| Beckmann began. I was listening with one ear and began listening closely when he said: "I am a huge fan of what the [World] Bank has done" recently. He elaborated, saying that when the financial crisis hit, they rapidly expanded finance for developing countries. They allowed a lot of countries get through the crisis we are in without having to slash budgets. He gave a few more examples and then added that the World Bank can move much faster than individual developed country donors can.
Next, he complimented the U.S. leadership and the Obama administration in responding to the global food crisis. However, he noted, their efforts have been "somewhat stymied" by Congress. He then got into the details of what Congress has done with food aid funding in the last year.
The next speaker was Gawain Kripke of Oxfam. He began by complimenting Beckmann and then transitioned into his topic of discussing the underlying issues of the food crisis. In 2008, the "perfect storm" hit when a number of coincidental factors coincided to drive prices up. He called this a misleading analogy because it wasn't something that was going to blow over and pass. It did, for a while, but food prices are back up and sometimes higher than the historically high levels of 2008. So we have permanently high prices it seems.
At Oxfam, they think the are some deeper issues that lead to the higher food prices, not merely coincidences. He listed factors and noted that each one is debated.
- Increased demand (population and incomes are increasing, so people are eating more and eating higher up the value chain, i.e. eating more meat)
- Food production is "increasing but not at rates we want to see." The rate of increase has been declining in the last couple decades so the wedge between demand and supply getting narrower. "This is where technologists come in" saying that we need to increase production. The FAO says we must increase food production by 70% by 2050.
- Increase linkage between food prices and energy prices. Energy is used in the production and transport and processing of food but at the same time, increasingly, food and agricultural inputs are a factor for energy. In this country, we're consuming a lot of food as gas for our cars. In general, energy prices tend to drive food prices.
- The weather. The weather, in acute situations, is causing big problems, i.e. drought in Horn of Africa. Most scientists agree that the weather is changing globally. We're talking about climate change. Weather is becoming more erratic, more volatile, heavier rains, more drought. Most of agriculture in Africa is rainfed so there is very little ability to do anything about this.
- The financialization of agricultural markets. There's been a migration of hundreds of billions of dollars into agricultural markets. Agricultural futures and derivatives. While it's debated, the actual impact, it's observably true that prices are more volatile.
All of this argues that there are structural and underlying reasons for this food crisis, and all of this implies policy changes. For Oxfam, we agree that these crises have structural and underlying causes and we are trying to apply ourselves in a more structural way. We have a campaign called the Grow Campaign.
Last, if we are facing higher prices, we have to be realistic about it. We must understand that a drought in the Horn of Africa is not a one-off crisis. Don't pretend we aren't going to have another food crisis in two years because we will.
He then (correctly) criticized the U.S. food aid program, because it requires purchasing food from the U.S. and shipping it overseas instead of buying it from the country or region in need of aid.
Next was Asmita Tiwari of the World Bank, who said she would speak mostly about how the bank responded to the drought in the Horn of Africa this past year. Unfortunately she showed slides that I could not see and did not read them, so it is hard to understand her full presentation. She said there are approximately 12 million people affected by drought and famine, especially in Somalia. We have seen the progression having the food crisis in July which became more serious in September, when more than 30 million people were effected. It's now been eased a bit due to both rain and international support.
The factors Kripke mentioned were some of the factors that caused the food crisis, she agreed. A lot of vulnerable people were not able to buy food and store food when the dry season was approaching in the Horn of Africa. The intensity and frequency of disasters like the drought in the Horn of Africa are increasing. With the climate crisis, a lot of changes in precipitation lead to even more disasters. That coupled with the increasing population and increasing demand is going to mean even more disasters in the future.
Socio-economic impacts in the Horn with rising cereal prices include more children with malnutrition. Originally, the African Union responded to the crisis. The countries also responded - Ethiopia, Kenya, Djibouti. Uganda didn't suffer too much with the drought but it's the breadbasket of the region. Many people say that in Somalia, conflict led from drought to famine because international agencies were not able to access people.
The bank has been following an agenda of disaster risk reduction. We are working through partnerships with regional organizations and international agencies. We are working on knowledge production and planning for the future and also by providing financing. There's a lot of focus on response right now. But we are trying to put it on a more balanced approach in putting more money in prevention.
We had a number of missions in the country, we have offices in most of the countries. We came up with an amount needed in a response package. We are working in some of the camps for refugees in Ethiopia and Kenya, investing $30 million through the UN to help in health and nutrition, especially pregnant women and children suffering from malnutrition.
This crisis gathered a lot of international political will, but was it timely? We had some of the indications that this is going to happen early in the year but it took a lot of time for the international community to respond. We would have saved more people if we had responded earlier.
At the regional level, the African Union has done a good job, but there are still issues with coordination between all of the different international agencies.
Finally, the role of media. The media plays a good role of bringing this to the forefront, but there was the issue of Ethiopia, who felt that the work they have done in preventing famine and crisis was not appreciated, and that only the negative side was shown in the media.
Next was Devry S. Boughner of Cargill. She mentioned how David Beckmann spoke about policy. She decided to focus on how Cargill approaches that. Cargill is invested in 63 countries and trades with 130 countries, making them one of the single largest movers of food in the world. She also likes to characterized Cargill as one of the world's largest development organizations. Through their history, she said, Cargill has seen the best and seen the worst of policies and their reactions.
She then brought up the term: food diplomacy. She thinks we must encourage governments and other actors to have the right attitude on what it takes to produce and move the food. There are five Ps: Production, Prices, Political Will, Policy, and Partnerships.
First and foremost, we spend our time understanding the global supply and demand. On the first P, there is enough food produced today to feed the world. It gets to then the policy. To get the right policies to move the food from where it's produced to where it's being consumed.
Then it gets to political will. We can figure out what the right policies are, but is there the political will to enact them?
And then there are prices. We are in what we are calling a permanent crisis in prices. How can we have a conversation about how we have the right prices. Prices are a double edged sword depending on the side you're sitting on. Prices should send a signal to farmers to produce but should also be affordable to consumers. Where we have potential for production, where we have those that are in the crux of a caloric or an economic famine, perhaps governments need to set prices to give incentives to smallholder farmers to produce.
Last, partnerships. We at Cargill partner when we know we are organized around a common goal and each one of us has a particular strength we bring to the table. We've built out an infrastructure of global logistics, transport, knowledge of market infrastructure, that we can bring to the table for others. For the long term, we need to proactively address the production and distribution and in the immediate term, always be prepared for a crisis.
Cargill recently partnered with the UN World Food Program (WFP) in the Horn of Africa. Cargill announced last week that the single largest donation to the WFP, we shipped a vessel, 10,000 metric tons from India to Mombasa, Kenya to feed 1 million people for 1 month. We can move food, we can turn it around very quickly as our customers demand it, but in this case it took us three months from when our CEO sat down with Rajiv Shah (of USAID) to get the vessel there. Why? Because it goes back to those 5 Ps. We had the production. We were trying to address the Prices - on the consumer side, this was donation. Policy - some of the policies we had to face to figure out where we can source that, we can't use GM corn. We had to find where governments would allow us to export food because it would be too difficult to manage even though they had the food. We ended up sourcing the rice from India. How can we make this happen more quickly? Now, WFP is working with Oxfam and Care on the distribution of the rice to make sure there are no negative impacts as well. |
