Income growth, climate change, high energy prices, globalization, and urbanization are all converging to transform food production, markets, and consumption, according to a new report by the International Food Policy Research Institute (IFPRI). As a result, global food demand and prices are likely to rise, threatening the livelihoods and nutrition of poor people in developing countries. The report, “The World Food Situation: New Driving Forces and Required Actions,” was released at the annual general meeting of the Consultative Group on International Agricultural Research (CGIAR) on 4th December.
“Food prices have been steadily decreasing since the Green Revolution, but the days of falling food prices may be over,” said Joachim von Braun, lead author of the report and director general of IFPRI. “Surging demand for feed, food, and fuel have recently led to drastic price increases, which are not likely to fall in the foreseeable future, due to low stocks and slow-growing supplies of agricultural outputs. Climate change will also have a negative impact on food production, compounding the challenge of meeting global food demand, and potentially exacerbating hunger and malnutrition among the world’s poorest people.” “Economic growth has helped to reduce hunger, particularly when it is equitable,” added von Braun. “But unfortunately, growth does not always reach the poorest people.”
Increased bioenergy production may harm the world’s poor
The report focuses on the topics of consumer demand, bioenergy, agricultural trade and climate change. On Bioenergy, IFPRI concludes that in response to rising oil costs, the production of biofuels as an alternative source of energy is also contributing to dramatic changes in the world food situation. According to the report, increased production of bioenergy will adversely affect poor people in developing countries by increasing both the price and price volatility of food. Subsidies for biofuels, which are common, exacerbate the negative impact on poor households, as they implicitly act as a tax on basic food.
Using state-of-the-art computer modeling, IFPRI has projected the possible price effects of biofuels for two potential scenarios up to the year 2020:
1. Under scenario one, which is based on the actual biofuel investment plans of many countries and the assumption that high-potential countries will expand their production of bioenergy, maize prices would increase by 26 percent and oilseed prices would rise by 18 percent.
2. Under scenario two, which assumes that the production of biofuels would expand greatly, to twice the level of scenario one, maize prices would increase by 72 percent and oilseeds by 44 percent.
In both scenarios, rises in crop prices would lead to decreases in food availability and calorie consumption in all regions of the world, with Sub-Saharan Africa suffering the most. As biofuels become increasingly profitable, more land, water, and capital will be diverted to their production, and the world will face more trade-offs between food and fuel.
Given the various risks and challenges posed by the rapidly changing world food situation, current market trends and government policies could exacerbate hunger and poverty, especially for the world’s poorest people. Policymakers thus must take explicit measures to mitigate the negatives effects on poor households. While tackling long-term challenges is vital, the report recommends that policymakers also take immediate action:
1. Developed countries should facilitate flexible responses to drastic changes in food prices by eliminating trade barriers and programs that set aside agriculture resources. A world facing increased food scarcity needs to trade more, not less.
2. Developing countries should increase investment in rural infrastructure and market institutions to improve access to critical agricultural inputs, including fertilizers, seeds, and credit, which are key to enhancing productivity.
3. To counteract rising food prices, national and international research systems, including the CGIAR, should be positioned to invest more heavily in agricultural science and technology to increase agricultural production on a global level.
4. Policymakers should enact social protection measures that focus on early childhood nutrition to mitigate risks associated with reduced food access, particularly for the poorest households.
5. Because poor people in developing countries are especially vulnerable to the risks associated with climate change, particularly as it relates to food security, policymakers should take agriculture and food issues into account when developing national and international climate change agendas.
“As the world food situation is being rapidly defined by new driving forces, including income growth, climate change, and increased production of biofuels, the global community must give renewed attention to the role of agriculture, nutrition, and health in development policy,” said von Braun. “Above all, policies must target the world’s most poor and hungry people, to ensure that they do not get left behind in the wake of overall economic growth and global progress.”
- Joachim von Braun (IFPRI), 2007: The world food situation: New driving forces and required action.Biannual Overview of the World Food Situation presented to the CGIAR Annual General Meeting, Beijing, December 4, 2007. Full report, key findings (PDF-documents)
- IFPRI press release of 2007-12-04 (PDF-document)
Source: "International Food Policy Research Institute (IFPRI)[www.ifpri.org]", press release, 2007-12-04.