Kofi Annan calls for food stability, moderation on speculation

IFAD food security
World Bank data released on Tuesday showed higher food prices - mainly for wheat, maize, sugars and edible oils - have pushed 44 million more people in developing countries into extreme poverty since June 2010. Source: ifad.org

Former United Nations chief Kofi Annan has called on governments to stabilise international food supply and to moderate food commodity speculation to reduce the volatility of global food prices.

Speaking at the opening day of the International Fund for Agricultural Development’s (IFAD’s) governing council meeting in Rome, Mr Annan said structural reforms were also needed to protect the world’s poorest from global shocks.

Prices for food and other basic commodities have risen sharply. They have now passed the peak in 2008 which sparked the last food crisis and caused such misery for the most vulnerable in the world, noted Mr Annan, who is now the chairman of the Alliance for a Green Revolution in Africa (AGRA).

“The FAO has warned that the high cost of food is re-emerging as a serious threat to economic development and social stability, It has already helped fuel the unrest in the Middle East and North Africa.” he added.

“With climate change certain to increase the extreme weather events behind recent price rises, high costs and local shortages are unlikely to be temporary.”

Mr Annan also warned against protectionist tendencies, which can be the knee-jerk reaction to rising prices. Some countires such as Russia have already banned the exports of grain.

His comments come just as World Bank chief Robert Zoellick warned last Tuesday that global food prices have reached “dangerous levels”. He added that the impact could complicate fragile political and social conditions in the Middle East and Central Asia.

World Bank data released on Tuesday showed higher food prices – mainly for wheat, maize, sugars and edible oils - have pushed 44 million more people in developing countries into extreme poverty since June 2010.

Climate-related disasters such as storms and droughts have damaged the world’s agriculture-producing countries, disrupting supplies from Australia to Russia. Maize prices, for example, soared about 73 percent over six months, while prices for sugar, for fats and oils have risen 20 percent and 22 percent, respectively, in the past quarter alone.

Inflation in Indonesia powered to 7 percent in January and 8.2 percent in India – where the cost of vegetables spiked by almost two thirds – while in China it was near a 28-month high as food costs jumped more than 10 percent, said recent wire reports.

Volatile food prices were also high on the agenda for the G20 meeting which opened in Paris yesterday under the French Presidency. French president Nicholas Sarkozy has put foward proposals relaunching investments in the agriculture sector, transparency on world agriculture stocks and cooperation between countries.

France wants greater transparency and regulation of commodities prices and derivative trading to stop markets being driven by speculation, as opposed to demand.

“A market without rules is a market which is governed by speculation,” Mr Sarzoky said.

IFAD president Kanayo F. Nwanze further underlined the importance of global food security and rural poverty - the central theme for this year’s IFAD meeting.

He told the IFAD conference that with floods and droughts once more in the headlines, “it is clear that there is nothing simple about reducing poverty and ensuring food security for today or for tomorrow.”

The world population, projected at 7 billion this year, is expected to grow to 9 billion by 2050. With this growth, IFAD estimates that global food production has to increase by 70 per cent to meet the world’s needs.

“Rather than romanticizing the concept of lifting poor rural women, men and children above the poverty line, we are advocating the pro-active creation of vibrant rural economies. Rural economies where young people see a future for themselves; rural economies that offer a range of attractive opportunities for people to choose from; rural economies that allow them to fulfil their individual aspirations,” said Mr Nwanze.

IFAD’s aim is to enable smallholder farmers and other poor rural people to have a significantly better standard of living than they do today. They will then be able to spend and invest in their own livelihood opportunities and in the local economy, he said.

He also noted that the future is bright for smallholder agriculture, which can lead economic growth in developing countries and lift millions out of poverty, “but only if it is market-oriented, profitable and environmentally sustainable”.

This is beginning to happen in countries such as Vietnam, he observed, where smallholders are leading agricultural and economic growth.

Mr Nwanze called on developed countries to support developing agriculture nations with the right policies and investments, and for these latter countries to make “tangible commitments to investment of political capital, of financial capital and in human capital at home to create the conditions for successful rural development”.

Her Royal Highness Princess Haya Al Hussein of Jordan, United Nations Messenger of Peace, who also spoke at the conference, appealed to the conference with personal stories of hungry children who are the ultimate victims of food poverty.

In the rural areas of Cambodia, as much as 70 percent of household income is spent on food - triple the level of a family here in Italy, she said. In 2007 to 2009 alone, there were more than 60 food riots from Haiti to Indonesia. “There will be more now that FAO’s global food price index has hit a historic high.

“We have lost the sense of compassion and community that makes life worthwhile. We are morally bankrupt. We can spend over a trillion dollars for armaments as we fight over land, ideology and religion and, yet, we let 300 million children starve.”

IFAD does not often make the news, she noted, “but your work has never been more timely or urgent”. She called on governments to honour their pledges to agricultural development and rural poverty, saying that “the alarm clock on hunger went off a long time ago”.

“We cannot hit the snooze button any more. If we do, you must realize that every tick of the second hand is a child’s life. We should act as if those threatened children are our children — because, in every sense, they are.”

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