PHM-Exch> Linking Trade and Hunger

[Claudio Schuftan]

From: Ellen Shaffer <ershaffer at cpath.org>
From: David Wallinga <dWallinga at iatp.org>

Is Famine the New Norm?
By Jim Harkness
<http://www.policyinnovations.org/innovators/people/data/jim_harkness>
Institute for Agriculture and Trade Policy <
http://www.policyinnovations.org/innovators/organizations/data/00127>,
February 15, 2011

http://www.policyinnovations.org/ideas/commentary/data/000209

[cid:image001.jpg at 01CBCDC9.50EC38D0]

CREDIT: International Center for Tropical
Agriculture<http://www.flickr.com/photos/ciat/5367322642/>
(CC<http://creativecommons.org/licenses/by-sa/2.0/deed.en>).

When global food prices spiked in 2007-2008, 100 million people were
added to the ranks of the world's hungry, pushing the total number
over 1 billion for the first time in history. Now, just two years
later, we are seeing another food price hike, and more famine is
likely to follow.
The United Nations Food and Agriculture Organization recently
published its global food price index for January 2011. The agency's
index was at its highest level (both in real and nominal terms) since
the FAO started measuring food prices in 1990. Food riots have already
begun in Algeria. As history repeats itself and the second major
global food crisis in two years takes shape, it is vital that we learn
the lessons of the first crisis, and address fundamental causes.
Food security depends on stable and predictable weather and markets,
and access to resources, all of which have been knocked dangerously
off balance in the past few decades. Since the 1970s, human-caused
climate change has brought more frequent extreme weather events
worldwide. Farmers who were used to dealing with the prospect of a
lost harvest once every ten seasons now experience flood or drought or
major pest infestations every second or third year. In 2010 and early
this year, Argentina, Australia, China, Pakistan, and Russia have all
seen extreme weather events disrupt their agricultural production.
The second source of instability is an increasingly chaotic
marketplace. In the name of free trade, the U.S. government and the
World Bank have spent the past three decades forcing open developing
country markets to cheap imports, which undermined local food
production. In a cruel irony, poor countries were also pressured to
cut support for their own farm sectors, and even forced to sell off
emergency food reserves, under the rationale that it would be more
efficient to simply buy food on international markets.
By 2006, more than two-thirds of the world's poorest nations were
dependent on food imports. Then came the wave of financial
deregulation over the past decade, unleashing speculators into
commodity markets, and creating index funds that tied together
commodity market prices for food, oil, and metals like never before.
But the leveraging, bundling, and "innovative instruments" that were
supposed to reduce risk in these markets have had the opposite effect.
The result has been a wildly volatile global food market, where
factors unrelated to actual supply and demand often drive prices.
This global double whammy of climate and financial instability has not
hurt everyone. Volatility is good for the biggest players. Many
agribusiness companies are experiencing record profits now and did so
during the last food crisis as well. There has been a spike in "land
grabbing," in which large areas of arable land in developing countries
are bought up by outside investors, and converted to non-food crops,
including feedstocks for biofuels.
On the other hand, some African countries won't be hit as hard this
time precisely because they insisted on boosting local production
instead of relying on global markets. But for the most part, poor
farmers are struggling in a hostile and volatile climate. No wonder
famine has become the new normal.
If we truly consider world hunger to be an abomination, and not merely
an investment opportunity, big changes need to be made. Nearly
everyone from the World Bank to the UN to the G-20 recognizes the need
to support small-scale farmers, particularly women, in countries
facing hunger. Globally, 70 percent of the world's food is grown on
farms less than two hectares (4 acres) in size, tended in large part
by women.
Development aid, as well as developing country government policies,
should focus on helping build the productivity and resilience of these
farmers. Instead of leaving small farmers powerless in the face of
global forces, we should build on the wisdom of traditional farming
systems which combine the best of ecological science with
on-the-ground farmer knowledge to encourage practices that reduce
costly inputs, produce higher yields, and increase farm incomes. And
food production for meeting domestic needs must take priority over
cash cropping for export.
But there is much more to do. Countries and regions struggling with
hunger need greater policy space at the national level to protect
domestic food production, prevent dumping, and stabilize supplies.
Some of their flexibility has been curtailed by World Trade
Organization rules.
Food reserves should be reexamined as a key tool for addressing
shortages, as well as for stabilizing food supplies and prices for
farmers and consumers. Land grabbing must stop, and it is time again
to support the redistribution of arable land to small farmers who will
use it to grow food. Funding to assist developing country farmers in
adapting to climate change is woefully inadequate.
Governments need to get serious about implementing rules to curb
excess speculation. The U.S. financial reform bill known as Dodd-Frank
is a good start, but Wall Street lobbyists are going full force to
weaken it during the rulemaking process.
Destabilization of the global food supply over the past several
decades can be undone. But that won't happen unless we learn from the
past and support new approaches to improve stability and resilience in
farming, markets, and food systems.
Jim Harkness is President of the Institute for Agriculture and Trade Policy.
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