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Resolving the Food Crisis:
Assessing Global Policy Reforms Since 2007
Timothy A. Wise
Global Development and Environment Institute
Tufts University
© Global Development and Environment Institute, Tufts University
Policy Report
by
Timothy A. Wise
Sophia Murphy
January 2012
Published by:
Institute for Agriculture and
Trade Policy (IATP)
Tufts University’s
Global 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:
•
•
•
Significant progress in funding, 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
LDC’s Soaring Food Import Bills
Agricultural Trade Balance of Least Developed Countries, 1961-2009
30
value (USD billions)
25
20
15
10
Imports
Net deficit
5
Exports
0
1961
1965
1969
1973
1977
1981
1985
1989
1993
1997
2001
2005
2009
Source: FAO (2011), TradeSTAT
© Global Development and Environment Institute, Tufts University
© Global Development and Environment Institute, Tufts University
Growing Donor Commitments to Agriculture
© 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
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
U.S. corn for ethanol a particular driver of high food prices
Less than 20% now for food or seed; more for ethanol than feed.
© 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.
Address volatility:
2.
1.
2.
Strong regulations to limit financial speculation – market
transparency, position limits, margins, and more
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.
Address volatility:
2.
1.
2.
Strong regulations to limit financial speculation – market
transparency, position limits, margins, and more
Active development of publicly held food reserves, not just for
emergency humanitarian uses, but as buffer stocks.
Moratoria on “land grabs:”
3.
1.
2.
3.
4.
227 million hectares since 2001
$91 billion in 2008 alone, dwarfing ODA to agriculture
“development in reverse” – land banking, displacement
Guidelines for “responsible agricultural investment” too little
and much too late to address urgency of problem
© Global Development and Environment Institute, Tufts University
Let Developing Countries Lead
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.”
© Global Development and Environment Institute, Tufts University
UN Special Rapporteur on the Right to Food
Olivier de Schutter’s priorities for policy-makers:
1.
2.
3.
4.
5.
6.
7.
8.
Support countries’ ability to feed themselves.
Establish food reserves.
Regulate financial speculation.
Ensure national social safety nets against declining export
revenues and rising food import bills.
Support farmers’ organizations.
Protect access to land, putting a moratorium on largescale foreign land purchases.
Promote the transition to environmentally sustainable
agriculture.
Defend the human right to food.
© Global Development and Environment Institute, Tufts University
Thank you.
© Global Development and Environment Institute, Tufts University
Funding: Progress, but not enough
Encouraging 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 change
But problematic policies persist:
•
•
•
•
•
Heavy reliance on market-based solutions
Bias toward external technologies, high-input agriculture;
Limited priority to domestic food production
Little concrete action on climate change, esp. adaptation
Continued support for biofuels expansion
© 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, Volatility
Short-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 markets
Long-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
Fossil fuel supply
5%
Waste
3%
Building
8%
Power Supply
21%
Power Supply
Industry
Forestry
Transport
13%
Agriculture
Transport
Industry
19%
Agriculture
14%
Building
Fossil fuel supply
Waste
Forestry
17%
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
1600
GHG Emission Potential- Mt CO2-eq/yr
1400
1200
1000
800
600
N2O
CH4
400
CO2
200
0
-200
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
Global Production of Biofuels
180000
160000
Production (millions of litres)
140000
120000
Biodiesel
100000
Ethanol
80000
60000
40000
20000
0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
© Global Development and Environment Institute, Tufts University
© Global Development and Environment Institute, Tufts University