A decade-long phenomenon of the number of undernourished people in the world falling between 2003 and 2014, both in absolute terms (from 961.5 million to 783.7 million) and relative to total population (from 15.1% to 10.7%), has reversed during the last three years.
According to the Food and Agricultural Organisation (FAO) of the United Nations, the world’s population suffering from hunger — the food they consume isn’t sufficient to provide the minimum dietary energy requirement for leading a normal, active and healthy life — rose to 784.4 million in 2015, 804.2 million in 2016 and 820.8 million in 2017, from the 2014 low of 783.7 million. In relative terms, too, the share of the undernourished in the world population has gone up from 10.7% to 10.9% since 2014.
What is interesting, though, is that the reversal of a prolonged declining trend in world hunger has come despite a collapse in international agri-commodity prices after 2014. The FAO’s own Food Price Index (base year: 2002-2004=100) plunged from an average of 201.8 in 2014 to 164, 161.5 and 174.6 for the following three years. It had previously soared from 97.7 in 2003 to as high as 229.9 in 2011 and remained at 200-plus levels till 2014. And ironically, throughout that period of rising food prices, global hunger numbers kept dipping (see global chart).
Trends in India
The apparent lack of connection between undernourishment and food prices may, to an extent, be seen even in India.
Annual food inflation (average three-year ending) based on the consumer price index (CPI) for industrial workers ranged from 1.6% to 3.4% during 2001 to 2005, a period when the country’s estimated undernourished population increased from 191.2 million to 256.5 million. Subsequently, food inflation surged to double digits by 2009-10 — which coincided with the worldwide commodity boom — but the number of hungry in India actually dropped to 214.4 million at the end of the decade. While food inflation remained at double-digit levels until 2014, it did not, however, lead to any rise in the number of undernourished. The latter figure has dipped in the last three years for India — unlike the global trend – although not as sharply as the slide in food inflation to below 4% by 2017 (see India chart).
How does one explain such seemingly contradictory movements? Shouldn’t the commodity price collapse or easing of inflation since 2014, after all, have made food more affordable and reduced the prevalence of hunger?
Conflict & climate
Kostas G Stamoulis, Assistant Director-General at FAO in Rome, attributes the return of global undernourishment to the levels of 2010 to three factors.
The first is the displacement of civilian population and food insecurity resulting from conflicts. Roughly 500 million out of the world’s 821 million undernourished people live in conflict-ridden regions such as West Asia, North and northern sub-Saharan Africa, Central America and Eastern Europe. Violent conflicts, both state-based and between organised armed groups, have increased dramatically, especially after 2010.
The second is climate variations (in temperature and rainfall) and extremes (leading to droughts, heat waves, floods, storms, etc). The 2015-16 El Niño — the abnormal warming of the equatorial eastern Pacific Ocean waters, known to adversely impact monsoon rainfall in countries such as India — was one of the strongest events of the past 100 years. It also contributed to 2016 being the warmest and 2015 the second warmest year based on recorded global average temperatures. The six warmest years for the planet have all occurred since 2010.
But the effects of conflicts and climate-related disasters, if any, would be mainly on agricultural production and supply, in turn, driving up commodity prices. Instead, the world has been awash with wheat, corn, rice, soyabean, palm oil, sugar, cotton, milk and almost every other agri-commodity. The story of the last four years, both globally and in India, has been one of glut and depressed price realisation for farmers.
That brings the third explanation given by Stamoulis. This has to do with general economic slowdown and commodity prices (whether agri, oil or metals) themselves falling. These result in lower fiscal revenues and foreign exchange earnings for commodity exporting countries, whose governments, then, have less money to spend on welfare programmes. That — and the fact of poor households also often being producers and now realising lower prices or wages — is a plausible reason for hunger making a comeback even in peaceful settings amidst over-supply of agri-commodities.
Channing Arndt, director of the Environment and Production Technology Division at the Washington-based International Food Policy Research Institute (IFPRI), agrees that “we need to figure out really why world hunger is rising now or not falling at the same rate as before in countries such as India”.
That question — raising doubts over meeting the target of ending the prevalence of undernourishment by 2030, under the UN’s Sustainable Development Goals — also engaged the attention of policymakers, economists, nutrition experts and others, who attended a three-day FAO-IFPRI ‘Accelerating the End of Hunger and Malnutrition’ global conference, at Bangkok last week.
Arndt, too, is more inclined towards the third explanation. “A spike in food prices, like in 2008-09, is bad for all, except net sellers, in the short-term. But sustained high prices can stimulate production, leading to increased farm incomes. It may result in higher demand for unskilled agricultural labour, raising overall rural wages as well. The only losers in the bargain would be the urban poor,” he says.
Derek D Headey and William J Martin, Arndt’s colleagues at IFPRI, have gone a step further. Using sophisticated simulation models and econometric tools, they have shown that the increase in food prices during the last decade benefited the rural poor and “likely contributed to faster global poverty reduction from the mid-2000s onward”. Conversely, “the recent decline in agricultural prices could retard global poverty reduction”.
It raises a related question: Consumer food inflation during the first four years of the current government from 2014-15 to 2017-18 averaged 4.6%, below even the 4.7% rise for the general CPI. In the current fiscal (from April to October), retail food inflation has averaged 1.8%, as against 4.2% for the overall CPI.
Now, how much will that help reduce rural poverty and hunger?