NEW STUDY: Governments Prolonging Global Food Crisis
IPN Press release
LONDON – Agriculture ministers from the Group of Eight (G-8) and major developing nations will meet in Italy this weekend to offer government solutions to the world’s food crisis. But a new IPN study -- Feed the World -- written by agricultural economist Douglas Southgate shows that governments were the primary cause of the crisis, which began in 2007. Government policies have prolonged the crisis, particularly affecting the world’s poorest people.
Study author Professor Southgate, of Ohio State University, said that governments’ responses – such as bans on food exports in emerging economies, coddling of biofuels development and needless restrictions on agricultural biotechnology – have made the food crisis worse. He added:
“Meddling by politicians makes food more expensive for millions of the world’s hungry. It is a wholly preventable tragedy. That is just unacceptable.”
(The World Bank says that 28 countries still maintain export bans on agricultural goods.)
But there is a solution. Professor Southgate’s study, which is co-published by IPN and over 20 research institutes around the world, argues that politicians both in rich and poor countries must eliminate subsidies, quotas and other trade restrictions, as well as make other policy changes.
Professor Southgate observed that “Modern agriculture can feed the world – if only governments would stop standing in the way.”
The agriculture ministers are due to release their own report this weekend, but Professor Southgate is sceptical that it will lead to anything substantive:
“Governments are good at blaming others. It’s time they take responsibility. And frankly it’s time for action, not words. If governments are serious about solving the food crisis, they should eliminate the barriers to food production and distribution that they have created”, he said.
Professor Southgate’s new study identifies numerous policy changes that would improve agricultural output and reduce the price of food for everyone. These include:
- scrapping agricultural subsidies
- scrapping import and export restrictions on agricultural goods as well as inputs, such as fertiliser, pesticide and new crop varieties
- improving protection of property rights
- eliminating subsidies and trade protection for biofuel development
- taking full advantage of the opportunities for sustainable agriculture created by biotechnology
Published April 2009 by International Policy Network (www.policynetwork.net), a global think tank based in London.
Notes for Editors
Douglas Southgate is a professor of agricultural economics at Ohio State University and author of The World Food Economy (Blackwell, 2007).
“Feed the World: The Challenge of Agricultural Development” (April 2009, IPN) shows that:
- Contrary to the views of many naysayers, the Green Revolution (which promoted the use of fertilizer and other technologies) prevented widespread starvation during an era of unprecedented population growth. Crop yields increased, resulting in more food at cheaper prices.
- Between 1950 and 1985, there was a 75 percent decline in the real prices of wheat, rice and other staples.
- Yet during the era of cheap food and other commodities, from the middle 1980s to the early years of this decade, many countries ignored the need to adopt new agricultural technologies and to enact policies to support agricultural production.
- Per-capita food production in Africa was 6 percent lower in 1981 than it was in 1961. This decline continued during the 1980s and 90s.
- In countries such as the Ukraine and Argentina, which have natural environments that are highly conducive to agriculture, farmers have been hindered by their governments’ policies for decades.
- The lack of clear property ownership, limits on grain exports (Ukraine), taxes on exports (Argentina), and other discriminatory policies all have negative effects on agricultural productivity and crop yields.
- Policy reform could dramatically enhance crop yields: the Ukraine could easily double its crop yields on existing cropland, from an average of 2.3 tons per hectare to 4-5 tons per hectare, producing a total of 60-70 million tons annually (compared to 30 million tons at present).
- Subsidies for converting crops into liquid fuels cost the US taxpayer $7 billion annually.
- Between 2000 and 2050, even low-end estimates suggest that demand growth in food will be 60 percent. With faster growth, real food prices will go up, thereby harming hundreds of millions of the world’s poorest people.
- Agricultural markets need free trade, property rights, contracts and the rule of law to function.
- Investment in agricultural research, including biotechnology, must increase, although public monies used for this purpose must be awarded on a competitive basis – not through cronyism.