Ways out of the silent tsunami

A silent tsunami is engulfing the planet. According to the World Bank, 33 countries are especially hard-hit. The international community is responding. UN Secretary-General Ban Ki-moon has set up a task force to organise effective aid for people in danger. The WFP says it will require at least an additional $ 750 million this year. Immediate international solidarity is indispensable.

The WFP is the world’s largest supplier of food aid. It has a highly sophisticated logistics network, and can supply food quickly almost all over the world. We have added $ 20 million to Germany’s annual contribution and project funding for the WFP, and will further increase our additional aid. Furthermore, we work closely with German non-governmental organisations that specialise in emergency relief such as Welthungerhilfe (German Agro Action) or Caritas and Diakonie Katastrophenhilfe, the Catholic and Protestant charities.

In my view, it is essential that such aid affect local markets as little as possible. Today it is more important than ever not to hamper local food production. We are therefore focusing on providing financial assistance or food coupons to households affected by famine in urban areas. After all, food is available – but not at a price the poor can pay. We have to focus especially on mothers and children. Where direct transfer payments are not an option, food-for-work programmes may make sense instead; direct food aid should only be a last resort.

The International Monetary Fund is contributing to emergency relief by acting in support of countries on the brink of financial default because of skyrocketing prices. I hope that financial support from the international community will provide enough incentives to keep countries with strong agrarian sectors from restricting exports further. Such regulative restrictions may look understandable, but they really only exacerbate scarcity of market supply, with the poorest of the poor suffering the most.

Long-term perspective

As necessary as immediate emergency relief may be, we must also find a long-term answer to the underlying problem – and that will not be easy. It would, however, be fatalistic, irresponsible, and simply wrong to conclude from the current crisis that the Millennium Development Goals have failed and that all we can do now is to try to limit the damage. We must not sit back idly and watch as unrest breaks out due to this scourge in many of the world’s countries, the economies of which had been growing for years. Rather, we must quickly – though diligently – assess this explosive situation and then act with determination.

The crisis’ causes are complex and inter-related. While growing prosperity in some developing nations is welcome, the results include growing demand for food and changing consumption patterns. On average, more people today have a more balanced diet worldwide than 20 years ago, and more people have enough to eat and drink. Middle-classes that can afford more fruit, vegetables and – most important – dairy and meat products on a daily basis have expanded, especially in large Asian countries. However, meat production requires ten times more grain for animal feed.

Food has become scarce and expensive accordingly. Most experts expect this trend to continue. Climate change will also worsen things by reducing the amount of precipitation, especially in the southern hemisphere; as a result, land used for agriculture will be lost or at least become less productive. In coastal regions, farmland will be flooded. Moreover, rising energy prices will have to be passed on in the price of food products. Finally, a number of industrial countries promote mixing gasoline with biofuels, a practice that puts additional pressure on the scarce land and water resources. Depending on plants and blends, biofuels cause somewhere between 26 % and 72 % of the food-price hikes, according to the renowned International Food Policy Research Institute (IFPRI).

Nevertheless, properly designed national and international agriculture policy can stabilise prices – and even bring them down. Developing nations in particular could produce far more food than they currently do if agricultural productivity were boosted to the degree possible. One reason this has not been done yet is the relative lack of investments in rural development. Developing countries are called upon to improve their agricultural policies and design suitable subsidy strategies. The current price hikes are a great opportunity for implementing change.

The responsibility of industrial countries

Nonetheless, the advanced nations are also guilty for the plight of rural areas. Markets in developing countries were flooded with cheap products thanks to subsidised agrarian exports from industrial countries. Rich nations used subsidies to dump exports onto developing countries, crippling production and market mechanisms there. Domestic farmers were in no position to compete. Under these conditions, investments did not make sense for small farmers and trading companies. Nor did they look attractive to African governments, who needed to ensure that their growing urban populations could rely on affordable food prices.

When European chicken parts are sold at a price below local production costs in Ghana, the market is irreparably distorted to the detriment of Ghanaian agriculture. The result in the long run is lower local production and, indirectly, famine. Mexico now has to import expensive food because subsidised maize exports from the US ruined the country’s once flourishing domestic production.

As these examples illustrate, industrial countries are part of the destructive force in this silent tsunami. We thus bear a responsibility to design global regulations more fairly and conclude the Doha Round of World Trade negotiations in a development-promoting way. When, if not now under the pressure of the food crisis, will it ever be time to put an end to export subsidies and import restrictions that distort markets to the detriment of producers in developing countries? I wholeheartedly support World Bank President Robert Zoellick’s call for a “New Deal for Global Food Policy”.

This New Deal should include support for reforming agrarian policy and investment programmes in developing countries, such as the African Union's Comprehensive African Agriculture Development Programme (CAADP). African countries understand that investments in rural development are more necessary than ever. The World Bank’s World Development Report last year clearly spelled out that the potential to combat poverty and famine through rural development has not been exploited sufficiently. Higher prices for agricultural products could provide farmers with an incentive to increase production. At the same time, however, access to land, water, credit and markets must be improved. Implementing sound gender policy and strengthening the role of women is not only a question of equality, but also of economic prudence. After all, women produce some 80 % of all food in Africa, to cite only one figure.

If agricultural production is to be increased in the long run, international agricultural research will also have to be intensified for yields to be increased and the negative effects of climate change to be compensated for. Policies on biofuels must be reconsidered in light of the current food crisis. We have to review the fuel-mixing targets; and for the time being, we need a moratorium. Certification systems have to be designed to ensure that producers comply with environmental and social standards. The right to food has priority over the need for mobility.

Thus there are ways out of the silent tsunami. In addition to emergency relief, these ways are the development paths that lead towards the implementation of the Millennium Development Goals. Both approaches must be linked effectively. Food aid has to be part of a long-term food-security strategy. People in developing countries will need social safety nets to protect them from fundamental threats to their livelihood. The good news is that India and China have already begun setting up such social-security systems. Related matters will also play a larger role in German development cooperation.

In September, a UN conference will take place to determine how close the global community has come to the goals we set for ourselves at the turn of the millennium, and what needs to be done from now on. At the end of 2008, another global conference will take place in Doha (Financing for Development), where crucial decisions must be made on how to finance the global development processes. It is a demand of humanity itself to use both conferences to find a way out of this silent tsunami. We will only succeed if all parties take the new global partnership created by the Millennium process seriously – and contribute to funding it. The food crisis makes it clear that agricultural policy cannot be made separately from policies on trade, environment, climate and social security. To deliver results, we need a holistic approach to development.