Food crisis talks put renewed focus on agriculture

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Concerns about skyrocketing food prices and growing pressures on land and water were the focus of a high level conference in Brussels yesterday (3 July). Most participants agreed that agricultural markets and farm output need to be improved in order to feed the planet’s growing population.

French Agriculture Minister Michel Barnier, EU Agriculture Commissioner Mariann Fischer Boel and EU Development Commissioner Louis Michel were among the panellists at the conference, organised by the French EU Presidency and held at the European Parliament in Brussels.

During a press conference on the margins of the conference, Barnier repeated an earlier call for the creation of regional models, based on the CAP, whereby developing states would cooperate more closely in agricultural matters. While such a model should not lead to excessive protectionism, developing states should also not be subjected to the “brutal liberalisation” of global agricultural markets, he said.

Barnier, who will chair the meetings of the EU’s agricultural ministers for the next six months under the French EU Presidency, is a strong supporter of keeping a strong CAP and has been using the food crisis as an argument against further market reforms of the policy (EURACTIV 20/05/08).

But Ivo Hlavac, state secretary for agriculture for the Czech Republic, which takes over the EU’s six-month rotating presidency in January 2009, says the current CAP reform plans are the way forward and expects the plans to be finalised before the end of the year (EURACTIV 04/07/08).

Biofuels to blame?

But while the Commission’s CAP reform plans were generally welcomed, Brussels is under growing pressure to scrap its controversial targets for the use of biofuels, which should constitute 10% of the EU’s transport fuels by 2020, according to a 23 January Commission proposal (EURACTIV LinksDossier). There are concerns that the cultivation of crops for fuel instead of food is driving up food prices even further and increasing poverty while degrading the environment.

The pressure for a re-think on biofuels is unlikely to relent. A new report by the World Bank, which was leaked to the press, concludes that the US and EU biofuels policies have already led to a 75% increase in global food prices, far more than previously estimated.

“Without the increase in biofuels, global wheat and maize stocks would not have declined appreciably and price increases due to other factors would have been moderate,” according to the report, which contradicts one of the most commonly-cited explanations for the rise in prices. “Rapid income growth in developing countries has not led to large increases in global grain consumption and was not a major factor responsible for the large price increases,” it says.

EU Development Commissioner Louis Michel supported Barnier's idea for regional models and speculated that such a model could work relatively well in West Africa. But Michel also cautioned against overly simplistic solutions to the food crisis, which he described as multi-faceted and complex. The international community and rich nations alone cannot solve the problem, he said, insisting that partner states in the developing world must also put greater focus on developing their domestic agricultural sectors.

EU Agriculture Commissioner Mariann Fischer Boel lamented that development policies have neglected agriculture for more than 20 years, and called for a renewed focus of development monies into the sector. Boel also said the Commission will next week (8 July) reveal the extent to which surplus EU funds obtained through higher agricultural commodity prices could be used for agricultural development aid.

The conference also addressed the issue of speculation on financial markets, where many investors are betting on food commodities in the wake of the fallout of the US credit crisis. Michel Griffon, director general of the International Food Policy Research Institute (IFPRI), argued that "speculation is a consequence, not the cause" of food price increases, since markets naturally gravitate towards those investments that promise growing returns in future.

Greenpeace says there is "no single solution to the crisis" and is calling for more research into "ecological and climate change-resilient farming" and the slashing of funds for genetically modified crops and "environmentally destructive agricultural" and "chemical-intensive farming". The organisation is also pushing for the EU's biofuels targets to be dropped.

Sharp increases in food prices in recent months have sparked riots in a number of countries, including Haïti, Mexico, Egypt, Morocco, Senegal, Uzebkistan, the Philippines, Bangladesh, Thailand and Indonesia. EU consumers have also seen dramatic increases in prices for basic foodstuffs and are growing increasingly concerned about the issue (EURACTIV 14/03/08).

Rising global populations and demand for food, climate change-related crop failures, higher fuel and fertiliser prices, speculation on commodity markets, dysfunctional global agricultural markets and greater biofuels production are widely seen as the causes of the crisis.

EU policies, most notably export subsidies under the Common Agricultural Policy (CAP) and more recently the bloc's proposed target to increase biofuels use by 10% by 2020, are also coming under increasing scrutiny. There are concerns that the combined effect of these measures acts as a disincentive to boost greater agricultural output in developing countries, notably in Africa.

  • 7-9 July: Food crisis to be discussed at G8 Summit, Hokkaido, Japan.
  • 8 July: Commission to unveil the amount of surplus funds, obtained from higher agricultural commodity prices, that could be used for food aid.

EU official documents

Parliament

International Organisations

  • International Food Policy Research Institute:Website

Press articles

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