Development and Environment Institute, Tufts University

Financial Speculation Fuels Market Distortions

© Global Development and Environment Institute, Tufts University

Three Priorities for Urgent Action

1. Slow biofuel expansion, especially in crops that contribute to underlying rise in demand, e.g. corn ethanol.

© Global Development and Environment Institute, Tufts University

Three Priorities for Urgent Action

1. Slow biofuel expansion, especially in crops that contribute to underlying rise in demand, e.g. corn ethanol.

2. Address volatility:1. Strong regulations to limit financial speculation – market

transparency, position limits, margins, and more2. Active development of publicly held food reserves, not just for

emergency humanitarian uses, but as buffer stocks.

© Global Development and Environment Institute, Tufts University

New England Complex Systems Institute

© Global Development and Environment Institute, Tufts University

Three Priorities for Urgent Action

1. Slow biofuel expansion, especially in crops that contribute to underlying rise in demand, e.g. corn ethanol.

2. Address volatility:1. Strong regulations to limit financial speculation – market

transparency, position limits, margins, and more2. Active development of publicly held food reserves, not just for

emergency humanitarian uses, but as buffer stocks.

3. Moratoria on “land grabs:”1. 227 million hectares since 20012. $91 billion in 2008 alone, dwarfing ODA to agriculture3. “development in reverse” – land banking, displacement4. Guidelines for “responsible agricultural investment” too little

and much too late to address urgency of problem

© Global Development and Environment Institute, Tufts University

Policy Space for Developing Countries

African Union response to G-20:

“African countries are not looking forward to depending continuously on external supplies that will remain uncertain in prices and quantities. Actually, our ultimate and unquestionable ambition is to develop our agriculture and markets…. In our opinion, we must rely on our own production to meet our food needs. In fact, importation is not Africa’s goal.”

Challenge to developing countries: Taking advantage of the policy space.

© Global Development and Environment Institute, Tufts University

UN Special Rapporteur on the Right to Food

Olivier de Schutter’s priorities for policy-makers:

1. Support countries’ ability to feed themselves.2. Establish food reserves.3. Regulate financial speculation.4. Ensure national social safety nets against declining export

revenues and rising food import bills.5. Support farmers’ organizations.6. Protect access to land, putting a moratorium on large-

scale foreign land purchases.7. Promote the transition to environmentally sustainable

agriculture.8. Defend the human right to food.

© Global Development and Environment Institute, Tufts University

Thank you.

© Global Development and Environment Institute, Tufts University

Weaknesses in Global Response to Crisis

Need more decisive action on key issues:• Funding for Agri. Rural Development• Curbing Food Price Increases and Reducing Volatility • Reducing the Impact of Energy Crops on Food Prices • Stopping “Land Grabs” and Promoting “Responsible

Agricultural Investment”• Promoting a Transition to Agro-Ecology • Addressing Climate Change and Agriculture • New policies on Trade and Food • Addressing Market Power in the Food System

© Global Development and Environment Institute, Tufts University

Drivers of Price Increases, VolatilityShort-term causes:• Low inventories of key food crops• Export restrictions, border measures during crisis• Weather, possibly due to climate change• Depreciation of the dollar• Financial speculation in commodities marketsLong-term causes• Expansion of crop and land use for biofuels• Decline in food-producing capacity; import dependency• Growth of meat-based diets in large developing countries• Slowing yield growth for key food crops• Reductions in publicly funded R&D• Climate change

© Global Development and Environment Institute, Tufts University

World Bank: Land Acquisitions

© Global Development and Environment Institute, Tufts University

Figure 1. Forestry and Agriculture as a Percent of Total Greenhouse Gas Emissions

Power Supply21%

Industry19%

Forestry17%

Agriculture14%

Transport13%

Building8%

Fossil fuel supply5%

Waste 3%

Power SupplyIndustryForestryAgricultureTransportBuildingFossil fuel supplyWaste

Source: Figure adapted from UN Framework Convention on Climate Change , UNFCCC 2007

© Global Development and Environment Institute, Tufts University

Figure 19. Global GHG Mitigation Potential from Agriculture

Croplan

d man

agem

ent

Grazing l

and m

anage

ment

Restore

cultivated

organic s

oils

Restore

degrad

ed la

nds

Rice m

anage

ment

Livest

ock

Bioenerg

y (so

ils componen

t)

Water m

anag

emet

Setasi

de, LU

C & agrofores

try

Manure

manag

emen

t

-200

0

200

400

600

800

1000

1200

1400

1600

N2OCH4CO2

GHG

Emiss

ion

Pote

ntial

- Mt C

O2-

eq/y

r

Source: Adapted from Metz et al. 2007a and Smith et al. 2008, available at http://www.ipcc.ch/graphics/ar4-wg3/jpg/fig-8-4.jpg

© Global Development and Environment Institute, Tufts University

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Prod

uctio

n (m

illio

ns o

f litr

es)

Global Production of Biofuels

Biodiesel

Ethanol

© Global Development and Environment Institute, Tufts University