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In the short term, the most immediate responsibility of rich Governments is to ensure that the UN’s food programmes are fully funded. I trust that, at the G8 meeting next week in Japan, the rich countries will ensure that that happens. I note in this morning’s Herald Tribune that Robert Zoellick, the president of the World Bank, says that he needs $10 billion in order to make that happen.
My final point relates to whether there should be more or less free, but fair, global trade in food. In an economic crisis it is understandable that frightened people are inclined to become protective. Both Barack Obama and President Sarkozy are already making protectionist noises. Some British farmers are jumping on to the protectionist bandwagon, arguing for more home-produced food. This is understandable but quite wrong. Protectionism was the world’s disastrous reaction to the great depression of the 1920s and 1930s, with awful economic and political consequences, whereas the remarkable growth in global prosperity over the past 60 years was significantly stimulated by the reduction of trade barriers under the GATT and, more recently, WTO agreements.
In the short term, we must ensure that those countries desperately short of food can make purchases in a fair and open global market, not one distorted by export restraints and taxes. There should be a Doha agreement, but I am not optimistic that it will happen, especially if the new American Administration are ambivalent. In the medium term, as I have suggested, this sudden escalation in food prices is likely to reverse as farmers
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In the longer term, however, the Malthusian threat may re-emerge as climate change impacts on agriculture across the world and as the world’s population is set to grow by 40 per cent. Some areas will suffer, such as north Africa, Australia and the Middle East, but others will benefit, such as many parts of northern Europe, Siberia and Canada. In these circumstances it is even more important that food moves easily and fairly from regions in surplus to regions in deficit. It is even more important that farmers in the developing world are able to enjoy the full benefits of modern science and technology and that research and development in agricultural science and technology are stepped up rather than resisted.
In my lifetime, the world’s population has quadrupled, but the world’s farmers have also quadrupled their output—a remarkable achievement. Against that background, a further increase of perhaps 50 per cent to 100 per cent in output over the next 30 to 40 years should be achievable, but only if those who argue for responsible science and free trade win the day.
12.48 pm
Lord Alton of Liverpool: My Lords, coming as this debate does in advance of next week’s G8 summit in Japan, the noble Lord, Lord Taverne, has given the House a timely opportunity to reflect on the effects of the rise in world food prices. We are all indebted to him for that.
Last month, following the World Food Summit in Rome, I wrote to the Prime Minister urging him to make the issue a key question at next week’s summit. I also tabled a series of Written Questions to the noble Lord, Lord Tunnicliffe, who will reply to today’s debate, and he answered my Oral Question on 17 June. At the time I expressed surprise that he responded with the words,
I express surprise again at what I think is a contentious assertion. As we have heard, major food riots and angry street protests are going on all around the world, probably in some 33 countries, and at least one Government have been dislodged as a result. Ban Ki-Moon, the Secretary-General of the United Nations, says that if the present crisis is not adequately addressed, one consequence could be social unrest on an unprecedented scale. His predecessor, Kofi Annan, also recently remarked that the world food crisis threatens to destroy years of economic progress and may push millions back into abject poverty. A Chatham House paper published in April suggests that the crisis jeopardises our ability to meet the millennium development goals. However, good could yet come out of this crisis if it is seized as an opportunity to reform global agriculture and longer term productivity in Africa and elsewhere.
Last month’s Rome summit, convened to consider the food crisis, ended without agreement on some of the key issues that now confront the world. It was overshadowed by the bizarre decision to allow Zimbabwe’s Robert Mugabe and 200 of his henchmen to break the
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Every single day, 25,000 people die of hunger or hunger-related causes. We receive reports of food riots from disparate parts of the globe, of children dying of hunger in Ethiopia—where the poorest can buy only 40 per cent of the food and where 4.6 million are in urgent need of food—of famine in North Korea and the collapse of the Government in Haiti. These are all harbingers of worse to come. Many other fragile countries will reap the whirlwind of our failure to address a crisis that the United Nations World Food Programme has called “a silent tsunami”, affecting every continent and plunging more than 100 million people into hunger and more countries into violence and instability.
Spiralling food prices are creating the biggest challenge that the World Food Programme has faced in its 45-year history, with millions of people who were not in the “urgent hunger” category six months ago now listed as such. Maize and rice have almost doubled in price during the past year. In the United Kingdom, higher food prices are causing us all to tighten our belts, but in vast swathes of the world, where even before the crisis around 3.5 million children died annually of malnutrition, there are no belts to tighten.
The UK Government currently spend less than 1p per malnourished child per day. The devastating impact of the world food crisis on malnutrition will add to what was described in a series of papers published by the Lancet in January as a “fragmented and dysfunctional” international response to malnutrition. Save The Children, citing the World Bank, states that more than 100 million people will be pushed into poverty as a result of food price rises. It says that 854 million people were already hungry before prices started to rise, including 178 million children under the age of five who were stunted.
The cost of food accounts for half the expenditure of a poor family. As prices rocket out of control, those families simply cannot keep up. An average family in Bangladesh that has £2.50 a day will spend £1.50 on food. A 50 per cent rise in the cost of basic food requires a further 75p, leaving them with just 25p for all other expenditure. This shocking situation has been compounded by rising oil prices that have made farming more expensive, by natural disasters such as Cyclone Nargis in Burma and the Sichuan earthquake in China, by flooding and droughts, and by crop failures in countries such as Ethiopia. It has been accentuated further by the rapid industrialisation of vast parts of the world, especially India and China. That in turn has led quite understandably to demands for more and better food.
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The acute nature of the crisis in some parts of the world has already forced the World Food Programme to reallocate some of its resources. It has suspended some of its feeding programmes in various parts of the world—for example, to 450,000 children in Cambodia—because it simply does not have funds to meet all the challenges. WFP representatives in 78 countries around the world are facing similar dilemmas.
Even in Darfur, where the five-year conflict has led to more than 300,000 deaths and 2.5 million displaced people, the WFP has received only 17 per cent of the funds required to go on with its feeding programme. In June, it cut back its helicopter operations, which it says are the lifeline through which 12,000 relief workers are able to distribute food to remote areas of Sudan. At a recent meeting of the All-Party Group on Sudan, of which I along with my noble friend Lord Sandwich am an officer, we heard first-hand accounts of the increasingly desperate situation in many parts of Sudan. I was therefore staggered to read the Minister’s assertion:
“Our initial assessment is that the flight changes announced by the World Food Programme’s Humanitarian Air Service will not adversely affect the frontline work of the humanitarian operation in Darfur”.—[Official Report, 26/6/08; col. WA 275.]
That is certainly not the World Food Programme’s view.
In the short term, the world food crisis will lead to sudden, unexpected starvation and therefore to death. In the long term, development programmes will collapse and nutrition losses will damage children for a whole lifetime. The consequences of the 1990s famine in North Korea, for instance—I chair the All-Party Group on North Korea—can best be seen in the contrasting stature of North and South Koreans. The average adolescent in North Korea is 18 centimetres shorter than his counterpart in the south. Stunted growth and malnutrition damage bodies and educational attainment. I recently asked the Minister what assessment the Government had made of the report of the Peterson Institute for International Economics on food shortages in North Korea. Does he have the results of the independent assessment which he said would be made available early this month?
Failure to take the right decisions on agriculture, biofuel production, subsidies, tariffs and trade are the key factors in precipitating this crisis. The president of the World Bank, Robert Zoellick, has challenged the world community to find the £370 million needed to avert the immediate crisis. He has said:
The World Trade Organisation, too, can take a lead on this issue. It needs to be persuaded to abandon the grossly distorted trade policies to which my noble friend Lord Bilimoria referred earlier. Those policies have, for instance, forced Japan to import rice while it produces large surpluses—770,000 tonnes of unwanted and unneeded rice were imported last year alone.
What else might we do in the longer term? Food output in many impoverished parts of the world could be doubled or tripled by creating a special fund to support the world’s poorest farmers, helping them obtain seeds, fertilisers and irrigation—a point referred to extensively by the noble Earl, Lord Selborne; I
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As well as a green revolution, we have to persuade European and American Governments not to use corn to make ethanol, or to displace food crops by oil seed for use as biodiesel. That is a classic example of the law of unintended consequences. How many people could be fed by the food used to fill the tank of a four-wheel drive Mitsubishi Shogun? The US spends $7 billion annually on subsidies for maize-based biofuels. The diversion of that maize from the international markets accounts for a third of the price increase, but it also says something about our priorities that we would rather fill a petrol tank than the stomach of a starving child, and rather use food to feed our cars than hungry families. The moral bankruptcy of feeding cars at the expense of malnourished people should be self-evident.
There is also increasing evidence that biofuels have limited CO2-reduction benefit and, through the clearance of rainforests and other pristine areas such as peat bogs, will lead to an increase of CO2 emissions. Instead of subsidising biofuels, we should encourage the World Bank to get on with its plans to provide social safety nets, particularly insurance for poor farmers hit by natural disasters such as drought. That would tide them over until better times could come and allow them to stay on the land. Too many people feel forced to migrate to the squalor of urban shanty towns. Like that of my noble friend Lord Haskins, my own family came from the west of Ireland—my late mother came from the kind of conditions that he has just described. However, having visited places such as Kibeira on the outskirts of Nairobi, which is probably the largest shanty town anywhere in Africa, I am not sure that one can assert with quite such certainty as did he that life is better there than it is in rural squalor.
The World Bank also needs to atone for the too-rapid liberalisation of markets in the developing world. The consequence has been the initial dumping of food by Europe and the US, and the consequent reliance of poor nations on cheap imports attended by the abandonment of farming by their own people. “Back to the land” is a call that needs to go out across the developing world. As the noble Earl, Lord Selborne, said, infrastructure, especially water, has to go hand in hand with the provision of that land. Whenever we debate the availability of food to feed the starving, two other lines of argument loom large. They have been referred to in this debate—one is population control and the other genetically modified crops. In the House of Lords Library Note for today’s debate, we are reminded that,
- “the Food And Agriculture Organisation suggest that while population growth and increases in purchasing power in developing countries are important, they alone could not explain the sudden surge in food prices in recent years”.
Long before Thomas Malthus published his Essay on the Principle of Population and the later ideology of eugenics was promoted by Marie Stopes and the rest, there was always a tendency to attack population as the problem, rather than poverty. The greatest danger of an overexaggerated emphasis on population control
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Along with the argument that we must target population sits the other proposition, recently repeated by the Environment Minister, Mr Phil Woolas, that genetically modified foods can conjure up a way in which to feed the whole world. On 14 June in an editorial rebutting this claim, New Scientist said:
It can undermine food self-sufficiency, pollute water and land, cause significant soil erosion by depleting the soil of its carbon content and exacerbate climate change. It would be immoral in the face of the need to feed hungry people to reject GM lines out of hand, but we need to tread with extraordinary caution and tone down unjustified rhetoric. As the Independent said in an editorial on June 20:
To sum up, in trying to understand the forces at work in driving up food prices and their consequences, we should be careful not to tilt at the wrong windmills. At their summit in Japan next week the G8 leaders have the chance to avert this crisis. To do that in the short term they will have to increase resources, but there must also be significant investment in research and development, science and technology. I entirely agree with the noble Lord, Lord Taverne, about that. We must enhance yields, maximise land use, increase efforts to ensure an end to distorted trade policies and repudiate quick-fix solutions such as biofuels.
The House owes the noble Lord, Lord Taverne, its thanks for tabling this Motion for debate today.
1.02 pm
Baroness Northover: My Lords, I, too, congratulate my noble friend Lord Taverne for raising this extremely important issue. He is always in the lead in such matters. I have to declare what I hope is a very time-limited interest, which several noble Lords with a longer time commitment to it share. My father was a farmer on the South Downs and would very much have applauded what my noble friend had to say about the importance of investment in agricultural research. When he became ill and died in the autumn of 2006, I found myself having to take over his tenancies as his estate was gradually wound up. That autumn, I sold his barley out through Shoreham harbour as he had done; it was a new experience for me. He had a small arable area and his barley sold for about £10,000. Imagine my astonishment in early 2007 to find that the same acreage was then priced at three times that amount. I thought that I had misread it. Unfortunately, teenagers smoking in the fields just before harvest actually meant that a third of it went up in smoke—but such is life.
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When I found that these prices were real, as the spokesperson on international development for the Lib Dems in the Lords I found myself wondering, at the beginning of 2007, when those prices were predicted for me, what on earth the effect would be around the world. I was hearing little from others at that time. We are only just beginning to address this issue, together with related issues on the rise of oil prices and climate change. We have already heard an enormous amount about the impact of the increase in food prices. There are opportunities here as well as threats, but of course it is those at the margins who are most threatened, as they are often already in the most fragile states.
The opportunity is there to bring prosperity to some of those whose farms were barely viable. I think that my father, although not quite on such margins, might have benefited from the situation. As a small farmer, he was not on the scale of the noble Lord, Lord Haskins, or other noble Lords who have spoken in this debate, to say the least. But after all, in Britain and the west it was the agricultural revolution which then paved the way for the industrial revolution. But if you cannot afford to eat and cannot be self-sufficient on your farm, reaching a point when you can benefit from the sales of your crops may be beyond your reach, and those are the people to whom we must pay particular attention. As populations flooded into the cities, in Britain and other western industrialised countries, as they are in developing countries now, we know—as the noble Lord, Lord Alton, said—that usually their living standards declined. The urban poor will be particularly hard hit by soaring prices. They might have benefited and they may benefit later, but initially they often lose out in that move.
Many others in this debate, such as the noble Lords, Lord Bilimoria and Lord Alton, the noble Earl, Lord Sandwich, have made very clear the terrible impact of rising food prices on the poorest. As the Overseas Development Institute, on which I am a council member, put it:
“Soaring food prices pose problems for three groups. First, the poor whose ability to buy food is undermined. Second, governments of low-income countries facing higher import bills, soaring costs for safety net programmes and political unrest. Third, aid agencies juggling increased demands for food, cash and technical advice”.
The real price of food had been falling since the 1950s, and maybe this can be seen as a correction. The green revolution, to which other noble Lords referred, began in the mid-1960s, and saw increases in yields, falling food prices and reductions in poverty in some parts of the world. But food prices have risen over the past few years and particularly since 2006. Why has this happened? Clearly more research needs to be done, but a number of explanations have been given today. As the noble Lords, Lord Taverne, Lord Grantchester, Lord Bilimoria, and others, have said, there have been a number of factors ascribed to this. Oil price rises have increased costs for fertilisers, machinery and transport; there has been speculation on commodity prices and some exporting countries have imposed taxes, minimum prices, quotas and bans on foodstuffs. Increasing prosperity and changing diet in India and China has increased grain and meat consumption. Support for biofuels has diverted grain from food to energy. There is a whole range of possible issues.
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Possibly prices will drop a little but it is anticipated that they will not drop substantially in the medium term. As the noble Lord, Lord Alton, pointed out, the devastation and social unrest that could result is of key importance to all of us. Higher food prices could raise farmers’ incomes, if farmers can respond, as in some cases in the Asian green revolution. I look forward to the battles between the noble Earl, Lord Sandwich, and the noble Lord, Lord Bilimoria, over the plusses and minuses of how that may work through. Exactly whether we should go down the route of large farms, as the noble Lord, Lord Haskins, says, or small ones, will also be hotly debated and is of key importance.
In Cambodia, to take that as a case study, a higher rice price stimulated a 13 per cent increase in rice production and rice exports rose by more than 80 per cent. Rice farmers benefited but the rest of the economy suffered. Resources shifted from other farm activities to rice-growing, so livestock and fish production declined. Higher rice prices reduced household spending on other goods and services, depressing the economy; GDP fell by around 0.2 per cent; farming households were better off, with incomes for surplus producers—it is significant that they are big enough to benefit from this—rising by almost 4 per cent; but other households saw incomes fall by around 2 per cent. So it is a complex pattern of winners and losers.
In the short term, as other noble Lords have mentioned, and this is of key importance, we will need social protection—I am glad to see that DfID has recently been moving in that direction—transfers to the poor, as with the introduction of universal old-age pensions in India and South Africa, and general food subsidies. It is an issue that has been particularly addressed in concern about AIDS and the impact on orphans and vulnerable children, and how best to support them. The area of social protection is developing. More will need to go to the World Food Programme, which itself will need to be transformed to make it more effective.
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