El m´ etodo de descomposici´ on aplicado a la epidemiolog´ıa

The Food Price Crisis of 2007-2008 and the additional price spikes of 2010-2011 brought the challenges facing the global food system to the world’s attention as commodity prices more than doubled, the number of hungry reached over one billion and violent protests broke out in countries around the globe. For the poorest, those living on less than a dollar a day and who already spent 80 percent of their income on food, the doubling of food prices caused even greater suffering as they faced hunger and malnutrition. (FAO, 2009a;

Mittal, 2009; Rogers, 2008b; ESA, 2011; Wise and Murphy, 2012; Oxfam, 2010)

The increase in prices was sudden and significant: in the three years from 2005 to 2008 food prices increased 75 percent, with nearly every commodity affected.

The prices of wheat, butter and milk had tripled from 2000 prices, and the prices of maize, rice and poultry nearly doubled. In fact, the food price index rose by nearly 40 percent in just 2007. (IFPRI, 2008) At the World Food Summit (2009b, p.1) member states recognised the situation as “an unacceptable blight on the

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lives, livelihoods and dignity of one-sixth of the world’s population.” However, with the arrival of the global financial crisis attention soon turned to other matters and the hungry were all but forgotten by world leaders and the general public.

From 2010 to 2011 there was a second price spike, which drove the global food import bill for 2011 to US$ 1.3 trillion. (Wise and Murphy, 2012) Although food prices have fallen from their peak it is expected that they will remain significantly higher than pre-crisis levels for years to come as agricultural production is placed under increasing strain. Projections for future food prices have demonstrated that if governments take a business-as-usual stance to climate change and many of the other challenges facing the food system that world cereal prices will rise by 30 to 40 percent and meat prices will rise by 20 to 30 percent by 2050. (IFPRI, 2008)

There were a number of reasons for the sudden and significant increases in food prices. Some changes in the global situation were recent, such as the pressure on land use with the introduction of biofuel production. Subsidies in the EU and US had made the growing of crops for biofuel increasingly attractive to farmers. For example, by 2008 the US government was providing US$ 7 billion a year in federal subsidies to its farmers for growing crops for fuel (Rogers, 2008b). Biofuels were not only grown on land previously used for food production but they also “tightened the correlation between oil and agricultural

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commodity prices creating new pricing signals that have little to do with food security or demand for food.” (Murphy, 2013, p.7) This increased price volatility and created a less stable distribution system, especially for food imports into poor net-food importing countries.

High oil prices, which by February 2008 were up by 19 percent at an all-time high of US$ 100 a barrel, increased the cost of oil-based inputs, such as fertilizers and fuel used in industrial agricultural production methods. This had a significant impact on US production prices and therefore the export prices of US commodities, which rose by 15 to 20 percent between 2002 and 2007 (Mittal, 2009). High oil prices also made the diversion of agricultural land to fuel production even more attractive. In 2007 the US produced a record maize harvest but one third of this went to produce ethanol. Globally this had serious implications, especially for the poorest and most food insecure. Staple grains such as maize and rice are the main food source for people in low-income countries. For example in low-income countries in Asia they account for 63 percent of the calories consumed and 50 percent in sub-Saharan Africa. The production of biofuels demonstrates the power imbalance in the food system. As IFPRI (2008, p.5) argues “450 pounds of maize can be converted into enough ethanol to fill the 25-gallon tank of an SUV with pure ethanol one time – or used to provide enough calories to feed one person for a year.” In fact, the quantity of cereals diverted to biofuels is equivalent to the annual cereal consumption of about 800 million people. (Jarvis, 2009)

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Nevertheless, many developing countries are implementing pro-biofuel national strategies to improve their own energy security and to increase their exports, among them Malawi, Mali, Mauritius, Nigeria, Senegal, South Africa, Zambia and Zimbabwe. Many have joined the Pan-African Non-Petroleum Producers Association. Molony and Smith (2010), through an investigation into the likely impact of biofuel production on local food security, have found there are many different approaches. For example, political unrest has followed an agreement between the government in Madagascar and Daewoo Logistics of South Korea, which has agreed to lease 1.3 million ha of land. Approximately the size of Belgium, the land will be used to produce maize and palm oil. However, in Mozambique the government has partnered with a research institute and a private company in an initiative to boost the livelihoods of 5,000 smallholders, whilst producing 100,000 litres of sorghum ethanol annually. Molony and Smith (2010, p.494) argue that if developed properly the “cultivation of biofuels may be instrumental in long-term poverty reduction in developing countries that have a high dependence on agricultural commodities, with benefits in the form of employment, skills development and the nurturing of secondary industries.”

However, to ensure this happens there will need to be “strong and thoughtful state regulation if biofuels are truly to be pro-poor.” (Molony and Smith, 2010, p.495) The authors predict that without strong leadership the temptation to scale up production to maximise profits will soon displace any meaningful pro-poor initiatives.

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Additional strain has been placed on the food system with increased demand for high-value products like meat, dairy, fish, fruits and vegetables in the new middle classes in the emerging economies, most notably China and India.

(IFPRI, 2008; Beddington, 2009) However, Mittal (2009) disputes this claim arguing that although there has been some increase in demand for high-value products in China and India this has been met by an increase in domestic production and has therefore not had a significant impact on the global situation.

Climate change also continued to play a part with the world’s largest wheat producer, Australia, caught in the worst drought for a century, which lasted for six years and reduced the country’s rice crop by 98 percent. Agricultural production was also reduced by other extreme weather conditions, such as floods in West Africa and Mozambique, and adverse conditions in Northern Europe, the Russian Federation and Ukraine in 2007. (IFPRI, 2008; Beddington, 2009; Mittal, 2009)

Combined with these poor harvests the world’s grain stocks had reached the lowest levels for decades with the US wheat stocks at their lowest for sixty years. Mittal (2009) argued that the private sector and IFIs viewed public stocks as costly and inefficient; there was a rise in the ‘just-in-time’ style of management of inventory and market liberalisation had created a general perception that individual countries did not need to hold public grain reserves as

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the market would provide if necessary. This proved incorrect; instead speculation drove hyperinflation with greater participation of hedge funds, index funds and sovereign wealth funds, especially after the sub-prime problems in the US market. Fund money invested in commodity indexes climbed from US$

13 billion in 2003 to US$ 260 billion in 2008. This level of interest in the deregulated market created extreme volatility with wheat prices rising by 46 percent between January 10 and February 26 in 2008; in just seven weeks.

(Mittal, 2009)

There were some who benefited from the food price crisis. With the concentration of ownership of the agri-businesses those few large multinational corporations that remained dominated marketing, production and agricultural inputs, and continue to do so. For example, “Monsanto’s net income more than doubled from US$ 543 million to US$ 1.12 billion in the three months up to the end of February 2008, compared to the same period in 2007, as its profits increased from US$ 1.44 billion to US$ 2.22 billion.” (UN, 2011, p.69) In the same period Cargill’s net earnings also soared by 86 percent to US$ 1.030 billion; Archer Daniels Midland increased its net earnings by 42 percent and Mosaic Company, one of the world’s largest fertilizer companies, enjoyed a 12-fold increase in its income. (UN, 2011) Although the relationship between these agri-businesses, industrial agricultural production methods and the overall impact on world food security is an area worthy of further investigation it is nevertheless beyond the remit of this thesis.

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The problems associated with extreme price volatility were exacerbated by export restrictions imposed by a number of countries, including those in the Russian Federation, as panic spread. Murphy (2013, pp.6-7) argues that the crisis “marked a watershed in our understanding of the world’s food systems”

and highlighted the flaws inherent in relying on the open markets to ensure food security. In fact the open market imperfectly regulated and with its inherent power imbalances, was part of the problem. She argues (2013, p.6-7) the

panic was largely misplaced, exacerbated by the failings of the WTO’s trade rules, which had successfully reined in import tariffs but failed to discipline export taxes, allowing food exporting countries to restrict or even ban exports just when food markets were short on supply.

The new challenges of biofuel production and increased demand for high-value foodstuffs were added to the inter-connected and multi-layered stresses already apparent in the food system through market liberalisation, climate change, water scarcity and pressure on land, as previously discussed. Mittal (2009) argues that although most attention has been focused on the role of higher energy costs, the decline in the growth of agricultural production and the increased demand from emerging economies there also has to be an evaluation of the structural causes of the crisis, including the decline in investment in agricultural

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productivity, the states’ reduced role in agriculture and the indiscriminate opening of agricultural markets.

The food price crisis brought the challenges faced by millions of people to the top of the political agenda, at least for a short time. With over one billion people hungry and social unrest in dozens of countries political leaders were forced to listen. (FAO, 2009a; Mittal, 2009; Rogers, 2008b; ESA, 2011; Wise and Murphy, 2012; Oxfam, 2010) However, the financial crisis has since taken precedence, especially in developed countries, but many of the problems remain.

Increased biofuel production actively promoted through government subsidies (Rogers, 2008b; Murphy, 2013) along with damaging price volatility driven by fund managers who took advantage of the deregulated markets were two new and interlinked challenges that had a significant impact on an already struggling and unbalanced food system. (Weis, 2007; De Schutter, 2014) These additional challenges exacerbated the problems of climate change, water scarcity and competition for land; problems that were aggravated by industrial agricultural productions methods. (ICA, 2012; HLPE, 2015; FAO, 2011d; FAO, 2009; Weis, 2007) In addition, the systemic decline in agricultural investment, which reduced the resilience of small-scale farmers, and the low cereal stocks that removed the safety net that should have protected the poor, were both as a direct result of neoliberal policies that had been implemented for decades. (De Schutter, 2014;

Mittal, 2009)

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Conclusion

Food is essential for life; it is vital to human health and is not a discretionary commodity. Furthermore the right to food is a human right that is enshrined in international law. (United Nations, 1948) Therefore food production should be given high priority at all levels, local, national and international. In addition, it also plays a significant role in the provision of a number of GPGs. However, not all types of agriculture provide the same level of GPGs. In fact industrialised methods, not only fail to provide many GPGs but they are also directly responsible for a wide range of public bads, from greenhouse gas emissions to extensive pollution, which have significant negative impacts. (IAASTD, 2009;

Weis, 2007; HLPE, 2015) These externalities are not reflected in the monetary cost of production but instead borne by others, often those least able to bear the additional cost. (Weis, 2007) Moreover, industrial agriculture does not provide the level or breadth of GPGs that sustainable agricultural methods, such as agroecology, have the capacity to provide, including social cohesion and rural development. (Wanki, 2011; Elliot, 2014; WDM, 2012; IAASTD, 2009; HLPE, 2013)

Industrial agriculture creates a wide range of problems especially in relation to climate change (De Schutter, 2014; HLPE, 2012) through its emissions, reliance on mechanisation and oil-based inputs; water scarcity through its over-consumption and pollution of freshwater and oceans, as well as its intensive use of land, promotion of monocultures and degradation of biodiversity. (IAASTD,

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2009; ICA, 2012; HLPE, 2015; FAO, 2009; Weis, 2007) These problems are exacerbated by the inclusion of agriculture in the world trading system (Clapp, 2006), which is presented as free trade, but which is in actual fact an unbalanced system (Weis, 2007; De Schutter, 2014; Tansey and Rajotte, 2005) that benefits developed countries at the expense of developing countries and the world’s poorest people.

Industrial agriculture has been promoted as part of the neoliberal agenda (Weis, 2007) for decades, being manifested in many different ways in different locations, through increased mechanisation, especially in developed countries;

through the ‘green revolution’ in Asia; and through the removal of state support for agriculture, most notably in developing countries. (De Schutter, 2014) Profit is paramount with economies of scale and a distorted system of state subsidies for industrial methods giving unfair advantages to such methods. The introduction of subsidies for biofuel production and the deregulation of the financial markets that create opportunities for highly damaging price volatility exacerbate the existing situation. (Murphy, 2012, 2013; HLPE, 2011;

McMichael, 2013; Land Matrix Portal, 2015; Mittal, 2009; IFPRI, 2008; Rogers, 2008b)

There is a growing consensus that recognises the challenges facing the world in relation to food production and the problems inherent in the present system, which fails to provide food security whilst at the same time adding to the

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deteriorating global situation. (Oxfam, 2010; WDM, 2012; Wise and Murphy, 2012) Within this group, which includes the special rapporteur on the right to food, different organisations within the UN system such as FAO, and the millions of farmers in La Via Campesina movement, there is recognition that the planet cannot sustain a business-as-usual approach. (De Schutter, 2014; FAO, 2011d; WDM, 2012; McKeon, 2013) This approach is not working now and it will continue to fail in the future.

There needs to be a move away from the market-based neoliberal agenda focussed primarily on profit and instead put in place a system that recognises the vital role that agriculture plays in the provision of food and also a wide range of GPGs. Agriculture is part of the problem; it has to be part of the solution.

The next chapter will examine the role of international organisations in the provision of global public goods. In later chapters the role of FAO in the provision of these goods will be examined in relation to its ability to help create a food secure world.

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