Food Crisis

Canada and the World

Current Events with a Canadian Perspective

Last update

03 December 2010

Site map

Canada and the World

Current Events with a Canadian Perspective

Global Food Crisis

While some farmers are paid handsomely for their crops, others are forced deeper into poverty

“It seems the governments of the world are conspiring to undermine farming in developing countries.” That’s Sebastian Mallaby, a fellow for International Economics with the Council on Foreign Relations, writing. He made this comment when the rapid increase in world food prices finally came to the notice of the media in early 2008.

Thomas Joannes

Rice is the staple grain for most Asian people.

With worldwide food prices almost twice their 2005 level, he says the global food crisis is “threatening to push (another) 100 million people into absolute poverty, undoing much of the development progress of the past few years. The new hunger has triggered riots from Haiti to Egypt to Ethiopia, threatening political stability; it has conjured up a raft of protectionist policies, threatening globalization.”

Hoarding and Protectionism

Mr. Mallaby points out that, while millions of people go hungry, some governments are stockpiling imported rice (purchased to meet trade commitments) to protect their home-grown varieties.

A New York Times article (April 2008) by economics professor Tyler Cowen also refers to rice as an example of the damage trade restrictions can cause. “Although rice is the major foodstuff for about half of the world, it is highly protected and regulated,” he writes. “Only about five to seven percent of the world’ s rice production is traded across borders; that’ s unusually low for an agricultural commodity.”

And he says the problem is not yields, which have gone up slightly, but international trade which has declined when it should be expanding. Trade restrictions in rice-producing countries such as India, Indonesia, Vietnam, China, Cambodia, and Egypt can lead to long-term shortages and permanently high prices.

Professor Cowen says wealthy countries are partly to blame as well. “Japan, South Korea, and Taiwan all protect their native rice farmers; you’ll even see rice being grown in Spain and Italy, aided by European Union subsidies and protectionism.” He adds that rice farmers in the United States receive billions of dollars in subsidies.

Huge Farming Subsidies Distort Trade

But, the governments of Western industrialized nations have been giving massive subsidies to farmers for decades.

Stephanie Nolen, Globe and Mail correspondent in Africa, talked to the head of the farmer’s cooperative in Warala in southern Mali, who shakes his head at the whole notion of subsidies. In February 2008 she wrote “The farmers of Warala have a limited understanding of agricultural subsidies, but they know three things: They don’t get any; rich farmers do; and thus the people of Warala earn less for their cotton.”

As a result, there is not enough food for their children. Education or health care must be paid for by selling an asset such as a cow, writes Ms. Nolen.

The $2 billion to $3 billion in subsidies paid to about 12,000 large-scale cotton growers in the southern United States crushes Mali’s farmers. Ms. Nolen says a quarter of Mali’s population of 12 million rely on the cotton industry either directly from growing it or working in related areas.

While the U.S. has the biggest impact as the world’s largest cotton producer, European growers also receive subsidies, as do China’s. Compounding the problem, she says, is the fact that Mali and other West African countries aren’t allowed to subsidize their farmers. This is because of a condition of the help they receive from donor nations and international financial institutions.

Many think developed countries need to slash import tariffs, instead of continuing to subsidize local well-heeled farmers: The Economist suggests (May 2008), for example, that cutting European farm-import tariffs in half “would do more to ease hunger in poor countries than any foreign aid.” But, many European governments support the European Union’s common agricultural policy (CAP), which makes European food among the most expensive in the world.

Call to Open Boarders to Food Trade

The president of Oxfam America is Raymond C. Offenheiser. In July 2008, he said Europe hadn’t done enough to help poor countries. The EU, he says, continues to insist on exemptions for its sugar, beef, and dairy farmers, while denying safeguards for farmers in poor countries.

“A fair trade deal would mean significant reform of trade-distorting subsidies in rich countries coupled with flexibilities for poor countries to promote food security, livelihoods, and rural development,” said Mr. Offenheiser. “But what we’re looking at now would only entrench existing advantages for rich countries and vulnerabilities for poor countries.”

Other groups are working for a better balance. The Quaker United Nations Office (QUNO) in Geneva and the Quaker International Affairs Program (QIAP) in Ottawa are among them. Their mission is to promote greater equity and justice in world trade to benefit the poor and support protection of the environment.

Control of Seed Market

Shifting control of the global seed market away from large corporations would be a move in the right direction they say. A paper on patents and plant variety protection by QUNO/QIAP explains that, particularly in developing countries, farmers save and re-use seeds from one year to the next. Doing that means they have the following year’s harvest, which helps ensure food security for millions of people in rural communities.

Traditional farmers conserve plant varieties and breed new ones, thereby developing plants that are better adapted to local climatic and ecological conditions. They also safeguard varieties that have potentially valuable traits or resistance to diseases.

“But, under global trade rules, agriculture in many developing countries has become subject to patents and other forms of plant variety protection,” says the paper. “Today, a handful of large corporations increasingly control the global market for seeds. These companies aim to prevent farmers from freely re-using seeds, by patenting plants or their genes.”

Some seed-breeding companies protect plant varieties through breeders’ rights, which are less restrictive, but still prevent farmers from saving and re-using seeds unless explicit provision is made for this in national laws. In trade negotiations, the report says developing country governments are coming under pressure to adopt stronger rules on both patents and plant variety protection.

“Legal protection for patents and plant varieties reduces agricultural biodiversity and threatens long-term food security not just locally, but worldwide. As farming becomes based on fewer crop varieties, it becomes increasingly susceptible to pests, diseases, and climatic variations. By establishing a shared pool of patent-free crops which can be freely exchanged between countries, and safeguarding farmers’ rights, it is hoped that agricultural biodiversity and food security can be maintained in the future.”

Image credit

Christian Guthier

Bff

Sources

“Freer Trade could Fill the World’s Rice Bowl.” Tyler Cowen, New York Times, April 27, 2008.

“U.S. Cotton Subsidies Rip apart Fabric of Malian Life.” Stephanie Nolen, Globe and Mail, March 30, 2009.

“The Right Time to Chop.” The Economist, May 1, 2008.

“Now more than ever a Fair Trade Deal is Needed.” Oxfam Press Release, July 21, 2008.

“Next Year’s Harvest.” Quaker United Nations Office.

“It is unacceptable that rich countries still subsidize farming by $1 billion a day, costing poor farmers in developing countries an estimated $100 billion a year in lost income.”

Douglas Alexander, Britain’s International Development Secretary

WORLD FOOD CONFERENCE

There was a Conference on World Food Security in Rome, Italy, in June 2008. At the meeting, United Nations Secretary-General Ban Ki-moon said the world will need to produce 50 percent more food by 2030 to meet growing needs. To satisfy the increased demand he has set aside a reserve of $100 million from the United Nations Central Emergency Response Fund.

The conference was sponsored by the United Nations Food and Agricultural Organization (FAO), which says 37 countries - 20 in Africa, nine in Asia, six in Latin America, and two in Eastern Europe - now face exceptional shortfalls in food production and supplies.

Meanwhile, in developed countries, food and fuel inflation are hitting working class families struggling in a falling job market and faced with a housing crisis.

FAO Director-General Jacques Diouf called for urgent and coordinated action to combat the negative impacts of soaring food prices on the world’s most vulnerable countries and populationsin the form of immediate food aid and increasing agricultural investment.

Noting that the world spent $1,200 billion on arms in 2006, he asked, how can we explain to people of good sense and good faith that it was not possible to find $30 billion a year to enable 862 million hungry people to enjoy the most fundamental of human rights: the right to food and thus the right to life?

The U.S. Agriculture Department calculates that the country’s commercial farm households will have an average income of $229,920 in 2008.

A quarter of all subsidies to U.S. cotton farmers go to the top one percent of producers.

BIOFUEL OR FOOD

When millions of people are hungry around the world, does it make sense to be using land to grow crops such as corn for biofuel? That depends who you ask.

In its annual Outlook report, the Farm and Agriculture Organization (FAO) says it is concerned about the increasing use of crops for biofuels, the largest new source of demand for agriculture.

The Organization says converting food to fuel as a means of reducing dependence on oil and coal is contributing significantly to higher food prices. And, the hardest-hit by rising food costs will be the poorest people on the planet, where a large share of income is spent on food.

Former U.S. Agriculture Secretary Ed Schafer claimed less than three percent of the global increase in food prices is attributable to competition from biofuels. However, the Washington-based International Food Policy Research Institute puts the figure closer to 30 percent.

FAO officials estimate that biofuels accounted for 59 percent of the increase in global use of coarse grains and wheat between 2005 and 2007, and 56 percent of the increase in vegetable oils.

It’s been calculated that as much as three-quarters of the increase in corn production worldwide in 2007 was for biofuels, such as ethanol. The FAO believes that biofuel has been more important in pushing up food prices than the huge increase in the price of oil.

At the Food Summit in June 2008, UN Secretary-General Ban Ki-moon asked the U.S. and other countries to phase out subsidies that encourage farmers to produce food for fuel. Nevertheless, the U.S. plans to use 25 percent of its corn crop for ethanol production by 2022, and the European Union aims to obtain 10 percent of its car fuel from bio-energy by 2020. Brazil also is a big producer of biofuels.

Jacques Diouf, director general of the FAO says it’s incomprehensible that the food crisis continues while subsidies and protective tariff policies worth $12 billion have diverted 100 million tonnes of cereals from human consumption to biofuels.

Ban Ki-moon says, “Nothing is more degrading than hunger, especially when man-made.” He said the global price tag to overcome the food crisis would be $15 billion to $20 billion a year.