(THIS ARTICLE IS MACHINE TRANSLATED by Google from Norwegian)
[food] How can the increased food prices also be good news? In recent weeks we have seen TV pictures from riots in Cairo, Manila and Port au Prince where people are furious because there is no more food left in the shops. In three years, global food prices have risen by 83 percent, and maize prices have increased by 75 percent only in the last two months.
16. In April, things turned calm in Port au Prince, and Brazilian UN soldiers were able to distribute food to hungry people in Haiti's capital. 15. In April, Minister of Development Erik Solheim met the Special Adviser for the World Food Program, Ramiro Lopes da Silva, and discussed Norway's emergency aid. Obviously, there is a great and urgent need for relief, but can emergency help do something about the cause of the problems? The short-term problems are big, but what about the long-term consequences?
During a meeting 11. In April, ministers from the G24 group, which includes Algeria, Brazil, Ethiopia, Ghana, India, Nigeria and South Africa, said that the world's rich countries must now open their markets to the poor. They adopted this:
"Today's situation is increasing the need to put in place a new and development-friendly WTO agreement, which is why rich countries must now cut their agricultural subsidies, which are destroying agricultural production in developing countries."
Broken price level
Ramachandra Deshmukh is Vice President of Indian Appropriate Rural Technology Institute.
- The increased prices are an advantage for the poor, he says to Ny Tid, and is supported by Helene Hoggen and Atle Sommerfeldt from Norwegian Church Aid
-Higher food prices are mainly a good thing, they write in the article on page 42 in this issue of Ny Tid.
To understand these statements, we need to take a closer look at the backdrop of recent months' development: Two-thirds of the world's poor grow and sell food. Therefore, one of the main concerns for many developing countries in recent decades has been falling food prices. Up until about three years ago, the global price level of food was totally different from today. At that time, prices were artificially low, due to global overproduction. The reason for the overproduction was massive production subsidies in rich countries. Surplus production has been dumped on the world market, where prices have been destroyed. Poor countries, which cannot afford to subsidize their farmers, were thus out-competed and have not been able to build up a robust or advanced agricultural industry.
-A producer in a developing country with production costs of 20 US dollars, will end up behind compared to a producer in a developed country, who despite a cost of 40 dollars will be able to offer the product for 15, due to 25 dollars in subsidies. It is not financially possible for the authorities to take action against the developed countries on this, writes Edélcio Vigna, Officer for Food and Nutrition Sovereignty Policies in the Brazilian organization Inesc in an email to Ny Tid.
Or as the presidents of Mali and Burkina Faso, Amadou Toumani Touré and Blaise Compaoré put it during the World Trade Organization (WTO) negotiations in 2003: “Most of all, Africa must be given the opportunity to take its fate into its own hands. The West's agricultural subsidies are suffocating us. " A new agreement is still not in place, but a breakthrough may come in May.
-Cut subsidies
A new WTO agreement will be a blessing for the productivity of developing countries in the long term, says Gawain Kripke of the development organization Oxfam in a press release on 11 April. But he adds that an agreement will not solve the acute problems we see now, and therefore immediate emergency aid is needed as well.
But isn't it a paradox to cut subsidies now that food prices are skyrocketing? Shouldn't subsidies be increased either?
-Agricultural subsidies should be cut in rich countries, and increased in developing countries, says Atle Sommerfeldt from Norwegian Church Aid, who now supports the World Food Programme's relief measures for poor, urban populations.
-But emergency aid from outside is not the solution in the long run. That's why we always hand out seeds and picks, along with food. But if there is to be momentum in agriculture in poor countries, there must be a connection between production cost and price. That is why we must stop agricultural dumping from rich countries, says Sommerfeldt.
-But Norway does not export much agricultural goods. What is the problem with Norwegian agricultural subsidies?
-Norway is subject to the same rules as everyone else, and thus the Norwegian government is now helping, by arguing for Norway's position today, to legitimize EU and US dumping.
-In recent years, we have seen an increasing urbanization in the South. What does that mean? And besides, many of the countries in the G24 are middle-income countries that export food. What about the importing countries?
-It is true that we are seeing an increasing urbanization in the south, more and more of the world's poor live in the slums of cities and thus do not benefit from increased income for farmers. But an important reason for both this urbanization and the price increase we now see is that agricultural dumping from rich countries has destroyed the price level on world markets, which in turn has destroyed the development of the agricultural industry in many poor countries, says Sommerfeldt.
-This reasoning also applies to countries that import food. They lose out on the current price increase, but have the prerequisites to build up greater agricultural production, if the conditions become more predictable.
Dividing line
Aksel Nærstad is development policy senior adviser for the Development Fund. He has a completely different analysis of the situation than Sommerfeldt, even though they both belong to organizations that many think of as idealistic and quite similar. The truth is that the two chiefs strongly disagree on many important issues. Both are among the heaviest suppliers of premises in the debate on Norwegian policy in this field.
-The price increase has now led to an acute crisis. This crisis may soon blow over, because food production in Australia, Russia, Ukraine and Africa, among others, has great potential to grow in the coming years. But in the long term, the trends we see now will lead to an even worse crisis that can drive many hundreds of millions into poverty and hunger, says Nærstad.
He believes that there are several causes for the crisis, and mentions reduced production due to climate change. Among other things, Australia has been hit by a drought for two years in a row.
-Furthermore, we see increased demand, both due to population growth and changes in diet, for example, Chinese and Indians are eating more and more meat. In addition, food speculation is rising on world stock markets.
-Can the price increase also have positive consequences?
- One might think that increased food prices were good because the majority of the world's poor are farmers, but the problem is that this is international business, large companies and speculators who profit from this development. Poor farmers also earn a little, but not much, says Nærstad.
Sommerfeldt replies that he has traveled a lot in developing countries, but has never talked to a single farmer who does not want to be able to sell his goods to a larger market.
Nærstad, for its part, believes that African countries should focus on small-scale production for their own markets.
-Not just self-rescue on each farm, but local and national markets. Many of the world's poorest countries are food importers. Agricultural exports will never bring developing countries out of poverty. The most important thing for them is to avoid importing. The increased food prices contribute to less agricultural dumping from rich countries, and that is good, he says.
-But more African leaders want both room for maneuver to protect their own domestic markets, and better access to markets in rich countries in the north?
-Export plays an important role for some developing countries today, and will be important also in the future. But I do not think that increased market access in the north is the most important thing for developing countries, says Nærstad.
Do not transport environmental damage
Malaysian Martin Khor heads The Third World Network based in Penang, Malaysia. "There is a danger that protectionism may be justified by false climate arguments," he wrote in a recent report. It is not transport, but the production process that is the major environmental problem associated with food, due to energy-intensive factors such as heating, fertilizers and concentrates. According to the report "Livestock's long shadow" from the UN's agricultural organization FAO, the production of meat and milk now accounts for 18 percent of global greenhouse gas emissions, but the emissions from food transport account for as little as ten thousandths of the emissions. For example, tomatoes grown outdoors in Morocco and transported to Norway emit one-eighth of the greenhouse gases from the corresponding amount of tomatoes grown in Norwegian greenhouses.
The demand for biofuels has also increased in the last year (see separate case). Sommerfeldt believes that there is a connection between skepticism about biofuels and skepticism that developing countries should focus on export-oriented agriculture.
-Either it is an ideological skepticism, or it is ignorance of the potential that lies in trade. The idea that African countries should invest in self-rescue agriculture reminds me of the Bantu schools, where the point was that Africans do not need more than six years of schooling – they have not spent more. It is completely hopeless to say that African countries will not have the opportunity to use the most effective tool, says Sommerfeldt.
-But what examples do you have that exports of agricultural goods can get countries out of the poverty trap?
-Export of fish and timber has been important for Norway, but several factors are important at the same time. The problem with that question is precisely that the global rules of the game are designed so that this is not possible. If we change the rules for world trade, the export of agricultural goods could lift millions of people out of poverty, says Sommerfeldt.
The disagreement between Nærstad and Sommerfeldt illustrates the contradictions in the debate series about the difference between a global and a nationally oriented policy, which Ny Tid has pursued this spring. Trade is one of the topics that is best suited to bring out the differences. Specifically, we see different attitudes in these three issues: Great or little belief in trade as a tool for development, willingness or unwillingness to open up Norwegian markets and cut Norwegian subsidies, as well as critical-constructive or dismissive attitude to the WTO.
-Riots against Norway
Nærstad believes that the food crisis will gradually get worse. Sommerfeldt, on the other hand, believes that there is a long way to go before we reach the point where the world cannot produce as much food as is needed.
-This is a dilemma that we must take seriously, but there is still a long way to go before we reach the ceiling. The potential for agricultural production in Africa is enormous, but little of it is used today. At the same time, we see that people who are lifted out of poverty eat more meat, ie more energy-intensive food. But should we deny Chinese and Indians eating meat? As we approach the ceiling for global food production that you mention, we must rather come up with solutions that mean that the West reduces its share of global consumption, he says. Sommerfeldt believes that an important reason for the increased food prices is the increased oil price.
-What we need now is a compensation mechanism for oil price shocks. Outbreaks we now see around the big cities in developing countries are also directed at Norway and our greed for oil.
