Europe is being confronted by a slowdown, at home and around the world. On the home front, it has to deal with stagnant economic growth, the debt crisis, and its ageing population. And abroad it needs to adapt to developing countries’ growing economic clout. Developing countries’ GDPs are expected to grow by an average 6.3% this year, and Europe’s by only 1.7%. By 2030, the developing countries will account for 60% of the global economy, up from 50% last year. Europe, which presently accounts for 20% will see that shrink to 15% over the coming two decades. So why, then, should Europe be doing more to fight global hunger?
One billion people go hungry every day. In developing countries, some 130 million children suffer from chronic under-nutrition and, overall, two billion people bear the brunt of micronutrient deficiencies. These deficiencies, plus low birth weight and protein malnutrition, can cost the developing world up to ten per cent of its GDP, a loss of up to US$1 trillion a year.
What is needed is greater European political engagement and leadership. The EU and its member governments have committed to action for food security and against food price volatility, but other concrete steps are also urgently needed.
“It is estimated that completion of the stalled Doha Round of trade liberalisations would bring annual trade gains from agriculture of $29bn to developed countries and $9bn to developing ones”
Back in 2003, African leaders pledged themselves to achieving 6% growth rates in agriculture and to devoting 10% of their spending to agriculture under the Comprehensive Africa Agricultural Development Program. Many African countries have reached the first target, and the region’s agricultural growth has certainly begun to accelerate, but only eight countries have reached the second target. Africa’s agriculture still needs more investments from African governments, European donors and the private sector. The EU has steadily increased its aid to agriculture, forestry, and fisheries since 2006, reaching a total of 7% of its ODA (official development aid), adding force to Africa’s commitment to agriculture. Investing in agricultural aid for developing countries has yielded attractive returns, so Europe should now aim to raise its agricultural assistance to at least 10% of its total aid budget by 2015.
Smallholders should obviously be the main focus of this aid. Smallholders dominate in sub-Saharan Africa and south Asia, accounting for four-fifths of all farms. At the same time, smallholders account for half of the world’s malnourished people, so strengthening their access to finance, seeds, water, energy and markets is of key importance.
But, the European Union’s subsidies to its own agriculture are 70 times what it spends on aid for agriculture elsewhere. And its subsidies have done much to create unfair competition between Europe’s large commercial farms and the smallholders of Africa and south Asia. It’s no secret that by reducing and eventually eliminating the Common Agriculture Policy’s subsidies to European farmers the overall EU economy would be made more efficient and the EU budget much leaner.
Free trade in agriculture would benefit developed and developing countries alike. It is estimated that completion of the stalled Doha Round of trade liberalisations would bring annual trade gains from agriculture of $29bn to developed countries and $9bn to developing ones. Global income gains are reckoned at $70bn a year, with developing countries gaining fairer access to European markets while Europe’s consumers would benefit from cheaper food.
“Advances in soil science can help regions like sub-Saharan Africa to combat climate change through agriculture, enabling Europe to become a world leader in climate-proofing and greener agriculture”
Growing biofuel production was one of the factors that contributed to the 2007-08 food crisis, yet biofuel production in Europe has increased by 77% since 2007 with ethanol and biodiesel production up 93% and 67% respectively. The OECD and the UN’s Food and Agriculture Organization (FAO) have both forecast that in Europe this trend will see biofuel production doubling over the next eight years, placing further strong pressure on land, forests and pastures.
The G20 agriculture ministers called in June on European countries to further investigate the relationship between biofuels and food price volatility, and also with environmental sustainability. Biofuels may well have a role to play, but they clearly cannot be the single solution for reducing greenhouse gases and promoting energy security and rural development in Europe. Europe should instead develop renewable energy technologies that avoid competition between biofuels and food crops for land and water. The focus should be on advanced biofuels and the development of alternative feedstocks for biofuels.
Both the EU itself and countries like France now advocate the tighter regulation of food and commodity markets to rein back speculation. Financial markets in Europe and the U.S. are putting new instruments in place to increase regulation, so we can expect better supervision of agricultural futures and derivative markets, along with enhanced transparency. For agriculture stakeholders to fully understand and manage the links between financial and commercial agricultural markets, accurate information has to be made publicly available. So the Agricultural Market Information System (AMIS) announced by the G20 mid-year is a welcome step.
The EU now aims to invest 3% of its GDP in research and development by 2020 to underpin its international competitiveness. It should therefore continue to increase investment in agricultural innovation, especially to promote crop and livestock productivity through breeding technologies and water and energy saving technologies, along with climate change adaptation. As part of this strategy, European institutions need to form strong partnerships with national research systems in developing countries and global research institutions, notably with the Consultative Group on International Agricultural Research’s (CGIAR) centres for developing new high-nutrient crops resistant to drought and flood. CGIAR centres now exist in Latin America, Africa, the Middle East and South Asia and their existing public-private partnerships offer great potential partner for European collaboration.
Europe should also reinforce its efforts in carbon markets, both through its Emissions Trading Scheme (ETS) and also by developing new methodologies enabling agriculture to qualify for the ETS. Advances in soil science can help regions like sub-Saharan Africa to combat climate change through agriculture, enabling Europe to become a world leader in climate-proofing and greener agriculture.
“Growing biofuel production was one of the factors that contributed to the 2007-08 food crisis, yet biofuel production in Europe has increased by 77% since 2007 with ethanol and biodiesel production up 93% and 67% respectively”
New actors ranging from private sector corporations to philanthropic organisations and donors from emerging economies are increasingly working together to reduce global hunger, which means that new ways of sharing knowledge are emerging. In this new context, Europe has a great role to play here by sharing the lessons learned from both its successes and failures. As a longstanding aid donor, Europe should encourage emerging countries to play a pivotal role in setting standards and structures in the aid system rather than just following a “northern” aid paradigm.
Both the Paris Declaration (2005) and the Accra Agenda for Action (2008) on aid effectiveness underlined the way that closer co-operation between donor and recipient countries is needed to make aid more useful. Co-operation means less duplication of efforts through more information sharing and capacity building. Reducing poverty through long-term food security policies is possible if we take action now. The poor must not go on paying the high price of hunger because of the rich countries’ inertia.