Inequality of Food & Nutrition Security: Stress Factors on Agri-Food Business

1. Life on the margins: the inequality of food and nutrition securitySTRESS FACTORS ON AGRI-FOOD BUSINESS PowerPoint presentation by Médecins Sans Frontières / Doctors Without Borders (MSF) UK Schools Team: Mary Doherty and Severa von Wentzel January 2014

2. “Beyond funding, we find that the policies that contributed to the recent food-price crisis have gone largely unchanged, leaving global food security as fragile as ever. The world needs policies that discourage biofuels expansion, regulate financial speculation, limit irresponsible land investments, encourage the use of buffer stocks, move away from fossil fuel dependence and toward agro-ecological practices, and reform global agricultural trade rules to support rather than undermine food security objectives.” (http://www.ase.tufts.edu/gdae/Pubs/rp/ResolvingFoodCrisis.pdf)

3. Stress factors on agri-food system

4. Food price hikes • Price spikes are of serious concern, because they significantly raise global poverty. “People who are already poor are...highly vulnerable to even small shocks that will push them closer to destitution, starvation, even premature mortality”(http://www.fao.org/fileadmin/user_upload/hlpe/hlpe_documents/HLPE_Reports/HLPE-Report-4 Social_protection_for_food_security-June_2012.pdf) • Long term declining trend in food prices. • The global food system is becoming more sensitive to high prices and volatility. Food price hikes have increased in the last decade, but price volatility is not a new phenomenon. Some volatility is inherent in an agricultural commodity market. • Food price spikes pushed food security onto the global agenda and drew attention to the implications of 20th C food unsustainability. Note to students: It may well be useful in an exam if you could sketch this graph with labelled axes and a title. Source: http://www.fao.org/worldfoodsituation/wfs-home/foodpricesindex/en/ http://www.econlib.org/library/Topics/HighSchool/RealvsNominal.html; GHI document http://www.ifpri.org/sites/default/files/publications/ghi11.pdf

5. Agricultural price index and population trend As the world population has been rising, agricultural prices have been mostly following a downward curve.

6. Vulnerability: Low-income countries most affected “The link between intensifying inequality, debt, climate change, fossil fuel dependency and the global food crisis is undeniable”* Further info on debt relief: Heavily Indebted Poor Country Initiative (HIPC) and Multilateral Debt Relief Initiative (MDRI): http://www.imf.org/external/np/exr/facts/hipc.htm Quote: The Guardian “Why food riots are likely to become the new normal, March 2013 http://www.theguardian.com/environment/blog/2013/mar/06/food-riots-new-normal Image from http://www.savethechildren.org.uk/sites/default/files/images/A_High_Price_to_Pay.pdf

7. Power of food Agro-industrialisation of the “Fast World”, which was built on the myth of the free market, has entailed the “extreme commoditisation of food” and marginalisation of rural communities and the poor. (www.researchgate.net/publication/...The.../32bfe5126ddd9a0460.pdf‎) Action for students: • Watch the FAO video on price hikes and make notes for your folder www.safeshare.tv/w/AsdCuESquO and m • Watch the Red Cross clip on “Food insecurity, how it happens and what you can do” http://www.youtube.com/watch?v=79UGlB1IRh4 • Note why women and children are especially affected: Save the Children UK, A High Price to Pay, http://www.savethechildren.org.uk/resources/online-library/high-price-pay

8. Food Riots “Not only do high food prices weigh heavily on the incomes of the poor, they lead to more political unrest around the world”– “Buttonwood: Gas, grains and growth”, The Economist June 23rd 2012 “ No government is more than nine meals away from anarchy” - Ewan Cameron • The food price index, a measure of the monthly change in international prices of a basket of food commodities. • Many poor countries are susceptible to price spikes and already have highest levels of malnutrition. Food price hikes cut access to nutritious food. • The 2008 food price rises and global rice shortage, rapid population growth, and dictatorial regimes / failings of the political systems in the human rights arena were the backdrop of the Arab Spring and food riots across the Middle East, North Africa and South Asia. Further info: Danger of spreading global unrest: http://necsi.edu/research/social/food_crises.pdf Juan Mabromata/AFP/Getty Images

9. Factors of the global food price crisis: Longer-term factors Source: http://www.icfi.com/insights/reports/2009/final-assessment-food-security-vulnerability-mapping-adverse-effects-food-prices-children-women-mena

10. Factors of the global food price crisis: Short/medium-term Factors Source: http://www.icfi.com/insights/reports/2009/final-assessment-food-security-vulnerability-mapping-adverse-effects-food-prices-children-women-mena

11. Food crisis on national level Source: http://www.icfi.com/insights/reports/2009/final-assessment-food-security-vulnerability-mapping-adverse-effects-food-prices-children-women-mena

12. Effects at the individual and household level Action for students: Use the slides in this section so far for research and write a one side of A4 about the impact of the food price crisis. Source: http://www.icfi.com/insights/reports/2009/final-assessment-food-security-vulnerability-mapping-adverse-effects-food-prices-children-women-mena

13. Food crisis factors driving the price hikes Action for students: In pairs, discuss how the factors are inter-related and draw a spider diagram.on the challenges might interact going forward. • Rising demand • Increase in use of agricultural crops and land for energy (biofuels). The impact may become less significant with the introduction of second generation biofuels technologies, but the competition between agriculture and energy will persist. • Rise in demand for feed crops and food given the nutrition transition and growing populations, largely in urban areas and developing countries, demanding more and better food • Climate change. Impact on crop production may be very significant over time and is geographically unevenly distributed. Interruptions to supplies and agricultural ecosystems in key exporting countries due to weather and climate change’s possible contribution to them; • Yields, technology. Slowdown in yield increases for key food crops partly owing to reductions in agricultural R & D. Land and water constraints will remain high. • Globalised agri-food business • Growing power and concentration: shrimking farms, growing food processors and intermediaries • Trade policies undermining developing countries’ food production capacity • Increasing financial speculation in agricultural commodity markets and not always adequate levels of publically-held inventories . Source: http://ase.tufts.edu/gdae/Pubs/rp/ResolvingFoodCrisis.pdf

14. Agri-Food-System:Biofuels, Financial Speculation and land grabs

15. What is going wrong in agricultural production and markets? • Highlights fundamental issues undermining agricultural development and food security: • Biofuels • Financial speculation • Land grabs • Action for students: • Read the report and/or watch the interview with the authors. • Take notes in your folder and create a spider diagram: • Report • http://www.ase.tufts.edu/gdae/Pubs/rp/ResolvingFoodCrisis.pdf • Video: http://www.youtube.com/watch?v=08bPnZudj3M

16. Biofuel production

17. Biofuel boom The umbrella term biofuelsis mostly used to refer to alternative substitutes for petrol, diesel or aircraft fuel.More on Biofuels: http://www.biofuels.co.uk/ Source: enoughFoodfor everyoneIf.org; http://www.grida.no/graphicslib/detail/biofuels-production-2005-by-country-ethanol-and-biodiesel_1353#

18. Biofuels debate Action for students: Assign students opposing positions to debate the impact of biofuel production in Africa: • saviour (development opportunity on the scale of Green revolution) or • threat to food insecurity in the region (decrease in food production and worse droughts). • Using the information below, prepare to debate the impact of biofuels on • food security in Africa. For biofuels: • Largely unable to compete with food prices because of cheaper exports, African farmers could compete in biofuels because North America or Europe don’t currently export these. • Some biofuels require fewer nutrients than food crops and could therefore be grown on lan unsuitable for food production. • Potentially an environmentally and affordable alternative to address dwindling natural resources and over-dependence on fossil fuels Against biofuels: • Increased biofuel production in Africa could decrease the land available for food production and food production . Conversion of food crops to agrofuel production is partly responsible for 12.7% decline in world cereal stocks between 2009 and 2011 (de Schutter 2011). • Biofuel production drives up world food prices. Given globalisation, prices in Africa can be affected by biofuel production and government subsidies, incentives and mandates in other regions. • Higher prices because of biofuel expansion can exacerbate the effects of droughts and risk of famine. • Provides profits for international investors, not locals. • Largely unproven technology, first-generation biofuels are corrosive and may not be an economically or environmentally viable alternative Source: Lifland, Amy. Starvation in the Sahel http://hir.harvard.edu/crafting-the-city/starvation-in-the-sahel; http://ase.tufts.edu/gdae/policy_research/resolving_food_crisis.html; Image: http://www.biofuels.co.uk/

19. “As food-producing resources become more valuable, resource-constrained countries and speculative investors have bought or leased millions of acres of agricultural land in Africa and in other developing regions, compromising the long-term food-producing capacity of developing countries” http://ase.tufts.edu/gdae/policy_research/resolving_food_crisis.html Land leasing A growing number of countries are leasing land abroad to secure and sustain their own food production. K Source: http://www.grida.no/graphicslib/detail/an-increasing-number-of-countries-are-leasing-land-abroad-to-sustain-and-secure-their-food-production_1164#

20. Land rush Driven by speculation, land grabs can pose issues for food security or development. Regulation or monitoring, transparency, consultation and consent, and land rights and governance for large-scale land acquisitions is lacking, but attention is growing. “Dramatic rise in the acreage of transnational land acquisitions to rise from 15m–20m hectares in 2009 to more than 70m in 2012.“ (Guardian http://www.guardian.co.uk/global-development/2013/apr/15/ireland-michael-higgins-land-rules-hunger) “More than 60 per cent of investments in agricultural land by foreign investors between 2000 and 2010 were in developing countries with serious hunger problems. However, two-thirds of those investors plan to export everything they produce on that land. ”(Oxfam http://www.oxfam.org/en/grow/policy/%27our-land-our-lives%27) Further info: On Land grabs by Oxfam: http://policy-practice.oxfam.org.uk/publications/our-land-our-lives-time-out-on-the-global-land-rush-246731; http://sites.tufts.edu/jha/archives/1241 http://www.youtube.com/watch?v=ExCQlobfAUU By the Guardian http://www.guardian.co.uk/environment/2010/mar/07/food-water-africa-land-grab Opinion piece on the role of EU biofule policy: http://www.irishtimes.com/news/world/european-biofuels-policy-is-feeding-cars-but-starving-people-in-developing-world-1.1633379 Source: http://www.weeffect.org/files/2012/12/LandGrabbingReport.pdf; Image: http://www.economist.com/node/18648855

21. Land acquisitionor land grab? Action for students: Learn the factors which make a land acquisition a LAND GRAB Discuss the factors prompting the increase in land grabs shown by this chart and the role of politics in ensuring domestic food security at the expense of food security elsewhere. As quoted in OXFAM Briefing Note October 2012: http://www.oxfam.org/sites/www.oxfam.org/files/bn-land-lives-freeze-041012-en_1.pdf based on As shown in: http://www.weeffect.org/files/2012/12/LandGrabbingReport.pdf

22. Green or Greed ? Action for students: Work with a partner and using the model and information on the previous slides to write a paragraph which explains how market power and influence is concentrated in trading, processing and retail and not in small scale farming • Divide the class into groups and assign each group one of the articles below. Ask each group to debate and distil the main points of their article and the slides which follow in this presentation and prepare a handout sheet for the other groups. 2. What are the issues with current demand trend such as biofuels, meat-based diets, post-production food waste? 3. Make sure that you note what may be the position / bias of your sources. • Socialist Magazine Monthly Review “Globalization of Agribusiness and Developing World Food Systems” http://monthlyreview.org/2009/09/01/globalization-of-agribusiness-and-developing-world-food-systems • Worldwatch Institute “Agribusinesses consolidate Power” http://www.worldwatch.org/node/5468 • FEW Resources.org “Some Issues posed by Market Concentration in Agriculture” http://www.fewresources.org/market-concentration.html • Etc Group “Who will control the Green Economy?” http://www.etcgroup.org/sites/www.etcgroup.org/files/publication/pdf_file/ETC_wwctge_4web_Dec2011.pdf

23. Teacher resourceSlides

24. Commodity prices and price volatility Oil prices superimposed on FAO Food Price Index and Food Commodity Price Indices. Energy, mostly oil, accounts for 30% of the cost of food. Source: http://www.marketoracle.co.uk/Article27857.html; http://www.fao.org/worldfoodsituation/foodpricesindex/en/; http://www.fao.org/worldfoodsituation/wfs-home/foodpricesindex/en/; http://www.thepredatorybird.com/window-of-opportunity-a-skaters-journey-from-the-oil-capital-of-europe-to-the-edge-of-a-global-economic-catastrophe-in-five-hilarious-minutes/; http://www.econlib.org/library/Topics/HighSchool/RealvsNominal.html; GHI document http://www.ifpri.org/sites/default/files/publications/ghi11.pdf

25. Time dependence of Food Price Index Source: http://necsi.edu/research/social/food_crises.pdf

26. Trading patternsand protectionist barriers “When countries with untapped agricultural resources provide food by importing more, they are effectively importing unemployment. By the same token, countries that are subsidizing food exports are increasing unemployment in food-importing countries. This marginalises people, and marginalized people are forced to destroy the resource base to survive. Shifting production to food-deficit countries and to the resource-poor farmers within those countries is a way of securing sustainable livelihoods.” (UN Documents, Our Common Future - http://www.un-documents.net/ocf-05.htm) Source: UN Documents, Our Common Future - http://www.un-documents.net/ocf-05.htm

27. Dominant trading houses • Concentration of power among very few players. • Four multinationals dominate global trade in agricultural commodities: Archer Daniels Midland (ADM), Bungo, Cargill and Louis Dreyfus. • The largest trading houses have net income greater than that of Goldman Sachs, JPMorgan Chase and Morgan Stanley combined. FAO – CFS. The G20 has introduced an agricultural markets information system (http://www.amis-outlook.org/) to increase transparency in key commodity markets. Transparency is about making information available. Support for open trade regimes and R & D help reduce price volatility. Source: G20 Action to curb price volatility: http://www.guardian.co.uk/global-development/2011/jun/23/g20-action-plan-to-curb-food-prices http://www.guardian.co.uk/global-development/2013/apr/15/ireland-michael-higgins-land-rules-hunger; Global Corporate Regime for Agriculture: http://www.cidse.org/content/sectors/just-food/food-governance/food-governance.html

28. Food prices, speculation and stocks Price hikes, volatility and distortions are driven by • Worldwide food speculation with rising levels of investments • Fluctuations in the financial markets • Lacking information on stocks and availability given secretive and deregulated agricultural commodity derivatives markets and associated uncertainty and panic • Profit motive remaining the priority over social, moral, ethical and ecological considerations. • Food reserves to limit volatility having been mostly rejected, though a number of countries are increasing them or changing their policies otherwise; they tend to rise after price hikes. • Further info: • Video on speculation: http://www.weedonline.org/themen/english/5021520.html • Video: Food commodities speculation and food price crises http://www.youtube.com/watch?v=zlIQnA99b6M • http://www.europarl.europa.eu/meetdocs/2009_2014/documents/deve/dv/oxfamspeculationvsfoodsecurity_/oxfamspeculationvsfoodsecurity_en.pdf • Article on “Market speculation drives starvation” http://www.dw.de/market-speculation-drives-starvation/a-15490895 Source: G20 Action to curb price volatility: http://www.guardian.co.uk/global-development/2011/jun/23/g20-action-plan-to-curb-food-prices http://www.guardian.co.uk/global-development/2013/apr/15/ireland-michael-higgins-land-rules-hunger; • Global Corporate Regime for Agriculture: http://www.cidse.org/content/sectors/just-food/food-governance/food-governance.html; http://ase.tufts.edu/gdae/policy_research/resolving_food_crisis.html; Save the Children UK, A High Price to Pay, http://www.savethechildren.org.uk/resources/online-library/high-price-pay ; http://www.cidse.org/content/sectors/just-food/food-governance/food-governance.html

29. Land grabbing Extract from The Race for Land of http://www.weeffect.org/files/2012/12/LandGrabbingReport.pdf Further info: Oxfam “Tell Coke, Pepsi and Associated British Foods to make sure their sugar doesn't lead to land grabs.” http://www.behindthebrands.org/actnow