We must also not forget that there is speculation . More people and smaller food stores mean higher prices. This is speculation. We see that stock players have entered food commodity markets, partly because there are worse times in a number of other markets. The Swiss bank UBS caused a stir when it offered people to invest in funds with good prospects for high returns, based on agricultural products and cattle.
It seems to be a fact that relatively less food is produced today than a few decades ago. Marcia Merry Baker writes in a study, “To Defeat the Famine: Kill the WTO” (Executive Intelligence Report) that per capita production of cereals of all kinds (rice, wheat, corn and more) has fallen for twenty years. While the figure was 338 kilos per person in 1986, it dropped to 303 kilos in 2006.
And in 12 of these 20 years, less grain was produced than was consumed in those same years. This means that grain stocks have fallen. They are not keeping pace at all with population growth . In addition, up to 40 per cent of food production in developing countries is lost as a result of insufficient capacity to process, store and transport food.
The stocks of rice are the lowest in almost 30 years. They have decreased from 130 million tonnes in 2000–2001 to 72 million tonnes in 2007–2008, according to figures from the US Department of Agriculture. Food stock levels are expected to remain low.
According to oxfordastronomy.com, the UN summit in Rome was the first in a series of summits to address what many leaders now see as a greater threat to peace and international stability than terrorism. “There is an urgent need to coordinate measures by the international community to deal with the consequences of higher food prices for the hungry and the poor,” said Jacques Diouf. Few people disagree. But the agreement no longer extends. No one still knows how to get the world back on track to reach the Millennium Development Goals. They were adopted eight years ago, and one of the goals was to halve the number of hungry people in the world.
Most people seem to agree that one must stimulate local production if one is to be able to get out of the food crisis. It is the small farmers who are responsible for food production for the vast majority of the population in developing countries. The Rome Summit therefore agreed that it would be impossible to fight hunger and eradicate poverty without strengthening their productive capacity and local markets.
It was also agreed that money is needed. How much, there are divided opinions about. The World Food Program (WFP) will have a $ 1.7 billion emergency fund. The UN has indicated that both $ 20 billion and $ 30 billion a year are needed to resolve the crisis – mainly by stimulating increased production in developing countries. “It’s not really that much,” the Los Angeles Times wrote in an editorial. “For now, in June, the US Congress allocated $ 162 billion for the wars in Iraq and Afghanistan for the fiscal year 2009.”
In other words: There is a need for development programs in agriculture – more must be invested there. Agricultural credit is another challenge. Many farmers’ lack of money means that they do not have good enough tools or money to fertilize or sow seeds. Freezer trolleys to bring the goods to market are also proposed. Because in Africa, two thirds of all food is destroyed before it has time to be sold.
It sounds so simple. But production is declining when using modern equipment that needs oil, because oil-based fuel is expensive. And if you do not have transport and storage options, then it goes the way the hen kicks with the quality rules that the World Trade Organization (WTO) has set up for agricultural products. If the quality rules are broken, we in the western countries will not import the goods.
The long period of cheap food is over, says Merritt Cluff, one of the authors of a recent report by the FAO and the OECD. There are several who believe that higher food prices will benefit producers. But high prices will first and foremost benefit commercial farmers in both industrialized and developing countries. Many farmers in developing countries have little or no contact with the market, and it is unlikely that they will be able to benefit from higher prices.
In addition, in many countries the ability to produce more grain is limited. In one of these – Mexico – many farmers have in recent years left agriculture and the countryside to find better paid work in the neighboring United States.
There are many questions, suggestions and answers regarding the food crisis. We are unlikely to find a solution soon.