Global shortage is food for thought

Union Finance Minister P. Chidambaram, while addressing the recent Spring Meeting of the International Monetary Fund and the World Bank, referred to the land diversion for bio-fuel contributing to food scarcity as being unconscionable. This sentiment may be echoed in many capitals, but is only a part of the problem. Estimates vary on how much food for humans has been lost in this process, as compared to the more fundamental causes: the unprecedented third year drought in Australia, and global warming leading to a decline in over-all agricultural productivity. Rising incomes in demographically dense but poorer countries has contributed substantially to both rising demand of cereals as well as changing consumption habits, generating pressure in the higher value-added food chain. Increasing consumption of animal proteins necessitates production of adequate animal feed of acceptable quality and the efficiency of conversion within the food chain vary greatly. They need independent assessment.

In this context, the coherence of an international response to growing concerns of food security remains grossly under-addressed. In the recent communiqué of the International Monetary & Financial Committee of the Board of Governors of the International Monetary Fund, there is only a passing reference to food security in the overall context of financial stability and inflation management. The communiqué does mention that “a number of developing countries, especially low-income countries, face a sharp rise in food and energy prices, which have a particularly strong impact on the poorest segments of the population.” The committee urges the Fund to work closely with the World Bank and other partners in an integrated response through policy advice and financial support.

The Exogenous Shocks Facility, designed to help countries in fragile situations, does mention commodity price rise. In the press briefing at the conclusion of the Fund Bank meeting, there is mention that “reports kept resurfacing about high fuel and food price, with oil still being about $100 a barrel and food prices having jumped 48 per cent since 2006. The commodity-producing countries that export may have enjoyed windfall gains but the poorer countries in Africa, Asia, Latin America and Caribbean’s have felt the pinch of higher commodity prices. The World Bank president, in seeking to act quickly to help hungry people, has committed an emergency aid to the UN World Food Programme of $500 million and has also sought the backing for a New Deal on Global Food Prices to combat hunger and malnutrition. It was recognised that over 100 million people could be pushed back deeper into poverty if action was not taken and the more affluent nations were exhorted that “we can’t afford to wait and that we have to put our money where our mouth is — now — so that we can put food into hungry mouths. It is as stark as that”.

Nevertheless, coordinated and coherent multilateral response remains elusive. This would need to entail at least the following ingredients:

• First, the need for inter-agency coordination within the UN family. Who is responsible and who will do what needs clearer delineation. Within the UN jungle of overlapping responsibilities, co-ordination deserves priority

• Second, member-countries of the UN family need to act symmetrically and in tandem, particularly during a scarcity cycle. Individual country actions can reinforce the psychology of shortage to generate an unsustainable vicious cycle. This includes decisions on domestic policy issues, tariff policy, export regime and non-tariff barriers, to mention a few. Which multilateral agency is expected to undertake a responsible dialogue with both consuming and producing countries that secures mutual gain?

• Third, the endemic issues of improving supply-side responses, both in the short and medium term, raises multiple issues. This includes improving storage, prolonging shelf life, reducing waste, diversify cropping patterns and fostering allied agricultural activities on dairy, fisheries and animal husbandry

• Fourth, a balancing of policy action which harmonises the good of the planet with that of man. The controversy between bio-fuel for production of non-fossil fuel energy through diversion of cropping area from food to fuel needs expert analysis.

Food security is more than a transient concern. A multilateral framework is necessary and so is a coordinated response within the UN family. Mere empathy will remain grossly inadequate.