Thursday, April 24, 2008

Food Inflation Watch: Zoellick's take on high food prices

The World Bank president Robert Zoellick argues that we have to solve the burden of high food prices on the most vulnerable people in the short run and in the long run, through a New Deal for Global Food Policy, we need to solve not only the food crisis but its underlying causes (energy, yields, climate change, investment, marginalization of women, economic resiliency, and growth). The column is pretty much snippets of the same speech he delivered at a CGD event in Washington, D.C.

Nancy Birdsall and Arvind Subramanian propose that under such a "new deal major developing country producers set aside for now their reasonable objections to traditional rich country agricultural protection -- the bone of contention in the Doha trade round -- at least in the case of food staples (if not cotton and cocoa). Rich countries would ideally reduce this protection on their own (as their taxpayers might well like in the case of domestic production subsidies). But for a hunger deal now their long-perverse agricultural protection is not a central issue -- and leaving it aside has the political virtue of greasing the wheels of a global deal on hunger."

Rodrik agrees that "unilateral trade policies in this area have clear negative externalities--export taxes in food exporting countries and import liberalization in food-importing countries both raise world food prices--the case for some kind of international coordination is indeed quite strong." However, he finds it pretty "mischievous" that Birdsall and Subramania want Zoellick to head the effort.


We should start by helping those whose needs are immediate. The United Nations' World Food Program requires at least $500 million of additional food supplies to meet emergency calls. The U.S., European Union, Japan and others must act now to fill the gap -- or many more people will suffer and starve.

Skyrocketing food prices have increased attention to the larger challenge of overcoming hunger and malnutrition, the underlying cause of the deaths of an estimated 3.5 million children under 5 each year. More than 20 percent of maternal deaths are traced to malnutrition. It weakens immunities to diseases. Hunger and malnutrition are a cause, not just a result, of poverty.

A shift from traditional food aid to a broader concept of food and nutrition assistance must be part of this New Deal. In many cases, cash or vouchers, as opposed to commodity support, is appropriate and can enable the assistance to build local food markets and farm production. When commodities are needed, purchasing from local farmers can strengthen communities. School lunch programs draw children to classrooms, while helping healthy kids to learn, and some offer parents food, too.

We can help create a "Green Revolution" for sub-Saharan Africa by assisting countries to boost productivity throughout the agricultural value chain and help small-holder farmers to break the cycle of poverty.