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Increasing productivity to reduce the volatility of agricultural prices 0

Brussels – In Africa, food security is synonymous with the strengthening of national agricultural production and political security, thus promoting regional integration. This assessment was shared by high-level agricultural experts who met in Brussels on November 30 during a conference on food price volatility organised by the Technical Centre for Agricultural and Rural Cooperation ACP-EU (CTA), in cooperation with the International Food Policy Research Institute (IFPRI), the New Partnership for Africa’s Development (NEPAD), the European Commission (DG Devco), the ACP Secretariat and Concord*.

It was no coincidence that the conference was held on November 30. It is a significant date which marks the end of the French presidency of the G20 which for the first time had food security at the top of its agenda. In Brussels, Mylène Testut-Neves, head of development cooperation at the French Ministry of Agriculture, took stock of the measures that the agriculture ministers of the world’s 20 most industrialized countries had taken in June in an attempt to curb the volatility of agricultural prices. It is this volatility which is considered to be one of the main causes of the food crisis in 2007 and 2008.

The representative handed over the G20 Presidency to Mexico, who was represented by Adriana Herrera Moreno, head of international trade negotiations at the Mexican Ministry of Agriculture. Moreno said that Mexico intended to give priority to increasing productivity to mitigate the effects of price volatility: “We want to confront all actors involved on five strategic points that we believe to be key to agriculture in the future: research and development, which are of critical importance, financing, phytosanitary issues – which are a concern as they prevent access to markets – sustainability and finally, the question of access to water. “

Structural food insecurity

According to Hafez Ghanem, Assistant Director-General of the United Nations Food and Agriculture (FAO), if some African countries, such as Ghana,  have managed to eradicate hunger it is due to the significant support provided to its farmers by the government. Unfortunately the same cannot be said for many other countries, as pointed out by Mamadou Cissokho, president of ROPPA, the Network of Farmers’ Organizations and Agricultural Producers of West Africa. “Public funds for the agricultural sector are few and poorly distributed,” said Cissokho, adding that: “The funding provided by donors is used to weaken our institutions. Our research institutes have become sub-agencies of the United States or European Institutions and for 25 years our governments have preferred to make easy decisions and import on a massive scale. “

The result? That expenditure on imports amounts to ten billion dollars in sub-Saharan Africa, of which five billion for the ECOWAS (Economic Community of West African States 15) and 300 million for Senegal. “Today, food insecurity has become a structural issue,” said Cissokho. The situation is so serious that 70% of family household budgets are destined to buying food. According to the president of ROPPA the solution lies in the need “to strengthen public investment, which the private sector will never do. Entrepreneurs are like flies, as soon as they smell something good they follow the smell with the sole purpose of getting rich. In Europe and the US agriculture has been developed through policies, not projects,” he concluded.

Diversifying producers

But is increasing agricultural productivity enough to curb the food crisis? “The situation is more complex than one might think,” acknowledged Maximo Torero, director of the Markets, Trade and Institutions Division at the International Food Policy Research Institute (IFPRI). “We are living through four crises: food, financial, linked to the growth of new biofuels, and the climate crisis, which increases the pressure on the agricultural sector as well as volatility.” There have been times in which food prices were even higher, such as before 2007.

The difference lies in the fact that volatility happens more often and lasts longer. “Before 2007 there had been three moments in which prices became volatile, since 2007 there have been 85 of these moments”. This volatility is a problem, said Morero, “because it prevents producers from being able to make predictions and is a source of uncertainty in terms of financial gains”.

To address this uncertainty in the aftermath of the meeting of Agriculture Ministers which was held in Paris last June, the G20 countries have set up the new Agricultural Market Information System (AMIS). “This network brings together organizations from 28 countries (those of the G20, Spain and seven other countries),” said Hafez Ghanem, “with the aim of providing reliable and timely supply, demand, stocks and the availability of products. This transparency should lead to a more stable market and one which is less subject to pressure from speculators.”

The information provided by AMIS should also be a source of relevant information for decision-makers. Like Ghanem, Carmel Cahill, Senior Counsellor for Trade and Agriculture Directorate at the Organisation of Economic Cooperation and Development (OECD) points out that the decisions taken by some countries to block imports or exports have only made the 2007 situation worse.  “Rice, which unlike corn or wheat was not affected by rising prices, has been sucked into the volatility vortex. “

The AMIS initiative was welcomed Takavarsha Tobias, Senior Agricultural Policy and Investment Officer at NEPAD, who highlighted the importance of food reserves in Africa to quell the crisis. Similarly, it is important for African countries to have adequate infrastructure and to follow the example of programs such as “corn without borders” to strengthen regional integration in a stable political climate. ” Meanwhile, the Director of CTA, Michael Hailu, would like to contribute along with other partners by speaking out for producers in ACP countries (Africa, Caribbean and Pacific) in the next G20 Mexico.

By Marie-Martine Buckens (Former Deputy Editor-in-chief of The Courier ACP-EU)

© Sud Quotidien (Senegal), Les Echos du Mali (Mali), Le Républicain (Niger) and Afronline.org (Italy)

* This article is published in the framework of an editorial project supported by CTA in the framework of Brussels Development Briefings (http://bruxellesbriefings.net), but does not necessarily reflect the views of the this organisation.

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