World Trade Organization Director General Pascal Lamy addressed The Economist Conference "Feeding the World" in Geneva this week. He spoke about the volatility of food prices saying that they are a result of the fundamentals of the food market, and it is those fundamentals that must be focused on.
"Back in 2008, the world faced what it called a food price crisis," Lamy said. "Since then, prices have started to fall, albeit remaining at a higher plateau than previous years because of, amongst other factors, the nutritional transition that the world is undergoing. But does that mean that the food crisis is over? Does it mean that food security has been attained? It has not. Food prices fell since 2008 only because a global recession kicked-in to depress demand. We must also remember that while higher food prices are bad news for some, they are good news for others — I speak here of farmers."
Lamy went on to say that it is tempting for politicians to frame the food security debate around price or volatility, as high food prices can and have brought governments down. However in order to ensure a safe, sufficient food supply, broader questions need to be asked.
The first question Lamy asked was about the safety of having food production concentrated in a handful of countries.
"Today, five countries produce 70% of the world’s rice, three countries produce 80% of our soybeans, five countries produce 70% of our maize. And this concentration of production is mirrored, if not even accentuated, in international trade," Lamy said." For example, 85% of all soybeans on the international market are exported by only two countries. Surely, we are gambling with our future if we do not improve the agricultural policies that are preventing this sector from taking off in other corners of the globe."
Lamy addressed Africa, a continent that he says we must ask probing questions about.
"It is 1/7th of the world population, but 1/4th of its under-nourishment! It is also the continent that is experiencing the fastest population growth," Lamy said. "Africa is one of the regions of the world with the lowest levels of intra-regional trade in food. When Africa needs food, only 10% of it comes from other African countries, and the rest has to be brought in from elsewhere. Yet in my opinion, Africa is the 'missing part of the food security puzzle'. It is the continent with the greatest amount of arable land left fallow. If Africa is seen as a food security problem today, it may very well hold the key to global food security tomorrow."
Lamy told the conference that the 'Brazilian miracle' can and should be reproduced. In less than 30 years, Brazil turned itself from a food importer into one of the world’s breadbaskets. In those same 30 years, Africa went from being a net food exporting continent to being a net food importer.
"While I have focused on Africa, there are other parts of the world too where a change of policies could turn the situation around," Lamy said. "In summary, let us get our policy mix right on food production and on trade. We need to ask the difficult questions."