Thursday, April 24, 2008

Food Inflation Watch: Maize export ban by Nepal

The Nepali government has banned export of wheat from the country amidst rising food crisis in the international market. This move comes on the backdrop of shortage of wheat in the country because producers were increasing exports to Bangladesh, where wheat price is much higher than in Nepal. This reduced wheat supply in the Nepali market and shot up prices. Nepali flour mills, bakeries, biscuit, and noodle factories are expected to benefit from this move.

India, Vietnam, China, Bangladesh, Thailand, Philippines, Egypt, and many others have either imposed export ban or quotas and liberalized imports. Meanwhile, there have been riots in Latin America, Asia, and Sub-Saharan Africa. If all countries follow suit, then individual acts would stall international trade. This is going to put another hurdle in passage of the Doha Round, where agricultural sector reform has been a bone of contention between the West and the developing countries. What would be an acceptable solution?

My reaction: now even Nepal is fueling speculative drive in the international market. Prices began to rise rapidly after India impose ban on exports, followed by China, Vietnam, Thailand, and many others. More worse to come. The countries are ruining their own markets!

Will Green Revolution Help Solve Poverty and Hunger in Sub-Saharan Africa?

No, says a policy brief (an old one, published in October 2006) from the Institute for Food and Development Policy. I somehow stumbled upon this policy brief. It looks interesting though I think that a global effort to promote (rather revive) the Green Revolution is definitely going to produce some good outcomes.

The policy brief is titled : Ten reasons why the Rockefeller and the Bill and Melinda Gates Foundations' Alliance for another green revolution will not solve the problems of poverty and hunger in Sub-Saharan Africa.

The authors argue that, based on the first Green Revolution experience, this initiative will not succeed because:

  1. the Green Revolution actually deepens the divide between rich and poor farmers.
  2. over time, Green Revolution technologies degrade tropical agro-ecosystems and increase environmental risk.
  3. the Green Revolution leads to the loss of agro-biodiversity.
  4. hunger is not primarily due to a lack of food, but rather because the hungry are too poor to buy the food that is available.
  5. without addressing structural inequities in the market and political systems, approaches relying on high input technologies fail.
  6. the private sector alone will not solve the problems.
  7. genetic engineering (GE) will make Sub-Saharan smallholder systems more environmentally vulnerable.
  8. GE crops into smallholder agriculture will likely lead to farmer indebtedness.
  9. the assertion that "There Is No Alternative" (TINA) ignores the many successful agro-ecological and non-corporate approaches to agricultural development.
  10. AGRA's "alliance" does not allow peasant farmers to be the principal actors in agricultural improvement.

Recommendation from the authors: Invest in the service of the struggle by peasant and farmer organisations and their allies to truly achieve food sovereignty.

The recommendation is quite blurry. At a time when there have been calls for revival of the Green Revolution in Sub-Saharan Africa due to sky-rocketing food prices, it won't hurt to look at the concerns of the authors of this policy brief.

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.


Food Inflation Watch: Drought in Thailand

Thailand is one of the largest rice producer and exporter. Now, reprots are coming in that it is too suffering drought. This is going to potentially push the food prices up. Too bad! Also see this

More than 10 million people in parts of Thailand's rice bowl region have been hit by drought, the government said on Monday, causing further concerns as prices of the staple grain soar. Thailand's Disaster Prevention and Mitigation department reported that 55 of the kingdom's 76 provinces were struggling with drought, mostly in the central, north and northeastern regions. More than 151,000 rai (60,000 acres) of farmland has been affected, they said in a statement, including half of the key central rice growing provinces.

The first rice harvest of the year in Thailand, the world's biggest rice exporter, traditionally ends in late March or early April. Farmers then let the fields recover, before planting a second harvest in May. But as export and domestic rice prices hit record highs, many farmers are trying to plant a third crop or move their second harvest forward to take advantage of the boom. The benchmark Thai variety, Pathumthani fragrant rice, was priced on April 9 at 956 dollars per tonne for export, up about 50 percent from a month earlier, the Thai Rice Exporters Association said in its price survey. International demand for Thai rice has soared after other top exporters, Vietnam and India, imposed limits on exports to ensure domestic supply.