Monday, December 15, 2008

Is the food crisis truly over?

In the opinion of an interview in the Scientific American, Joachim von Braun of the International Food Policy Research Institute thinks that the crisis will continue. Von Braun is of the opinion that the drop in food prices is only because of the economic recession that is spreading around the world.

David Biello interviewed von Braun for the magazine.

Earlier this year there was a widespread perception of a food crisis as grain and other food commodity prices soared, accompanied by food riots in Haiti and elsewhere. But recently those prices have dropped. Has the crisis passed?
Not at all. Only some of the elements and causes of the crisis have changed. Prices came down in the international commodity markets and that helps import-dependent poor countries. But in many countries the international price change is not quickly passed on to the domestic markets. For instance, in many African countries [prices] remain far above long-term trends. Now the financial crisis comes on top of the price crisis. Capital for investment in agriculture is very limited and employment and income of the poor is reduced in the recession. Hunger will increase further.

What was responsible for this crisis?
The [food] price crisis in 2007–2008 stemmed from long-term neglect of agricultural investment, especially investment in research and development; the financial crisis in the second half of 2008 stemmed from fundamentally different causes—flawed regulatory regimes in banking and finance—but the two crises have fed on each other. Although the food and financial crises developed from different underlying causes, they are becoming intertwined in complex ways through their implications for macroeconomic stability, food security and political security. Because the two crises are interconnected, a coordinated response is needed to alleviate the double blow on the poor.

Why can't we produce enough food and/or get food to where it is needed?
We can grow enough food but currently don’t. Greater investment in research and development [R&D] is crucial for promoting pro-poor agricultural growth. Even though spending on agricultural R&D is among the most effective types of investment for promoting growth and reducing poverty, such spending has stagnated since the mid-1990s. A recent study by IFPRI shows that if investments in public agricultural research doubled from US$5 [billion] to US$10 billion from 2008 to 2013, agricultural output would increase significantly and millions of people would emerge from poverty. If these R&D investments are targeted at the poor regions of the world—sub-Saharan Africa and South Asia—about 282 million people could come out of poverty by 2020.


Global Patriot said...

With millions around the globe suffering from extreme hunger it is important that this issue be addressed soon. While we are currently seeing price relief in many areas, this dynamic will change once the world economy gets back on track and energy prices rise once again.

There also needs to be increased regulation of the commodities market, as speculators jump in whenever supplies get tight and add to the upward price pressure.

We saw this in the oil markets, and while the rich make money, the poor go hungry.

Silvia said...

I think we are yet to see the ugliest part of the food crisis. The financial downturn has only blurred this issue but food and economics go hand in hand.