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world over the focus is no 1 food security

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    ""The pressure to supply more inputs (fertilizer and herbicides) has consequently increased the prices of those products substantially, with the consequential increase in the cost of producing food.

    South Africa: Time Ripe for Food Security to Move Up Policy Agenda

    22 February 2008
    Posted to the web 22 February 2008

    Jannie De Villiers

    THE increase in fossil fuel prices has led the world to reconsider alternative sources of energy, such as biofuels.

    As a result, the demand for grains and oil seeds has increased substantially over a short period , with prices reaching record highs. At the same time, the economic growth and increasing wealth in countries such as China and India have put additional demand on grain supplies.

    The prophets of climate-change doom have highlighted the effect that this could have on the availability of food. All these factors have brought agriculture to the forefront of international discussions, not only among governments but also among business leaders.

    Various governments have adapted different strategies to deal with this new food security issue. All are concerned when it comes to feeding the masses that put them into power.

    The common agricultural policy in the European Union was a direct result of a decision regarding food security following the Second World War. The goal was never to let Europeans go hungry again, and the policy was successfully implemented. The latest developments with regard to the energy crisis, and the exceptional growth in highly populated countries, necessitate the urgent attention of political policy makers.

    Food security has two legs to it: availability and affordability. Availability is a job for the free market. Free markets and capitalism will ensure that there are always food products on the table. The free market, however, distributes products and services according the ability to pay, which is where the affordability issue comes into play. The availability of food is the responsibility of business driven by the free market, while affordability is the responsibility of governments, which aim to alleviate poverty through job creation and economic growth.

    Governments all over the world have reacted differently to this new challenge of food security. To increase food security by increasing production will take time as the agricultural sector is directly linked to the cycles of nature.

    New agricultural policies will have to be developed through consultation and within the current framework of the World Trade Organisation rules. This process, coupled with the delays of nature, will cause a time lag that could be very critical to food security in the immediate future. The change in climate conditions will prevent the agricultural sector from doing business as usual.

    We have seen governments implementing quantitative restrictions on exports to create surpluses of grains in their domestic markets. This action, together with other policy tools, was used to ensure the availability of food and, through surpluses, reduce prices and increase affordability.

    Some governments have opted to tax their exports in a way that increases food security domestically. Ironically, SA still taxes its wheat imports. We have also seen governments temporarily reduce their import duties on grains to improve food security. Some governments have gone all the way and commenced with food-price controls to deal with the matter of food security.

    Only time will tell which of these interventions will prove to be effective in dealing with this new phenomenon . The true colours of patriotism were most evident when the US said it would no longer provide food aid in kind, but only cash. For many years, the food aid system was misused by developed countries as a surplus removable scheme. They have always denied these accusations, but the truth has surfaced.

    The bottom line for SA is that these developments in the past year serve as a wake-up call to the government and policy makers to seriously adapt to the new global conditions and views regarding food security.

    The agricultural sector in SA has, among others, the goal of being the vehicle for transformation and to form the backbone of the rural economy. Food security has not been in the front of the minds of those developing economic policy. The latest developments have changed the priority that food security should get in developing new policies for agriculture. The result of the Uruguay round of the World Trade Organisation talks in 1994 gave governments the assurance that free trade would provide food security.

    Measures implemented by governments in their own interest, as we have seen in the past year, suggest that the government should not only rely on free trade, but also redesign our agricultural policy to ensure enough investment in this sector to secure our food availability and affordability for the future.

    This will necessitate a revision of our trade and tariff policy, as well as our spending on research and development. The negative trade environment, coupled with low spending on research and development, has decreased the profitability of the sector to such an extent that very little new investment is being attracted. This can be compared to the current energy crisis in SA.

    The huge demand for increased production of grains internationally has brought new challenges to input suppliers, such as seed, chemical and fertiliser companies.

    The pressure to supply more inputs has consequently increased the prices of those products substantially, with the consequential increase in the cost of producing food.

    This will again worsen the food security issue. One of the many solutions is the responsible application of biotechnology. The availability of biotechnology for maize and soya beans used for animal feed and industrial usage could speed up production to catch up with the growing demand.

    The initial refusal by consumers in some countries to accept biotechnology in wheat has caused most researchers in the field to abandon all new projects to improve wheat production through biotechnology.

    Those governments that chose wheat for biofuel purposes are already regretting it. The recent announcement by the European Union in this regard is enough evidence that they overreacted with policy decisions to address the energy crisis without properly considering the implications for food security.

    The world has changed permanently and needs a quick reaction by the government to create a policy environment that will attract new investments in agriculture to ensure food security.

    Reliable structures, free from corruption, should also be developed to directly address the needs of the poor during the lag time that agriculture needs to react to this new challenge.

    De Villiers is executive director of the Chamber of Milling in SA.
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