Many people, particularly in the world's poorest regions, were gripped by food shortages and price spikes in 2007 and 2008. There were many reasons for this: Global grain stocks had been dropping for years; prices of some commodities (such as rice) had been rising; global demographics had increased pressure on both stocks and prices; and economic success in much of the developing world, including China and India, was altering eating habits. The stampede into biofuels to supplement international oil reserves also handicapped food production.
Food - and oil - prices subsided late in 2008. The temptation now is to forget all about earlier developments. But this would be deeply unwise.
Canada is closely associated with agriculture internationally, having contributed over many decades to significant research that supports agricultural productivity growth worldwide. So, looking ahead, what should we be worrying about?
We have all the basic food we need, and we export a good deal, too. Other rich countries will always be able to amass whatever food supplies they need by outbidding poorer countries on international markets. Thus, we need to focus on poor consumers in poor countries.
Alex McCalla of the University of California at Davis scans global agriculture and food production for trends. These are not reassuring.
Demand-side factors exerting pressure on stocks and (eventually) prices include: (a) rapid growth and rising incomes in developing countries (China and India together account for 32 per cent of the share of growth in grain consumption from 2005 to 2008); (b) recent enthusiasm for biofuels; and (c) urbanization and globally rising incomes, which increase demand and changes the mix of food people can afford.
Supply-side constraints include: (a) slower agricultural productivity growth and increased competition for land and water; (b) petroleum costs that affect agricultural costs of production; (c) global stocks at their lowest levels since the early 1970s, as global consumption increased much faster than global production; (d) population growth; and (e) fertilizer costs that tripled in 2007 alone.
What's to be done?
Decreased investment in agricultural research and global development over the past two decades can be reversed. Bad policies can be stopped: Export embargoes and increased export taxes reassure in the short term but create distortions worldwide and undermine access for the poorest countries and consumers. Water management techniques and policies are in their infancy in much of the world, and this needs to change. And the reality of climate change is not yet fully acknowledged in the policies of many countries.
Different approaches to agricultural development hold clues. Take the diverging paths of India and China. India's key economic reforms of the early 1990s centred on liberalization favouring the manufacturing and services sectors. These were tremendously successful, but little was done for agriculture. China, on the other hand, started its key reforms earlier and focused first on agriculture.
China's approach was counterintuitive, initially bottom-up rather than top-down. In the late 1970s, after Maoist excesses led to an economic dead end, Deng Xiaoping sought to raise agricultural production by encouraging multiple experiments at the local level, "learning by doing." Only after it was clear what worked did Beijing launch a reform process that succeeded dramatically in raising production and reducing rural poverty.
India was once at the apex of international achievement in agricultural innovation. Drawing on a variety of international grain types, pioneers of high-yielding hybrid seeds were able to achieve a "green revolution" in the 1960s and 70s, boosting agricultural productivity and making the country self-sufficient in its main food requirements for the first time in modern history. Scientific innovation was supported by energetic government policy. But then, as so often after success, attention and focus faded.
Is India facing a long-term challenge in agriculture and a serious threat to its food security? Yes, but there is no reason for panic. India remains capable of meeting its main needs. It is the combination of its demographics with the growing success of its economy and environmental stress that demand attention: Increasingly prosperous Indians will be eating more (and probably wasting more, as do middle classes everywhere).
But the country has been prudent on another front: Rural India may be better equipped to absorb shocks than its highly privatized Chinese counterpart because of the range of its anti-poverty programs. China, flush with its market reforms, may not have been sufficiently attentive to the need for such social programs.
Fulfilling developing countries' agricultural potential will require sound government policies, determined implementation and greater attention to more sustainable growth of farm produce. Industrialized countries should intensify efforts to support innovation in nutrition and to achieve greater agricultural productivity at home and abroad. With its fine universities and demonstrated excellence in agricultural research, Canada is exceptionally well placed to do so.
David Malone is president of Canada's International Development Research Centre and former Canadian high commissioner to India.
