Institute proposes policies to tackle food prices
including a possible freeze on grain-based biofuels - and a
longer-term strategy to secure supply for the future and establish
global trade systems, says institute.
At a meeting held in Brussels on Friday, the International Food Policy Research Institute (IFPRI) stressed the need for urgent, coordinated response to food prices, which have risen as a result of combination of factors, including promotion of biofuels, poor harvests, agricultural policy and commodity speculation. The institute has identified two packages of measures to ameliorate the current situation and relieve the threat of starvation that is hanging over some 160m people who currently survive on less than $0.50 per day. These include a combination of investments in agriculture, improvement of bio-energy and trade policies, and programmes to protect the most vulnerable people. "Implementation of both the short-term emergency response and the long-term solutions must begin now," said Joachim von Braun, director general of the IFPRI. "Together, action in these areas would go a long way to stem the tide of rising food prices and reduce the threat of hunger and poverty." Biofuels The development of bio-fuels derived from grains traditionally used as food sources is one of the factors identified as being behind the current Just how much of a contribution the biofuels industry is making is a subject of debate, however, with experts putting it at between 10 and 30 per cent. The IFPRI includes curbing biofuels' competition with food in its emergency package, and would see governments revoking biofuels subsidies and quotas on the percentage of ethanol blended with gasoline, and potentially even freezing biofuels production at current levels, reducing production, or preventing use of grains and oils for biofuels. The institute suggests that a moriatium on the use of grains and oils for bio-fuels would "quickly unlock" non-food based bio-fuels technologies that are currently under development. This could happen if there was increase financial support for their development. "This measure might being corn prices down globally by about 20 per cent and, as a consequence, decrease wheat prices by about 10 per cent," said von Braun. In a recent interview with FoodNavigator.com, Dirk Carrez, public policy director at EuropaBio, said that, based on current levels on investments biofuels v2.0 looks to be between five and seven years away. Export bans In recent months, several countries have implemented export ban, high export tariffs and price controls on food staples, so as to help protect their own populations' supply in the short term. For instance, export restrictions for rice have been put in place in Indonesia, India, Egypt and Vietnam. Sri Lanka last month imposed its first even control on rice prices in an effort to counter the effects of rice hoarding. When politicians are often held to be directly responsible for the supply of affordable food (witness the ousting of Haitian prime minister Jacques-Edouard Alexis following food price riots), such measures may seem to make political and economic sense on the home front. However von Braun believes that such an approach is short term, and "may backfire by making the international market smaller and more volatile". He sees export restrictions as having a harmful effect on trading partners that rely on imports, and also reduce the incentives for farmers in the restricting countries to invest in agriculture. "The elimination of export bans would stabilise grain prices fluctuations, reduce price levels by as much as 30 per cent, and enhance the efficiency of agricultural production." Assistance and empowerment Food assistance is important to combat immediate threat of hunger for the most vulnerable people, and the IFPRI says donor governments need to increase their support for food and nutrition security for poor people. "The focus should be on the most vulnerable, including children." In addition, the institute holds that empowering small-scale farmers, by providing them with resources including improved seeds, fertiliser and credit, would have a quick effect to improve production, increase incomes and lower prices. Resilience package Beyond the emergency programme to ward off humanitarian crisis, the institute is also proposing a 'resilience package' of measures "to strengthen the capacity of poor people and developing countries to meet their own needs in the long run". Part of this is investment by industrialised nations in research and innovation - and extension of this for the benefit of small-time farmers. For their part, African heads of state should deliver on pledges to dedicate 10 per cent of national budgets to agriculture, which would have high returns for growth and also help reduce poverty. Social protection - such as cash transfer programmes, pension and employment programmes, preventative health and nutrition programmes for vulnerable groups, and school feeding programmes - could reduce the number of vulnerable people most likely to be affected by food crises. Von Braun also believes that reducing market volatility through curbs on excessive speculation in the commodity markets would help stabilise the markets. As for global trade, he sent out a message to world leaders on the completion of the Doha Development Round, which has been lingering in stalemate for some time. This, he said, would give "a global a global system that promotes agricultural trade on a fair and equitable basis".
