Resources Research

A useful addition from FAO and IFAD, this publication describes an array of organisations and institutional for access to and help managing natural resources for small farmers. These include mediation committees for conflict resolution over land or securing land-use rights, women’s groups for reclaiming land, and forest-community based enterprises for generating income activities. The publication, ‘Good Practices in Building Innovative Rural Institutions to Increase Food Security’, outlines how a vast array of producer-organization initiatives have enabled small producers to increase their access to markets and productive assets.

From 'Good Practices in Building Innovative Rural Institutions to Increase Food Security', by Food and Agriculture Organization of the United Nations (FAO) and International Fund for Agricultural Development (IFAD).

The case studies describe some of the services and resources that these institutional arrangements and new models of public-private engagement can offer to small-scale producers. They include accessing and managing natural resources; providing inputs like seeds and equipment; enabling access to markets; improving information and communication, and helping small producers to have a voice in decision-making processes.

* Farmer Field Schools developed by FAO in Asia, and subsequently in Africa, have enabled millions of small farmers to analyze their production systems; identify their risks and opportunities and test solutions, and adopt new practices that lead to improvements in their livelihoods and food security.
* West African and Indian farmer groups have helped members to obtain short-term credit through a “warehouse receipt system”. In collaboration with micro-finance institutions, they have provided storage facilities for agricultural products. The receipts are then used as guarantees to obtain short-term credit.
* In India, where a disastrous harvest can lead poor people to mortgage their lands, a women’s association has provided loans to release mortgaged land and free borrowers from dealing with money lenders.
* In Cameroon, farmers’ groups, collectors, buyers, resellers and researchers collaborated to select a new plantain variety that fetches a higher price than traditional plaintains. The new variety is also used to make specialty dishes and chips. This has led to the emergence of small groups, including dozens of women’s groups, concerned not only with the production and sale of bunches, but also with processing the plantain into chips.
* In the Gambia, the National Fisheries Post Harvest Operator Platform is a mechanism for dialogue where governments can learn about small producers’ needs while producers express their concerns and preferences.
* In Honduras, greater control over natural resources was transferred to local communities as part of the decentralization process, resulting in better land management and cropping practices. These Community Development Councils, representing rural families, participated in the Municipal Council and managed to ban slash-and-burn agriculture.

The World Development Movement has been bringing to public attention, and to policymakers in Britain, the effects of financial market speculation in food. Recently, a WDM campaign group circulated a letter amongst economists in all countries addressed to the finance ministers of the countries that make up the G20. They met in Paris, France, on 15 October.

I am honoured to be amongst the 450 who have signed the statement. Those who have lent their names to the statement are amongst a group of economists, social scientists, academics and activists who are witnessing – every day no matter where they live – the impacts of relentless food inflation on the lives of poor households whether urban or rural. This statement is one way to remind the G20 powers of their social responsibilities.

Here follows the text of the letter, which is available on the original site here:

11 October 2011

Dear G20 Finance Ministers,

We write to you ahead of the October meeting of the G20 Finance Ministers to urge you to commit with your counterparts to take effective action to curb excessive speculation on food commodities. Excessive financial speculation is contributing to increasing volatility and record high food prices, exacerbating global hunger and poverty.

While there are many pressures on food prices, fundamental changes in supply and demand cannot fully account for the dramatic price fluctuations that have occurred in recent years.

In June, a report for the G20 by international organisations including the IMF and the OECD noted that “too much speculation can cause frequent and erratic price changes” in futures markets.

Evidence suggests that financial speculators are less likely to make trading decisions based on information regarding supply and demand and are more prone to herding behaviours than commercial traders. Excessive speculation undermines the price discovery function of futures markets, driving real prices away from levels determined by supply and demand.

The High Level Panel of Experts on food security for the Committee on World Food Security at the FAO reported in July that “tighter regulation of speculation is necessary.” The panel suggested that “Increasing transparency, by requiring exchange trading and clearing of most agricultural commodity contracts, and setting lower limits for noncommercial actors could be the first set of measures taken by the countries that house major commodity exchanges.”

Increasing market transparency is vital, but will not go far enough to tackle excessive financial speculation. We therefore urge you to support the establishment of position limits to cap the proportion of agricultural commodity derivatives markets that can be  held by financial speculators.

Limits could be set at a level that would maintain sufficient liquidity in the markets while preventing an excessive concentration of purely financial actors. The US has already passed legislation including provisions to introduce such limits and the G20 should act to prevent regulatory arbitrage between exchanges.

Position limits would be more effective in tackling excessive speculation than position management powers, which rely on the use of judgement by exchanges and provide little assurance that powers will be exercised effectively. Clear limits would provide regulatory certainty, promoting stable and sustainable derivatives markets to the benefit of food producers, consumers and broader economic stability.

With around 1 billion people enduring chronic hunger worldwide, action is urgently needed to curb excessive speculation and its effects on global food prices.

Yours sincerely,

The UN Food and Agriculture Organization (FAO), the International Fund for Agricultural Development (IFAD) and the World Food Programme (WFP) have released ‘The State of Food Insecurity in the World 2011′ (SOFI).

This year’s report focuses on high and volatile food prices, identified as major contributing factors in food insecurity at global level and a source of grave concern to the international community. “Demand from consumers in rapidly growing economies will increase, the population continues to grow, and further growth in biofuels will place additional demands on the food system,” the report said.

Moreover, food price volatility may increase over the next decade due to stronger linkages between agricultural and energy markets and more frequent extreme weather events.

Price volatility makes both smallholder farmers and poor consumers increasingly vulnerable to poverty while short-term price changes can have long-term impacts on development, the report found. Changes in income due to price swings that lead to decreased food consumption can reduce children’s intake of key nutrients during the first 1000 days of life from conception, leading to a permanent reduction of their future earning capacity and an increased likelihood of future poverty, with negative impacts on entire economies.

Key Messages

Small import-dependent countries, especially in Africa, were deeply affected by the food and economic crises. Some large countries were able to insulate themselves from the crisis through restrictive trade policies and functioning safety nets, but trade restrictions increased prices and volatility on international markets.

High and volatile food prices are likely to continue. Demand from consumers in rapidly growing economies will increase, population will continue to grow, and further growth in biofuels will place additional demands on the food system. On the supply side, there are challenges due to increasingly scarce natural resources in some regions, as well as declining rates of yield growth for some commodities. Food price volatility may increase due to stronger linkages between agricultural and energy markets, as well as an increased frequency of weather shocks.

Price volatility makes both smallholder farmers and poor consumers increasingly vulnerable to poverty. Because food represents a large share of farmer income and the budget of poor consumers, large price changes have large effects on real incomes. Thus, even short episodes of high prices for consumers or low prices for farmers can cause productive assets – land and livestock, for example – to be sold at low prices, leading to potential poverty traps. In addition, smallholder farmers are less likely to invest in measures to raise productivity when price changes are unpredictable.

Large short-term price changes can have long-term impacts on development. Changes in income due to price swings can reduce children’s consumption of key nutrients during the first 1,000 days of life from conception, leading to a permanent reduction of their future earning capacity, increasing the likelihood of future poverty and thus slowing the economic development process.

High food prices worsen food insecurity in the short term. The benefits go primarily to farmers with access to sufficient land and other resources, while the poorest of the poor buy more food than they produce. In addition to harming the urban poor, high food prices also hurt many of the rural poor, who are typically net food buyers. The diversity of impacts within countries also points to a need for improved data and policy analysis.

High food prices present incentives for increased long-term investment in the agriculture sector, which can contribute to improved food security in the longer term. Domestic food prices increased substantially in most countries during the 2006–08 world food crisis at both retail and farmgate levels. Despite higher fertilizer prices, this led to a strong supply response in many countries. It is essential to build upon this short-term supply response with increased investment in agriculture, including initiatives that target smallholder farmers and help them to access markets, such as Purchase for Progress (P4P).

Safety nets are crucial for alleviating food insecurity in the short term, as well as for providing a foundation for long-term development. In order to be effective at reducing the negative consequences of price volatility, targeted safety-net mechanisms must be designed in advance and in consultation with the most vulnerable people.

A food-security strategy that relies on a combination of increased productivity in agriculture, greater policy predictability and general openness to trade will be more effective than other strategies. Restrictive trade policies can protect domestic prices from world market volatility, but these policies can also result in increased domestic price volatility as a result of domestic supply shocks, especially if government policies are unpredictable and erratic. Government policies that are more predictable and that promote participation by the private sector in trade will generally decrease price volatility.

Investment in agriculture remains critical to sustainable long-term food security. For example, cost-effective irrigation and improved practices and seeds developed through agricultural research can reduce the production risks facing farmers, especially smallholders, and reduce price volatility. Private investment will form the bulk of the needed investment, but public investment has a catalytic role to play in supplying public goods that the private sector will not provide. These investments should consider the rights of existing users of land and related natural resources.

Macroscan, the website is maintained by Economic Research Foundation, professional economists seeking to provide an alternative to conservative and mainstream positions, has posted an article I have written on ‘Food Prices, Health and Nutrition: Red-flag indicators for the 12th Plan’. Here is the opening section.

India rice price trends

The long-term impacts of food inflation on the rural and urban poor are yielding worrying indicators in the nutrition and health sectors. The debate over the provision of the National Food Security Bill and over the reform of procurement for the public distribution system has helped a great deal to bring to the foreground persistent inequities in food access and quality. What remains are the health and nutrition dimensions that are also determined by access to food, the prices at which food items are available and the extent to which food inflation determines nutritional choices for citizens in low income categories. Some of these linkages are brought out by reading together new data from the National Sample Survey Organisation’s 66th Round, and recent trends in retail food prices.

Retail prices of the separate elements of a common food basket are recorded by the Ministry of Food and Consumer Affairs (FCA), Department of Consumer Affairs, for 49 cities. This is a new series of 22 items, compared to the 16 items the FCA had maintained until early 2011. For rice and wheat there is a curious pattern to the price rise. The price band for the 49 cities moves up over time, but it also expands over that time. This can be seen in Chart 1.

With Bharat Nirman-centric infrastructure programmes deepening the connectivity between food supplying districts and consuming regions and with growing investment in agri-logistics and in food retail chains, in fact the reverse ought to happen. That is, food basket staples should be displaying greater homogeneity in retail prices. However, there are a variety of other factors influencing the price band (for the FCA’s 49 cities as much as for district kirana shops) and some of these are external factors such as energy costs, new demand centres arising in fast-urbanising towns which skew distribution costs and corner investment, and the offtake by the food processing industry which is growing at an annual rate of 14%-15%.

India rice and wholesale price index

While a number of factors are at work behind the divergences over time between states and between rural and urban consumption centres, these are not reflected by the movement of the Wholesale Price Index. However, it can convincingly show the variance between types of measurements. The Office of the Economic Adviser maintains the Wholesale Price Index (WPI). After indexing the upward movement in WPI (new series 2004-05) for rice from January 2006 and also indexing the minimum and maximum prices per kilo of the 49 cities’ price trendline, Chart 2 is the result.

As pointed out in a number of articles and commentaries on MacroScan by Jayati Ghosh and C P Chandrasekhar, there is a gap between the rate of increase of CPI for food items and the WPI for those items. This we can see in Chart 2. What we also see is that from October 2008 to January 2010 the rise in WPI accompanied, more or less, the rise in the lower limit of the rice price trendline. From January 2010 onwards, the difference in the growth rates of the WPI for rice and of the rice trendline is significant. This is the ‘fair average quality’ of rice. Yet the gap between the lower price trendline and the WPI is now greater than it has been at any time during 2007-08, when the global food price shocks took place.

How have these price trends hurt households in the lower deciles of consumption in both rural and urban areas? One of the early results of the 66th Round of the NSSO, ‘Key Indicators of Household Consumer Expenditure in India, 2009-10′, provides an answer. The state- and decile-grouped summary data tables show that for 16 major states, the rate of increase in monthly per capita expenditure (MPCE) on food has been faster than the rate of increase of the total MPCE. What has been the impact in the states? For example, with both food and total MPCEs indexed to the levels found in each state by the NSSO in 2003,  the food MPCE rose by 87% in 2009-10 in rural Maharashtra whereas the total MPCE rose by 65%. In 2005-06, food MPCE in rural Maharashtra had risen 14% and the total MPCE had risen 19%.

[Macroscan, the alternative economics website, has the full article.] [pdf only is here.]

On 9 August 2011, a date marked every year as ‘Quit India Day’ for its association with a landmark in India’s freedom movement, thousands of Indians marched to support food and seed sovereignty. From remote tribal hamlets in Orissa to cities like Mumbai and New Delhi, more than a hundred events were organised by civil society groups and concerned individuals to highlight the issues of food, farmers and agricultural freedom.

[See earlier post, 'Monsanto, get out of India!']

The ‘Monsanto, Quit India!’ day call was given by the Alliance for Sustainable and Holistic Agriculture (ASHA), a national network of more than 400 organisations working to promote sustainable farm livelihoods, seed and food sovereignty, food safety, farmers’ and consumers’ rights etc.

Across the country, the demands made to central and state governments were four-fold: no collaborative research partnerships with companies like Monsanto in the state agriculture universities and other institutions in the NARS; no commissioned projects especially for GM crop trials, by these institutions and no GM crop trials in general; no public-private-partnerships (PPP) in the name of improving productivity especially of crops like maize and rice which in effect pose serious questions on food/nutrition security as well as seed sovereignty; setting up grassroots systems of seed-self reliance, recognising farmers’ skills and knowledge related to seed and supporting institution-building and infrastructure around such self-reliant systems, so that timely availability of appropriate, diverse, affordable seed for all farmers is possible.

The Alliance for Sustainable & Holistic Agriculture, India (ASHA) has summarised the Quit India day events and actions ahead:

In Mumbai, farmers from the Vidarbha region of Maharashtra state joined hands with Mumbai citizens to narrate stories about GM seeds like Bt cotton and how suicides by farmers continue to take place because of debt related to high inputs and crop failures. In Mumbai, youth joined freedom fighters in a silent march from the Lokmanya Tilak Statue in Chowpatty to the historic August Kranti Maidan.

In Orissa, padayatras and palli sabhas marked the day with dialogues with farmers in the tribal regions where the government is promoting hybrid maize along with chosen corporations, activists and farmers leaders urged farmers not to fall prey to the false promises and short-term yield claims of these corporations.

In Andhra Pradesh, all major farmers’ unions along with dozens of civil society groups came together to urge the state government not to allow any GM crop trials in the state. They reminded the state government that corporations like Monsanto (and its associates) have not hesitated to defy the government on various issues including redressal for loss-incurring farmers and price reduction on cotton seeds. A delegation met with senior bureaucrats in the Department of Agriculture after a protest sit-in at the Agri-Commissioner’s office.

Bangalore in the state of Karnataka witnessed a gathering of 300 farmers and consumers under the leadership of Kodihalli Chandrasekhar, President, Karnataka Rajya Raitha Sangha (KRRS) who held a demonstration at the Directorate of Agriculture. One of the main points raised here was related to state agencies like the University of Agricultural Sciences-Dharwad facilitating biopiracy in the name of collaborative research. Protesters demanded the scrapping of the ABSP II project through which Bt brinjal varieties were created posing serious questions on the IPRs over farmers’ seed resources; they also demanded that agencies which have violated the legal provisions of the Biological Diversity Act be penalised for such violations. The protestors dispersed only after receiving an assurance from top bureaucrats sent by the Agriculture Minister, that all partnerships and collaborative projects with Monsanto and other such companies will be reviewed.

In Patna, in the state of Bihar, freedom fighters and social activists along with farmers’ leaders joined hands to take up a one day symbolic fast against the government’s partnerships with Monsanto and research on GM crops like Golden Rice. The activists were met by the Minister for Agriculture and Minister for Food and Civil Supplies and an assurance provided that Bihar government would look into all the issues raised with regard to hybrid rice, hybrid maize, Golden Rice etc.

More than 15 events marked the day in Tamil Nadu state. In Coimbatore farmers and acitivists urged the state government not to allow the State Agriculture University to take up GM crop trials. They reminded the ruling party in Tamil Nadu about its election manifesto in 2009, where AIADMK had expressly recognised the threat from GM seeds and their unsuitability for Indian conditions, wherein the party had promised ‘no more promotion of GM seeds’. Memoranda submitted to the Chief Minister from various locations across the state urged her to follow the footsteps of other progressive states, which have taken a firm stand in favor of farmers and environmental sustainability and have said NO to GM crops. Data was shared from official records on the occasion to show that Bt cotton had not made any dent to the insecticides use in cotton in the state and that yields have been fluctuating greatly over the years that Bt cotton expanded in the state.

In Madhya Pradesh, hundreds of protesters gathered in Neelam Park in Bhopal from all over the state and took out a funeral procession of Monsanto and cremated Monsanto symbolically. They pointed out that the promotion of hybrid maize seed would nullify the efforts of the state government in promoting organic farming in the state, with an organic farming policy being officially adopted recently here. Protesters said that hybrid maize PPPs with corporations like Monsanto will take away diversity from our farms, will jeopardize food and nutrition security of poor tribals, will bring in agri-chemicals and indebtedness and will push the farmers of the state towards more suicides.

Punjab saw the launch of a week-long unique ‘Kheti Khuraak Azaadi Jatha’ from Jallianwala Bagh on the occasion. This Jatha will travel through the villages and towns of Punjab in the coming days and highlight the dangers of the recent secret deal that the Punjab government entered into with Monsanto. Farmers unions and activists here cautioned the government against giving a No Objection Certificate to GM crop trials in the state and said that all political parties have to take cognizance of the opposition amongst citizens against GMOs in our food and farming, as Punjab moves towards Assembly elections next year.

In Gujarat, a Beej [seed] Yatra in the tribal pockets of the state preceded the August 9th events; in Baroda, many Gandhians, along with housewives, youth and activists, took out a rally across the city today, despite heavy rains. In Uttar Pradesh, led by Bhartiya Kisan Union’s Rakesh Tikait, a fiveday long mobilization effort began with a farmers’ meeting held in Muzaffarnagar. The UP government was urged not to allow any GM crop trials in the state and to revise its plans for hybrid maize and hybrid rice promotion.

Under the presidency of France, the G20 called a meeting of its member countries’ agriculture ministers to consider the food production and food price problems. They have releaed a “ministerial declaration”. This declaration is being called a “renewed commitment” to tackling hunger by part of the financial media, or is being called “weak” and a mere restating of positions by the more critical, or is being called an empty document full of vague promises and no reform by some activists.

Sandatu Kalug, 58, a lifetime rice farmer in Maguindanao Province lost his entire paddy crop to heavy flooding in June 2011. Photo: David Swanson/IRIN

In fact, it is a strong statement alright. It supports the current model of agri-business, of international investment in arable land, it supports the operations of the global agriculture commodity markets and trading systems, and it ensures that the flows of finance and capital between the world’s financial markets and the commodity markets will continue with less restrictions rather than more control.

All this is done in the name of small farmers and poor consumers. They have talked about a new global agriculture market information system (Amis) so that governments can share better data about the state of food stocks and global production. This is nonsense – it is the bankers, food traders, commodity funds, retail food industry and foodgrain exporters who will use this new knowledge and data. They imply that the Food and Agriculture Organisation (FAO) will run the Amis and they will exploit the new data. Private sector players, such as the large grain traders for whom knowledge of stocks and harvests represent a key competitive advantage, are simply ‘urged’ to participate – they will, at a profit which further loots the urban and rural poor.

There are five main objectives the G20 ministers made commitments to. However, like earlier inter-governmental statements over the last few years concerning agricultural production and access to food, it’s always safer I find to consider what is being meant here.

If we look at the five objectives and take the first:
“i. improve agricultural production and productivity both in the short and long term in order to respond to a growing demand for agricultural commodities”

There is a growing demand for “agricultural commodities”. So investment and research and trade arrangements and enabling policy are to be deployed to help fulfil this kind of demand?

“ii. increase market information and transparency in order to better anchor expectations from governments and economic operators”

Do governments and “economic operators” (what are these? food traders? commodity funds? integrated retailers?) have the same kinds of expectations? Is better “market information and transparency” to benefit only government and “operators” or do food producers and consumers also require them?

To make best use of the land, the Jumma tribes of Bangladesh's CHT practise a form of ‘shifting cultivation’, growing food in small parts of their territory, before moving on to another area and allowing the land to recover. Photo: IRIN/Courtesy of Christian Erni/IWGIA

“iii. strengthen international policy coordination in order to enhance confidence in international markets and to prevent and respond to food market crises more efficiently”

Confidence in international markets may be a concern for governments and economic operators, but in what way are they essential for food producers and consumers, who have since late 2007 suffered through price spikes amplified by these same international markets? The implication here is that responses to “food market crises” can be provided by – among other measures such as policy direction – these markets, which I find troublesome especially given the evidence since 2007.

“iv. improve and develop risk management tools for governments, firms and farmers in order to build capacity to manage and mitigate the risks associated with food price volatility, in particular in the poorest countries”

What are these risk management tools? Are they commodity hedge funds? Are they trading agreement? Are they bilateral agreements and FTAs? Are they commodities exchanges? Who will wield these tools? In poor and the poorest countries farmers have little or no capacity to manage and mitigate existing risk – they surely cannot bear the additional risks brought about by price volatility, but in what way will these tools help and function?

“v. improve the functioning of agricultural commodities’ derivatives markets.”

To what end? Agricultural commodities derivatives markets tie up crop production and food-in-stock, but for whom do they do this? If the functioning of these markets is to be “improved”, who will benefit from this improvement? Will it be the smallholder farmer and if so in what way? How many farmers of the South are directly connected to the agricultural commodities derivatives markets as beneficiaries? Are consumer coops connected?

These are some questions that come to mind when reading these five objectives. I see that Sarkozy has stated, “”We all know that agricultural production is insufficient to meet demand”. This may be so, for certain crops in certain regions, but against the background of these five objectives, I have to question: demand from whom or what and to what end?

[See 'The priorities of the agriculture G20', Nicolas Sarkozy's address at the G20 and you can get the G20 ministerial declaration here]

A vegetable seller waits for customers at the Wakulima market in Nairobi, Kenya. Photo: Siegfried Modola/IRIN

Here are a few sentences from paras 18 and 19 of the ‘ministerial declaration’:

“18. We commit to creating an enabling environment to encourage and increase public and private investment in agriculture. In particular, we stress the need to support public-private partnership on investments, based on a value-chain approach, for services (such as access to financial services, agricultural education and extension services), and for infrastructure and equipment for production (such as irrigation), for agroprocessing, for access to markets (such as transport, storage, communication) and for reducing pre and post-harvest losses.”

“19. We encourage countries, international organizations and the private sector to increase investment in developing countries agriculture, and in activities strongly linked to agricultural productivity growth, food security and generation of income in rural areas, such as agricultural institutions, extension services, cooperatives, research, roads, ports, cold chain, power, storage, irrigation systems, information and communication technology, climate change mitigation and adaptation. We also encourage them to enhance public-private partnerships in this field, in particular to improve market and value-chain operators’ cooperation and procurement from smallholders.”

This is a direct and unambiguous call for greater industrialisation of agriculture, for the strengthening of the tools of globalisation that have given rise to the agri commodity markets and products like derivatives, for the intensification of corporate R&D in agbiotech and with the support of national agricultural reseach systems in various countries – and at the likely cost of traditional knowledge and ecological approaches to cultivation. This sounds to me like an unambiguous statement of support for the food trading and food retail industries and their vast ‘verticals’ (as they call the integrative links these days), and finally for the systems of finance and banking that undergird the globalisation of food.

Vendors in Mapusa, Goa. The middle basket contains 'nachne', local millet

Are the current arrangements fit for the job? This is the question posed in a current discussion on FAO’s The Global Forum on Food Security and Nutrition (FSN Forum). The Forum is set up and managed by by FAO’s Agricultural Development Economics Division and, in their words, “is a community of practitioners currently reaching more than 2800 members” around the world.

The short intro to this discussion is: one of the consequences of the 2007-08 food price crisis was the emergence of a number of new institutions and initiatives that were intended to strengthen global capacities to respond to such situations. “You are invited to share views on how an effective global food governance system should work and on what major issues are to be addressed in order to ensure an adequate and safe food supply for all humans at all times.”

Here is my contribution to the discussion on ‘Global Governance for Food Security: are the current arrangements fit for the Job?’.

‘Global governance’ and ‘food security’ are not compatible ideas in present circumstances. If we look at the idea of ‘food security’, which development agencies and social scientists tend to agree is achieved by every family/household having enough to eat – and able to find and purchase that food easily – then this is only part of a way of living. That way of living, where the production and consumption of food is concerned, has for some years now been more aptly called ‘food sovereignty’. The difference between ‘security’ and ‘sovereignty’ is a major one, and governance – as it is commonly understood by UN agencies and development professionals – may apply to ‘security’ but hardly can to ‘sovereignty’.

So there is a difficulty with how this has been framed. Global governance is I’m sorry to say neither feasible under current economic conditions nor desirable from a cultural diversity point of view. It may have been a guiding principle in the mid-1930s when the League of Nations was created, and has been re-articulated in many forms – sometimes grandly, at other times in attempts to find peace and end conflict. The idea lies at the heart of many of the multidisciplinary efforts led by UN agencies, especially concerning human development, environment, healthcare, the right to education. It is at the core of the Millennium Development Goals programme. It remains, as it was more than 70 years ago, a fuzzy notion that does more to distract than to build. FAO needs to have nothing to do with such an idea.

Rice is still planted and harvested in the coastal talukas, but fields such as these are threatened by urbanisation

The food crisis of 2007-08 is a point of extreme stress in the steady progress of the consolidation of the factors of food production and the organisation of the consumers of food products. In many ways, the ‘crisis’ began when the first fields were harvested with Green Revolution hybrids, and that was a long time ago. It is the growing concentration of capital in the post-harvest sequence – rather than in the people and households and villages who cultivate – that has led to the extreme food impoverishment which we first recognised in 2007-08 and promptly called a ‘crisis’.

This systemic difficulty continues simply because the same forces that, in public fora, in UN agencies, in corporate-industrial circles and within national policy, call for governance are also the forces that create legislation, treaties, trade agreements and multilateral institutions designed to sabotage all expressions of food sovereignty.

I have no doubt that within the ‘number of new institutions and initiatives’ there are also a number of people with the will and intention to help solve a problem that is found in many countries, many provinces and states. However, that does not make it a ‘global problem’. Some of the forces at work are international in scope and scale, such as the reach of the giant fertilisers corporations, the impact of the world’s major agricultural commodities exchanges, the dense links between grain trading cartels and the financial markets. These operate internationally, and the effects of deprivation and food price inflation are also seen in many countries. There are common elements, no doubt, but it is useful to distinguish elements that are common from the idea of ‘global’, for there will not be an inter-agency solution.

Identification of these problems, the reform of economic systems which permit such deprivation, and the creation and maintenance of social institutions (council of village elders for example) can only form locally and work locally. At best, there may be an exchange for methods and practice, available to all to participate in. That I think is what FAO should aim for on this subject.

Xinjiang street food vendor. Photo: China Daily/Lin Dihuan

How much grain will China import? How will it compare with their soybean imports? No one knows for sure, the Earth Policy Institute’s Lester Brown has said. “But if China were to import only 20 percent of its grain, it would need 80 million tons, an amount only slightly less than the 90 million tons of grain the United States exports to all countries each year.” This would put heavy additional pressure on scarce exportable supplies of wheat and corn, said Brown.

For China, the handwriting is on the wall, the Earth Policy briefing has stated, in ‘Can the United States feed China’. It will almost certainly have to turn to the outside world for grain to avoid politically destabilizing food price rises. To import massive quantities of grain, China will necessarily draw heavily on the United States, far and away the world’s largest grain exporter. To be dependent on imported grain, much of it from the United States, will be China’s worst nightmare come true.

“For US consumers, China’s worst nightmare could become ours. If China enters the US grain market big time, as now seems inevitable, American consumers will find themselves competing with 1.4 billion Chinese consumers with fast-rising incomes for the US grain harvest, driving up food prices.”

Protesters scramble for food and drink being distributed during mass demonstrations at Cairo's Tahrir Square in early February. Photo: Reuters/RFERL

Bangladesh, South Asia’s biggest rice buyer, is in talks with India to buy grains on a regular basis to bolster food security as governments seek to avoid a repeat of the unrest that broke out when prices last soared, reported Bloomberg.

A long-term agreement will protect Bangladesh from possible defaults by private traders, who sometimes fail to meet their commitments if prices gain, Muhammad Abdur Razzaque, the nation’s food minister, said in an interview yesterday. “Rice prices rose this year in our country; people are suffering as they have limited income,” Razzaque said by phone from Dhaka.

Bangladesh’s plan underscores a drive by governments to strengthen their reserves to help manage the impact of food prices that advanced to a record last month, beating the jump in 2008 that spawned riots from Haiti to Egypt. This year’s surge has driven millions into extreme poverty, according to the World Bank, and contributed to unrest in the Middle East and Africa. “When we go for international tenders and prices suddenly rise, private suppliers sometimes fail to fulfill their commitments,” Razzaque said. “They don’t supply us and put us in trouble. It has happened.”

In the Philippines, Sen. Francis Pangilinan, chairman of the Senate committee on agriculture, has called on the country’s Department of Agriculture (DA) and the Department of Trade and Industry (DTI) to start preparing for the worst-case scenario as far as the prices of oil and other basic commodities are concerned in response to the volatile situation in the Middle East.

The Philippine Star quoted Pangilinan as having said that other nations have started preparing for an expected food and oil shortage, not only because of the turmoil in the Middle East but also because of the erratic weather patterns that the world has been experiencing. “Some Asian governments have already started to come up with measures to mitigate rising prices. Erratic weather patterns have started wreaking havoc on our agricultural lands. China and India are stockpiling on grains, which means we need to rely less on importation to secure our buffer. The price of oil continues to soar, it is a matter that requires our serious attention,” he said.

In today’s world of interlinked markets, a problem in one place quickly ripples out to others. Croplands in Russia, one of the world’s leading wheat producers, were devastated by fires during last summer’s record-breaking heat wave. Wheat harvests in Ukraine, also plagued by torrid weather, dropped 15 percent last year, a comment in Radio Free Europe/Radio Liberty reminded readers.

Both countries responded by introducing export bans that have exacerbated global shortages of the commodity. Partly as a result, world wheat prices doubled between June 2010 and January 2011. According to the World Bank, wheat prices have risen in the past six months by 54 percent in Kyrgyzstan, 45 percent in Bangladesh, and 33 percent in Mongolia.

In the oil-rich Caucasus republic of Azerbaijan, high prices have been sending citizens across the border into neighboring Georgia, where they are buying up meat, potatoes, onions, and apples. Nadeem Ilahi, head of an International Monetary Fund (IMF) delegation visiting Baku this week, warned that Azerbaijanis should expect overall prices to rise 10 percent in the course of this year — most of it due to the worldwide rise in the cost of food.

India’s economy planners when discussing agriculture are no closer to farm and field realities. That much is clear from a reading of the ‘Review of The Indian Economy 2010-11′, by the Economic Advisory Council to the Prime Minister, released to the public on 2011 February 22.

The document had, I suspect, been finalised and was waiting for the data from the Second Advance Estimates of agricultural production for the 2010-11 year. A cursory analysis of this forms the ‘Agriculture’ section of the ‘Review’ [read the relevant portions of the Review here].

Chairman of the Economic Advisory Council to the Prime Minister, C Rangarajan (centre), flanked by members Suman Bery (right) and Saumitra Chaudhuri releasing the 'Review of the Economy 2010-11' in New Delhi on 21 February 2011. Photo: The Hindu/V V Krishnan

It is in the ‘Concluding Comments’ section concerning agriculture in India that the intent and direction of the current government are underlined. There are a few strong pointers:

* “As against the target of average 4 per cent growth during the Eleventh Plan period, the actual average growth is likely to be slightly less than 3 per cent.” Which only indicates that ‘growth’ in the agricultural sector will continue to be seen as a primary consideration, outweighing the sustainable use of natural resources management. The growth insistence will also mean the continued support of high-input and financially burdensome agricultural methods.

* “Somewhat in parallel, the per capita availability in grams per day has also not gone up in a context where per capita income has been rising quite strongly.” The Economic Advisory Council has not been honest enough to draw the needed connections – between population growth and therefore foodgrain demand, and the need for urgently revisiting the basis for planning agricultural cultivation at the district level.

* “The international prices for grain have been very volatile and much elevated in recent times and therefore higher levels of domestic output is an even more important factor to consider in the context of domestic food security.” This is spot on. Why doesn’t the rest of the Concluding remarks section build on this?

* “Attention must be focused on building rural infrastructure, developing technologies that are appropriate to the region which have to be disseminated – delivered in an efficient fashion. The institutions that are enjoined with this task have to be activated in a more energetic fashion.” The Concluding Remarks does not build on the above point because of such weak, vague and misguided points as this one. ‘Technologies’ and ‘Infrastructure’ for growth at 4%? Or for food security?

* “The liberalization of the economy has benefited the farm sector and as a result the terms of trade for agriculture are no longer adverse.” This is one of the Big Contradictions of the Review. No, the liberalisation of the economy has NOT benefited the farm sector. Has the Government of India and its economic planners so quickly and so completely forgotten that 200,000 farmers have committed suicide over the last decade?

* “Investment in the farm sector has also picked up substantially and capital formation as a percentage of agricultural GDP has more than doubled in the past decade.” To what end? To achieve the 4% growth target which is denominated in ‘technology’ and ‘infrastructure’ in the agri sector? Has there been even 2% annual growth in the incomes of the cultivating households?

Demonstrators shout slogans as they hold steel plates during a protest rally in New Delhi February 23, 2011. Tens of thousands of trade unionists, including those from a group linked to the ruling Congress party, marched through the streets of the capital on Wednesday to protest food prices, piling pressure on a government already under fire over graft. Photo: Reuters/Parivartan Sharma

* “There seems to be evidence that better quality seeds and superior cultural practices are available, but the delivery system for translating these to the field are lagging.” This is where the threat in the Review lies. What delivery systems and who owns them?

* “A major hurdle in agricultural development is the inefficiency of the delivery systems. There is a plethora of institutions in research, extension, credit and marketing. However, efficacy of these institutions to deliver goods and services to the country’s vast small and marginal farms section is quite limited. This is a serious cause for concern.” True. How to support this point and rescue it from the overall contradictions of the Concluding Remarks?

* “There is need therefore, to attune these various institutions to the emerging agrarian structure, which is progressively identified with the small and marginal farmers.” True.

* “A two-fold strategy is indicated for this purpose. One, to encourage farmer’s collaborative efforts as in cooperatives, or more recently in producers companies, and vertical integration of production and marketing by suitable models of contract farming.” Emphatically NO. This is not the answer.

* “Two, at the institutional level, the organizational changes to cut down the cost of transactions (e.g. through a flexible and inclusive business correspondent model) and the use of information technology for the same purpose needs to be encouraged.” True with reservations. Infotech is a means and not an end.

* “In addition both for purposes of ensuring remunerative prices for farmers as well as an anti-inflationary measure, the strengthening of organized retail, as well as use of these outlets for public distribution along with the strengthening of the existing public distribution networks, are measures that need to be tried out seriously.” This is dreadfully ill-advised and apparently motivated by the FDI-seeking stand of the central government. This point of view must be stopped immediately. Dozens of farmers’ cooperatives and small traders have clearly and vociferously rejected FDI-driven organised retail in India. This point holds the back door open for the entry of corporate retail and will be used to legitimise retail control over access to food to vulnerable rural populations.

* “Local procurement by State Government agencies provides an incentive for farmers to grow grain. Coarse cereals are a varied commodity and tastes differ across States. There is also a problem in handling coarse grains.” Yes, yes and no. This point must be supported and rescued from the other corporate-oriented directions of the Review.

[Second Advance Estimates are available from here.]