Resources Research

Making local sense of food, urban growth, population and energy

Posts Tagged ‘malnutrition

Indexing food prices the FAO way

with one comment

The FAO food price index for 2013 October which includes the calculation and measurement changes. Spot the differences? I can't.

The FAO food price index for 2013 October which includes the calculation and measurement changes. Spot the differences? I can’t.

Why has the Food and Agriculture Organisation (FAO) changed the way it calculates the monthly FAO Food Price Index? But hold on, let us scrutinise first what the FAO Food Price Index is for 2013 October.

The FAO has said: “The FAO Food Price Index rose slightly in October, averaging 205.8 points. This was 2.7 points, or 1.3% above September, but still 11 points, or 5.3% below its October 2012 value. The slight increase was largely driven by a surge in sugar prices, although prices of the other commodity groups were also up.”

The usual blue pair.

The usual blue pair.

In substance, this sort of commentary for the FAO monthly food price index barely differs from the standard tedious template, in tone and tenor, that FAO has applied throughout 2013. The tone has been, as we begin to close 2013, that food prices have not moved very much through the year, and the tenor has been that food price volatility is being reined in.

Based on the evidence provided by real prices I experience in India – real markets (or bazaars or mandis) in which real vendors sell actual produce to real household buyers – I have no idea what the FAO Food Price Index is talking about. Nor do tens of millions of urban and rural households all over the world when they try and correlate the numbers of the FAO index to what they must confront every time they make a food purchase.

This is because of what the FAO Food Price Index measures which, I wearily point out, is a criticism levelled time and again. Why call it a food price index when it is in fact a food exporters’ and importers’ price indication?

Impressive equations, but where's the connection with the local markets you and me buy our veggies from?

Impressive equations, but where’s the connection with the local markets you and me buy our veggies from?

Now, with a change in its calculations, the FAO index includes the following 23 commodities: wheat (10 price quotations monitored and reported by the International Grains Council), maize (1 quotation) and rice (16 quotations) for cereals; butter, whole milk powder, skimmed milk powder (2 quotations for each) and cheese (1 quotation) for the dairy group; poultry (13 quotations), pig (6 quotations), bovine (7 quotations) and ovine (1 quotation) for the meat dairy group; sugar (1 quotation); the oils group consists of one oil price quotation for soybean, sunflower, rapeseed, groundnut, cotton seed, copra, palm kernel, palm, linseed and castor. This construction, thus, includes the use of 73 price series.

The FAO has said: “The Index, which is a measure of the monthly change in international prices of five major food commodity groups (including 73 price quotations), has undergone some changes in the way it is calculated, although the new approach did not significantly alter the values in the series.” (See the Food Outlook released in 2013 November.)

Perhaps. We will not know for another few months. If a change was needed that made sense to consuming households, then FAO should have ensured the index reflected what households pay for the food the buy in the markets near their homes. If the FAO must serve multiple audiences, then it must devise food price indexes for these audiences separately (but the IGC already serves the food traders, and FAO’s own Agricultural Market Information System already serves the policymakers and the major international blocs).

Appraising World Food Day 2013

leave a comment »

FAO-world_food_day_2013It must be difficult to be a senior official in the Food and Agriculture Organisation (FAO) of the UN these days, especially if the official is above 40 years old and has spent the last two decades working “in the field” (which usually means away from some capital city somewhere, in discomfort that is amusingly relative to most of us proletarian toilers). For, I do think that there is still a majority of folk in the FAO who care about their work and the aims of the organisation, muddled though these get when 190-odd member states each bring their own version of reality (and ambition) into the proceedings.

More difficult it is nowadays in an FAO that is being shepherded more closely into the embrace of the OECD, the World Bank-International Monetary Fund, World Trade Organisation embrace, with its murmuring old boys’ clubs all shadowy in their suits, adept at facilitating the trade of political positions for corporate board seats. And more difficult it is nowadays in an FAO that is scrutinised every day by NGOs and civil society groups that have successfully ensured that negotiations called ‘multi-lateral’ must be open before public gaze and can no longer hide behind empty principles when hunger – FAO’s single problem – stalks the planet.

Perhaps that is one reason why the FAO has called this year’s World Food Day ‘Sustainable Food Systems for Food Security and Nutrition’ – and notice the addition of ‘nutirion’, there’s no getting away from the N-word these days, so loaded has it become. The theme, to borrow from the typically bland FAO pronouncement, “gives focus to World Food Day observances and helps increase understanding of problems and solutions in the drive to end hunger”. Well said, for the umpteenth time.

Via_Campesina_food_sovereigntyBut there have been departures from the corporate script lately which are surprising. On 2013 October 04 the Director General of FAO, José Graziano da Silva, formalised a tie with La Via Campesina, recognising it as the most important voice of small food producers worldwide. This is seen by Campesina as “yet another welcome step in a series of ongoing reforms of the FAO, which have created a unique and unprecedented space to collaborate with civil society and democratize the arena of global food policy”. Easier wished for than done, as Campesina well knows, because the financiers and bankers, agri-commodity trading oligopolies and mafioso, the crooked politicians in the European Union and their willing partners in the ‘developing’ world are not going to quietly let this happen.

These reforms are aimed at giving the FAO not just more political legitimacy by becoming more inclusive, but also at reviving it as the cornerstone for international cooperation in the area of food security, starting to take such policy decisions out of the hands of the World Bank (WB) or the World Trade Organization (WTO.) While these developments are welcome, the global peasants’ movement remains realistic about the amount of energy that should be put into the UN, maintaining its greatest strength on the ground mobilizing farmers and building alternatives.

The IFPRI Global Hunger Index 2013 world map, blatantly patronising in its North-South exclusion. The white areas are not even in the map legend. They correspond to the OECD/'industrialised' world, and the IFPRI/CGIAR view is that the chronic mis-nutrition of western societies has no place in a report on global hunger. Nor does this map consider the growing effects of working class poverty in the OECD countries.

The IFPRI Global Hunger Index 2013 world map, blatantly patronising in its North-South exclusion. The white areas are not even in the map legend. They correspond to the OECD/’industrialised’ world, and the IFPRI/CGIAR view is that the chronic mis-nutrition of western societies has no place in a report on global hunger. Nor does this map consider the growing effects of working class poverty in the OECD countries.

In 2012, at the 39th session of FAO’s Committee on Food Security (CFS), the G20 approached the CFS and asked the Committee to agree with what it said on price volatility in agricultural commodities, which since 2007 has dragged tens of millions of households in South and North into hunger and debt. When that happened, and when a compromised CFS agreed, the civil society delegation to the session walked out. The NGOs, social movements, representatives of peasants’ federations and associations who were present had, on the contrary, demanded strong regulation of the commodity futures markets that fuel price volatility and the food insecurity of the poorest. But the G20 (and that means the investors in a global agribusiness industry) won that round.

With the help of the CGIAR, what for the sake of convenience we call the G20 will want to win every time. The CGIAR is the Consultative Group on International Agricultural Research which runs 15 centres around the world that are described as “independent, non-profit research organizations, innovating on behalf of poor people in developing countries” and as being “home to almost 10,000 scientists, researchers, technicians, and staff working to create a better future for the world’s poor”. The descriptions about ‘independent’, ‘non-profit’ and ‘for the poor’ are lies, as they have been for every single one of the 40 years of this plague called the CGIAR. But the CGIAR system is large, powerful, almost invisible and little understood except by those in agricultural research systems (such as those in the Indian Council of Agricultural Research) in ‘developing’ countries.

And that is why the release, a few days ago, of the ‘Global Hunger Index’ 2013 needs to be interpreted for what it is, because it is the product of one of the CGIAR centres, the International Food Policy Research Institute (IFPRI). The annual index offers a ranking of hunger, or food insecurity/security for many countries but not all (see the image of the map and its caption). The IFPRI functions worldwide as a motivated think-tank that commissions carefully scripted research to fulfil pre-determined outputs that serve the interests of those who profit from the industrial agricultural system and retail food system.

That such an obvious fifth column finds residence and a willing ear in India ought to be a matter of shame to us. Here is a small example why. The IFPRI, in the 2013 Global Hunger Index, has distributed its ‘recommendations’ which are from the typical neo-liberal charter of subjugation of the working classes and the denial of choice, all camouflagued by whichever development jargon is found to be currently in vogue.

The cover of the Global Hunger Index 2013 report. Read the recommendations to grasp why this has been released, ignore the data.

The cover of the Global Hunger Index 2013 report. Read the recommendations to grasp why this has been released, ignore the data.

Hence “broader policy coherence for development is also a key requirement for efforts to strengthen resilience. Policies that undermine resilience must be revised. To foster resilience to undernutrition, policies should be designed with the intention of improving nutrition outcomes and realising the right to adequate food” in fact means – do away with policies that still see a role for the state and the public sector, hide this behind trendy concepts like ‘resilience’ and ‘right to food’, but include nutrition (which I mentioned earlier) because that is the route the MNCs have successfully used.

Hence “encourage and facilitate a multisectoral approach to resilience (as the Scaling Up Nutrition movement encourages a multisectoral approach to nutrition, for example), coordinating plans and programs across line ministries” in fact means – phase out your thinking and replace it with ours, which comes with a United Nations endorsement and which places private business at the centre of policy and its implementation.

Hence “adjust policies and strategies that undermine the resilience of poor and vulnerable groups, such as the low import tariffs or the structural neglect of smallholder agriculture in Haiti” in fact means – remove barriers to food imports, stop subsidies and subventions that the poor, marginalised and vulnerable have a right to in your country (consider the ruckus the World Trade Organisation has been making about India’s new National Food Security Act) and spout righteous claptrap about ‘neglect’.

Hence “ensure that policies and programs draw on a wide range of expertise such as collaborative, multiagency, and multisectoral problem analysis. National governments should support the emergence of multistakeholder platforms and make active use of such forums” in fact means – the expertise will be foreign and provided by the CGIAR and its numerous allies in all garbs, these ‘multi’ platforms will be public showcases to conceal an agenda already set.

[The full IFPRI Global Hunger Index 2013 report is here. The ‘issue brief is here’ for those who want a condensed dose of dangerous neo-liberal vitamins. And the obligatory data set used to support the well-set arguments is here.]

There is no comparison between the IFPRI propaganda and the annual report of the Right to Food and Nutrition Watch 2013, the sixth edition of which was released in 2014 October. The Watch identifies a number of policies that generate hunger and malnutrition instead of reducing them. The Watch insists on the need for meaningful participation – at every level – of people and communities in the development of those public policies which affect their lives.

You will find here national case studies and analysis that show (1) policies that foster violence and discrimination against women with regard to equal access to natural resources, inheritances, equal wages and political decision-making, (2) policies that systematically limit and exclude large groups, including peasants, agricultural workers, fisherfolks, pastoralists and indigenous peoples from participating in those decisions that affect their very livelihoods and (3) policies on a global level that facilitate land grabbing, concentrated ownership of natural resources and the commodification of public goods that deprive smallholders and other people of their food resources.

Of an India behind the new poverty ratio

with one comment

Mural titled 'In the name of development', at Jawaharlal Nahru University, New Delhi

Mural titled ‘In the name of development’, at Jawaharlal Nahru University, New Delhi

New poverty claims from the government of India are being interpreted as (a) proof that the economic liberalisation is working, (b) that the ruling coalition has begun its preparation for the 2014 general election by claiming the largest percentage reduction of poverty ever, (c) that the ruling coalition by lowering the poverty line (and therefore the number of Indians identified as poor) will slash its social subsidies outlay, (d) that the way India measures poverty is desperately in need of repair, if not altogether in need of renewal.

The new state poverty lines table (see below for xls link)

The new state poverty lines table (see below for xls link)

India’s English-language media (in particular the financial and business press) has either repeated what the Planning Commission has released, or has reported reactions to the latest claim from opposition parties. Here is a selection:

“The proportion of people living below poverty line (BPL) has came down from 37.2 per cent in 2004-05 to 21.9 per cent in 2011-12 — a decline of 15.3 percentage points in a period that roughly coincides with the first eight years of the United Progressive Alliance.”
“The sharp drop was attributed to the high real growth in recent years, which raised the consumption capacity. The number of India’s poor fell to less than a quarter of its population in 2011-12, giving the government a reason to cheer amid the recent raft of disappointing macro economic data.”
“Over the last decade, poverty has witnessed a consistent decline with the levels dropping from 37.2% in 2004-05 to 29.8% in 2009-10. The number of poor is now estimated at 269.3 million, of which 216.5 million reside in rural India.”
“One theory is that this is the outcome of the trickle-down impact of the record growth witnessed in the first decade of the new millennium.”
“The BJP slammed the figures as a ‘political gimmick’ and a ‘conspiracy’ of the Congress to deprive the poor of the benefits of government schemes while CPI(M) said it amounted to ‘adding salt to the wounds of the poor’.”

It was only last year, in 2012 June, that the Planning Commission constituted an ‘expert group’ chaired by a former head of the Reserve Bank of India to “review the methodology for the measurement of poverty”. In the hoary tradition of Indian bureaucratese, this expert group is now “deliberating on this issue” (said the Planning Commission) and is expected to submit its report by the middle of 2014.

What is the main substance of the new claim? The note from the Planning Commission (titled ‘Press Note on Poverty Estimates, 2011-12′ and dated July 2013) has stated that the “percentage of persons below the poverty line in 2011-12 has been estimated as 25.7% in rural areas, 13.7% in urban areas and 21.9% for the country as a whole”. [A spreadsheet with the new statewise rural and urban poverty lines is available here.]

Government-friendly infographics from a financial newspaper

Government-friendly infographics from a financial newspaper

Thereafter the myth of the descending poverty line is outlined: that in 2004-05 the respective poverty ratios for the rural and urban areas were 41.8% and 25.7% and 37.2% for the country; that in 1993-94 the ratios were 50.1% in rural areas, 31.8% in urban areas and 45.3% for the country. And, in triumphant tones, that hence the 407 million Indians below the poverty line in 2004-05 had by 2011-12 dwindled dramatically to 270 million – a reduction of 137 million persons over a short seven years! And that indeed, it is all the more significant that for the last eight years it is the UPA (that is, the Congress) that has ruled India. So flows the polemic.

In the eagerness to find ‘rural’ and ‘urban’ and a ‘national’ poverty line, the tales of the deciles of the NSS surveys, referred to only fleetingly, are of importance (for the 43rd, 50th, 55th, 61st, 66th and 68th rounds, all of which we hope are being studied by the Rangarajan expert group). The deciles in the 68th round tell us that in rural India, the average monthly expenditure per person of Rs 153 on cereals would buy 7.3 kg of rice or 8.5 kg of wheat, and that the Rs 40 spent per person on pulses would buy 0.85 kg of pulses, both monthly measures (outside the fair price shop) being well under (13.8 kg and 1.2 kg respectively) the recommended dietary allowances.

Persistent high food prices and a winter’s tale of the FAO index

leave a comment »

This chart, using data from the FAO food price index and considering the period 2006 Jan to 2012 Sep, shows the four sections of price plateaus, with the longest – and most severe – being what we are experiencing now.

In this chart I have divided the period from 2006 January till 2012 September into four sections. These four sections represent different phases of the global food price rise and consequent levels of persistent food price inflation. As with all price series movements, the sections flow into and from one another, but with the five components taken together (I have omitted the sugars index, so these five are food, cereals, oils, dairy and meat) the sharp upward and downward gradients become visible. These differences help find the four different sections of prices over the last six years and nine months.

Index close-up: 2007 May to 2008 Nov

Most conspicuously, what is immediately clear from the main chart is that the current period of high food prices (and high levels of food price inflation coupled with volatility in global, regional and local food markets) began in 2010 June and established a new set of plateaus by 2010 August. It is now therefore two years of such a plateau, and the worrying indications are that, as happened in 2009 August and September, we may be on the cusp of an even higher upward movement of prices.

Index close-up: 2010 Jun to 2012 Sep

The thin lines representing averages for the five separate index components (four plus the main food index) are visible for each of the four sections. These provide more evidence of the higher overall index and graphically show the very worrisome duration of the current elevated plateau of prices – the averages for the 2010 June to 2012 September period are higher than the averages for the 2007 May to 2008 November period. Thus the optimistic pronouncements by FAO on the monthly variation in its index – such as this month’s “the FAO Cereal Price Index is 7 percent higher than in the corresponding period last year but still 4 percent below the peak of 274 points registered in April 2008″ – fail to present the context, that it is not how far below the 2008 peak but how much the current average is higher than the 2007-08 average that matters.

Indeed, using the FAO food price index data released early in 2012 October (covering the period till 2012 September) this may be the FAO confirmation of the signal that the widespread droughts of 2012 have begun to affect food prices even at this already elevated level. It is all the more worrying since, in the period since 2006 January and which includes the 2007 May to 2008 November period, this is the longest period of sustained high food prices recorded by the FAO food price index. These are the long-term signals that are not conveyed by FAO’s standard monthly chart, which you can see here.

Written by makanaka

October 8, 2012 at 20:07

Of GM food crops, Bt cotton and an honest committee in India

with 2 comments

The Lok Sabha (the 15th Lok Sabha) of the Parliament of India has released the report of the Committee on Agriculture (2011-2012) on ‘Cultivation Of Genetically Modified Food Crops – Prospects And Effects’. This report was presented to the Lok Sabha on 09 August, 2012.

Cover of the report. Click for the full report (pdf, 6.35 MB)

The report stands as a comprehensive indictment of the genetically modified food crops industry and its attempts to wrest control of India’s foodgrain and commercial crops production. The Committee sought views and suggestions on the subject from the various stakeholders and 467 memoranda, most of them signed by several stakeholders were received. In all, the Committee received documents running into 14,826 pages. The Committee also extensively interacted with various stakeholders including state governments, farmers organisations, NGOs, and also with farmers and their families during study visits during this period. Altogether, 50 individuals and organisations gave oral evidence before the Committee. Verbatim records of the proceedings of the oral evidence runs into 863 pages.

This small extract is from pages 24 to 29 of the 532-page Committee report:

GM crops are released in environment only after stringent evaluation of food/biosafety protocols/issues. To have a holistic and comprehensive view on the pros and cons of application of bio-technology on agricultural sector the Committee took on record IAASTD Report as it is an authentic research document prepared after painstaking effort of four years by 400 scientists from all over the world. India is a signatory to this Report which has been extensively quoted in a subsequent Chapter of the present Report of the Committee. Amongst various recommendations germane to all spheres of agriculture and allied activities and sectors, the following recommendations on bio-technology caught the attention of the Committee in all context of their present examination:

Conventional biotechnologies, such as breeding techniques, tissue culture, cultivation practices and fermentation are readily accepted and used. Between 1950 and 1980, prior to the development GMOs, modern varieties of wheat may have increased yields up to 33% even in the absence of fertilizer. Even modern biotechnologies used in containment have been widely adopted. For example, the industrial enzyme market reached US$1.5 billion in 2000. Biotechnologies in general have made profound contributions that continue to be relevant to both big and small farmers and are fundamental to capturing any advances derived from modern biotechnologies and related nanotechnologies. For example, plant breeding is fundamental to developing locally adapted plants whether or not they are GMOs. These biotechnologies continue to be widely practiced by farmers because they were developed at the local level of understanding and are supported by local research.

Much more controversial is the application of modern biotechnology outside containment, such as the use of GM crops. The controversy over modern biotechnology outside of containment includes technical, social, legal, cultural and economic arguments. The three most discussed issues on biotechnology in the IAASTD concerned:

o Lingering doubts about the adequacy of efficacy and safety testing, or regulatory frameworks for testing GMOs;
o Suitability of GMOs for addressing the needs of most farmers while not harming others, at least within some existing IPR and liability frameworks;
o Ability of modern biotechnology to make significant contributions to the resilience of small and subsistence agricultural systems.

The pool of evidence of the sustainability and productivity of GMOs in different settings is relatively anecdotal, and the findings from different contexts are variable, allowing proponents and critics to hold entrenched positions about their present and potential value. Some regions report increases in some crops and positive financial returns have been reported for GM cotton in studies including South Africa, Argentina, China, India and Mexico. In contrast, the US and Argentina may have slight yield declines in soybeans, and also for maize in the US. Studies on GMOs have also shown the potential for decreased insecticide use, while others show increasing herbicide use. It is unclear whether detected benefits will extend to most agroecosystems or be sustained in the long term as resistances develop to herbicides and insecticides.

Biotechnology in general, and modern biotechnology in particular, creates both costs and benefits, depending on how it is incorporated into societies and ecosystems and whether there is the will to fairly share benefits as well as costs. For example, the use of modern plant varieties has raised grain yields in most parts of the world, but sometimes at the expense of reducing biodiversity or access to traditional foods. Neither costs nor benefits are currently perceived to be equally shared, with the poor tending to receive more of the costs than the benefits.

The Committee note with great appreciation the fantastic achievements of India’s farmers and agriculture scientists leading to an almost five times growth in food grains production in the country during last six decades or so. From a paltry 50 million tonnes in 1950 the Country has produced a record 241 million tonnes in 2010-11. In spite of this spectacular achievement that has ensured the food security of the nation, things continue to be bleak on several fronts. Agriculture sector?s contribution to GDP has slid down from 50% in 1950 to a mere 13% now, though the sector continues to provide employment and subsistence to almost 70% of the workforce. The lot of the farmer has worsened with increasing indebtedness, high input costs, far less than remunerative prices for his produce, yield plateau, worsening soil health, continued neglect of the agriculture sector and the farmer by the Government, dependence on rain gods in 60% of cultivated area, even after six and a half decades of Country’s independence, to cite a few. All these factors and many more have aggravated the situation to such an extent that today a most severe agrarian crisis in the history is staring at us. The condition of the farming-Community in the absence of pro-farmer/pro-agriculture policies has become so pitiable that it now sounds unbelievable that the slogan Jai Jawan – Jai Kisan was coined in India.

There is, therefore, a pressing need for policies and strategies in agriculture and allied sectors which not only ensure food security of the nation, but are sustainable and have in built deliverable components for the growth and prosperity of the farming community. It is also imperative that while devising such policies and strategies the Government does not lose track of the fact that 70% of our farmers are small and marginal ones. As the second most populous Country in the world, with a growing economy ushering in its wake newer dietary habits and nutrition norms, a shrinking cultivable area, a predominantly rainfed agriculture, the task is indeed enormous.

In the considered opinion of the Committee biotechnology holds a lot of promise in fructification of the above-cited goals. Several of conventional bio-technologies viz. plant breeding techniques, tissue-culture, cultivation practices, fermentation, etc. have significantly contributed in making agriculture what it is today. The Committee note that for some years now transgenics or genetical engineering is being put forward as the appropriate technology for taking care of several ills besetting the agriculture sector and the farming community. It is also stated that this technology is environment friendly and, therefore, sustainable. Affordability is another parameter on which policy makers and farming communities world over are being convinced to go for this nascent technology.

The Committee further note that in India, transgenics in agriculture were introduced exactly a decade back with the commercial cultivation of Bt. Cotton which is a commercial crop. With the introduction of Bt. Cotton, farmers have taken to cotton cultivation in a big way. Accordingly, the area under cotton cultivation in the Country has gone up from 24000 ha in 2002 to 8.4 million ha at present. Apart from production, productivity has also increased with the cultivation of the transgenic cotton. The Committee also take note of the claim of the Government that input costs have also gone down due to cultivation of transgenic cotton as it requires less pesticides, etc.

Notwithstanding the claims of the Government, the policy makers and some other stakeholders about the various advantages of transgenics in agriculture sector, the Committee also take note of the various concerns voiced in the International Assessment of Agriculture, Science and Technology for Development Report commissioned by the United Nations about some of the shortcomings and negative aspects of use of transgenics/genetical engineering in the agriculture and allied sectors. The technical, social, legal, economic, cultural and performance related controversies surrounding transgenics in agriculture, as pointed out in IAASTD report, should not be completely overlooked, moreso, when India is a signatory to it.

The apprehensions expressed in the report about the sustainability and productivity of GMOs in different settings; the doubts about detected benefits of GMOs extending to most agro-eco systems or sustaining in long term; the conclusion that neither costs nor benefits are currently perceived to be equally shared, with the poor tending to receive more of the costs than benefits all point towards a need for a revisit to the decision of the Government to go for transgenics in agriculture sector. This is all the more necessary in the light of Prime Minister’s exhortion on 3 March, 2010 at the Indian Science Congress about full utilisation of modern biotechnology for ensuring food security but without compromising a bit on safety and regulatory aspects. The present examination of the Committee, as the succeeding chapters will bear out, is an objective assessment of the pros and cons of introduction of genetical modification/transgenics in our food crops which happened to be not only the mainstay of our agriculture sector but also the bedrock of our food security.

The hidden hunger that shames India

with 2 comments

Infochange India’s special hunger and malnutrition issue of its journal Agenda, 2012 July

Agenda, which is the journal of the excellent development news website Infochange India, has issued its new number, themed on hunger and malnutrition. The articles in this collection are a mix of reportage from amongst the poorest rural regions of India, insightful explorations into the nature of nutrition and the change in food systems, and critical views on food and agriculture policy in India.

“Forty-eight per cent of all children under 5 in India are stunted for their age – the impact of longstanding hunger which, in turn, is a result of sheer poverty, marginalisation and a government that clearly does not care,” explained the introductory essay by the issue editor. “Twenty per cent of children are wasted – they are stick-thin because a drought or other crisis has forced the family to further cut back on food. And an outrageous 43% of all children under 5 are underweight – a composite index of chronic or acute deprivation.”

Children in India are especially severely affected. The Integrated Child Development Services (ICDS) programme is supposed to address this extreme deprivation by providing supplementary food, rations and growth monitoring through community-level anganwadis for children under the age of six years. However, though a whopping 70% of children in India between six months and five years are anaemic, 74% of children under 6 do not receive any supplementary food from the anganwadi in their region. Convert those numbers into more than 100 million children who don’t get enough to eat.

I am privileged to have contributed three articles to this issue of Agenda. They are:

What individuals spend on a monthly food basket – Though the amounts spent on cereals are largely the same, there are clear differences between the spending of rural and urban consumers on milk and milk products, sugar and oil. Urban consumers spend 104% more than rural consumers on beverages, refreshments and processed foods.

Approaches to malnutrition and the writ of a compartmented government – The absence of inter-sectoral programmes covering the entire life-cycle of women and children in particular and requiring coordination between different ministries such as women and child development, health and family welfare, agriculture, food processing and human resource development, is the reason why, at the start of the Twelfth Five-Year Plan period (2012-17), the fundamental causes of malnutrition in India remain as they were during the First Five-Year Plan.

Micro, bio and packaged — how India’s nutrition mix is being reshaped – Crop and food multinationals, ably assisted by government, are using the ‘reduce hidden hunger’ platform to push hunger-busting technologies that best suit them — including biofortification of crops, the use of supplementation, and of commercial fortification of prepared and processed foods.

Food crisis in the Sahel

leave a comment »

UN-OCHA map of vulnerability to food insecurity in the Sahel.

ReliefWeb has a series of backgrounders, assessment reports and maps to explain the malnutrition and food crisis in the Sahel. The UN Office for the Coordination of Humanitarian Affairs has said that the Sahel is characterised by long standing chronic food insecurity and malnutrition, poverty and extreme vulnerability to drought. “The localised deficit recorded for the agropastoral season 2011-12 and increasing cereals prices in Mali and Niger could bring millions of people at risk of food insecurity,” said the UN-OCHA briefing.

Throughout the Sahel, acute malnutrition in children reaches its annual peak during the hunger season. Children under two years of age have the highest risk of becoming sick or dying during this period. Malnutrition is caused by inadequate food quality and quantity, inadequate care, as well as unhealthy household environment and lack of health services.

The prevalence of global acute malnutrition met or exceeded the critical threshold of 10% in all of the surveys conducted in the hunger season of 2011 (from May to August). If food security significantly deteriorates in 2012, the nutrition conditions for children could surpass emergency levels throughout the Sahel region.

Affected countries are: Burkina Faso, Cameroon, Chad, Gambia (the), Mali, Mauritania, Niger (the), Nigeria and Senegal.

Food insecurity and malnutrition chronically affect a significant part of the Sahel population. However, several events came in 2011 which exacerbate this vulnerability:

1. In 2011 many parts of the region received late and poorly distributed rains, resulting in average harvests and serious severe shortfall in some areas. Consequently, the Government of Niger as an example has estimated that the 2011 agro pastoral season will record a deficit of 519,600 tons of cereals and of over ten million tons of fodder for livestock.
2. In Mauritania, authorities expect a decrease of more than 75% of the agriculture production and a strong fodder deficit.
3. In areas where harvests are weak, households will run out of food stocks faster than usual and will be forced to rely on markets for supplies, contributing to maintaining the already high prices at the same level.

UN-OCHA map of expected cases of severe acute malnutrition in the Sahel.

Furthermore, the purchasing power of the most vulnerable populations is likely to deteriorate. In addition the lean season is estimated to begin earlier than usual, probably as early as January 2012 in Chad, two months in advance. As the situation gets worse by spring 2012, there will be an increase of infant acute malnutrition, already beyond emergency thresholds in four wilayas in southwestern Mauritania.

Several countries in the Sahel have already announced measures taken to curb the negative effects of the food insecurity and malnutrition on vulnerable populations; who have not had enough time to recover from the 2009-10 crisis, despite the good harvest registered last year. Three countries (Burkina Faso, Mauritania and Mali) have also requested for assistance from the humanitarian community. In late November, the United Nations Central Emergency Response Fund (CERF), administered by OCHA, allocated US$ 6 million to three organisations in Niger – the World Food Program, UNICEF and the Food and Agriculture Organization – for emergency operations to fight food insecurity and malnutrition.

According to a ‘Humanitarian Dashboard – Sahel’ dated 12 January 2012 released by UN-OCHA, early indicators point to a likely food crisis in localised areas of the Sahel in 2012, with people at particularly high risk in Mauritania, Niger, Burkina Faso, Mali, Chad, and localized areas of Senegal. These are:

1. Acute food insecurity already noted in southeastern Mauritania.
2. Deficits in 2011, in agro-pastoral production led to higher market prices, resulting in an earlier than usual need for food aid.
3. Resilience to food insecurity is low in most vulnerable groups.
4. High poverty level in Sahel (51%) impacting on food accessibility due to high prices.

The day India said ‘yes’ to Wal-Mart

with 2 comments

Update – The real nature of the neoliberal economy of India has become clearer with the decision – against the run of public opinion and against the evidence from the agricultural and food sectors – to permit opening up the retail sector.

Since the decision was taken, the central government has spared no effort in a cynical and devious campaign to claim that permitting foreign direct investment in retail will benefit farmers and consumers. On Sunday, 27 November 2011, large advertisements were released in newspapers proclaiming the benefits of this decision. Nothing is further from the truth. India’s urban households, those eking out livelihoods from informal work and precarious manufacturing sector jobs, recognise the untruth and see the evidence in the 10%-15% annual food inflation. Our trade unions know this and our left parties know this.

Ranged against this population, rural and urban, are the ministries and industries who see in the permission a new means to control access to food and the provisioning of food. That is why I support the opposition represented by the Communist Party of India (Marxist), whose concerns reflect those of this broad majority.

The CPI(M) has said correctly that this decision “will destroy the livelihoods of crores of small retailers and lead to monopolisation of the retail sector by the MNCs”. The party’s statement said: “Coming in the backdrop of persistent high inflation, growing joblessness and agrarian distress, this decision shows the utterly callous and anti-people character of the UPA Government. The Government seems to be more eager to meet the demands of the US and other Western governments and serve the interests of the MNCs like Walmart, Tesco and Carrefour, rather than protect those of its own people.”

India’s central ministries – now even further disrobed to reveal their predatory nature as instruments of the country’s business satraps – have held up the flimsy excuse that conditions imposed will safeguard the farmer, consumer and small retailer. This is lies.

The restriction that foreign retail outlets are limited to operating in cities of over 1 million population is meaningless because those are precisely the places where the MNCs want to go, to tap the lucrative segment of the market. It is in these cities – there are 53 cities with populations of over a million – that small retailers are mostly concentrated. India has the highest shopping density in the world, with 11 shops per 1,000 persons – these have evolved as neighbourhood suppliers and represent a cultural integration of small supplier and household familiarity.

The result is a rich density of trusted small retail – India has over 12 million such shops and these employ directly over 40 million persons. Well over 95% of these shops are run by self-employed persons in floor areas of under 500 square feet (about 48 square metres). It is these small shopkeepers in urban areas who fear for their future with the now-sanctioned entry of the MNC retailers. International experience shows that supermarkets everywhere invariably displace small retailers. Small retail has been virtually wiped out in the developed countries like the US and Europe. South East Asian countries had to also impose stringent zoning and licensing regulations in order to restrict the growth of supermarkets, after small retailers were getting displaced.

Then there is the cunning untruth that the condition for making at least 50% of the investment in ‘backend’ infrastructure will benefit rural populations, as this is said to lead to more cold chains and other logistics, benefiting the farmers. International experience has, however, shown that procurement by MNC retailers do not benefit the small farmers – we have seen this in India despite the specious and manufactured ‘case studies’ produced by India’s management schools (the several worthless and compradorist Indian Institutes of Management and their similarly worthless competitors). Over time, smallholder farmers receive depressed prices and find it difficult to meet the arbitrary quality standards. Allowing procurement by MNCs will also allow the central government to reduce its own procurement responsibilities, and this will directly affect the food security of those millions of rural and urban households which depend India’s public food distribution system.

2011/11/25 – This is a turning point for India’s economy. The central government has allowed foreign investment up to 51% in the retail sector for ‘multi-brand’ ventures, and has allowed 100% foreign investment for single brand retailers.

With this permission, the ruling United Progressive Alliance has ignored utterly the concerns of hundreds of representations made over the last year by small traders and wholesalers, and by grocery shops’ assocations all over India, against the entre of foreign direct invetment in the retail sector. The ruling United Progressive Alliance has also ignored the needs and conditions of hundreds of thousands of smallholder farming families, who will from now on be steadily exposed to increasing levels of coercion to submit to corporate and industrial farming pressures, or to quit cultivation and join the masses of informal labour in urbanising towns and cities.

India’s powerful business and indutries associations – the Confederation of Indian Industry (CII), the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Associated Chambers of Commerce and Industry of India (ASSOCHAM) – have vigorously for the last two years been manoeuvring the ruling political alliance towards this position. They have been aided substantially by representations from the countries and regions who have the most to gain from this permission being given – the USA and the European Union.

The so-called economists and analysts who are regularly polled by the business media and whose pronouncements are used to justify the progression of policy towards such permission, are making a variety of claims about the effects the expected foreign investment will have on India. They are saying that this “much delayed reform” will help unclog supply bottlenecks and help ease food inflation, that it will benefit farmers who can get better prices for their produce and will bring in international expertise to streamline supply chains in India.

This is rubbish meant to distract. The big retail corporations have for years been demanding entry into a country which is estimated to have a retail sector whose annual sales are said to be around US$450 billion. But this is a sector populated by tens of thousands of tiny family-run shops that account for 90% of this enormous volume of sales. This is a turning point for India’s economy, for it signals the start of yet another struggle to first block, and then throw out the retail conglomerates.

Here are some of the many news stories on this important matter:

Moneycontrol.com – ‘Don’t expect investments to flow instantly: Bharti Walmart’ – After a long wait, the government has finally allowed 51% foreign direct investment (FDI) in the multi-brand retail. It has also decided to raise the cap on foreign investment in single-brand retailing to 100% from the current 51%. …

The Hindu – ‘Cabinet approves 51 per cent FDI in multi-brand retail’ – In a bid to remove the impression that UPA II was suffering from “decision making paralysis” and kicking off the second generation reforms, the Union Cabinet on Thursday gave its approval to allowing 51 per cent foreign direct investment (FDI) in …

Shanghai Daily (subscription) – ‘India to allow global chains to open multi-brand retail stores’ - MUMBAI, Nov. 24 (Xinhua) — India’s cabinet has given the green light to foreign investors to take up to 51 percent stakes in multi-brand retail stores later Thursday after a meeting chaired by Prime Minister Manmohan Singh, said a report by the …

MarketWatch (press release) – ‘Government of India Unleashes Potent Phase II Reforms’ – WASHINGTON, Nov 24, 2011 (BUSINESS WIRE) — The US-India Business Council (USIBC) today hailed India’s steady progress in advancing major economic reforms with the Cabinet’s approval of opening India’s vast multi-brand retail sector to foreign direct …

Reuters India – ‘India opens supermarket sector to foreign players’ – India threw open its $450 billion retail market to global supermarket giants on Thursday, approving its biggest reform in years that may boost sorely needed investment in Asia’s third-largest economy …

Wall Street Journal – ‘Carrefour Welcomes India’s Decision To Open Multi-Brand Retail Market‘ – PARIS (Dow Jones)–French retail giant Carrefour SA (CA.FR) said Thursday it welcomed the Indian government’s decision to open the country’s multi-brand retail market to foreign investment. “Carrefour will follow with attention the finalization of the …

Voice of America – ‘India Opens Retail Sector to Foreign Supermarkets’ - November 24, 2011 India Opens Retail Sector to Foreign Supermarkets VOA News India’s Cabinet has approved a plan to open up the country’s $450 billion retail sector to foreign supermarkets, a reform that could unclog supply bottlenecks that have kept …

Wall Street Journal – ‘India Unlocks Door for Global Retailers’ - MUMBAI—India paved the way for international supermarkets and department stores to establish joint ventures, a major step in opening one of the last great consumer markets that has been off-limits to many of the world’s biggest …

Hindustan Times – ‘Left and Right sharpen knives for FDI battle’ - The Cabinet’s approval of 51% FDI in multi-brand retail is likely to flare up into a major political controversy with the main opposition parties gearing up to oppose it. While BJP leaders Sushma Swaraj and Arun Jaitley jointly condemned any such move …

Namnews – ‘Government Opens Up Country’s Retail Market’ - It’s official – the Indian retail market is now open to international chains, setting the stage for a major change of the local industry. Earlier today, the Indian government approved Foreign Direct Investment of up to 51% in multi-brand retail, …

Bloomberg – ‘India Allows Foreign Investment in Retail, Paving Wal-Mart Entry’ – India approved allowing overseas companies to own as much as 51 percent of retail chains that sell more than one brand, paving the way for global retailers such as Wal-Mart Stores …

indiablooms – ‘India opens retail to foreign players’ – New Delhi, Nov 24 (IBNS): India on Thursday decided to allow foreign direct investment (FDI) in its closely-guarded multi brand retail market, paving the way for global supermarket giants to step into the $450 billion sector that was widely seen as one …

Tehelka – ‘Cabinet approves 51% FDI in multi-brand retail’ - The Cabinet cleared 51 per cent foreign direct investment (FDI) in multi-brand retail on Thursday paving the way for global retail giants like Wal-Mart and Carrefour to enter India. The Cabinet also cleared 100 per cent FDI in single-brand retail. …

Newser – ‘India to allow more foreign retail investment, likely paving way for Wal-Mart’ – India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global …

NetIndian – ‘Cabinet clears 51% FDI in multi-brand retail’ - After dithering for a long time, the Union Cabinet today cleared a proposal to allow 51 per cent Foreign Direct Investment (FDI) in multi-brand retail and raised the cap to 100 per cent in single brand retail. This will allow global retail giants like …

Boston.com – ‘India opens more to foreign multibrand retailers’ - AP / November 24, 2011 NEW DELHI—India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global …

Retail Week – ‘Indian cabinet approves foreign investment in retail‘ – The Indian government has cleared the way to allow multinational retailers including Tesco, Carrefour and Walmart to enter its retail market. We provide a range of advertising opportunities. By advertising with us, you are guaranteed to reach the …

Atlanta Journal Constitution – ‘India opens more to foreign multibrand retailers’ – AP NEW DELHI — India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global retailers such as …

Houston Chronicle – ‘India opens more to foreign multibrand retailers’ – NEW DELHI (AP) — India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global retailers such …

IBNLive – ‘FDI in retail cleared; multi brand 50 pc, single brand 100 pc’ – The Union Cabinet FDI in multi-brand retail and single brand retail despite division within the UPA on the issue.

Moneycontrol.com – ‘Cabinet approves 51% FDI in multi-brand retail’ – Indian retailers finally get a chance to rejoice as the Cabinet today cleared the bill to increase foreign direct investment to 51% in multi-brand retail and 100% in single brand. Commerce and industry minister Anand Sharma said that he would give a …

Business Standard – ‘Too early to celebrate for Pantaloon retail’ – Valuations may prove to be a hurdle, while real gains will take time to yield. Stocks of organised retail companies like Pantaloon Retail and Shoppers Stop have been in action in the recent past on hopes that foreign direct investment (FDI) in the …

BusinessWeek – ‘India Allows Foreign Investment in Retail, Paving Wal-Mart Entry’ – Nov. 24 (Bloomberg) — India approved allowing overseas companies to own as much as 51 percent of retail chains that sell more than one brand, paving the way for global retailers such as Wal-Mart Stores Inc. …

Washington Post – ‘India to allow more foreign retail investment, likely paving way for Wal-Mart’ – NEW DELHI — India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global retailers such as Wal-Mart. …

STLtoday.com – ‘India opens more to foreign multibrand retailers’ - AP | Posted: Thursday, November 24, 2011 10:36 am | Loading… India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to …

Newser – ‘India to allow more foreign retail investment, likely paving way for Wal-Mart’ – India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global …

Wall Street Journal (blog) – ‘FDI in Retail: If Wal-Mart Builds It, Will Indians Come?’ - The Indian government deserves credit for doing what , for at least five years, it has been contemplating: setting the stage for the creation if a modern retail industry. It is unlikely that the Cabinet was seized by Adam Smith-like …

Houston Chronicle – ‘India opens more to foreign multibrand retailers’ – NEW DELHI (AP) — India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global retailers such …

Zee News – ‘Cabinet clears FDI in multi-brand retail’ – New Delhi: In a major decision, the government Thursday approved 51 percent FDI in multi-brand retail paving the way for global giants like WalMart to open mega stores in cities with population of over one million. The nod from the Union Cabinet came …

This permission, given by a ruling political coalition that has allowed food inflation to rage on unchecked for the last three years, which has regularly pushed up the prices of petrol (gasoline) and diesel, and whose record on tackling corruption and graft is shamefully weak, will not go unchallenged.

FAO 2011 October Food Index down, food prices still up, what’s going on?

leave a comment »

FAO has released its Food Price Index for October 2011, saying the index has dropped dropped to an 11-month low, declining 4 percent, or nine points, to 216 points from September. Indeed the index has dropped, declined and has certainly not risen. But does this mean food prices for the poor in many countries, for labour, for informal workers, for cultivators too – has the cost of food dropped for any of them?

The answer is a flat and unequivocal ‘No’. FAO has said so too: “Nonetheless prices still remain generally higher than last year and very volatile.” At the same time, the Rome-based food agency has said that the “drop was triggered by sharp declines in international prices of cereals, oils, sugar and dairy products”.

The FAO has said that an “improved supply outlook for a number of commodities and uncertainty about global economic prospects is putting downward pressure on international prices, although to some extent this has been offset by strong underlying demand in emerging countries where economic growth remains robust”.

Once again, the FAO is speaking in two or more voices. It should stop doing so. A very small drop in its food price index does not – repeat, does not – indicate that prices for food staples in the world’s towns and cities has dropped and people can afford to buy and cook a square meal a day for themselves and their children. Not so at all.

I am going to contrast what FAO has said about its October food price index with very recent reportage about food and food price conditions in various parts of the world.

FAO: “In the case of cereals, where a record harvest is expected in 2011, the general picture points to prices staying relatively firm, although at reduced levels, well into 2012. International cereal prices have declined in recent months, with the FAO Cereal Price Index registering an eleven month-low of 232 points in October. But nonetheless cereal prices, on average, remain 5 percent higher than last year’s already high level.”

Business Week reported that rising food prices in Djibouti have left 88 percent of the nation’s rural population dependent on food aid, the Famine Early Warning Systems Network said. A ban on charcoal and firewood production, which provides about half of the income of poor people in the country’s southeast region, may further increase hunger, the Washington- based agency, known as Fewsnet, said in an e-mailed statement today. Average monthly food costs for a poor urban family are about 33,907 Djibouti francs ($191), about 12,550 francs more than the average household income, Fewsnet said. Urban residents in the Horn of Africa nation don’t receive food aid, it said.

FAO: “According to [FAO’s November 2011] Food Outlook prices generally remain ‘extremely volatile’, moving in tandem with unstable financial and equity markets. ‘Fluctuations in exchange rates and uncertainties in energy markets are also contributing to sharp price swings in agricultural markets,’ FAO Grains Analyst Abdolreza Abbassian noted.”

A Reuters AlertNet report quoted Brendan Cox, Save the Children’s policy and advocacy director, having said that rising food prices are making it impossible for some families to put a decent meal on the table, and that the G20 meeting [currently under way in Cannes, France] must use this summit to agree an action plan to address the food crisis. Malnutrition contributes to nearly a third of child deaths. One in three children in the developing world are stunted, leaving them weak and less likely to do well at school or find a job. Prices of staples like rice and wheat have increased by a quarter globally and maize by three quarters, Save the Children says. Some countries have been particularly hard hit. In Bangladesh the price of wheat increased by 45 percent in the second half of 2010. In new research, Save the Children analysed the relationship between rising food prices and child deaths. It concluded that a rise in cereal prices – up 40 percent between 2009 and 2011 – could put 400,000 children’s lives at risk.

FAO: “Most agricultural commodity prices could thus remain below their recent highs in the months ahead, according to FAO’s biannual Food Outlook report also published today.  The publication reports on and analyzes developments in global food and feed markets. In the case of cereals, where a record harvest is expected in 2011, the general picture points to prices staying relatively firm, although at reduced levels, well into 2012.”

IRIN News reported that food production is expected to be lower than usual in parts of western Niger, Chad’s Sahelian zone, southern Mauritania, western Mali, eastern Burkina Faso, northern Senegal and Nigeria, according to a report by the World Food Programme (WFP) and the Food and Agriculture Organization (FAO), and a separate assessment by USAID’s food security monitor Fews Net. “We are worried because these irregular rainfalls have occurred in very vulnerable areas where people’s resilience is already very weakened,” said livelihoods specialist at WFP Jean-Martin Bauer. Many Sahelian households live in a state of chronic food insecurity, he said. “They are the ones with no access to land, lost livestock, without able-bodied men who can find work in cities – they are particularly affected by a decrease in production.” A government-NGO April 2011 study in 14 agro-pastoral departments of Niger noted that pastoralists with small herds lost on average 90 percent of their livestock in the 2009-2010 drought, while those with large herds lost one quarter. Those who had lost the bulk of their assets have already reduced the quality and quantity of food they are consuming.

FAO: “Food Outlook forecast 2011 cereal production at a record 2 325 million tonnes,  3.7 percent above the previous year. The overall increase comprises a 6.0 percent rise in wheat production, and increases of 2.6 percent for coarse grains and 3.4 percent for rice. Globally, annual cereal food consumption is expected to keep pace with population growth, remaining steady at about 153 kg per person.”

The Business Line reported that in India, food inflation inched up to 11.43 per cent in mid-October, sharply higher than the previous week’s annual rise of 10.6 per cent, mainly on account of the statistical base effect of the previous year. Inflation in the case of non-food items and the fuels group, however, eased during the latest reported week. According to data released by the Government on Thursday, an increase in the year-on-year price levels of vegetables and pulses contributed to the surge in the annual WPI-based food inflation for the week ended October 15, apart from the base effect. Sequentially food inflation was up 0.25 per cent.

FAO: “The continuing decline in the monthly value of the FAO Cereal Price Index reflects this year’s prospect for a strong production recovery and slow economic growth in many developed countries weighing on overall demand, particularly from the feed and biofuels sectors.”

Al Ahram reported that Egyptian household budgets had mixed news in September with prices for some basic foods tumbling month-on-month and others showing small climbs, according to state statistics agency CAPMAS. Figures released this week show the price of local unpacked rice fell 15.6 per cent to LE4.96 per kilo between August and September 2011. It was the commodity’s first decline in nearly a year, although the per kilo price remains 68 per cent higher than the LE2.95 that rice cost in October 2010. Chicken also fell 5.8 per cent to LE16.26 per kilo between August and September. Other staples, however, continued to rise; the price of potatoes climbed 14 per cent to LE4.89 per kilo, while a kilo of tomatoes gained a monthly 14.8 per cent to cost LE4.65.

World food insecurity report 2011 – expect more of the same

with 2 comments

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.

Follow

Get every new post delivered to your Inbox.

Join 385 other followers