10
October 2011, Rome - Food price volatility featuring high prices is
likely to continue and possibly increase, making poor farmers, consumers and
countries more vulnerable to poverty and food insecurity, the United Nations'
three Rome-based agencies said in the global hunger report published
today.
Small, import-dependent countries, particularly in Africa, are especially at
risk. Many of them still face severe problems following the world food
and economic crises of 2006-2008, the UN Food and Agriculture Organization
(FAO), the International Fund for Agricultural Development (IFAD) and the
World Food Programme (WFP) said in "The State of Food Insecurity in the World 2011"
(SOFI), an annual flagship report which they jointly produced this year.
Such crises, including in the Horn of Africa, "are challenging our
efforts to achieve the Millennium Development Goal (MDG) of reducing the
proportion of people who suffer from hunger by half in 2015," the
heads of the three agencies — Jacques Diouf of FAO, Kanayo F. Nwanze of
IFAD and Josette Sheeran of WFP — warned in a preface to the
report.
Never acceptable
"But even if the MDG were achieved by 2015 some 600 million people
in developing countries would still be undernourished. Having 600 million
people suffering from hunger on a daily basis is never acceptable," they
said.
"The entire international community must act today and act forcefully to
banish food insecurity from the planet," the three heads added.
"Governments must ensure that a transparent and predictable regulatory
environment is in place, one that promotes private investment and increases
farm productivity. We must reduce food waste in developed countries through
education and policies, and reduce food losses in developing countries by
boosting investment in the entire value chain, especially post-harvest
processing. More sustainable management of our natural resources, forests and
fisheries are critical for the food security of many of the poorest members
of society," the three heads said.
High and volatile food prices likely to continue
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.
Smallholders and poor consumers
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.
But price swings affected countries, populations and households very
differently, the report found. The most exposed were the poor and the weak,
particularly in Africa, where the number of undernourished increased by 8
percent between 2007 and 2008 while it was essentially constant in Asia.
Some large countries were able to shelter their food markets from the
international turbulences through a combination of trade restrictions, safety
nets for the poor and releases of food stocks. However, trade insulation
increased prices and volatility in international markets compounded the
impacts of food shortages in import-dependent countries, the report said.
Long-term investment
Meanwhile, stronger economies and high food prices present incentives for
increased long-term investment in the agricultural sector, which can contribute
to improved food security in the long run. When farmers react to higher
prices with increased production it is essential to build on their short-term
response with increased investment in agriculture, with emphasis on
initiatives that support smallholders, who are the main food producers in
many parts of the developing world.
At the same time, targeted safety nets are crucial for alleviating food
insecurity in the short term. They must be designed in advance in
consultation with the most vulnerable people.
The report stresses that investment in agriculture remains critical to
sustainable, long-term food security. Key areas where such investments should
be directed are cost-effective irrigation, improved land-management practices
and better seeds developed through agricultural research. That would
help reduce the production risks facing farmers, especially smallholders, and
mitigate price volatility.
Private investment
Private initiatives by millions of farmers and rural entrepreneurs will
form the bulk of agricultural investments. High food prices have also
provided incentives for increased investments by corporate investors
(including cross-border public and private entities) in all parts of the
agricultural value chain. It is important that all investment considers and
respects the rights of all existing users of land and related natural
resources, benefits local communities, promotes food security and
environmental sustainability, and contributes to adaptation to and mitigation
of climate change impacts.
Together with increased investments, greater policy predictability and
general openness to trade are more effective than other strategies such as
export bans, the report noted. Restrictive trade policies can protect
domestic prices from international price swings, but such restrictions often
also increase susceptibility to domestic production shocks, thus failing to
reduce domestic price volatility. Restrictive trade policies also risk
increasing volatility and prices on international markets.
FAO’s best estimate of the number of hungry people for 2010 remains at 925
million. For the 2006-2008 period FAO calculates the number of hungry at 850
million. The methodology FAO uses for calculating the prevalence of hunger is
currently under revision, so no estimates have been produced for 2011.