Managing food crisis

Hard times. Photo: Raj Aniket/ Drik News

AT the first World Food Summit held in Rome in 1996, the heads of states of all countries in the world had "reaffirmed the right of access to safe and nutritious food, consistent with the right to adequate food and fundamental right of everyone to be free from hunger." The world leaders at that time agreed to halve the number of hungry people in the world by 2015.
Now, 12 years on, the dream of the global community is about to wither away in view of the challenge of food crisis and skyrocketing food prices. Food and energy prices have hit at least 40 developing countries during the last year, and is feared to exist for a few more years. During January 2007 and January 2008, food inflation increased between 10 to 34 per cent in these countries.
In Bangladesh, it reached 12 per cent. Though global food and energy prices were on the increase since 2004-05 the rise during recent months has hit the hardest, with high probability of food and energy insecurity in future.
The reason for food price increase is the low global production of food, which has been lowest in the last 25 years. Terming the situation as an international crisis the Food and Agricultural Organisation (FAO) warned that the present stock of world food would last only for 57 days.
On the other hand, consumption in some countries such as India and China has increased due to increased income. Along with these, is the export ban imposed by major rice exporting countries.
The present food crisis is not a short-term problem, it is a structural issue. While global demand for food has increased, production has declined. Food grains are in high demand for producing bio-fuels in the developed countries.
Last year, farmers in the US used 20 per cent of their maize production to produce high value ethanol, as the US president has announced that the use of petrol had to be reduced by 20 percent by 2017 in the US. Some African countries, too, are producing bio-fuels on 4 million hectares of land. The European Union and India are also planning to produce bio-fuels.
The current food crisis should be an eye opener for these countries, which were planning to reduce their dependence on environmentally polluting petrol and diesel, because alleviating hunger is the priority at the moment. However, this will not reduce the food prices immediately as there are other factors that affect global food production.
First, the conflict between food and fuel will increase, with high demand for fuels by the rich countries and also the big emerging economies, such as India and China. The distribution of land for agriculture and land for fuels will be a major factor in limited food production.
Second, the ongoing Doha Round Negotiations of the World Trade Organisation (WTO) on agriculture will have an impact on net food importing countries. The objective of the negotiations is to withdraw domestic support given by the USA and the European Union. This implies that food importing countries like Bangladesh will have to buy at a higher price from the global market.
Third, the impact of climate change will be felt more frequently and severely by low- lying countries such as Bangladesh. Frequent floods, cyclones and extreme weather are indications of such danger. This will not only destroy production, it will also reduce the fertility of land and change cropping patterns.
Fourth, every year 90 million people are adding to the global population, increasing the demand for food.
Given the present and future global scenario of food production, Bangladesh has to follow a two-pronged solution. Firstly, the procurement of boro rice has to be enough to face the crisis. We have learned in a bitter way how the recommendations of the donor agencies and international research organisations to keep rice stock of only for 30 to 45 days has made the country vulnerable.
Now, with a comfortable level of boro procurement, a balance between the procurement price and market price is required so that the farmers get the right price for their produce and feel encouraged to produce more in future and, at the same time, rice is available in the market at an affordable price for the poorer section of the society.
The government has fixed Tk 18 per kg for paddy and Tk 28 per kg for rice as the procurement price. This is a good step towards encouraging the farmers, as the average cost has been estimated to be Tk 12.77 per kg for boro paddy and Tk 20.26 per kg for boro rice. At the same time, rice milling and storage capacity should be increased.
Secondly, in view of the continuous price increase of fertiliser in the international market, the government should buy fertiliser now for the forthcoming aman season to minimise costs.
Ensuring food security also requires revisiting the whole paradigm of development strategy. The future of the economy of Bangladesh lies in a modern and dynamic agriculture sector.
In the past, agriculture had been neglected and, as a result, its contribution to the gross domestic production has gone down to only 23 per cent at present. However, in terms of employment, it is the single largest sector -- 48 per cent of total employment in the country.
In order to develop a modern and high-yielding agriculture sector, we must use technology, marketing, extension and price support. More investment is needed for research and development of agriculture, which gets only 0.15 per cent of the total budget. Agricultural inputs should be made available at a lower cost.
Import duty from irrigation pumps may be withdrawn in the budget for 2008-09. Distribution of good quality seeds and adequate fertiliser is essential. Farmers should be provided with modern training so that production can be increased with the use of balanced fertiliser, seed and irrigation.
During this crisis, many countries have banned food export. This has further squeezed the global rice market, where only 7 per cent of total global production is traded. And the number of customers for this limited supply is large. Out of 50 least developed countries 41 are food-importing countries. This only shows that we have to be self-reliant, not merely self-sufficient, by increasing our food production.
Given the fact for food prices will not go down substantially soon, as production cost has increased with high cost of fuel and other inputs, the poor and the low income earners should be provided with opportunities for employment.
Social safety net programs such as vulnerable group feeding, vulnerable group development, food for work and allowances for the destitute will have to be broadened, and a guaranteed employment scheme has to be ensured so that the purchasing power of the poor is increased.
Food security and eradication of hunger cannot be addressed fully through the availability of food only. Adequate food availability creates the necessary condition for eradication of hunger, but the ideal condition for food security is achieved through effective entitlement, that is, through a combination of purchasing power and public provisioning.
The problem of food security is deeply rooted in the larger issues of poverty and deprivation, and also linked with policies within and outside the borders of the country.
As Amartya Sen wrote: "There is no 'magic bullet' to deal with the entrenched problem of hunger in the world. It requires political leadership in encouraging democratic governments in the world, including support for multi-party elections, open public discussions, elimination of press censorship, and also economic support for independent news media and rapid dissemination of information and analysis. It also requires visionary economic policies which both encourages trade (especially allowing exports from poorer countries into the markets of the rich), but also reforms (involving patent laws, technology transfer etc) to dramatically reduce deprivation in the poorer countries (June 2002, The Observer)."
While dealing with the food crisis the policy makers have to keep this in mind. It is a multifaceted phenomenon, and, therefore, the solution has to be a multifaceted one.

Dr. Fahmida Khatun is an Economist at the Centre for Policy Dialogue (CPD).