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We are told that this global instability is a result of a “perfect storm”, a series of events that have combined to create a crisis. Let me run through some of them. The world’s population continues to grow. One-third— 80 million tonnes—of America’s maize crop is being taken out of the food chain for biofuel production. Double what the US exports in the average year was eaten up, not by people or by animals, but by refineries last year. Fuel and fertiliser costs, which account for 25 per cent to 30 per cent of farming overheads, have rocketed as a result of the price of oil more than doubling in less than a year.
We have witnessed a global credit crunch, property prices continue to fall and inflation is rising on all products. Growth is slowing and unemployment is starting to climb. There is little wonder that economists around the world are predicting stagflation, a recession or, worst of all, a depression. Our economy has never before faced such a daunting combination of challenges. The global economy has never faced a combination of these challenges—not since the great depression or the recession of the early 1990s. As if that were not enough, as we have heard, some of the most populated countries on earth are developing a taste for meat and dairy, the production of which requires more water, as we have heard from the noble Earl, Lord Selborne, and, more importantly, more cereals.
Due to the awesome scale and complexity of these issues, it is hard to see how we could begin to address them in any meaningful way. However, if the analogy of a perfect storm is correct, thanks to the common agricultural policy, we in the European Union have sailed into it with all sails set. As we have heard, the CAP was established with noble intent, but the world has moved on in the half century since the policy was introduced. Far from addressing the challenges of today, the CAP is intensifying them and making them worse. For 50 years, it has offered a disincentive to developing nations to diversify and grow their agriculture sector and it has severely limited the ability of poor farmers to compete with their subsidised counterparts in Europe and the United States.
Last year, in India, more than 25,000 farmers took their own lives after being driven to despair by grain shortages and bad debt. India, a country which experienced the green revolution, has for the past two decades seen its agricultural growth rates halved. As India Today reported:
“The spectre of food grain imports stares India in the face as agricultural growth plunges to an all-time low”.
I am proud to be the chairman of the UK Indian Business Council, which is supported by UK Trade & Investment. As I have said before in this House, there
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Addressing protectionism will not be enough. If the international community is to meet the challenge Ban Ki-Moon set three weeks ago in Rome and increase global food output by 50 per cent by 2030, then it must also reaffirm its commitment to advancing the science of agriculture, as the noble Earl, Lord Selborne, said.
I feel that I should touch briefly on the sensitive topic of genetically modified food. I can see a time, perhaps soon, when we may not have the luxury of rejecting GM, as we do now. According to the European Commission, only 21 per cent of Europeans say they will eat GM food, leaving British farmers to pay, for example, a premium of £20 a tonne for non-GM soya. The rest of the world does not share our fear of GM. For example, 95 per cent of the United States soya crop is genetically modified, and it is the world’s biggest exporter. Brazil, the world’s second biggest exporter, aims to increase the amount of its GM crop to more than 80 per cent by 2025. If necessity brings GM back on to the political agenda—and it seems inevitable that it will—I hope that a rational debate will prevail.
I hope that the name Norman Borlaug will gain the recognition in Britain that it has abroad. His experiments in genetic cross-breeding doubled the wheat yields of India in five years and won him not only the Nobel Peace Prize but the Padma Vibhushan, one of India’s highest awards. I have seen for myself how productive the coupling of science and agriculture can be. Every year for the past 15 years I have returned to South Africa, the country of my wife Heather, to visit her family home—a large mixed farm in the Free State. I have seen the increasingly important role that technology plays in raising productivity on the farm. Just last month, I witnessed a new high-tech software system go live that monitors not only the location of every one of our dairy cows on the farm in every herd, but each cow’s yield, as well as monitoring at every milking various aspects about the animal. It can even predict oncoming illness. This extraordinary Israeli technology, now implemented on a South African farm, will help us on our farm to be more proactive, more reactive and more productive.
I ask noble Lords to imagine the technology we could deliver to the developing world if £32 billion were not being squandered on the CAP in the EU, where many farmers enjoy great wealth and comfort compared with their counterparts in India, for example. It is worth remembering that here in the UK, agriculture represents less than 2 per cent of our GDP and employs less than 2 per cent of our workforce. But in a
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I congratulate the noble Lord, Lord Taverne, on securing this important debate. As patron of CINI—Children In Need International—I know how, for those living on the threshold of subsistence, the smallest change in the food price can mean the difference between life and death. The short-term future for the 800 million who are malnourished, and the 100 million who can no longer afford to feed themselves looks very bleak. The World Bank has recently reported that it fully expects recent price rises to increase inequality and hit children the hardest, especially those in countries afflicted by conflict, HIV and drought.
How was the global community caught unawares like this? With the World Health Organisation, the UN World Food Programme and the UN Food and Agriculture Organisation, among others, just how did this global food crisis sneak up on us like a silent tsunami? Why was Joachim von Braun, the director general of the International Food Policy Research Institute, made to feel,
when some time ago he tried to warn officials that 2008 would be “a dangerous year”? Surely in this integrated and increasingly interconnected world, with all our technology, we should have been warned and we should have been prepared.
The developing world need not live for ever in the shadow of hunger. The future of agriculture must not be held back by tariffs, barriers and bureaucracy, but set free through investment, technology and science to become a sustainable and vibrant industry. Together, we can deliver what Norman Borlaug called,
by which he meant adequate food for all mankind; together, if we ensure that we never, ever take agriculture for granted again.
12.26 pm
The Earl of Sandwich: My Lords, my noble friend has reminded us that this is obviously a critical global issue that involves us all. Perhaps a billion people are now threatened by hunger, and there have been food riots across the world. The millennium development goals, especially the one on poverty reduction, will have been set back several years. I, too, thank the noble Lord, Lord Taverne, for introducing this debate and drawing Africa to our attention.
Speaking in the debate we are mainly Peers interested in international development and agriculture, and the Minister speaks mainly for the Department for International Development, but this is a much wider issue, and it seems that we shall not cover adequately the important subjects of trade, economics, finance and foreign policy. Many Peers with expertise in those areas may, I fear, have been frightened off by the sheer magnitude of the problem, and that is to be regretted. However, we have expert Peers contributing to the debate, and I look forward in particular to the speech of my noble friend Lord Haskins in a moment.
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We who are concerned with developing countries have to look at the price rises through the eyes of the very poorest, who are hardest hit, but we also have to ask what a crisis is. Every year there is a crisis in countries such as Mali and Burkina Faso, and this year is no exception; the price rises we are discussing are additional problems. In spite of the FAO’s excellent early-warning systems, we do not hear very much about these crises until famine is well under way. There are, for instance, acute food shortages right now after two years of drought in Karamoja, in northern Uganda, with the risk of another famine. Will the Government respond promptly to the increased humanitarian needs arising from the increase in food prices and drought, especially in west Africa and Ethiopia? To mention just one organisation in this country, Save the Children is appealing for $20 million to help around 900,000 people, including 325,000 children, who are victims of the current food crisis in Ethiopia.
We hear constantly of the war in Afghanistan and the Taliban, but we do not hear the complaints of the poorest, the malnourished and the smaller farmers suffering from drought. Only this week I have read reports of drastic falls in fruit production in Balkh province and of poor harvests in Gorh, Badakshan and elsewhere in the north. It is essential that post-conflict countries are enabled to rebuild their infrastructure and agricultural capacity. I believe that this is slowly happening even in Afghanistan, but I would like to hear that the Government are doing more for Afghan agriculture, because we are sending billions there for defence purposes.
The story is not as good in Africa, where despite our efforts through the Africa Commission and the Commonwealth, there is far too little expenditure on transport to allow goods to be transported, even within countries with huge agricultural potential such as Mozambique and Uganda, a subject mentioned yesterday by the noble Baroness, Lady Rawlings. The immediate concern is about food prices and shortages, and one of the obstacles is the tendency of Governments in this crisis to place a ban on their exports. This is quite understandable and normally unstoppable.
The FAO recently published forecast import bills for the least developed and low-income countries—the very poorest countries—showing that their annual food imports by the end of this year could be quadruple the price they paid in 2000. The developing countries food bill rose from $190 billion to $253 billion last year. Much of this comes from regional surpluses and may be needed urgently. A current example is the food shortages in Niger, which could be met from surpluses in Burkina Faso next door. Perhaps I may therefore press the Minister on the point I raised about the World Food Programme during Question Time yesterday: what is the Government’s response to the call from the World Food Programme during the African summit to exempt humanitarian agencies from export restrictions so that states with surplus food could help meet deficits in poorer countries? The noble Lord gave me some encouragement about the European Union yesterday, and I hope he will have a fuller answer today.
The world food shortages and price rises inevitably spawn instant solutions, as I well remember from the previous world food crisis, in 1974. The World Bank
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The noble Lord, Lord Taverne, along with others, has revived the idea of reintroducing GM crops against the prevailing trend of sustainable and organic farming. I have no doubt that there is a place for GM crops and for the use of chemicals, but I have strong reservations, along the lines of the noble Earl, Lord Selborne, about their use in the least developed countries. I do not dispute the noble Lord’s claims on behalf of small farmers, but many have to live in environments where there is no water, as the noble Earl, Lord Selborne, has pointed out. I am not thinking only of the flowers and fruit that we get from the vicinity of Nairobi airport, but of vast export-led plantations all over the developing world, all of which require massive irrigation.
Large-scale projects in Africa and India have traditionally favoured large farmers and exporters not the malnourished. My own experience of the green revolution in India—I, of course, remember the name of Norman Borlaug—was that many farmers grew wealthy in states such as Punjab while the majority of the poorer farmers in UP and AP were comparatively worse off because, even where they had access to irrigation, they were unable to afford the machinery, fertiliser and the other inputs required.
I know that my noble friend Lord Bilimoria will take issue with this—we will resolve the debate within the Cross Benches—but we forget in this country how serious the inequalities are in tropical countries and how hard it is for some farmers in the remoter dry-land farming areas who are dependent on the vagaries of government extension services and the outreach of non-governmental organisations. It is hard for them to pay for the inputs needed, even for drought-resistant crops. I acknowledge the research that is going on into such crops, as mentioned by the noble Lord, Lord Taverne. As he and other noble Lords have said, we forget how little aid and agriculture research reaches these rain-fed areas—Oxfam and FARM-Africa were mentioned, and my noble friend Lord Bilimoria gave prominence to the issue. In fact, funding has recently moved away from, not towards, these areas. Multilateral aid to African agriculture fell from 32 per cent of total aid in 1981 to only 7 per cent in 2001, according to the World Bank’s evaluation unit. Will Her Majesty’s Government make a renewed effort to support this kind of research?
I have considerable doubts about the withdrawal of subsidies for biofuels based on research I have seen from north-east Brazil. Brazil is the golden boy of biofuels and ethanol and is undoubtedly an economic and industrial success story, but I do not agree with the assertion made last week by the Economist that it has hardly affected the rainforest. Of course it has.
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In more human terms, the increase in sugar production, quite apart from the land issue, is achieved literally on the backs of the poorest and most exploited labour force, which is at the mercy of farmers who tie their migrant workers into a feudal contract—a modern form of debt slavery. Whatever we do in Europe and the US with subsidies to help ourselves, we must take an equal interest in what is happening to labour in other countries. The ILO and the churches are doing their utmost to free these workers in Brazil from tyranny. This issue is completely ignored by European negotiators, who are solely concerned with our trading interests and our own production of biofuels.
Finally, on the subject of trade, I am sure the Minister will acknowledge the effect of farm subsidies on world food prices, as well as the unexpected purchase of food by Russia and the OPEC countries. He will, I hope, confirm that the European Union is doing very little to reform the CAP at present—perhaps it is diverted by other issues—that the new economic partnership agreements are eating away at the sustainability of the poorest African, Caribbean and Pacific countries, and that the Doha round still shows little sign of life. All these things are having an adverse effect on the ability of developing countries to feed themselves, but, as the noble Earl, Lord Selborne, said, none so much as the lack of water.
12.37 pm
Lord Haskins: My Lords, I declare an interest as an east Yorkshire farmer who, three years ago, was happy to sell my wheat for £65 a tonne and recently has been selling it at £175 a tonne. It is one of the ironies of farming that when everyone else is suffering farmers do well, and vice versa. On the radio yesterday morning, a pundit, when asked where to put her money, thought for about 10 seconds and said, “Into agricultural land”. That is where we are at present.
There have been many deep differences on the issue of food supplies in the world over the past 50 years. Until recently, the problem was for many years not a Malthusian one but rather the fact that, while there was plenty of food about, it was in the wrong places: chronic surpluses in the European Union and North America; chronic shortages in parts of Africa and elsewhere.
The priority over those years should have been to increase production in those poorer countries, where farmers have been unable to compete with surpluses dumped on their markets by Europe and the Americans; where farmers cannot afford the science and technology available to their richer competitors; where the tiny farm structure—although it is actually reducing in Africa—means that it is impracticable to employ the modern farm technology of the West; where it is impossible to borrow to invest because the asset base is so small; where, at the same time, some farmers, especially in east Africa, find it profitable to supply European and American markets with out-of-season fruit, vegetables and flowers; and where, as a last resort, the United Nations provides the most desperate regions with food, either free or heavily subsidised.
Today the escalating cost of food is creating entirely new situations, but the same questions and arguments continue. Rather than a problem of food surpluses,
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There is some uncertainty about the scale of the problem. Speculative buying has undoubtedly played a part in pushing up prices. Indeed, I suspect that consumers may not yet have seen the worst. Many farmers like me sold forward into the markets for much lower prices than today’s prices reflect. When those contracts run out, as they surely will in the next few months, I fear that consumer prices will have to rise further.
The immediate short-term priority is to raise food production to meet demand, thereby reducing prices. Over the next two to three years I suspect that that will happen; more land will be brought into production, the growth of renewable energy crops will probably slow or reverse and the speculators will probably burn their fingers, with a resultant collapse in food prices and, I suspect, oil prices. We have to remember that relatively small changes in food supply have a dramatic impact on prices, upwards and downwards.
Increasing agricultural output in the developing world is not easy, though. The so-called and somewhat misnamed “green revolution” that happened in the West in the 1960s, 1970s and 1980s has not happened in many regions of the world. Farms are often too small, equipment is often wholly inadequate and agriscience is supplied only spasmodically. The current high cost of fertilisers might actually reduce outputs and yields because poor farmers cannot afford to borrow to buy them. The noble Lord, Lord Taverne, has powerfully made the case to promote rather than resist the application of modern science in the developing world, but it is also important that modern technology, machinery and infrastructure, as the noble Earl, Lord Selborne, commented, should be made available in these regions. Such countries need the high-speed automated equipment that carries out the work in the West before the weather intervenes and which enables more land to be brought into production. Those countries need the infrastructure that enables farmers to preserve water to store crops and even to move crops from the farm to the markets.
For all that to happen, farms have to get bigger, with fewer people employed. However, many NGOs are strongly opposed to that argument; they believe that present farm structures—in Africa, as small as half a hectare and declining—are adequate and that a rural status quo should be the desirable and practical objective. Some even argue that a largely organic system of farming will meet the farms’ needs. That is desirable but not realistic.
I disagree with both propositions. The rural status quo is a mirage and unachievable. The flight from the land to the cities started in the 19th century in Britain and has continued remorselessly ever since. France promoted the common agricultural policy post-war in
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It is foolish and Canute-like to refuse to recognise these realities. However bad urban poverty may be, rural poverty is far worse. Fifty years ago I was brought up in rural Ireland where people, such as an employee of my father, raised nine children in houses with three rooms. People had one objective in the Irish countryside in those days: to get out and come to Coventry to work, however awful it was. The objective in policy must surely be to ensure that when rural migrants move into the towns and cities they have decent wages, decent conditions and decent housing. We need to manage these changes, not deny them.
If the world’s agriculture went 100 per cent organic, Malthus’s dire prediction of two centuries ago would probably be realised in a matter of months, not years. The contentious issue of luxury food exports to Europe from poor countries in Africa and Latin America may be less relevant in today’s world as affluent consumers are deterred by high prices—see Marks & Spencer’s food business yesterday, which is one sign that this is already happening—and as farmers in the developing world find that higher prices in their domestic markets make it more attractive for them to serve those markets. That export trade should be properly regulated for environmental, health and social reasons, but it should nevertheless be allowed to continue, because it brings economic benefits to these poorer regions.
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