News
26 February 2014
Trends in food and agricultural policies: short term decisions likely to jeopardise transition to sustainable agriculture and hunger eradication
In its recently published Food and agriculture policy decisions - Trends, emerging issues and policy alignments since the 2007/08 food security crisis, FAO presents the results of the work conducted by its Food and Agriculture Policy Decision Analysis (FAPDA) project since 2007. Trends in policy decisions made in more than 70 countries in Africa, Asia and Latin America are analysed over the 2007-2012 period.
What are the main conclusions that can be drawn from the analysis of the mass of information provided in this rich report, which can be used as a reference on what is going on in various policy areas relevant to food security in non-industrial countries?
Eight key main ideas can be highlighted here:
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•As a reaction to the food crisis of 2007-2008, governments have put food and agriculture back high on the agenda and they have increased resources allocated to this sector
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•The brunt of the effort made to support agriculture has been to provide subsidies on agricultural inputs (mainly fertiliser and improved seeds)
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•The crisis also put back price stability on the forefront of government concerns. Variability of international prices and local climatic events have convinced many governments to revive or reinforce their price stabilisation programmes, particularly in Asia
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•With agriculture being perceived as being a more profitable sector, pressure on land increased and many governments have adopted measures to improve access to land for smallholder farmers and increase security of land tenure
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•The reaction to the crisis has also been to give more attention and resources to food subsidies and social protection programmes to improve access to food by the poor. This has entailed food distribution, cash transfers, nutrition programmes, etc.
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•Governments have adopted more trade policies favorable to their consumers (they facilitated imports and restricted exports) which have penalised producers. Some of these measures have been removed of late, particularly those imposing export restrictions which were felt to be too disadvantageous for producers and tended to exacerbate price peaks on the world market.
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•Measures have been taken to improve the functioning of domestic markets and new technologies are being promoted to improve the flow of market information.
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•Despite years of efforts for regional integration, policy misalignement among members of a same regional grouping and between members and the grouping remains very frequent.
These conclusions call for three main comments:
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•First, the policy decisions taken by governments in the wake of the crisis show that they have mainly considered the food crisis as a supply crisis and have responded by subsidising and promoting well known technologies that increase production, the so-called green revolution technologies [read more on the food crisis]. As a result, it is most likely that the majority of poor smallholder farmers, who do not have the financial means to buy inputs, will not have benefited from these subsidies, despite targeting efforts made in some countries and despite the establishment of special credit programmes. Moreover, this reaction to the crisis will not have been in favour of the very much required transition to more sustainable agricultural practices.
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Market stabilisation being usually an expensive progamme to run, it draws heavily on government resources. Its benefit is double: when programmes are effectively run, they provide a stabler environment to producers and encourage investment, and they also reduce price variations for consumers, reducing the likelihood for the poorer urban dwellers of periods where prices put food out of reach.
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Both of these reactions (subsidies and price stabilisation programmes) are potentially costly, aim at immediate results which can generate political benefits for governments, but they put a serious dent in the resources allocated by governments to investment in public goods and for the preparation of the future (research and extension, infrastructure, etc.). The analysis of public expenditure for agriculture conducted in 5 countries in Africa illustrate this fact [read]
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•Second, efforts to improve access to land for smallholder farmers and increase security of land tenure may potentially have both positive and negative implications: positive insofar that security of land tenure is protecting the right of access to land by smallholder farmers and rural communities, thus giving them security and an incentive to invest in their land; negative insofar that secure land tenure can also be used to officialise land grabbing operations that have resulted, in some countries, in the eviction of communities from their land. It could also open up the perspective for more land acquisitions by investors in those countries where the land is formally owned by the state. This is one of the main policy conditionalities imposed by the New Alliance for Food Security and Nutrition in Africa [read].
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•Third, while agriculture did get more support as a result of the crisis with the view to boost production, there were also considerable efforts made to protect consumers from high food prices: more food subsidies and social protection programmes, trade policies and efforts to make domestic markets work more effectively.
The picture of policy changes given by the report raises important questions that unfortunately are not spelled out in the document but that could be the subject of further research within FAO or in other organisations:
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•Implications of these policy changes on government budgets (income level and structure, expenditure structure, fiscal balance)
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•Implications of the short term orientation of the policy decisions made on medium and long term issues (level of poverty and hunger, transition to a more sustainable agriculture, level of investment, food trade balance, etc.)
Surprisingly, little is said in the report about the promotion of private investment which has become a leit-motiv since the 2007-2008 crisis. Does this mean that private investment promotion has been mainly a theme of official documents and has only benefited from lip service? Or is it that the land acquisition movement and increased interest of large international investors in agriculture has so far escaped any specific effort of promotion or regulation? In any case, one would have expected this important issue to be mentioned in this report.
The report produced by FAO, latest of a series of three papers produced since 2008 (see below), is certainly a major reference document for keeping track of policy changes taking place in the non-industrial world, and the FAPDA Tool is a very valuable source to identify countries where specific policy instruments have been used.
Unfortunately the report does fall short in highlighting the major emerging issues arising from this review, despite the expectations created by the title of the publication. It also does not draw the implications of the analysis done on FAO’s own policy work in the future.
Let us hope that the very useful work initiated under FAPDA at FAO will continue in the future and serve as a major source of information for all those interested in food and agricultural policy.
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To know more:
M. Demeke et al., Food and agriculture policy decisions - Trends, emerging issues and policy alignments since the 2007/08 food security crisis, FAO 2014
M. Maetz et al., Food and Agriculture Policy Trends after the 2008 Food Security: Renewed Attention to Agricultural Development, FAO 2011
M. Demeke et al., Country Responses to the Food Security Crisis: Nature and Preliminary Implications on the Policies Pursued, FAO 2008
FAO, FAPDA Tool
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