SANGAM

The Looming Food Crisis
Sangam Prasain

Growing con cern over soar ing food prices threatens to push millions of people deeper into poverty. The Asian Development Bank (ADB) has projected that the soaring cost of food affects one billion poor in Asia who spend the bulk of their wages on arranging two square meals a day.The price of cereals, edible oil, pulses and vegetables has surged by 100 per cent compared to the price in 2000 and by 50 per cent in the last two months of the current fiscal year. This price is expected to increase by 40 per cent monthly if the major grain producing countries continue to impose restrictions on exports.The global food crisis has been attributed to the poor harvest caused by climate change, use of agricultural commodities to make bio-fuels and switching of occupations by the farmers in the countries of South Asia. Besides, the growing population puts a lot of pressure on food production that has remained more or less static over the years. Although the food crisis at the moment has been blamed on poor harvest, there is still some hope that India, Bangladesh and some other South Asian countries will see a bumper harvest in 2009.Reasons behind crisis At the outset, the increase in the price of oil in the international market has automatically raised transportation and fertiliser costs, which greatly discourage the farmers from raising the land’s productivity. Secondly, some developed countries are diverting food crops to produce bio-fuels. The use of agricultural commodities such as sugarcane, maize and oil seeds to produce alternative fuels has immensely contributed to the shortfall of grains in the international market. For example, the United States, the world’s largest producer and exporter of maize, diverts about 30 per cent of its total maize production to produce ethanol, whose demand has doubled in the last few years. This demand has attracted the farmers to growing cash crops, which are more economical than harvesting paddy and other food grains. Thirdly, the growing rush to find employment abroad has led to the export of labour to the developed nations. The better income that these youths make in the developed nations is causing a shortage of labour in the home countries of South Asia. Fourthly, the weather has been playing havoc in some grain exporting countries, such as Australia which has experienced a substantial drop in its grain production. Finally, the increasing demand for meat and protein diet, which requires more input than cereals, in the developing countries has placed emphasis on livestock than on grain harvesting.The latest World Development Report calls for greater investment in agriculture in the developing countries and warns that the sector must be placed at the centre of the development agenda if the goals of halving extreme poverty and hunger by 2015 are to be realised. The report says that the agricultural and rural sectors have suffered from neglect and underinvestment over the past 20 years. While 75 per cent of the world’s poor lives in the rural areas, a mere 4 per cent of the official development assistance goes to agriculture development in the developing countries. Agriculture is said to consume 85 per cent of the world’s water available for use, and the sector has contributed to deforestation, land degradation and pollution. The report recommends measures to achieve more sustainable production systems and outlines incentives to protect the environment. The report further says that in agriculture-based countries, the agricultural sector is essential for overall growth, poverty reduction and food security. And these issues should be highlighted to increase public spending on agriculture. Today more than 75 per cent of South Asia’s poor lives in the rural areas, and the agriculture sector employs about 60 per cent of the labour force. Agricultural growth in South Asia has been less than 3 per cent, far below the growth rates of other economic sectors, and this has been a major concern for this country in lessening the increasing poverty. The agricultural sector is regarded as an effective tool in poverty alleviation in South Asia. Unfortunately, this sector has not been effectively capitalised, with the youths more attracted towards foreign employment.Obviously, the remittance has had a positive impact on the national economy, but the absence of an effective policy in the agricultural sector forces farmers to continue to adopt traditional methods of farming, which have led to declined productivity.Agricultural growth will depend largely on investments in rural infrastructure such as irrigation, roads, transport and power. Therefore, investments in access to commercial markets and technology are crucial to reviving and sustaining agricultural productivity.In the context of Nepal, it consumes 5-6 million tons of rice and wheat annually. Its exports have dwindled since a decade as Nepal now imports rice from India, which accounts for 2 per cent of that country’s rice exports, while Nepal’s wheat imports from India accounts for 0.6 per cent of its total wheat export. This dependence could go up in the coming years if the government does not introduce any effective policy, similar to the ones adopted by other South Asian and developing countries.Long-term investmentThe most serious challenge to the governments of the developing countries in dealing with the looming crisis is commercialising the traditional farming system. It should provide subsidy to small producers, which will significantly reduce the cost of doing business in the rural areas, and facilitate their integration into the value chain. Besides, land reforms, an effective labour policy and increasing long-term investment in the agriculture sector would give a boost to the farmers.