Global food prices have been skyrocketing over the last one year. As food producers and exporters, including India, China and Vietnam, are curbing exports to meet their internal requirements, protect their stocks and check inflation, the food crisis might further worsen. Nepalese consumers are also bearing the pinch of food price inflation. As a net food importer, Nepal may face a severe crisis with a negative impact on food security if the government does not look into the matter immediately.
Realizing the need to discuss the soaring food prices in the international market and devise strategies to combat their impact on the food security situation in Nepal, ActionAid Nepal and SAWTEE jointly organized a bi-monthly forum titled ‘Rising Food Prices: Impact on Food Security’ on 30 April 2008 in Kathmandu.
Presenting a paper on ‘Rising Food Prices: Food Security in Nepal’, Mr Navin Dahal, Executive Director, SAWTEE, said that the Indian government’s ban on exports of rice and wheat could create food shortages in Nepal. Pointing out that rising prices in the domestic market are also a result of black marketing, hoarding and undue profit, he said that the government should ensure an effective implementation of legal instruments like Consumer Protection Act, and Black Marketing and Certain Other Offenses (Prevention and Control) Act.
Dinamani Pokhrel, senior theme leader at ActionAid Nepal, said that the increase in food prices would have severe adverse effects on the food security situation in a poor country like Nepal. Therefore, he said, there is a need to increase productivity in the agricultural sector. Bishwanath Tiwari, National Programme Manager, UNDP, and a discussant at the programme, said that food production in Nepal is less than the demand of the rising population and, to make matters worse, people are fast abandoning agriculture for employment in other sectors. Therefore, he added, there is a need to attract people into agriculture and also chalk out strategies to retain the population that has taken up agriculture as a profession. Likewise, another discussant, Mr Rishi Niraula, lawyer and consumer activist, said that it is the responsibility of the government to curb food prices, devise strategies to ensure food security of its population and see that there is enough food supply within the country. The programme, chaired by Assistant Professor at Patan Multiple Campus Dr Keshav Khadka, was attended by more than 50 participants, including government official, researchers, consumer activists and media persons.
The world’s poorest people will be hardest hit by the global rise in food prices. Poor people in developing countries typically spend more than half of their overall budget on food. For the 160 million people worldwide who survive on less than fifty cents a days, food price inflation can spell disaster.
This global food crisis is a complex problem that cannot be solved with simplistic approaches. More effective and coherent action is needed now to help the most vulnerable populations cope with the drastic hikes in their food bills and to assist developing countries with strategies to increase agricultural productivity. We call for a short term “emergency package” to stem the tide of the humanitarian crisis. We also call for a “resilience package” to strengthen the capacity of poor people and developing countries to meet their own needs in the long run.
Enhance food assistance: Donor governments need to provide increased support for poor people’s food and nutrition security. The focus should be on the most vulnerable, including children.
Improve biofuels policies: Governments should revoke biofuel subsidies and excessive blending quotas (such as the requirement to use a certain percentage of ethanol in gasoline). Political leaders should consider a range of additional measures, including freezing biofuel production at current levels, reducing production, or enacting a moratorium on the use of grains and oil seeds for biofuels. At the same time, there needs to be support for development of bioenergy technologies that do not rely on food crops. A moratorium on grain based biofuels would quickly unlock these commodities for use as food.
This measure might bring corn prices down globally by about 20 percent and, as a consequence, decrease wheat prices by about 10 percent.
Stop export bans: A country that enacts measures such as agricultural export bans, high export tariffs, and
price controls may reduce its risks of food shortages in the short-term. However, these measures are likely
to backfire by making the international market smaller and more volatile. Export restrictions have harmful effects on import dependent trading partners. For example, export restrictions on rice in India affect Bangladeshi consumers adversely and also dampen the incentives for rice farmers in India to invest in agriculture. Price controls reduce farmers’ incentives to produce more food. On the other hand, the elimination of export bans would stabilize grain prices fluctuations, reduce price levels by as much as 30 percent, and enhance the efficiency of agricultural production.
Empower small-scale farmers. Providing improved seeds, fertilizer, credit, and other resources for small-scale farmers in developing countries would quickly improve production, increase incomes, and lower prices.
Invest in people: For longer term impact, developing countries need to invest in social protection measures, such as cash transfer programs, pension systems and employment programs. Preventative health and nutrition programs targeted to vulnerable groups (e.g. mothers, young children, and people living with
HIV/AIDS) should be scaled up to ensure universal coverage. In addition, school feeding programs can play an important role in increasing school enrollment and in retaining children in school and enhancing their academic achievement. These programs would reduce the vulnerability of poor people and enhance their long term productive capacity.
Reduce market volatility: Improving grain stocks and enacting regulatory measures to curb excessive speculation in agricultural commodities would help to stabilize markets in times of crisis.
Complete Doha round: World leaders need to complete the Doha Development Round, so that we have a global system that promotes agricultural trade on a fair and equitable basis.
Support agriculture: Long term relief from rising food prices can only be possible with increased agricultural production. Industrialized nations should revitalize their support for research, innovation, and extension to transform small farm agriculture. African heads of state need to deliver on their commitment to allocate 10 percent of their national budgets to agriculture. These investments not only have high returns in terms of agricultural growth, but also have a major impact in reducing poverty.
Implementation of both the short-term emergency response and the long-term solutions must begin now. Together, action in these areas would go a long way to stem the tide of rising food prices and reduce the threat of hunger and poverty.