2008-04-20 01:00:00
Time to change strategies to fight hunger
Hunger is the food for thought now. And, this phenomenon is not restricted to any particular country. It is visible everywhere now.
Reasons are many. In fact, food security is back as a hot international issue. Consumers are facing high prices of food. And, if you thought that will help farmers realize better prices for their produce, you are mistaken.
Prices of foodstuff have risen 80 per cent over the last two years, rice prices are at a 19-year high, wheat is at a 28-year high and global food stocks are low.
With this happening one would expect farmers to have taken some benefits of these high prices already.
But paradoxically poverty continues to prevail in rural areas in Asia, with some 70 per cent of the poor deriving their living from agriculture one way or the other.
The World Bank has recently warned that 33 countries run the risk of social unrest. China, Vietnam and India have cut exports, while Indonesia has lowered its tariff on imports. Kazakhstan, a major wheat-exporting country, has increased its export tariffs.
In Indonesia, as in many other countries, high food prices are the main contributing factor to high current inflation, spreading its effect in the wider economy.
The wider global economy, though fed by high growth in China and India, is not free from shocks. The United States is in a recession, while many banks worldwide are still trying to count their losses from the US mortgage bubble.
The world is witnessing a truly unique event in the global economy. The long decline of prices for agriculture seems to have come to an end. Apparently the global food economy is now supply-constrained.
What can countries do? Very simple. In theory. Invest in agriculture, rural infrastructure, including irrigation, education and health and harmonize trade policies and tariffs applying to foodstuffs.
And design and conduct research and development programs, and use the results. But the effects of these intervention areas will only be felt after a while, and in the meantime policymakers have to deal with the here and now of food scarcity. By necessity short-term supply adjustment policies are needed.
One thing is certain: It is in the interests of rice-producing and rice-consuming countries to get together and set short-term policy agendas. Regional and subregional consultations are necessary; bilateral negotiations only will not provide the answers.
It is very important that in these talks the starting points are well-defined. To contribute some information to this, it is worthwhile to know how Indonesia solved food security questions in previous years because the future policies will by necessity be based on interventions that have worked.
In the years 1970-1990, when the rural economy in Java was primarily driven by expansion of rice production and yield growth, the government of Indonesia operated an intricate system whereby locally buffer stocks of rice were stored while in times of shortage the government purchased and imported rice for distribution
Time to change strategies to fight hunger
Hunger is the food for thought now. And, this phenomenon is not restricted to any particular country. It is visible everywhere now.
Reasons are many. In fact, food security is back as a hot international issue. Consumers are facing high prices of food. And, if you thought that will help farmers realize better prices for their produce, you are mistaken.
Prices of foodstuff have risen 80 per cent over the last two years, rice prices are at a 19-year high, wheat is at a 28-year high and global food stocks are low.
With this happening one would expect farmers to have taken some benefits of these high prices already.
But paradoxically poverty continues to prevail in rural areas in Asia, with some 70 per cent of the poor deriving their living from agriculture one way or the other.
The World Bank has recently warned that 33 countries run the risk of social unrest. China, Vietnam and India have cut exports, while Indonesia has lowered its tariff on imports. Kazakhstan, a major wheat-exporting country, has increased its export tariffs.
In Indonesia, as in many other countries, high food prices are the main contributing factor to high current inflation, spreading its effect in the wider economy.
The wider global economy, though fed by high growth in China and India, is not free from shocks. The United States is in a recession, while many banks worldwide are still trying to count their losses from the US mortgage bubble.
The world is witnessing a truly unique event in the global economy. The long decline of prices for agriculture seems to have come to an end. Apparently the global food economy is now supply-constrained.
What can countries do? Very simple. In theory. Invest in agriculture, rural infrastructure, including irrigation, education and health and harmonize trade policies and tariffs applying to foodstuffs.
And design and conduct research and development programs, and use the results. But the effects of these intervention areas will only be felt after a while, and in the meantime policymakers have to deal with the here and now of food scarcity. By necessity short-term supply adjustment policies are needed.
One thing is certain: It is in the interests of rice-producing and rice-consuming countries to get together and set short-term policy agendas. Regional and subregional consultations are necessary; bilateral negotiations only will not provide the answers.
It is very important that in these talks the starting points are well-defined. To contribute some information to this, it is worthwhile to know how Indonesia solved food security questions in previous years because the future policies will by necessity be based on interventions that have worked.
In the years 1970-1990, when the rural economy in Java was primarily driven by expansion of rice production and yield growth, the government of Indonesia operated an intricate system whereby locally buffer stocks of rice were stored while in times of shortage the government purchased and imported rice for distribution