Incentives can make farming attractive again
May 06, 2008
HOW did we get to this place where food prices are prohibitively high for over 100 million people around the world? This question will be pondered over the next several years by people whose job it is to think about why things happen the way they do.
PERSPECTIVE OF A UGANDAN IN CANADA
Opiyo Oloya
HOW did we get to this place where food prices are prohibitively high for over 100 million people around the world? This question will be pondered over the next several years by people whose job it is to think about why things happen the way they do.
But for the hungry in the food lines in Egypt, Haiti, Bangladesh, Nigeria, Uganda, Burkina Faso, the Philippines and many other developing nations, the main question is: Can I afford the food to feed my family tonight?
For millions around the world, the answer is increasingly uncertain as food prices gallop ahead of wages, and ability to afford the most basics. What is more, looking at the causes of the current crisis, it is predictable that there is no end in sight to the problem. Indeed, the food crisis crept up on a world that appeared to be pre-occupied with everything else except food! We have been worried about fuel prices going up. We have been fighting the global war on terror that is spearheaded by the US.
We have been working hard to get rid of malaria, HIV/AIDS and all the other diseases that stalk people around the world. But we never thought about the food that we need to eat to survive. Now, we are in a rut, and very hungry and things are about to get much worse.
For those paying attention, several factors have brought us to the brink of starvation. Foremost, there are simply way too many mouths to feed and not enough food to go around. China and India, the two most populous nations on earth with a combined population of 2.5 billion people, are not producing nearly enough food for their own people.
To make ends meet, the two newly minted economic powers have been buying just about anything they can put money on, sucking up all the food reserves around the world. What makes the China and India problem even more complicated is that their citizens have grown relatively wealthier.
With money to burn, appetite has increased for poultry and other meats. To keep up with demand these food items, suppliers have had to increase production which in turn means using more grain to fatten the animals before the slaughter.
The paradox being that the more grain is fed to chicken before export to Chinese and Indian markets, the less food is available worldwide to a starving population. But, it would be simplistic to simply blame Chinese and Indian nationals for their changing tastes. There are also other factors at play here, throwing the monkey wrench in food production.
In the US, for example, more farmers are discovering that there is money to be had by planting crops such as wheat and corn, and selling it to companies that make biofuels for running automobiles. This is especially profitable as the price of oil inches toward a record $130 per barrel. Excited by profit to be made in this new area, farmers are sending certain crops to factories that turn them into fuel for use in vehicles.
As well, poor harvests in Asia and elsewhere coupled with continuing problems with global warming, have played havoc with food supply. The immediate focus now is how to reverse the upward mobility of world food prices in order to bring relief to the world’s poor.
The solution is clearly not in tinkering with high food demands in populous Asia or eliminating the competing demand for biofuels. What is required is deliberate and concerted world policy to stimulate the return to agriculture, as well as better research into high-yield crops for small-scale farmers. The first shake-up should focus on agricultural subsidies in developed nations in the European Community and North America whereby farmers are paid by their governments in order to regulate supply of food commodities.
The US Department of Agriculture, for example, subsidises at least two dozen agriculture commodities including wheat, rice and peanut. Although some argue that subsidies allow farmers in developed nations to increase production without worrying about driving down the price through oversupply, the impact is negative for farmers in developing nations.
Faced with much cheaper food items from developed nations, struggling farmers in developing nations quickly lose the ability to compete in their own domestic markets. Soon, the very farmlands that sustained generations of families are unable to produce food to compete with cheap imports from Europe and America. Forced off the land, without source of income to buy food, the once self-sufficient farmer in Ghana or Sri Lanka or the Philippines becomes the new dispossessed poor in the food line, clamouring for hand-outs.
The problem is how to stem off food imports that destroy domestic markets at a time when food prices are so high. To simply say to developed countries, “Do not dump your cheap food in our backyards†is to create riots as the crisis will only escalate due to the immediate food shortage. Instead, stimulating domestic agricultural production requires that farmers get incentives that will make farming attractive again—free seeds, free tillage, interest-free loans, and whatever else is needed to take away the burden of producing food. At the same time, small farmers need to be guaranteed a larger share of the domestic markets to sell their commodities.
That means limiting the amount of food import as well as export at some point to allow domestic producers to sell within the country.
Long term planning will require that governments of developing nations declare certain land areas as agricultural land, and therefore off limit to sprawling urbanisation.
Small scale farmers need to know that their efforts will be rewarded rather than punished. They also need to have confidence that governments are ready to help when crops fail in bad weather or due to unforeseen crop disease.
Ultimately, the word on the street needs to be that we cannot take our farmers for granted, certainly not if we want to keep on eating, and stay alive.
Opiyo.oloya@sympatico.ca
Opiyo Oloya
HOW did we get to this place where food prices are prohibitively high for over 100 million people around the world? This question will be pondered over the next several years by people whose job it is to think about why things happen the way they do.
But for the hungry in the food lines in Egypt, Haiti, Bangladesh, Nigeria, Uganda, Burkina Faso, the Philippines and many other developing nations, the main question is: Can I afford the food to feed my family tonight?
For millions around the world, the answer is increasingly uncertain as food prices gallop ahead of wages, and ability to afford the most basics. What is more, looking at the causes of the current crisis, it is predictable that there is no end in sight to the problem. Indeed, the food crisis crept up on a world that appeared to be pre-occupied with everything else except food! We have been worried about fuel prices going up. We have been fighting the global war on terror that is spearheaded by the US.
We have been working hard to get rid of malaria, HIV/AIDS and all the other diseases that stalk people around the world. But we never thought about the food that we need to eat to survive. Now, we are in a rut, and very hungry and things are about to get much worse.
For those paying attention, several factors have brought us to the brink of starvation. Foremost, there are simply way too many mouths to feed and not enough food to go around. China and India, the two most populous nations on earth with a combined population of 2.5 billion people, are not producing nearly enough food for their own people.
To make ends meet, the two newly minted economic powers have been buying just about anything they can put money on, sucking up all the food reserves around the world. What makes the China and India problem even more complicated is that their citizens have grown relatively wealthier.
With money to burn, appetite has increased for poultry and other meats. To keep up with demand these food items, suppliers have had to increase production which in turn means using more grain to fatten the animals before the slaughter.
The paradox being that the more grain is fed to chicken before export to Chinese and Indian markets, the less food is available worldwide to a starving population. But, it would be simplistic to simply blame Chinese and Indian nationals for their changing tastes. There are also other factors at play here, throwing the monkey wrench in food production.
In the US, for example, more farmers are discovering that there is money to be had by planting crops such as wheat and corn, and selling it to companies that make biofuels for running automobiles. This is especially profitable as the price of oil inches toward a record $130 per barrel. Excited by profit to be made in this new area, farmers are sending certain crops to factories that turn them into fuel for use in vehicles.
As well, poor harvests in Asia and elsewhere coupled with continuing problems with global warming, have played havoc with food supply. The immediate focus now is how to reverse the upward mobility of world food prices in order to bring relief to the world’s poor.
The solution is clearly not in tinkering with high food demands in populous Asia or eliminating the competing demand for biofuels. What is required is deliberate and concerted world policy to stimulate the return to agriculture, as well as better research into high-yield crops for small-scale farmers. The first shake-up should focus on agricultural subsidies in developed nations in the European Community and North America whereby farmers are paid by their governments in order to regulate supply of food commodities.
The US Department of Agriculture, for example, subsidises at least two dozen agriculture commodities including wheat, rice and peanut. Although some argue that subsidies allow farmers in developed nations to increase production without worrying about driving down the price through oversupply, the impact is negative for farmers in developing nations.
Faced with much cheaper food items from developed nations, struggling farmers in developing nations quickly lose the ability to compete in their own domestic markets. Soon, the very farmlands that sustained generations of families are unable to produce food to compete with cheap imports from Europe and America. Forced off the land, without source of income to buy food, the once self-sufficient farmer in Ghana or Sri Lanka or the Philippines becomes the new dispossessed poor in the food line, clamouring for hand-outs.
The problem is how to stem off food imports that destroy domestic markets at a time when food prices are so high. To simply say to developed countries, “Do not dump your cheap food in our backyards†is to create riots as the crisis will only escalate due to the immediate food shortage. Instead, stimulating domestic agricultural production requires that farmers get incentives that will make farming attractive again—free seeds, free tillage, interest-free loans, and whatever else is needed to take away the burden of producing food. At the same time, small farmers need to be guaranteed a larger share of the domestic markets to sell their commodities.
That means limiting the amount of food import as well as export at some point to allow domestic producers to sell within the country.
Long term planning will require that governments of developing nations declare certain land areas as agricultural land, and therefore off limit to sprawling urbanisation.
Small scale farmers need to know that their efforts will be rewarded rather than punished. They also need to have confidence that governments are ready to help when crops fail in bad weather or due to unforeseen crop disease.
Ultimately, the word on the street needs to be that we cannot take our farmers for granted, certainly not if we want to keep on eating, and stay alive.
Opiyo.oloya@sympatico.ca