The global food market has been a major factor in supporting rapid population gr

Question

The global food market has been a major factor in supporting rapid population growth in areas which have limited food-production capacities. By providing relatively low-cost food, it has enabled rapid population expansion in areas with high rates of poverty, illiteracy, and other factors which would normally limit growth. The effect here is that we are fostering poverty on an ever-increasing scale, creating populations who are driven by short-term situational economics rather than the long-term interests of their societies. In the end, we are creating vast populations of such limited resources that they will starve for a lack of food the next time that there is a major drop in food production. Mass starvation is broadly viewed as a bad thing. Critique the flaws in the system which contribute to this.

Explanation / Answer

The absolute number of undernourished people in the world has been on an upward trend since the mid-nineties. While the proportion of undernourished people has been more or less constant, it has risen sharply owing to the food and financial crises. Further, the economically known crisis has had a different impact on developed and developing countries, with the least developed countries being affected the most. Around 98 per cent of the world’s undernourished people live in developing countries.

The prevalence of undernourishment varies significantly from region to region, with sub-Saharan Africa heading the list with around 30 per cent of the population, followed by Asia with 16 per cent and Latin America and the Caribbean with 10 per cent. In the developed world, most people were able to deal with the crisis reasonably well as a result of well-functioning safety nets; however, people in many relatively poor import-dependent countries, especially in Africa, experienced large price hikes that had permanent effects on their future income and their ability to escape poverty.

Small farmers and poor consumers are extremely vulnerable to poverty as a result of unstable commodity prices. It is important to note that food represents a large share of farmer income and also a significant share of the budget of low-income consumers. As a result, big changes in food prices have a large negative impact on the real incomes of small landholders and poor families. For that reason, even temporary reductions in prices for farmers or price hikes in prices for consumers can cause permanent effects on income, leading to poverty traps. In addition to high and volatile food prices, some countries are more vulnerable than others to undernourishment and recurrent food shortages. People in countries that are in protracted crises are more vulnerable to hunger.

Protracted crisis situations are characterized by recurrent natural disasters and/or social conflict, the longevity of food crises, the breakdown of livelihoods and insufficient institutional capacity to react to the crises. One way FAO identifies countries in protracted crises is by the proportion of humanitarian assistance received by the country as a share of total ODA . If a country has received 10 per cent or more of their ODA as humanitarian aid since 2000, then it is classified as being in a protracted crisis. Somalia, for example, one the 22 countries on FAO’s list of countries in protracted crisis has received as much as two thirds of its ODA as humanitarian aid.

Investment in agriculture remains the most decisive instrument to promote sustainable long-term food security. Such investment has the potential to improve the competitiveness of domestic production, increase farmers’ profits and make food more affordable for the poor. Safety nets are also crucial for alleviating food insecurity in the short term, as well as for providing the basis for long-term development. Additional measures would include limits to biofuels expansion as it is clear that this was one of the key factors behind rising agricultural commodity prices. The high levels of price volatility must also be addressed, by increasing financial regulation to curb speculation in commodity markets. Finally, food reserves are needed to cushion price swings. When the global financial and economic crisis hit, a large number of developing countries were still reeling from the economic and social impacts of the earlier global food crisis. Prior to the global financial crisis, concerns about the spikes in food and energy prices were at the center of public and media attention.

Global leaders and policymakers were concerned about the potential welfare impacts of the sharp increases in the prices of food commodities, such as rice, corn (maize), wheat and soybeans, as well as global food security. There was concern about how higher food prices were adversely affecting low-income consumers and efforts to reduce poverty, as well as the political and social stability of poor countries and food-importing countries. These concerns have subsequently heightened with the social tensions, unrest and food riots that have broken out in several countries. However, attention to the fragile and unsustainable global food security situation was pushed off the center stage of international concerns and replaced by the global financial and economic crisis and the later push towards budget cuts and fiscal austerity in most major industrialized countries.

With the increase in hunger and malnutrition, the risk of premature deaths is likely to increase among the young, old, infirm and other vulnerable people and this will continue unless conditions improve. The survivors are harmed in other ways as well. The impact of the food crisis is likely to be much more severe among women and children. Because of gender discrimination and various cultural practices that influence intra-household resource allocation, these groups tend to be more vulnerable to chronic and transitory food insecurity. Furthermore, the crisis may undermine efforts to reduce maternal and infant deaths as the food and nutrition deficits facing pregnant and lactating women worsen in already adversely affected regions. Lack of social protection for female workers in the informal sector compounds their vulnerability to such external shocks. Higher food prices have forced households to spend more on food. As per statistics, the food price shock caused the average poor household. The result was that households with limited or no substitution options have been pushed below their normal caloric or micronutrient intake, a situation that threatens their long-term health and ability to escape poverty.

Even where households have been able to maintain their levels of daily caloric intake, by substituting more expensive foods with cheaper alternatives, this practice is causing micronutrient deficiencies where the substitutes are less nutritious. The global food price crisis has also induced reduced household spending on health care and children’s education. Although much global attention has been focused on the impact of the food and the energy crises on developing countries, these impacts also hit more developed countries. While starvation seldom occurs in industrialized economies, declines in food expenditures by middle- and low income households have forced families to eat less frequently and to consume less diverse and nutrient-rich foods.

Several developed countries saw spikes in chronic mild under-nutrition among the poor and other social groups, primarily due to job losses due to the global financial and economic crisis. People who are out of work, have exhausted their savings, or are nearing the end of their unemployment benefits increasingly find themselves having to rely on local food banks and other not-for-profit charitable organizations. For many of the “new poor”, this is the first time they have had to rely on public assistance programs for food and other benefits. The food crisis is a result of a complex interplay of several factors. Some of these factors have recently emerged, such as excessive speculation in agricultural commodity futures markets, drought-induced crop failures in major grain- and cereal-producing regions and the surge in biofuel production.

Other causes are longer-term, including reduced national and international investments in developing-country agriculture, distortions in the international trading system and changing consumption patterns. All these factors have adversely affected agricultural production. However, some factors played much larger roles than others. As the search for cheaper energy sources continues, the demand for biofuels has increased. A major source of the growth in demand for food crops is for the production of bioethanol and biodiesel. The conventional wisdom holds that a free-market economy, with minimal government interference, would function more efficiently and thus become more productive than a command or planned economy. A rapidly liberalized agricultural trade in pursuit of the promised gains from trade liberalization including expanded access to foreign markets and technology, and lower food prices for consumers gained much less than expected: job creation has been weak, environmental costs have often been high, and in some cases, governments have lost the policy space necessary to ensure long-term development. The tendency in the past quarter century to overestimate the benefits to the poor of cheap imports and to underestimate the development and poverty alleviation benefits of a strong domestic food agricultural sector.

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