Transcript Impacts of Changes in US-Mexico Corn Trade Under NAFTA
Resolving the Food Crisis:
Assessing Global Policy Reforms Since 2007
Timothy A. Wise Global Development and Environment Institute Tufts University
© Global Development and Environment Institute, Tufts University
Policy Report
by Timothy A. Wise Sophia Murphy January 2012 Published by: Institute for Agriculture and Trade Policy (IATP) Tufts University’s Global Development and Environment Institute (GDAE) Available at: http://www.ase.tufts.edu/gdae/policy_research/resolving_food_crisis.html
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Assessing Global Policy Reforms Since 2007
• • • Research question: What has truly changed in policy and practice since 2007 price spikes?
• • • • • Assessed progress in five institutions: International Donors World Bank and Multilateral Development Banks United Nations (FAO, Committee on Food Security) G-20 Countries UN Special Rapporteur on the Right to Food • • • Main conclusions: Significant progress in funding, priorities, but… Key reforms still urgently needed Underlying causes of food crisis not yet addressed
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LDC’s Soaring Food Import Bills
Agricultural Trade Balance of Least Developed Countries, 1961-2009
25 20 15 10
Imports Net deficit
5
Exports
0 1961 1965 1969 1973 1977 1981 1985 1989 Source: FAO (2011), TradeSTAT 1993 1997 2001 2005 2009
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© Global Development and Environment Institute, Tufts University
Growing Donor Commitments to Agriculture
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© Global Development and Environment Institute, Tufts University
•
Some new wine, in mostly old bottles:
Only $6.1 b of $22 b L’Aquila pledges represent new money, over three years • Barely returns to levels of early 1990s • Austerity budgets threaten even those gains
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Structural Changes:
• • • Integration of: food fuel finance
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Financial Speculation Fuels Market Distortions
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Three Priorities for Urgent Action
1.
Slow biofuel expansion, especially in crops that contribute to underlying rise in demand, e.g. corn ethanol.
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U.S. corn for ethanol a particular driver of high food prices Less than 20% now for food or seed; more for ethanol than feed.
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Three Priorities for Urgent Action
1.
2.
Slow biofuel expansion, especially in crops that contribute to underlying rise in demand, e.g. corn ethanol.
1.
2.
Address volatility: Strong regulations to limit financial speculation – market transparency, position limits, margins, and more Active development of publicly held food reserves, not just for emergency humanitarian uses, but as buffer stocks.
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New England Complex Systems Institute
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Three Priorities for Urgent Action
1.
2.
3.
Slow biofuel expansion, especially in crops that contribute to underlying rise in demand, e.g. corn ethanol.
Address volatility: 1.
2.
3.
4.
1.
Strong regulations to limit financial speculation – market transparency, position limits, margins, and more 2.
Active development of publicly held food reserves, not just for emergency humanitarian uses, but as buffer stocks.
Moratoria on “land grabs:” 227 million hectares since 2001 $91 billion in 2008 alone, dwarfing ODA to agriculture “development in reverse” – land banking, displacement Guidelines for “responsible agricultural investment” too little and much too late to address urgency of problem
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Let Developing Countries Lead
African Union response to G-20:
“African countries are not looking forward to depending continuously on external supplies that will remain uncertain in prices and quantities. Actually, our ultimate and unquestionable ambition is to develop our agriculture and markets…. In our opinion, we must rely on our own production to meet our food needs.
In fact, importation is not Africa’s goal
.”
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UN Special Rapporteur on the Right to Food
Olivier de Schutter’s priorities for policy-makers: 1. Support countries’ ability to feed themselves.
2. Establish food reserves.
3. Regulate financial speculation.
4. Ensure national social safety nets against declining export revenues and rising food import bills.
5. Support farmers’ organizations.
6. Protect access to land, putting a moratorium on large scale foreign land purchases.
7. Promote the transition to environmentally sustainable agriculture.
8. Defend the human right to food.
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Thank you.
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Funding: Progress, but not enough
Encouraging signs: • Growing commitment to Agric and Rural Development • Recognition that smallholders and women are important • Respect for “country-led programs”, less top-down, e.g. CAADP, GAFSP • Acceptance of strong state role in agric development • Acknowledgment of resource constraints, climate change But problematic policies persist: • Heavy reliance on market-based solutions • Bias toward external technologies, high-input agriculture; • Limited priority to domestic food production • Little concrete action on climate change, esp. adaptation • Continued support for biofuels expansion
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Weaknesses in Global Response to Crisis
• • • • • • • • Need more decisive action on key issues: Funding for Agri. Rural Development Curbing Food Price Increases and Reducing Volatility Reducing the Impact of Energy Crops on Food Prices Stopping “Land Grabs” and Promoting “Responsible Agricultural Investment” Promoting a Transition to Agro-Ecology Addressing Climate Change and Agriculture New policies on Trade and Food Addressing Market Power in the Food System
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Drivers of Price Increases, Volatility
Short-term causes: • • Low inventories of key food crops • Export restrictions, border measures during crisis • Weather, possibly due to climate change • Depreciation of the dollar
Financial speculation in commodities markets
Long-term causes • •
Expansion of crop and land use for biofuels Decline in food-producing capacity; import dependency
• Growth of meat-based diets in large developing countries • Slowing yield growth for key food crops • Reductions in publicly funded R&D • Climate change
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World Bank: Land Acquisitions
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Figure 1. Forestry and Agriculture as a Percent of Total Greenhouse Gas Emissions
Fossil fuel supply 5% Building 8% Waste 3% Transport 13% Agriculture 14% Power Supply 21% Industry 19% Power Supply Industry Forestry Agriculture Transport Building Fossil fuel supply Waste Forestry 17% Source: Figure adapted from UN Framework Convention on Climate Change , UNFCCC 2007
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Figure 19. Global GHG Mitigation Potential from Agriculture
1400 400 200 0 -200 1200 1000 800 600 N2O CH4 CO2 Source: Adapted from Metz et al. 2007a and Smith et al. 2008, available at http://www.ipcc.ch/graphics/ar4-wg3/jpg/fig-8-4.jpg
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Global Production of Biofuels
180000 160000 140000 120000 100000 80000 60000 40000 20000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Biodiesel Ethanol
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© Global Development and Environment Institute, Tufts University