Still Waiting for Developed Countries Commitments and Action on Food Crisis

In the lasts months, International Organizations as well as NGOs multiplyed ewquests for additional foundings both in the short and in the long term in order to fight against food crisis negative impacts on the South.

World Bank was probably the most active institution. They propose an interesting action plan that couple both emergency intervenctions (mainly through financing food vauchers that are less distoritves than in-kind food aid) as erll as medium term investments and aid to improve productivity in the South. Mr. Zoellick call it a New Deal for the food crisis.

So far, so good. This time solutions proposed seems to be pragmatic and not biased toward a so-called neo-liberal ideology (as in the 80s and 90s). What is more, the debate with other organizations provide some other needed policy changes as, for example, more "policy space" for developing countries, the need to increase climate adaptation aid, etc.

The problem it that as Mr Diouf (FAO Secretary General) says these kind of programs have been created by the FAO (among others) many years ago. The problem is that founding by developed countries was not enough to implement them.

Once again, in this current cisis, developed countries do not answer quickly by providing new founding. They simply put on the table some small grants in order to demonstrate to theyr citizens that they are doing something.

We need to change the system by reducing the dependency of the UN and other international institutions on developed countries "special contribution" (in fact, "compulsory" contribution are quite low and allow only to run these institutions). The ideas to found a global development program with a small tax on airplanes tickets or on financial transactions need to be further explored and implemented.

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What to read to understand causes and action needed in the current food crise

Many newspaper articles, papers, etc. are disseminated in these days to inform the issue of rising food prices and their causes, impacts on developing countries. However, I found only an article that is comprehensive and that explain well the issue, impacts and the way out. If you are interested on this issue you should read this article of Bridges (ICTSD).

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The Missing Element To Understand High Food Prices: Past Developed Countries Policies Matter

These days there is a lot of media coverage on high rising food prices and their impacts on developing countries. Media, scholars, NGOs and International Organization underline 3 causes that explain the rising of food prices:

• Emerging Markets growing demand of food (notably milk and meat).
• Growing Biofuels production.
• Market speculation.
  

All these elements played a crucial role in increasing food prices. Nevertheless, there is another explanation that it is never mentioned: the long-term impact of developed countries subsidies and protectionism.

In fact, developed countries dumping reduced and reduce the incentive for developing countries farmers to produce more food. What is more, dumping on international and local markets in the last couple of decades pushed out of business an important number of developing countries. The consequence was a reduction of the (growth of) developing countries food production. In fact, for example, the number of ha used for cereals production in developing countries decreased of more than 13% (FAO stats) since 1975.

Developed countries are in large part responsible of the current situation (also because of the negative impact on developing countries agriculture of the liberalization promoted by developed countries in the 80s and the 90s). They should pay for their responsibilities.

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Increasing food prices: what solutions to increase gains for rural poor and decrease risks for urban poor and developing countries?

Dani Rodrik comment in a very insightful post a statement made by Mr Zoellick that show how many decision-makers does not understand neither what is going on in agricultural markets nor what will be the impacts on development and poverty of high prices. In fact, they merge the old discourse (high agricultural prices = gains for developing countries) with a new one (high prices = problems for urban poor). Either discourse it is true but we need an analysis that take into account both and that provide some solutions.

To start, we should remember three elements:

• High food prices are caused by biofuels and emerging countries growing demand but also by speculation on commodities markets.

• 2/3 of the poor lives in rural areas and depends on agriculture and many of the urban poor are former peasants.

• Many developing countries, even if they are net importing countries, have still an important potential in expanding their agricultural production.
  

These elements mean that high agricultural prices are positive for most poor in developing countries but the risks are very high because urban poor uprising (caused by high food prices) can destabilize several developing countries.

This mean that we need to find solutions to reduce these risks and the adjustment costs. Developing countries need neither more food aid (which often create many problems) nor laissez-faire.

Developing countries need active rural development policies (founded also through Aid), which will increase their agricultural production (also by helping urban poor to come back to rural areas that they leaved) and some policies to decrease food prices in urban areas (notably by creating food stocks filled by national production). These policies need important resources that should be provided by bilateral and multilateral donors. The problem is that, even after the last World Development Report, I do not see an upward trend in Aid dealing with rural development and food policies in developing countries.

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