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Published July 18, 2011, 04:33 AM

Learning from the past, looking to the future

KNOXVILLE, Tenn. — The high and volatile agricultural commodity prices of 2007 and ’08 and 2010 and ’11 have given crop farmers relief from years of low and often below-the-cost-of-production prices, but they also have resulted in food riots around the world and a major jump in the number of persons experiencing chronic hunger — from approximately 850 million people to more than 1 billion people. By far, the most devastating effect has been felt in developing countries, particularly the least developed among them.

By: Daryll E. Ray and Harwood D. Schaffer,

KNOXVILLE, Tenn. — The high and volatile agricultural commodity prices of 2007 and ’08 and 2010 and ’11 have given crop farmers relief from years of low and often below-the-cost-of-production prices, but they also have resulted in food riots around the world and a major jump in the number of persons experiencing chronic hunger — from approximately 850 million people to more than 1 billion people. By far, the most devastating effect has been felt in developing countries, particularly the least developed among them.

As a result, President Abdoulaye Wade of Senegal took the initiative of organizing the second International Dakar Agricultural Forum — called Dakar Agricole 2011 — in April in Dakar, Senegal. This meeting included heads of state, ministers, farmers and experts from across the globe to discuss issues surrounding agricultural regulation and global agricultural governance.

The event was organized to answer fundamental questions faced by the international community:

n Under which principles can we regulate agricultural markets to prevent food crises and avoid repeated agricultural crises?

n What instruments and international cooperation should be put to use to improve food security and fight poverty?

n On what grounds can we create a new global governance that will make agriculture, food and environmental preservation top priorities?

Dr. Aliou Diagne, an economist and Program Leader with the Africa Rice Center in Cotonou, Benin, talked about some of the policies advocated in the past under the structural adjustment programs promoted by the World Bank and the International Monetary Fund that made the recent problems worse than they otherwise would have been.

As a part of the Structural Adjustment Programs, the WB and the IMF advocated that the countries refocus their agriculture toward the support of higher-priced crops where they had a comparative advantage and could generate foreign currency. The reasoning was that these African countries should concentrate on growing these crops — such as bananas, cacao, coffee, cotton, flowers — and leave the production of grains to developed countries and other developing countries in Asia and Latin American where the yield was higher and the cost of production was lower. African countries then could use their earnings to purchase more grain at a lower price than they could produce themselves.

Issues come up

This makes sense. But when applied to food and agriculture, problems arise.

First, in most developing countries, millions of farmers produce the major grains and other staples that are the foundation of the diets of the farmers’ own families and those of their city cousins. When shifted to export crops, those who receive the major financial benefits from producing the export crops are not necessarily the ones who till the soil and who no longer receive government support such as access to extension personnel. As a result, they become dependent upon feeding programs instead of growing most of their own food and the food needed to feed the rest of the population.

Second, when a country produces enough of its staple foods, a sharp rise in international prices results in a relatively small increase in the cost of importing the balance needed. On the other hand, when a country imports 50 to 80 percent of its food needs and prices double or triple, it suddenly faces a monumental crisis — adequate food imports become unaffordable.

Leader’s suggestion

Diagne suggested that, as a matter of food security for its population, developing countries should strive to produce at least 80 percent of their basic foodstuffs. They don’t need to become fully self-sufficient in the production of all staples to ensure food security. They also should develop more integrated regional markets that encompass neighboring countries and for many of the key food staples consider regional instead of national self-sufficiency as a goal.

Editor’s Note: Ray holds the Blasingame Chair of Excellence in Agricultural Policy at the Institute of Agriculture at the University of Tennessee and is the director of the university’s Agricultural Policy Analysis Center. Schaffer is a research assistant professor at APAC.

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