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GLOBAL: Differing views on a “new deal” to counter soaring food prices for the poor

NEW YORK, 6 April 2008 (IRIN) - With soaring food prices expected to continue for the foreseeable future, the World Bank is calling for a “new deal” of long-term measures, ranging from increased investment in African agriculture to genetically engineering fuel-producing plants.

Aid organisations are already confronting growing financial shortfalls in their struggle to feed the world’s hungry as food prices have exploded over the past six months, propelled by increased demand from newly prosperous Asian countries like China, rising fuel prices and the diversion of land from food crops to bio-fuel production.

The problem extends way beyond usual temporary production blips like the recent Australian drought, the volatility of soaring oil prices and a falling dollar, and could be severely compounded by climate change - with harsher droughts in some parts of the world and more severe flooding in others predicted.

In a worst case scenario not only could mortality and disease from malnutrition, already the underlying cause of an estimated 3.5 million child deaths each year, soar, but widespread social and political unrest might erupt. Food riots have already been reported in several countries and the World Bank estimates that 33 nations face potential social unrest.

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 SOUTHERN AFRICA: Feeling the bite of rising food prices
“For these countries, where food comprises from half to three-quarters of consumption [spending], there is no margin for survival,” World Bank President Robert B. Zoellick told the Center for Global Development in Washington on 2 April, calling for a "new deal" combining hundreds of millions of additional dollars for immediate relief with long-term efforts to boost agricultural productivity in developing countries.

He announced that the Bank would nearly double agricultural assistance to US$800 million in Africa, adding: “We can help create a ‘Green Revolution’ for sub-Saharan Africa.”

Just last month the UN World Food Programme (WFP) issued an “extraordinary emergency appeal” to world government leaders, endorsed by Zoellick yesterday, for an additional $500 million over the $2.9 billion it sought a few months ago, just to feed the same 73 million people in 78 countries.

Policy questions

For some the World Bank’s “new deal,” which follows up on the conclusions of a report last year, has been too slow in coming. “The World Bank, I would say very belatedly, acknowledged the importance of the agricultural sector,” Tom Arnold, chief executive of the non-governmental organisation (NGO) Concern Worldwide, which seeks to reduce suffering in the poorest countries, told IRIN.

“Immediately, there needs to be a recognition that if we are to have some kind of international safety net in place for the most vulnerable people on the planet, then responding positively to something like WFP is an important aspect,” he said.

“For the longer term, there are a lot of big policy questions that need to be addressed both nationally and internationally, such as taking agriculture more seriously in the economic sector... Any short-term measures to alleviate the problem have to go hand in hand with a serious and strategic commitment to promoting agricultural productivity in sub-Saharan Africa.”


Photo: Simone D. McCourtie/World Bank
"We can help create a ‘Green Revolution’ for sub-Saharan Africa"

Robert B. Zoellick, President of the World Bank Group, speaking at the Center for Global Development

Other NGOs agree. “For the recent couple of decades donors, including countries like the United States, have been quite dramatically neglecting the agricultural sector, reducing their funding support for agricultural programmes,” Oxfam America Policy Director Gawain Kripke told IRIN.

“The food aid system is quite broken and needs reform, and urgently needs it, because dollars are being wasted quite dramatically. We need to be thinking about less short-term palliative responses and longer-term security responses,” he said.

Avoiding high transport costs

The NGO Action Against Hunger (AAH) calls for building capacity in Africa through access to credit, agricultural extension programmes and training, citing the continent’s untapped potential and the need to avoid the high transportation costs as oil prices soar.

“The transport costs associated with food aid could be better used to improve local production techniques and agricultural systems,” AAH Food Security Adviser Silke Pietzsch told IRIN.

Oxfam America’s Kripke cited US insistence that all US food aid be purchased in the US and shipped mostly on US-flagged carriers as a major barrier, greatly increasing costs and entailing delays of up to six months.

“The cost increment of doing it that way rather than buying food more flexibly for instance in Africa for distribution in Africa, can be 50 percent,” he said. “So we can get a lot more assistance from the same amount of money if the United States were to reform how it did its food assistance.”

GM crops

Siwa Msangi, research fellow in the Environment and Production Technology Division of the Washington-based International Food Policy Research Institute (IFPRI), believes bio-technology holds the solution and that genetically mutated crops need to be de-demonised.

“Biotechnologies can help us grow more drought-resistant, pest-resistant, disease-resistant traits in staple crops,” he told IRIN. This could counter climate change by, for example, producing submergence-resistant strains to withstand increased flooding.

Watch video on World Bank's "new deal"

World Bank multimedia

“There are certain attitudes to technologies in food that I think we need to overcome through better education,” he said, citing the prejudices against so-called franken-foods and franken-fish and noting that farmers in Africa are afraid to use bio-technologies that might reduce their competitiveness on the European market due to attitudes there.

But for some there is at present no clear way ahead. Jim Bishop, president for Humanitarian Policy and Practice of InterAction, a US-based coalition of non-profit organisations, said US groups and international agencies like the WFP are still trying “to come to grips” with how to respond adequately.

“The longer term prospects are not terribly encouraging,” he told IRIN. “No one has come up with an agreed answer to the problem. There obviously isn’t a silver bullet, and there’ll be various views, and we hope that the international community will contribute additional resources.”

Bio-fuels and biotechnology

Nobel economics prize winner and former World Bank chief economist Joseph E. Stiglitz sees bio-fuels as a major culprit. “The market has been distorted badly by some of the bio-fuel requirements,” he told IRIN. “The whole system is affected by this very large withdrawal of agricultural output that was going into food production.”

But this is where biotechnology could come to the rescue, according IFPRI’s Msangi. “We should be aiming for high yielding varieties both for food and for fuel as well,” he said, foreseeing a switch to grasses, and to using the stock instead of the grain of maize for fuel.

Meanwhile the immediate problem remains. Zoellick called for immediate action on WFP’s new appeal. “The United States, the European Union, Japan, and other OECD [the 30-member Organisation for Economic Co-operation and Development] countries must act now to fill this gap - or many more people will suffer and starve,” he warned.

USAID announced in February that its food aid costs had jumped 41 percent in the first half of the US 2008 financial year, swallowing $120 million.


Photo: Amantha Perera/IRIN
A farmer holds mature paddy ready for harvesting in eastern Sri Lanka. At least 2.5 percent of the harvest was left in ruins by torrential rains this March
Another donor, the Canadian International Development Agency (CIDA), this fiscal year has already provided over $116 million to WFP. “The Government of Canada is concerned by the impact that the rising price of food commodities will have on the world’s vulnerable and hungry people,” CIDA spokeswoman Jo-Ann Purcell told IRIN. “We will continue to follow WFP needs closely and make every effort possible to respond to the increased demands for food aid.”

WFP continues to call attention to the plight of the one billion people who still live on less than $1 a day, the threshold defined by the international community as absolute poverty, below which survival is in question.

“The crunch means that families which may have had a bit of money to pay school fees for their children, to go to clinics when they are sick, or take much-needed nourishing food together with anti-retroviral drugs, will suffer as they will cut back in these areas,” it said in a recent update. “They will also start cutting meals and substituting less nutritious foods.”

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Theme (s): Aid Policy, Early Warning, Food Security, Health & Nutrition,

[This report does not necessarily reflect the views of the United Nations]

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