Europe and global food crisis

Europe and global food crisis

MICHEL BARNIER
PARIS

Monday, November 24, 2008

BUT there is more to finding a solution than simply identifying those nations that are capable of feeding the rest of the world. It is increasingly urgent that every nation gain the means of feeding itself. This means that agriculture should become an international priority, with the poorest countries helped to safeguard the security and independence of their food supplies.

Countries and organisations are already mobilising. The United Nations Food and Agriculture Organisation argues that rising food prices could lead to increasing global conflicts. The Davos World Economic Forum ranks food insecurity as a major risk to humanity. The World Bank has forcefully emphasised the importance of agriculture to jump-starting economic expansion and breaking the cycle of poverty. UN Secretary Ban Ki-moon has created a working group to define a common plan of action, and Frances President Nicolas Sarkozy has proposed a global partnership for food.

Sarkozy's proposed partnership has three pillars. First, an international group should draft a worldwide strategy for food security. Second, an international scientific platform should be charged with evaluating the worlds agricultural situation, sending out warnings of upcoming crises, and possibly facilitating governments adoption of political and other strategic tools to deal with food crises.

Finally, the international finance community, despite its current problems, must be mobilised.

The reliability and size of the European Unions farm output means that it can and should play the role of regulator in global markets. If Europe cut back on its agricultural production, the increase in its own food imports would contribute significantly to a worldwide increase in food prices. This makes it imperative that EU food production levels be held steady for the sake of Europeans and of people in the worlds poorest countries.

But Europe cannot build up its own agriculture to the detriment of the less fortunate. So the EU must harmonise its policies with poorer countries. At present, export subsidies and support payments represent less than 1 per cent of the European agricultural budget, and the EU has undertaken to eliminate them once it receives reciprocal undertakings from major food-exporting countries. Since 2001, with the Everything but Arms initiative, all products from poor countries with the exception of weapons and munitions can enter the EU single market on a duty-free basis. This has led to the EU becoming the primary market for the poorest countries products.

The EU is also developing ways to respond to new global challenges through changes to its Common Agricultural Policy. This was reflected in the decision to suspend the set aside rule that requires a proportion of agricultural land to lie fallow. Now the EU is preparing to increase dairy quotas progressively, and evaluating the impact on world markets of its decisions regarding bio-fuels.

But Europes focus must be on encouraging the development of local agriculture. Doing so is the only way to achieve greater global food security and reduce poverty. It will also make it possible to ensure that today's high prices for agricultural products are transformed into opportunity for poor farmers. This is vital because, according to the World Bank, growth in farming eliminates poverty twice as much as growth in any other economic sector. Indeed, agriculture remains the primary productive sector in the worlds poorest countries, employing 65 per cent of the working population and, on average, contributing more than 25 per cent to GDP.

But over the past 20 years, support for agricultural development has been declining. Only 4 per cent of public development assistance is now earmarked for agriculture. The European Commission and EU member states are therefore planning to increase their assistance, both through the European Development Fund and by developing new sources of financial support.

Further liberalisation of farm trade will not ensure food security. Faced with the erratic nature of agricultural markets, regulation is needed to soften the impact on poorer countries of volatile food prices. This does not mean that protectionism is the way forward, only that taking account of specific issues that affect international farm trade weather, price volatility, or health risks may be necessary from time to time.

But, in a world where productivity differentials can be as great as one to 1,000, it would be unwise to rely on markets alone to enable the poorest countries to expand their economies.

Nor is it likely that much economic expansion will result from competition between multinational food distributors and producers in countries where famine still stalks the land.

Instead, bringing together outside expertise and local knowledge of the geography and environmental and economic constraints in order to spread risks and share the management of resources and projects is far more likely to help poor countries achieve food independence.

It was such an approach that, in less than 20 years, helped postwar Europe achieve food sovereignty. Countries that have protected their agricultural development from the threats posed by international markets such as India or Vietnam have achieved substantial reductions in agricultural poverty.

The time has also come to prioritise agriculture in order to ensure growth with a more human face. At the heart of the EU, France wants to play its part in a collective effort that is fast becoming a major issue for us all.

Michel Barnier is Frances Minister of Agriculture and Fisheries, and was formerly Frances Foreign Minister and EU Commissioner in charge of Regional Policy and the Reform of European Institutions.

Project Syndicate