Says current high prices are chance to end developed nations´ crops subsidies;more investment needed to spread technology useful to poor-country farmers; role of speculators in recent price boom should be assessed
A long-term agricultural decline in poor countries caused in part by imports of subsidized food from the world´s rich nations has left the world´s developing regions vulnerable to the current spike in food prices, UNCTAD´s Secretary-General told a high-level meeting in Rome today.
Secretary-General Supachai Panitchpakdi said that agricultural productivity has declined in many less-developed countries from its levels of the 1970s and 1980s. He added that official development assistance (ODA), transfers of knowledge and technology, and various government supports for the farming sector have dwindled as well. As rising demand for food resulting from economic growth in such countries as China and India has combined with droughts and high energy prices, the basic cost of food has climbed 54% in the past 12 months, he said, citing the Food and Agriculture Organization´s food price index.
Mr. Supachai spoke during a High-Level Conference on World Food Security: the Challenges of Climate Change and Bioenergy being held in Rome from 3-5 June. The conference, called by United Nations Secretary-General Ban Ki-moon, features participants in a task force Mr. Ban recently established to respond to the food crisis. Members include the heads of UN specialized agencies, funds, and programmes; the World Bank; the International Monetary Fund (IMF); the World Trade Organization (WTO); and relevant parts of the UN Secretariat.
At the conference, Mr. Supachai introduced an UNCTAD report titled Addressing the Global Food Crisis: Key trade, investment and commodity policies in ensuring sustainable food security and alleviating poverty.
Among the report´s recommendations are that food procurement systems and mechanisms be strengthened, that financial and regulatory steps be taken to spur agricultural production, and that more be done to help developing countries deal efficiently and profitably with "post-harvest" losses.
Along with urgent steps to meet immediate shortages around the world, Mr. Supachai said, long-term steps will be needed to cure the underlying causes of the food crisis. He lamented "a decline in agriculture in many developing countries brought about by distorted international markets, lack of investment, and absence of institutional support." More official aid should be channelled into the agricultural sector, he said, noting that such aid has decreased 85% -- from US$3.4 billion in 1980 to $0.5 billion in 2002. Bilateral donors also reduced agricultural spending during that time by 39%, from $2.8 billion to $1.7 billion.
Of special concern is that only 3% of aid sent to developing countries for science, technology and innovation is now targeted at agricultural research, he remarked.
"It is not very surprising that that many developing countries have not invested substantially in agriculture," Mr. Supachai said, when the markets are awash with subsidized exports from the developed world. Many former net exporters of food in Africa, Asia, and Latin America are now net importers as a result of the market distortions caused by the subsidies, he said. He added: "Current high prices provide a good opportunity to phase out agricultural support and subsidies in the developed world through the Doha Round" of world trade negotiations.
The effect of the general lack of investment in agriculture has been worsened by the abolition of support to domestic food sectors and the dismantling of institutional support for agriculture, Mr. Supachai said.
The extent to which market speculation has caused rises in the price of food must be investigated, he told the conference. "If speculation did indeed play a leading role in the current price hike, it must be dealt with forcefully, and collectively," he announced. "It is simply obscene to let greed and speculation cause massive starvation."
Particularly discouraging, Mr. Supachai said, is that the jump in food costs comes at the end of five years of impressive economic growth in the developing world. The crisis now threatens progress that has been painfully achieved. "As long as globalization fails to reduce hunger, no one can claim that it engenders development," he said. He termed the crisis a "wake-up call" for the international community.
High food prices are good for some and bad for others. They are beneficial for many commercial producers in both developed and developing countries. However, many farmers in developing countries are not linked to markets and will draw little or no benefit from current higher prices. At the household level, surging food prices hit those who already have the lowest purchasing power. The likely result of this is increased hunger and malnutrition, in particular for the urban poor in net food importing developing countries.
