Within just one year, the world has been shaken by an unprecedented spike in the cost of basic foods, by hunger riots and by social tensions that have demonstrated – if demonstration was needed – that food insecurity is an irrefutable reality of our century. It is a new reality to which global warming and declining natural resources are now adding an unprecedented sense of urgency.

The scale of this crisis has been making headlines around the world. After all, nearly 900m people now suffer from chronic hunger, while destitution is leading to conflicts between peoples and countries. And the pressures look set to grow. By 2050 it’s estimated that there will be 9b people on earth so the need for food may well have doubled – primarily amongst the urban populations of the world’s poorest countries – and the earth will be no less fragile.

Action is needed. There is far more to finding a solution, however, than simply identifying those few nations that are capable of feeding the rest of the world. It is increasingly urgent that every nation should be provided with the means of feeding itself. This means that it is essential that agriculture should become an international priority, with the poorest countries being helped to safeguard the security and independence of their own food supplies. These issues transcend national borders; guaranteeing the world’s food supplies is increasingly a matter of peace and fairness between peoples and nations. It also represents a huge challenge with regard to the environment and the management of the world’s most fundamental resources.

The will to act already exists, and countries and organisations are mobilising for the task. The United Nations’ Food & Agriculture Organisation (FAO) has been emphasising since last year the danger that rising food prices could lead to an increase in global conflicts. This year, the report of the Davos World Economic Forum for the first time ranked food insecurity as a major risk to humanity. The World Bank’s most recent report forcefully emphasised the importance of agriculture in effectively jump-starting economic expansion and breaking the cycle of poverty. UN Secretary Ban Ki-moon has created a working group to define a common plan of action and France’s President Nicolas Sarkozy has proposed a global partnership for food. This proposed partnership has three pillars. First, an international group made up of all interested parties should draft a worldwide strategy for food security. Second, an international scientific platform should be charged with evaluating the world’s agricultural situation and sending out warnings of upcoming crises. Just as with climate change, this platform could facilitate government adoption of political and other strategic tools to deal with food crises. Finally the international finance community that deals with agriculture and rural development should be further mobilised.

The EU has been at the heart of this international mobilisation. As a structure built on solidarity as well as being a major agricultural force in its own right, the EU wants to contribute fully to the international drive for the agricultural development of the countries of the south. We can be confident that Europe will approach this task with full regard for the diversity of the challenges ahead and without claiming it has any sort of off-the-shelf solution, or than it possesses some sort of universal model.

“Europe cannot build up its own agricultural sector to the detriment of the less fortunate”

Europe can begin to make its contribution by applying the strength of an agricultural sector that has an essential role to play in supplying food to the world. The reliability and sheer size farm output means, it could and should play the role of regulator in global markets. It is also reminding ourselves that, if Europe were to cut back on its agricultural production then the increase in its own food imports would contribute significantly to a worldwide increase in food prices. This makes it imperative that EU food production levels should be held steady – both for the sake of Europeans themselves and also for the sake of people in the world’s poorest countries. In other words, maintaining Europe’s farm outputs at present levels also contributes to the stabilisation of global food markets.

But Europe cannot build up its own agricultural sector to the detriment of the less fortunate. On the contrary, the EU wants to harmonise its policies with those of poorer nations so as to aid their development. At present, export subsidies and support payments represent less than 1% of the European agricultural budget, and the EU has undertaken to eliminate them entirely once it receives reciprocal undertakings from the major food exporting countries. And since 2001, with the implementation of the “Everything But Arms” initiative, all products from the poorest countries – with the exception of weapons and munitions – can enter the European market on a duty free basis. This has led to the EU becoming the primary market for the products of the poorest countries.

The EU is also developing ways of responding to new global challenges through changes to the Common Agricultural Policy (CAP). This was reflected in the decision, taken in the face of world demand, to suspend the “set aside” requirement for a proportion agricultural land to lie fallow, and now the EU is also preparing to progressively increase dairy quotas. Europe is evaluating the impact on world markets of its decisions regarding bio-fuels.

Emergency food assistance is also essential if the EU is to help prevent human tragedies and defuse future social and political crises. The EU has already increased its food assistance budget; having recently added €60m to the €283m that was budgeted for this year. Beyond these steps, though, we also need to develop long-term responses. It is hardly a sustainable situation if all that food assistance can do is to enable refugees to survive and to support those who have lost everything through crop failure, or because they have been forced from their homes. That kind of ‘band-aid’ support will do nothing to help poverty-stricken countries develop food supply sovereignty, nor will it contribute to their wider economic growth. Europe’s clear focus must be on encouraging the development of local agriculture.

Doing so is the only way to achieve greater food security around the world and thus reduce poverty. It will also make it possible to ensure that the high price of agricultural products today is transformed into an opportunity for farmers in the developing world. In its most recent report, the World Bank stated that growth in the agricultural sector eliminates at least twice as much poverty as do identical levels of growth in any other economic sector. The aim, therefore, should be clear – we need to invest in agriculture to tackle both hunger and economic marginalisation. Let’s not forget that agriculture remains the primary productive sector in the world’s poorest countries, employing at least 65% of the working population in many of them and on average contributing more than 25% to the GDP.

This is why the EU should want to strengthen the relative share of its development assistance programme that focuses on agriculture and food security. Over the past 20 years, support for agricultural development has been constantly declining. Only 4% of public development assistance is nowadays earmarked for agriculture, at a time when over 2m people are trying to survive – most of them without sufficient means (essentially without land) – and when 75% of the poorest live in rural areas. The daunting scale of the task facing the world makes bolstering agricultural investment essential and, according to the World Bank, total public sector funding in this area has increased to roughly $17bn, of which $8bn is for Africa alone. The European Commission and the EU’s member states are therefore planning to increase their assistance, both through the European Development Fund and by developing new sources of financial support.

“The time has also come to make agriculture a new priority so as to create growth with a more human face”

The food crisis now buffeting the world also requires a new solidarity between the countries of the North and South. To tackle the challenges, innovative financing techniques and novel but ambitious ideas are needed. The European Commission’s proposal to use the budgetary margins of the CAP to aid development is one such idea, even though it’s a proposal that may well face considerable scrutiny if not outright opposition from some quarters. While a serious debate between EU member states is essential, this should not detract from Europeans’ common desire to be in the vanguard of the international effort to tackle the crisis.

Europe’s engagement has of course to be pursued within a framework of political choices of the nations involved; any development strategy is naturally shaped by national views and priorities. In 2003, for example, the states of the African Union committed to devoting 10% of their public expenditure to agriculture to make-up the ground lost by insufficient investment in the past. It is just such an approach that – by linking public will and resources – can make possible the structural development of developing countries’ agricultural sectors. It’s the sort of approach that should also encourage the creation of producers’ associations as well as helping to improve access to land and to research. And it is clearly essential that any global rural policy should also cover education, transportation, communication and private sector’s economic development, while also encouraging access to environmentally friendly forms of technology.

The EU wants to hep tackle these challenges – after all, they concern the entire world and call for collective choices that are by their nature global. Effective solutions certainly won’t be found if Europe casts its gaze no further than its own borders and limits its policies to domestic considerations. Developing global solutions requires patience and will involve a good deal of listening, as well an open exchange of ideas. But the route to be chosen must make food equity a common priority, and that means fundamentally that policies are required that are both public and collective as well as regional and specific.

A public policy response is essential because on its own the further liberalisation of farm trade will not tackle food security. Faced with the erratic nature of agricultural markets, regulation is needed to soften the impact on poorer countries of volatile food prices. This doesn’t mean that protectionism is the way forward, only that taking account of specific issues that affect international farm trade – weather, price volatility or health risks – may be necessary from time to time if we are to secure the engagement of producers in competitive markets. It will also be necessary to support policies designed to tackle the challenges of food security and development.

But it would be unwise to rely on markets alone to enable the poorest countries to expand their economies in a world where productivity differentials can be as great as 1 to 1,000. Nor is it likely that much economic expansion will result from competition between multinational food distributors and producers in countries where famine still stalks the land. Instead, bringing together outside expertise and local knowledge of the geography and environmental and economic constraints so as to spread risks and share the management of resources and projects, is far more likely help poor countries achieve food independence. It was precisely such an approach that in under 20 years, helped post-war Europe achieve food sovereignty. History also tells us, though, that those countries that protected their agricultural development from the threats of international markets – such as India or Vietnam – that achieved substantial reductions in agricultural poverty.

The time has come to take up the tools of collective action and regulation to help deliver food security for the world. The time has also come to make agriculture a new priority so as to create growth with a more human face. At the heart of the EU, France wants to play its part in a collective effort that is fast becoming a major issue for us all.

Commentary

Yes, but food self-sufficiency for poor countries is the wrong goal

One can only share Michel Barnier’s empathy and deplore the human suffering caused by the surge in food prices. The increase in the price of major food crops could undercut the remarkable progress in poverty reduction achieved in recent years. So Mr. Barnier’s call for strengthening food supply is also easy to agree with. The global food crisis poses serious macroeconomic challenges to low-income countries and could undermine their hard-won macroeconomic stability.

Increasing food production in low-income countries is indeed crucial in responding to the food crisis, and the aim should be to ensure food security rather than food self-sufficiency. The distinction is important; few if any countries in the world are naturally self-sufficient – geography and climate often don’t permit it – so aiming at self-sufficiency would in many countries promote an inefficient use of resources. Food security implies availability and access to food for all.

More rather than less trade liberalisation would help ensure food security, so the recent breakdown in the Doha Round negotiations is unfortunate. Agricultural trade is still much less liberalised than trade in goods. Production subsidies in rich countries such as those of the CAP have so far kept international food prices artificially low, discouraging production in other countries. More widely dispersed food production could therefore decrease price volatility by attenuating the effects of localised meteorological misfortunes. Export restrictions have multiplied in recent months, and even though they are allowed under WTO rules, export subsidies further distort food markets by decreasing production incentives for farmers, and pushing up international prices.

Policies to ensure food security of course extend well beyond trade policy. Financial and technical support for low-income countries to help boost food production will be essential. Paradoxically, many developing countries are already surplus producers of basic food grains, yet have high numbers of malnourished people unable to afford food. Delaying the food price increases or providing direct food aid can serve as emergency measures to protect the poor, but such measures are untargeted and very costly. In the long run, there is no alternative to passing on higher food prices to consumers. It is therefore essential to develop effective social safety nets to protect the most vulnerable members of society.

The food crisis poses formidable macroeconomic challenges to middle and low-income countries. For food-importing countries, higher import bills will worsen balance of payments positions that are already under strain from rising energy prices. This is a particular challenge to countries with inadequate foreign exchange reserves. By providing external support to finance additional food imports, the international community is helping low-income countries avoid balance of payment strains.

The food crisis is also putting new strains on government budgets. Some countries may need to increase public spending to accommodate the cost of measures adopted to mitigate the impact of increasing food prices on the poor. Fiscal responses need to be carefully designed, however, to safeguard the soundness of public finances, maintain debt sustainability and preserve spending on other sectors crucial for development such as education, health and infrastructure.

Higher inflation risks undermining hard-won macroeconomic stability – and once again this is especially true of many low-income countries. Higher food prices have already led to substantial increases in headline inflation because of the high share of food in their overall consumption, and thus in the consumer price index. While any permanent rise in food prices must in due course be passed on to consumers, monetary policy should not allow the current food price shock to translate into a generalised and sustained increase in inflation.

Addressing the food crisis requires broad cooperation among the countries affected, donors and international organisations to put in place a more comprehensive policy response. Smoothly-functioning international agricultural markets would ease the food crisis, and international support has a role to play to help poorer countries implement good policies. Stepped-up budget support can help finance food aid, targeted support for the poor, and increased investment in agriculture, without jeopardizing macroeconomic stability. Low-income countries can also benefit from additional technical assistance to set up efficient, targeted, social safety net systems.