What we’ve been reading this week

This week’s summary on the news stories, reports and blogs that have grabbed our attention. We welcome your thoughts and comments on these articles.

Let’s tackle inequality head on for development after the MDGs, The Guardian

USAID, AfDB, Government of Sweden Announce Agriculture Fast Track, USAID

Forests and food security: back on the global agenda, Thomson Reuters Foundation

The ‘superwheat’ that boosts crops by 30%: Creation of new grain hailed as biggest advance in farming in a generation, The Daily Mail

Managing food price instability: Critical assessment of the dominant doctrine, Galtier, F. 2013

Adesina’s Brazil visit, agricultural transformation agenda and the farmers, Peoples Daily

High-tech: The best solution to take farming to the next level, The Citizen

Food aid for the 21st century (Opinion), Chicago Tribune

What will it take for policymakers to act on climate change?, Thomson Reuters Foundation

Cambridge-based scientists develop ‘superwheat’, BBC News

Dr Akinwumi Adesina: Building resilience in Nigeria

On 4th of March 2013, the 30th edition of the Brussels Development Briefing took place, the topic being “Agricultural resilience in the face of crisis and shocks”. Organized by CTA in collaboration with the African, Caribbean and Pacific Group of States (ACP) Secretariat, the EC/DEVCO, Concord, and the International Food Policy Research Institute (IFPRI), and hosted by the European Economic and Social Committee (EESC), in Brussels, international experts and agriculturalists, including Gordon Conway discussed the concept of resilience and proven approaches to achieving it.

The keynote speaker, Dr. Akinwumi Adesina, Honourable Minister of Agriculture of Nigeria, outlined his plans for increasing resilience and boosting agricultural productivity. He began by reminding us how susceptible we all are to the forces of nature be they climate, health, market or environment related. Food security is a key component of ensuring humans, households and systems are resilient to the impact of stresses and shocks.

Nigeria, in order to build resilience and tackle food insecurity through raising agricultural productivity and food production, launched the Agricultural Transformation Agenda in 2012. The overall goals are to add 20 Million tons (Mt) of food to the domestic food supply by 2015; to create 3.5 million jobs and to become a net exporter of food.

Dr Adesina outlined six policy areas for improving resilience.

1)    Access to affordable inputs.

Nigeria launched a database of farmers for the country, registering 4.2 million farmers in 2012 and hoping to expand to 10 million this year. The aim is to know the country’s farmers better in order to target policies to support them.

Also launched in 2012 was the Growth Enhancement Support (GES) through which farmers receive subsidised seeds and fertiliser via vouchers on their mobile phones. The government was taken out of the procurement and distribution of these inputs, ending corruption in the sector. In the first three months, 1.2 million farmers received subsidised inputs through their mobile phones and the target is to reach 5 million in 2013. The GES has incentivised seed and fertiliser companies to develop value chains to supply directly to the farmer and in 2012 fertiliser and seed companies sold $100 million worth of fertiliser and $10 million worth of seeds directly to farmers, as opposed to the government. Increasing accessibility to farm inputs, in the words of Dr Adesina, unleashed an agricultural revolution, and food production rose by 8.1 Mt in 2012.

Food prices volatility: watch this space

A recent article by the Institute for Agriculture and Trade Policy (IATP) outlines the food price situation and the actions that need to be taken to reduce price volatility. In 2012, as prices began to creep higher and a third food price spike since 2007 looked likely, governments should have been poised to act to curb food price volatility once and for all. As the IATP authors believe, governments did not take this opportunity and failed to address the root causes of food price volatility.

This recent article is an update to the authors’ 2012 report, Resolving the Food Crisis, and calls for action to be taken around a series of themes:

• Donor funding for agricultural development
• Reducing biofuels expansion
• Curbing financial speculation on agricultural commodities
• Building food reserves
• Halting land grabs
• Addressing climate change

These issues are neither original nor specific to solving the problem of food price spikes. Instead they are frequently raised by NGOs and other stakeholders across the world and, as the authors point out, these problems are not going away. Not enough is being done to address them. There are huge opportunities for progress in 2013 but whether governments will seize them is another matter, as history attests. Action to address food price volatility from the G20 has revolved to date primarily around the Agricultural Market Information System (AMIS) and, while G20 leaders plan to meet in Russia this year, no meeting of agricultural ministers is planned. Decisions over the future vision of the World Trade Organisation Doha Development Round could be an opportunity to ensure trade rules ‘protect and promote food security,’ but given the previous disarray of the Doha Round this may be too much to hope for. New farm legislation in the US and reform of the Common Agricultural Policy in the EU show little sign of being transformative.

Food Price Rises: The Role of Speculation

Scientists from the New England Complex Systems Institute, in a paper published in September 2011, identified investor speculation and ethanol conversion as the two key causes of changes in food prices over the period 2004 to 2011. The latter linked to a gradual upward trend in prices, the former to food price spikes. Global food prices since 2007 have seen two surges whereby prices have increased by over 50% in less than a year. Authors of the paper warn that policy action to curb speculation in global food markets is urgent if we are to avoid another surge at the end of 2012. This is also important for the long-term given that the UN predicts food prices will rise by at least 40% in the next decade.

Speculation in the food market in the past has been limited to actors within the food industry itself. By setting a price, agreed between farmer and trader, prior to the harvest, risks were minimised as the farmer received a good price even in a bad year and the trader received a better than  average price in good years. In general, speculation had a stabilizing effect on food prices. With the liberalisation of markets in the late 1990s, however, non-food industry actors have become involved and speculation in the food commodities market by financial institutions has grown rapidly. In 2003 the market was worth £3 billion but by 2008 its worth had risen to over £55 billion.

Another Food Price Spike?

At the time of writing (August 2012) the worst drought in half a century is occurring in the US Corn Belt, despite high harvests having been predicted as little as two months ago. As an article in the Financial Times documented, 9 out of 10 acres of maize and soybean land is suffering drought and half of the maize harvest and a third of the soybean harvest are being categorised as poor to very poor.

Given that the US is the largest exporter of agricultural commodities, exporting 40% of the world’s maize and soybean crop last year, the impact on food prices is felt globally. Another increase in prices may lead to the same panic buying and export restrictions seen during the 2010 Russian heatwave and consequent cereal shortage.