Feb. 24, 2017

Food Policy Matters

John Maynard Keynes thought the ideas of economists and political philosophers were more influential than people understood; arguing that “the world is ruled by little else”. During his day Keynes witnessed through the Great Depression that political and economic theories concocted in libraries and classrooms fed into policies that had life and death consequences.

Nowhere is this continuing reality more present than the food sector.  

Food is a commodity. It is bought and sold at shifting values that relate both to the costs of producing and delivering it to a consumer, and to the amount that consumer is willing or able to pay. But food is almost unique in the commodity world as universally-required product for survival that is at all times and in all places a core quality-of-life necessity. As such, policies that determine what food is available, how people access it, and what prices they pay for it enliven the passions of societies around the world.

These passions yield a number of timeless questions. Is food a universal right? If so how does this relate to its place as a valued commodity? Is it the responsibility of governments to ensure the food security of their populations? And where do markets fit in?

The Global Simulation Devoted to Food Security on February 25-26 will call on participants to grapple with these core issues. As in the outside world, consensus is unlikely. What is clear is that food policies matter, and it is up to those that craft and execute the food policies of tomorrow to ensure that we meet the Sustainable Development Goal of ending hunger by 2030. Here are few issues to consider as you prepare for your task.

The Vicious Cycles of Food Price Crises

In early 2008, global rice prices tripled in the span of about three months. Much of the world’s poor spends nearly half of their income on food and depends on rice as their key staple. The 2008 price spike was a serious food security threat. It was not caused by a shortage of rice.

In 2007 international wheat prices climbed in response to a period of decreased production while corn prices rose as crops were diverted to the biofuel industry. Rice enjoyed a strong production year. Prices still spiked, however, as rice exporting countries such as India and Thailand reduced shipments and imposed minimum export prices out of fear that price hikes for wheat and corn increase their needs at home. Large importing countries such as the Philippines responded by trying to rapidly increase rice stocks through international purchases, which drove the prices ever higher in a compounding cycle of panic buying and climbing costs.

Events from 2007-2008 demonstrate the ripple effects that can occur across different commodities in food markets. More importantly, however, they show that food policies and human behavior can move a challenging situation to a dire food security threat.  

Food Security vs. Food Sovereignty

Reactions to the 2007-2008 rice price crisis illuminate a wider food policy debate on the appropriate role of the food trade in meeting the needs of vulnerable citizens. A response from several importing countries has been to expand food self-sufficiency. This entails setting targets for the percentage of their food they produce at home, and executing policies that help to achieve these goals.

These reactions are consistent with concepts of food sovereignty and follow the logic that by extracting itself from import dependencies, a country can protect its citizens from unpredictable market movements that threaten their food security. They also play well politically; aligning with desires for domestic economic prioritization and the protection of agrarian livelihoods.

The potential problem with self-sufficiency is that it may undermine economic opportunities while leaving countries more vulnerable to food insecurity. Domestic policies that compel farmers to grow rice for example can keep them in low-value segments of the economy and leave them with less income for their daily needs – including food. They can also impede the structural transformation to less-agrarian economies that developing countries desperately need.

Countervailing food security approaches do not emphasize self-sufficiency, and rather call on countries to find ways of feeding their populations that are environmentally and economically sound and resilient to unexpected events. This can include mixing imports and domestic production, and relying on markets to match up farmers and consumers. Risks here include a consolidation of farming to industrial levels, which bring a raft of social and environmental challenges.

All countries exist on the continuum between these differing ideas, and it is the charge of policy architects to determine what is best for their particular circumstances. 

Food Aid

When food systems breakdown completely – whether from natural disasters, failed harvests, pervasive poverty, or logistical barriers from conflict and civil strife – the essential role of food aid immediately becomes clear.

Consider the 2011 famine in Somalia in which 260,000 people died. Early and better assistance could have saved lives as half the casualties occurred before the famine was even declared by the United Nations, but the tragedy would have been still worse without heroic food aid efforts that ultimately took shape. As of 2016, 6.2 million Somalians remain food insecure with nearly 3 million unable to meet their daily food requirements, and the specter of another famine looms.  

Somalia is merely one of many countries that rely on World Food Programme (WFP) and other organizations for emergency aid. The WFP delivers millions of metric tons of food every year, and in a current environment of decreasing donations, good policies and practices are more vital than ever. If WFP misallocates its food deliveries, people will starve and die. At the same time, if food aid comes largely from outside sources and creates dependencies in vulnerable communities, it can undermine the ability of local farmers to find markets for their crops.

For this reason, visionary approaches at the WFP launched during the late-2000s that seek to protect local producers while meeting critical hunger needs are vital. The next generation of food aid delivery experts must take these reforms still further.

Question your Assumptions   

Food policy challenges do not lend themselves to quick-fixes, simple solutions, or black-and-white thinking. As you tackle the simulation it will be important to keep an open mind, question your assumptions, and look creatively for answers that address a key challenge of our time: ending hunger across the world.

Keynes is useful here as well. When criticized for moving away from a past position he retorted, “when my information changes, I alter my conclusions. What do you do?”

What will you do? For some, this simulation may be the beginning of journey to help feed the world. Good luck!