The Right Response to the Food Crisis
This week, we asked our Sustainability Roundtable about the growing concern that the world’s food supply is in serious danger over the long run. What can the developing and developed countries of Asia do to make their agricultural sector more resilient in the face of future climate shocks? How can these countries cope with a potentially crisis-inducing rise in food prices, growth in population, and increase in demand?
Rohit Viswanath is a foreign policy analyst with the Indian Council for Research on International Economic Relations (ICRIER) in New Delhi.
Extraordinary spikes in global prices of food in recent times indicate a worrisome trend. The volatility has stirred up concerns about an impending food crisis and its impact on poor people. In several low and middle income countries, where consumers often spend more than half of their income on food, accelerated food price inflation is a strain on populations. According to World Bank estimates, the current rise in food prices has driven an additional 44 million people into poverty.
Among the various reasons cited for the crisis is the steady increase in global grain consumption sparked by increases in incomes in developing countries — particularly in the BRIC nations. Climate change is another factor that is expected to complicate food security through its impact on all aspects of food production. There are indications that future population and economic growth will require a doubling of current food production, including an increase from 2 billion to 4 billion tonnes of grains annually. This, at a time when agricultural production in many large countries is expected to be severely hampered by climatic inconsistency.
In order to ensure food security, governments and international NGOs need to adopt a multi-fold approach. They need to address the issue of long-term food security while at the same time not ignoring the immediate need to help vulnerable people access affordable rations. Efficient management is required to store and distribute food rations.
Agricultural and economic policies need to be fine-tuned in keeping with the change in demand-supply equations. African countries have huge untapped potential in food production. As national economies in Asia and elsewhere move up the value chain they could explore outsourcing to these countries, which have relatively better comparative advantages in food production.
Designing appropriate policies to respond to the food crisis requires a solid foundation of empirical knowledge. Hence, a fresh impetus to research is critical to address knowledge gaps. Government subsidies that promote the diversion of agricultural land to the production of biofuels should be urgently reviewed. An investment friendly regime will help in encouraging corporations to expand their activities in agribusiness and related sectors. This will go a long way in facilitating not just enhanced production, but also development of financial market insurance products and risk management strategies.