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“Processing farm produce in rural areas would offer opportunities for creating additional jobs.” Baking baguettes in Mali
Does commodities trading on futures markets aggravate hunger crises?
We diligently analysed the data for 2008, and it is evident that such speculation indeed contributed to the price spike, and thus made matters worse. In 2009, however, speculation had no significant impact, which shows that futures trading is damaging when markets are already under stress due to market fundamentals.
Did that happen last year, when famine hit eastern Africa?
The famine in the Horn of Africa had other reasons. The most important were political conflict and drought. At the moment, drought is threatening West Africa once again. High prices on the world market compound matters because they make imports more expensive and burden poor people’s purchasing power.
For this edition of D+C/E+Z, I wanted to interview someone who is employed by a bank, but this expert declined to discuss speculation. Is that typical?
Well, the managers in the financial sector are certainly giving the impacts of futures speculation on food security a lot of thought. The financial industry is worried, and sensitivity for the issue has grown accordingly. Such awareness is good and can contribute to reducing speculation.
Is it necessary to regulate futures markets more stringently?
Yes, and that is about to happen. In the USA as well as in the EU, regulatory steps have been taken. By the end of the year, we will see new limits on how many contracts investors may hold, and over-the-counter trading will be made more transparent too. These and related initiatives are pointing in the right direction, but they have not come fully into force yet and must remain on the agenda.
At the G8 summit in L’Aquila in 2009, the governments of the leading industrialised nations promised more aid to agriculture. What has become of that pledge?
The programme that was drafted in L’Aquila makes sense, and it is being implemented. More determination would certainly not hurt, but it is noteworthy that some governments are pretty much living up to their word, including those of the USA, Germany and Britain. It is also worth pointing out that not only the big industrialised nations were involved in L’Aquila, so were big emerging markets and international organisations such as the multilateral development banks. Some of them could certainly do more, but generally speaking, the international community has set the right course.
Must agricultural production rise to feed a growing world population?
Yes, that will be the case in the medium term. Food security, however, does not only depend on harvest volumes. It is crucially important to make sure that all people have the purchasing power to buy what they need for good nutrition. It is therefore not only necessary to boost food production and health, but equally imperative to create new income opportunities. Rural areas are where the need for food and jobs is greatest. Processing farm produce in those areas and small towns would offer opportunities for creating additional jobs. Ultimately, food security depends on rural development and improved economic relations between towns and villages.
But how will production increases be achieved in the medium term? Does the world need something like a green revolution in Africa?
Yes, though I prefer to call it a multi-coloured revolution or rainbow revolution. We need many different innovations; this is not a one-dimensional challenge. Relevant issues include seeds, soil nutrients, water harvesting and storage. Success will depend on large-scale as well as small-scale interventions. The most important innovations will probably not only concern technology. They will be about improving organisations and institutions. Contract farming and cooperatives can make a difference, and so can more efficient marketing channels, skills training for farm women, appropriate financial services and a host of other things. Unless African agriculture is modernised in this sense, it will not prosper. But all in all, there is a great potential for boosting its productivity.
The international debate on agriculture has become more complicated. In the past, there were two camps. One side was in favour of high technology; the other promoted organic farming. Today, the gap does not seem that wide anymore. Is something of a consensus emerging?
I certainly wish that the debates would move from airing strong opinions toward basing them on empirical evidence, and I think that is happening. In truth, there is no conflict between environmental sustainability on the one hand and scientific and technological progress on the other hand. On the contrary, improved seeds and up-to-date irrigation offer great opportunities. Information and communication technology matters too. Today, farmers are using mobile phones to get information about markets, and that is very useful. There is no reason to be sceptical about technical progress. No doubt, Africa will have to find its own way, and the continent deserves science-based support. In the past years, developments have actually been quite promising; the productivity of African agriculture is growing.
Are genetically modified organisms – GMOs for short – relevant for the kind of progress that you have in mind?
That depends on circumstance. In India and China, farmers are cultivating genetically modified cotton with considerable success. Those GMOs are provided by various companies. There will be similar opportunities in Africa. The idea is not so much to boost yield levels but rather to stabilise them, and the emphasis is more on crops’ pest resistance, which would allow farmers to apply fewer pesticides. Reducing pesticide use would serve farmers’ health and the environment in general. Obviously, however, farmers always need solid information on how to use any given technology.
Will GMOs matter in food production?
Yes, they are likely to gain relevance in two aspects: draught resistance and nutritional value, especially in regard to iron, vitamin A and zinc. Conventional plant breeding is making progress in both respects, but not fast enough. Climate change means that we will soon need varieties that can cope with significantly less water and heat stress. And nutrients are important to stem malnutrition, which we call “silent hunger”. Trial runs have been promising, for instance concerning Golden Rice, a rice crop that contains more beta-carotine than conventional ones. We are no longer merely discussing things in theory. We now need to implement such innovations, keeping appropriate bio-safety standards in mind.
Questions by Hans Dembowski.