Global Trends by Martin Khor
Monday 9 June 2008
It was a colourful week at the World Food Security Summit, with a clash of views among political leaders as to the causes and solutions to the crisis of soaring food prices. Top of the topics was the role of biofuels in diverting the use of crops away from food.
The Food Security Summit brought together more than 30 heads of government and scores of Ministers in Rome last week to discuss the crisis of rising food prices. At the same time, demonstration and riots against high fuel and food prices were taking place in many countries around the world.
The presence of many political leaders, such as France’s President Nicolas Sarkozy, Italy’s premier Silvio Berlusconi, Brazil’s President Lula da Silva, Iranian President Mahmolud Ahmadinajad and Zimbabwe’s President Robert Mugabe, added some glamour as well as some controversy to the event.
The United Nations was represented by Secretary General Ban Ki Moon and the heads of many agencies.
Diverse and often contradictory remarks on what is causing the food price crisis and how to resolve it were made. At the end, because of these conflicting views, only a weak Declaration was adopted, with no mention of the role of unfair trade such as high subsidies in rich countries, or financial speculation driving prices up, or the importance of changing agricultural systems in view of the climate change problem.
The most controversial issue throughout was bio-fuels and its role in restricting the growth of food supplies and in the rise in prices. Many leaders, including Ban Ki-Moon, proposed the adoption of standards or criteria for the sustainable production of biofuels. But because of an inability of the governments to agree on how to deal with the issue, the Declaration only spoke of the challenges and opportunities of biofuels and called for in-depth studies and the need to exchange experiences.
Ban called for food aid to vulnerable countries in the short term, and increase in food production by small farmers in developing countries in the longer term.
The FAO Director General Jacques Diouf gave the most colourful speech, criticising developed countries for spending $11-12 billion subsidies on biofuels to “divert 100 million tonnes of cereals from human consumption to satisfy a thirst for fuel for vehicles.”
He said nobody understands how the rich countries could distort world markets with $372 billion in 2006 on agricultural subsidies, or how a single country could have $100 billion of food wastage 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 hungry people to enjoy the right to food?” he asked. At the conference’s end, Diouf announced that $5 billion had been pledged by a few agencies and governments, mainly for emergency food aid. Whether more funds will come later for the more difficult task of helping farmers grow more food in developing countries remains to be seen.
At the conference, the leaders pointed to the factors causing the crisis, including the steep oil price increase, financial speculation in the commodities market, low food stocks, drought and effects of climate change.
The subject of biofuels, and the extent to which it caused the crisis by switching the use of crops from food to fuel, was the most controversial issue. Several countries, including Egypt, India and Madagascar warned against the expansion of wrong bio-fuels, while Brazil defended its ethanol and the United States said biofuels caused only 3% the food-price inflation.
Egyptian President Hosni Mubarak called for an international code of conduct to slow down biofuels production and to assess its environmental and social dimensions. Slovenia’s President Danilo Turk said the European Union wanted sustainability criteria on biofuels production and called for the swift transition to the so-called “second generation biofuels” that do not compete with food production.
On the other hand, Brazilian President Lula said that “ethanol is not the villain” and referred to those governments that blamed ethanol production as having “fingers soiled with oil and coal” and “the same governments that extend trade-distorting subsidies”. Lula claimed that ethanol production in Brazil does not compete with food production nor does it encroach on the Amazon.
Malaysia was represented by Agriculture Minister Dato Mustapa Mohamed, who highlighted the effects of bio-energy and climate change as causes of the food price crisis and spoke of the needs to mitigate the risks of over-dependence on food imports. He announced Malaysia’s initiatives to boost local food production, especially in rice.
The President of Argentina, Cristina Fernandez de Kirschner 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. She called for increased investments in food production by directing resources to developing countries.
Mubarak (whose country is one of those experiencing food riots) proposed 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.
Japan’s Prime Minister Yasuo Fukuda said 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.
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 proposed a global partnership for food and agriculture, comprising an International Group on Food Security to coordinate a global strategy for food security; a group of scientists to analyse the problems, and the scaling up of financing to combat extreme food emergencies.
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 US$800 million directly to developing countries, particularly African countries experiencing food problems, to develop their own agriculture without depending on others.