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TWN Info Service on WTO and Trade Issues (June08/04)
10 June 2008
Third World Network

Development: Diverse proposals by political leaders at "Food Crisis Summit"
Published in SUNS #6489 dated 5 June 2008

Rome, 3 Jun (Neth Dano) -- The three-day food summit being held here at the FAO headquarters has seen differences in views among political leaders on which factors are more responsible for the crisis of soaring food prices, and on the solutions.

The High-Level Conference on World Food Security: The Challenges of Climate Change and Bioenergy, dubbed the "Food Security Summit", opened here on 3 June with various Heads of State and Government advancing diverse proposals on how to solve the crisis. More than 30 Heads of State are participating, as well as scores of Ministers among l4,400 delegates from 183 countries.

The Conference was originally planned by the FAO months ago as a technical meeting on agriculture, climate change and bio-fuels. But the food price crisis was added to the agenda and it was raised to the level of a summit in the midst of soaring food prices and social unrest across the world in the past few months. Prices of basic foodstuff, especially cereals such as rice, corn and wheat, have soared by as much as 130% over levels of a few years ago, sparking food riots in some 22 countries worldwide.

The UN Secretary-General Ban Ki-Moon said that the international community should respond to the food crisis through short-term emergency responses such as food aid and providing social safety nets to the poorest who cannot afford to buy food, as well as through long-term solutions that build the capacity of small farmers to increase food production. He said that these approaches should be complementary and that the short-term measures should not compromise the long-term solutions to the problem.

FAO Director-General Jacques Diouf criticized the inaction of the governments following the 1996 food summit. Agricultural aid fell in real terms by 54% from $8 to $3.4 billion between 1980 and 2005.

Despite agricultural plans in many developing countries and regional organizations, and efforts by the FAO to mobilize funds for inputs and production, these were "all in vain" as the funds were not forthcoming. He said the structural solution for food security lies in increasing production in low-income food-deficit countries.

He attacked several contradictions: how a carbon market of $64 billion can be created in developed countries but no funds are given to prevent deforestation of 13 million hectares a year; how $11-12 billion in subsidies were given in 2006 coupled with protective tariffs to divert 100 million tonnes of cereals from human consumption to satisfy a thirst for fuel for vehicles.

He said that nobody understands how the OECD countries distort world markets with $372 billion in 2006 on support for their agriculture, and that in a single country, food wastage amounts to $100 billion annually, and excess consumption by the world's obese costs $20 billion annually, while the world spent $1,200 billion on arms purchase in 2002.

"How can we explain that it was not possible to find $30 billion a year to enable 862 [million] hungry people to enjoy the right to food?" he asked, saying that this is the order of resources needed to lay to rest the spectre of conflicts over food that loom over the horizon. Food insecurity is a political problem involving a question of priority and choices made by governments on resource allocation.

Many heads of state mentioned several similar factors that caused the crisis, including the steep oil price increase that affected the costs of transportation and synthetic fertilizers, financial speculation in the commodities market, low food stocks, drought and pest/disease infestations, and effects of climate change.

The subject of bio-fuels, and the extent to which its production and growth caused the crisis by switching the use of crops from food to fuel, was the most controversial issue. A number of leaders pointed to this as a contributing factor.

Several countries, including Egypt, India and Madagascar warned against the expansion of wrong bio-fuels, while Brazil's leader gave a lengthy defence of his country's ethanol and the United States downplayed the role of bio-fuels in the food-price inflation.

Egyptian President Hosni Mubarak called for the establishment of an international code of conduct to slow down bio-fuel production and to assess its environmental and social dimensions. The President of Slovenia, Danilo Turk, reiterated the stand of the European Union for the adoption of sustainability criteria on bio-fuel production and called for the swift transition to the so-called "second generation bio-fuels" that do not compete with food production.

Brazilian President Luiz Ignacio Lula da Silva strongly contested the criticisms directed on bio-fuels as a reason behind food price increases. He said that "ethanol is not the villain" and strongly criticized those governments that blamed ethanol production as a cause of the food price crisis, referring to them as "fingers soiled with oil and coal" and "the same governments that extend trade-distorting subsidies".

President Lula claimed that the more than 30 years' of experience of Brazil in ethanol production has proven that it could increase rural livelihoods and the income of farmers. He said that ethanol production in Brazil does not compete with food production, since sugarcane cultivation only takes up around 1% of the country's total arable land, with half of that devoted for ethanol production.

He added that ethanol production in Brazil does not encroach on the Amazon where only 21,000 hectares are planted with sugarcane in areas that are formerly degraded pasture-lands. He said that not all ethanol are equal and that he is against using corn for ethanol production, likening corn ethanol (which is mainly produced in the United States) to "bad cholesterol fattened up by subsidies" and competing directly with food.

He encouraged other developing countries to study the feasibility of ethanol production, invest in research, and make their own decisions on which crops are appropriate in their specific conditions.

The President of Argentina, Cristina Fernandez de Kirchner, stressed that the food crisis is both a problem of production and distribution. She spoke of the structural roots of the crisis - the protectionist policies of developed countries and the imposition of policies of the international financial institutions that prevented developing countries from producing food for themselves, citing the case of Haiti.

She also pointed to the oligopoly of the food systems and control over patents by multinational corporations that aggravate the problem, along with speculative investments in the global market. President Fernandez called for increased investments in food production by directing resources to developing countries that have the capacity and technology to help less-capable countries to develop their own agriculture.

Various political leaders presented diverse proposals to address the food price crisis.

President Mubarak (whose country was one of those experiencing food riots) appealed for a global partnership through an International Emergency Dialogue, where food exporters and importers can work out an international strategy to solve the food crisis in the short and long terms, discuss means to increase investments in agriculture, promote scientific research to develop new seeds, and conduct collaborative studies on the effects of genetically modified seeds on human, plant and animal health.

Japan's Prime Minister Yasuo Fukuda said that his country has released tons of rice into the global market to help cool the pressure on the short supply, and urged other developed and net food producers to do the same. He added that governments need to demonstrate strong political will to monitor and address market speculation in the food market.

Sri Lankan President Mahinda Rajapakse proposed that the FAO should develop mechanisms for regional food buffer stocks which could be managed by regional agencies but funded internationally, to help cushion countries from fluctuations in prices and supply. He called for the establishment of a Global Food Crisis Fund with contributions from governments and the business sector, and a Regional Food Security Fund under the UN to assist in times of food crisis.

France's President Nicolas Sarkozy said that the old strategy of providing food at low cost has failed, and that the future strategy involves the development of local farming which is the only sustainable and responsible solution to the current food crisis. He said that the world should help the poorest countries to equip themselves with modern farming systems to produce food for themselves.

He stressed that local agriculture and support for local production, focussing more in developing countries, is an absolute priority.

He proposed a global partnership for food and agriculture, comprised of three pillars - (1) an International Group on Food Security under the UN to coordinate policies and activities of governments and different sectors towards a global strategy for food security; (2) the coordination of international scientists on food and agriculture, similar to the Intergovernmental Panel on Climate Change (IPCC), to provide objective analysis of the problems and the issues; (3) the scaling up of financing to combat extreme food emergencies.

Sarkozy announced that France would allocate Euro 1 billion in the next five years to develop agriculture in Sub-Saharan Africa. He called on the use of sovereign funds for investments in agriculture in developing countries, and supported the establishment of a Global Food Security Facility to be hosted by the International Fund for Agricultural Development (IFAD) to make funds for agricultural development and food production available and easily accessible for developing countries.

Iranian President Mahmoud Ahmadinejad proposed the formation of an independent, powerful body to regulate the food market and address related issues in production and consumption patterns.

Senegal's President Abdoulaye Wade called on the reallocation of FAO's annual budget of $800 million directly to developing countries, particularly, African countries experiencing food problems, to develop their own agriculture without depending on others. He cited the report of the International Assessment of Agricultural Science and Technology for Development (IAASTD) which pointed out the fundamental problems in the current agricultural model and the institutions that lead it such as the FAO.

He said that the FAO should stop sending experts to Africa and let Africans tackle their own problems since they know what they want do. President Wade urged the FAO to hold regional meetings where African countries will be asked on what they want to rather than being told on what to do.

Indian Agriculture Minister Sharad Pawar refuted ideas that rising food prices were caused by higher consumption in emerging economies, citing FAO data. He said that additional demand for maize and rapeseed as feed stock for ethanol and bio-diesel production and high energy and other input costs have had the strongest impact on prices.

He proposed a more in-depth study of the effect of bio-fuels on food grain prices. He cited a study indicating that converting all the world's grains to ethanol may yield only 11% of total world oil demand. "Simply put, even if we decided to convert all the world's grain to motor fuel, we will still need a lot of fossil fuel and will not have anything left to eat" he said.

"Given this scenario, the diversion of land which grows cereal for human consumption into production for bio-fuels is likely to be self-defeating. Conversion of food grains and edible oil seeds for producing bio-fuel, prima facie, is fraught with food security concerns as is evident already." He added that India's policy is for using non-cereal biomass, crop residues and cultivating jatropha on degraded land for bio-fuel production.

At a press conference, US Agriculture Secretary Ed Schafer downplayed bio-fuels as a factor in the food price crisis. His department's projections forecast an over 43% increase in food price inflation globally. Of that, it estimated that 2% to 3% of that price increase is driven by bio-fuels. He said that the two main causes were energy and increase in food consumption around the world which uses up food stocks.

He asked all countries to allow the free flow of food and safe food-producing technologies. Asked whether he regarded GMOs as a safe technology, Schafer said that the US thinks that GMOs are safe and have increased yields, lowered fertilizer use and provided better water and soil management, and he hoped that other countries that still have some concern will be convinced by science-based efforts.

Madagascar President Marc Ravalomana said "we can and should do better in bio-energy. We have to be very careful not to replace food plantations with bio-energy plantations." The underlying problem is the large extent of dependency on international markets, and thus on world prices, which could be affected by cyclones, hedge funds, and wars. "Our main challenge is to increase our production. We have to find a way to become net exporters instead of net importers of food products."

He recalled that 25 years ago, Africa had a surplus of exports in cereals, rice, soy beans and other food products. "Over the years we increasingly shifted towards imports of these products. The gap between exports and imports became ever widening. During the 1960s, Madagascar was a rice exporting country. Today, we are not."

One main reason, he said, was that industrialized countries subsidise their exports. "We just can't compete in the world market. And even in our own markets, national producers are not able to meet the challenges."

Another factor was the shift in national priorities away from agriculture to industry, with the stress on foreign investment, and free trade zones, a strategy that was strongly encouraged by international donors. "They were not something we came up with on our own. Donor programmes were rarely if ever focused on rural areas."

Finally, no one really cared about farmers, their legal situation or security, their need for access to credit and markets, their lack of access to agricultural infrastructure like silos and cold storage facilities.

He gave seven proposals, including better training for farmers, using better seeds without becoming dependent on international seed producers, the use of environmentally-friendly fertilizers, improved storage and transport facilities, better standards to meet international standards, and new international partnerships. +

 


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