A revolution in agriculture will be needed to meet a projected 50 per cent increase in demand for food by 2030 – and the ideal source will come from the poor nations, a new study has found.
Near and mid-term supplies are expected to be sourced from emerging countries such as Russia and Brazil. But for the long-term, developing nations in Africa would be the key to satisfying the increasing worldwide demand, said a report published by London-
based Chatham House.
“In the longer term, the key challenge is to increase the supply of food. The World Bank estimates that demand for food will rise by 50 per cent by 2030, as a result of rising affluence and growing world population. Achieving this challenge will require something close to a revolution and a massive investment in agriculture in developing countries,” said the report sent to Emirates Business.
However if the current food crisis is not managed well, the issue of ‘fair shares’ is expected to emerge as a significant global issue as a burgeoning global middle class consumes more grain by eating more meat and dairy products.
“Crucially, this process will take staple foods out of the purchasing power of the poorest people,” it said, adding that in the medium to longer term, scarcity trends – climate change, energy, land and water – could further limit the supply-side response.
Recent national concerns over soaring prices have already led some countries to reduce exports and others to try to build up stocks – creating a feedback loop that is feeding on itself to drive up prices still further.
The paper, Rising Food Prices: Drivers and Implications for Development by Dr Alex Evans, argues that it is vital to make sure that the urgent does not crowd out the essential in discussions of global food strategies.
Immediate action on humanitarian assistance needs to be matched by a sustained effort to invest in shared awareness between policymakers of what needs to be done to achieve “the feeding of the 10 billion”.
Dr Evans said to revolutionise the agricultural sector does not necessarily mean each country should be self-sufficient.
“In the Middle East for example, some countries are winding down their agricultural sector because this kind of business is water extensive and with most of their water coming from desalination plants, this sector also becomes power and energy intensive. So in some cases it makes sense to rather import food,” he told Emirates Business.
What the Gulf countries can do while in a limited position to increase agricultural investment is to raise their food aid to other countries, he said.
“The United Nations needs hundreds of millions of dollars just to continue feeding people under the current programme,” Dr Evans added. “To my understanding, the GCC countries do not really give heavily to the humanitarian food programme, so today is the best time for countries that can afford to help in feeding these people.”
He said while the current focus on humanitarian aid is welcome, a long-term solution should be taken into consideration. “What we’re seeing now is just the start of a multi-decade challenge: feeding a global population set to approach 10 billion by 2050, in the face of climate change, tighter energy supply and growing competition for land and water resources,” he said.
Dr Evans added: ‘While the current focus on humanitarian aid is welcome, we need to be thinking now about the long term too – especially how to grow food supply and make sure that the process benefits rural poor people.
He said how the issue is framed and perceived matters enormously.
“If the prevailing narrative is a Malthusian story of insufficiency, then the risk is of a self-fulfilling prophecy – for example fears that there isn’t enough to go around lead to countries panic-buying food for stockpiles, pushing prices up even more. Instead, we need to see this as a transition to a new and stable state of affairs,” said Dr Evans. “Feeding a world population of 10 billion people in 2050 will not be easy, but it can be done with forethought, collective action and if we don’t panic.”
Rising food prices are expected to hit poor countries and poor people hardest, and will present an obvious impediment to achieving the UN’s Millennium Development Goal of halving hunger by 2015.
The UN Food and Agriculture Organisation has already announced that 36 countries are in crisis in terms of food security and will need external assistance; of these, 21 are in Africa although not all of them have been affected equally.
Poor people typically spend a high proportion of their income on food purchases: Oxfam put this figure at about 50 to 80 per cent. Of particular concern are landless poor people in rural areas. Most poor people are rural, and most rural poor people are net food buyers, who are unlikely to be compensated fully by additional employment as agriculture grows, or by higher wages.
However, the extent and rapidity of current increases mean that urban populations are also being hit.
“There is food on the shelves but people are priced out of the market. There is a vulnerability in the urban areas we have not seen before,” World Food Programme head Josette Sheeran recently noted. The World Bank has argued that more expensive food imports will disrupt the trade balances of relatively few countries, because the majority will see largely offsetting gains in other commodity exports.
From the bank’s perspective, the countries most adversely affected include Jordan, Egypt, Gambia, Lesotho, Djibouti and Haiti.
However, the impact of rising food prices needs to be looked at in tandem with concurrently rising energy prices, which are also imposing a strain on many importing countries, said Dr Evans.
An International Energy Agency study in December 2007 found that the rising cost of oil had already wiped out the benefits of increased aid and debt relief to 13 non-oil-producing African countries including South Africa, Ghana, Tanzania, Ethiopia and Senegal.
According to the International Energy Agency, the increased cost of oil bought by these countries since 2004 was three per cent of their combined gross domestic product – more than the total sum of debt relief and aid they had received over the past three years.
“If the combined effect of higher food and energy prices is to create balance-of-payments problems for countries, the question of compensatory financing may emerge as a significant issue,” said Dr Evans.
So far, the International Monetary Fund reports that demand for financing from funding windows such as the Exogenous Shocks Facility has been low, although critics retort that this is at least in part because of the significant conditionality attached to such lending.
It is also important to note that funding windows designed to provide liquidity on shocks, such as sudden changes in terms of trade, are built on the simple assumption that such shocks will be short-lasting.
“If food prices have increased as a result of a longer-term structural shift, then there are open questions about how quickly countries taking out loans will be able to pay them back, potentially heightening pressure to increase the concessional element of such loans,” he said.
“Advocates of development may find that the emergence of food as a top-rank political issue provides them with an opportunity to form new alliances, new coalitions and new drivers for change,” Dr Evans added.
10bn Projected world population in 2050
36 States in crisis and need foreign help
13 Countries have not benefitted from aid and debt relief due to high oil prices
A revolution needed to keep world’s hunger pangs at bay