Press Release
June 15, 2010

Avoiding the next food crisis

As global food crisis creeps back despite economic theory telling us that economic slowdowns usually reduces commodity prices, including food Senator Edgardo J. Angara today emphasized the need to bring in agriculture and food security into the policy table.

"We are spending billions of resources which otherwise could be allocated to long-term investments to boost our agricultural productivity. Our failure to initiate a long-term and focused effort to boost agricultural productivity could result to more poverty and widespread hunger," said Angara who chairs the Senate Committee on Finance.

During the last few months, prices of agricultural commodities have risen to levels last seen at the start of the 2007-2008 global food crisis. The recent hikes in poultry prices here are largely due to the increase in the price of feedstock such as corn and soya.

There is, though, some silver lining. The United Nations' Food and Agriculture Organization (FAO) and the Organization for Economic Co-operation and Development (OECD), in their OECD-FAO Agricultural Outlook 2009-2018, see agriculture as more resilient to the global financial crisis than other sectors.

Their data, nonetheless show that over the next decade, agriculture prices will be up to around 10-30 percent higher than historic averages. This substantiates the forecasts of agriculture analysts that a structural upward shift in food costs has been happening.

Such upsurge, coupled with job losses from the economic slump and speculation of an impending El Niño (experts have predicted a 50% chance of drought this year) threatens not only food prices, but social sustainability as well.

Already, the number of chronically hungry people in the world has risen to 1 billion- up from 2007's 850 million, a figure which before the food and economic crises plagued the world has not increased since the early 1990s.

This grim scenario, made even worse by a lurking sequel to last year's global food crisis, shows that beyond economic and seasonal cycles, the main drivers of food price hikes are long-term trends such as an increasing population, and a more volatile climate.

However belated, it is fortunate that multilateral aid agencies and powerful think tanks are bringing agriculture and food security back into the policy table since it was seen by World Bank, in its report last year, highlighted agriculture as the single most cost-effective means to fight poverty.

"This strategy marks a shift from two-decades of preferring food aid over investing in agriculture as a form of official development assistance and hopefully, such efforts will rub off on Philippine policy makers and office budget keepers," said Angara.

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