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Sunday, February 15, 2009

Scarcity Issues

Global Dashboard » Climate and resource scarcity Economics and development Key Posts » The Feeding of the Nine Billion
The Feeding of the Nine Billion

January 26, 2009 | by Alex Evans | More on Climate and resource scarcity, Economics and development, Key Posts | No comments

Today sees the launch of The Feeding of the Nine Billion, my Chatham House pamphlet on food prices and scarcity issues, which brings a year-long research programme to its conclusion. This morning’s Financial Times has a piece on the report here, and there’s a BBC World Service interview with me here (scroll to 9.42; you need RealPlayer installed).

The report’s key diagnosis is that while food prices have fallen significantly from their peak last year, they remain acutely problematic for poor people and por countries at their current levels - and poised to resume their upwards climb when the world emerges from the downturn. Accordingly, the last thing policymakers can do at this stage is to heave a sigh of relief - on the contrary, they need to treat the current easing in prices as a window of opportunity in which to agree the comprehensive, long-term collective action needed to ensure food security for all in the 21st century.

Long term demand drivers, above all a population set to reach over 9 billion by mid-century and the rising affluence and expectations of a growing ‘gloal middle class’ are half the story, with the World Bank forecasting 50% higher demand for food by 2030.

On the other hand, scarcity issues will present increasing challenges on the supply side. Oil prices are also set to resume their climb after the downturn, given that investment in new production has collapsed as oil prices have fallen, setting the stage for a future supply crunch; food prices can be expected to follow them, as biofuels, fertiliser prices and transport costs all play their part. Climate change, water scarcity and competition for land will all also push prices upwards.

So what needs to be done? The report sets out a ten point agenda for action at the international level and in developing countries, but overall I think of the challenge in four key areas.

The first is to get a 21st century Green Revolution underway, and fast. Spending on agriculture by aid donors and developing country governments has collapsed over the last 25 years; it’s a similar story on R&D. At the same time, we need to move from today’s input-intensive model of agriculture to one that’s instead knowledge-intensive. People always ask whether that means GM crops, and I don’t rule out that they may have a part to play; but for equitability and social resilience, I think more ecologically integrated approaches (like integrated soil fertility management) often score higher.

Second, we need to scale up social protection systems in developing countries. Today, nearly a billion people don’t have enough to eat. But as you can see from the fact that about the same number of people are overweight or obese, the problem is not that there’s insufficient food to go around; rather, it’s that poor people find food prices beyond their reach. Social protection systems are a better bet for developing countries than price controls or economy-wide subsidies because they target help where it’s needed (and don’t break the bank) - but as yet, only 20% of the world’s people have access to them.

Third, we’ve got a lot to do in the trade context. One option that policymakers ought to be thinking about is a globally coordinated system of food stocks - a bit like the IEA’s emergency stocks in the oil context - as a way of building resilience to the spate of export restrictions we saw last summer when panic over food prices really set in. They also need to think about ways of that trade rules can help manage the risk of export suspensions, given that WTO trade rules were really built to resolve disputes over market access, not security of supply. But at the same time, it remains imperative for developed economies - above all the EU and US - to reform their iniquitous farm supprt policies, which structurally undermine developing country agriculture.

Finally, there remains the observation that (as Gandhi once put it), there’s enough for everyone’s need, but not for everyone’s greed. The global consumer class has barely begun to recognise that its western diet, rich in meat and dairy products, is far more resource intensive than everyone else’s diet - whether you’re looking at grain intensity, water use, energy consumption or greenhouse gas emissions. That doesn’t mean everyone has to be vegetarian - but there are nonetheless fundamental issues of fair shares involved. Exactly the same point applies on biofuels: not all biofuels are bad, but inefficient options like corn-based ethanol simply have no place in a sustainable or equitable agriculture system.

I finished this project with the conclusion that the worry that prompted me to do this work in the first place - that scarcity issues would make the future outlook for food much, much harder - is well supported by the data. But in spite of that, I’ve also come away feeling more hopeful than I did when I got started.

Part of the reason is a deeper understanding of the astonishing story of innovation that lies at the core of the history of agricuture - without which there is no way on earth we could have increased our numbers from 5 million to 6 billion - and of the prospects for more such innovation in the future. But at the same time, I also finished the project with a firm conclusion that technical innovation on its own isn’t sufficient.

Innovation always creates winners and losers. We saw that in the agricultural context with the 20th century Green Revolution (which despite huge improvements in yield also put huge numbers of agricultural labourers out of work; benefited larger farmers first and small farmers only later, if at all; and for the most part bypassed Africa altogether). So the other side of the coin is all about politics. It’s not enough for the world’s food system to become more productive, more resilient and more sustainable, though it needs to do all of those things; it also needs to become more equitable.

Admittedly, I found little evidence so far of the political will needed to make that a reality, either in developing countries or at the global level. But the reason why even then, I still feel more hopeful now than when I started the project, is the realisation that creating the more equitable food system that we need isn’t that far out of reach.

It wouldn’t take huge sacrifice; we know more or less what we need to do; with sleeves rolled up, I don’t think it’s remotely absurd to think that we could do it within a decade. And actually - in cheerful defiance of the gloomy clouds gathering overhead - I think we might actually do it.

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