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G8 Summit: Feed the Hungry or Fuel Hunger?

July 8, 2009
Foreign Policy in Focus

Anuradha Mittal

Editor: John Feffer

As the rich Group of 8 (G8) nations convene in L'Aquila, Italy this week, world hunger will once again take center stage. The United States will likely announce a "significant" increase in funding for agricultural development aid, along with multi-year commitments from other G8 countries. This follows the G8's admission of failure in tackling hunger at its first-ever farm conference in Treviso, Italy in April 2009.

Proposals to challenge hunger have become a common feature of international conferences since the 2008 food crisis. The 83% increase in food prices between 2005 and 2008 led to a massive surge in global hunger, as the number of hungry in 2008 increased from 854 million to 963 million in the space of a year. As warnings of political instability and social unrest grew, heads of state suddenly began to discuss food security. The political intent to combat world hunger, however, was short-lived. Perhaps the decline in crop prices that started in the middle of 2008 made the problem appear less severe for policymakers, while bank bailouts and automaker bankruptcies captured all the attention and resources.

The hunger crisis, however, is far from over. The number of hungry reached a historic high in 2009, with 1.02 billion people — one-sixth of humanity — going hungry every day. Despite an improved global cereal supply situation and a decline in international prices of most cereals from their highs in the first half of 2008, food prices remain high in developing countries. Thirty-two countries face acute food crises. The economic crisis has worsened the situation by further shrinking the purchasing power of the urban poor and subsistence farmers in poor countries.

In the midst of this deeply entrenched epidemic of poverty and hunger, the G8 will announce a new initiative that seeks a more coordinated approach to food aid and development. The G8's performance on its past commitments, however, casts a shadow on the sincerity of their intentions.

G8's Record

At the height of the 2008 food crisis, G8 leaders highlighted food security at their summit in Hokkaido, Japan. The summit alone cost over $600 million — the annual budget of the United Nation's Food and Agriculture Organization (FAO) is $400 million. The G8 spent half of this sum on a massive security operation involving some 21,000 police officers, coast guards, and soldiers. With much fanfare, the G8 communiqué on global food security committed $10 billion for food and other resources to increase agricultural production in developing countries. Despite the media glitz around the announcement, this was not new money, but a mere adding up of aid already pledged by the G8 countries. The G8 communiqué also included a commitment to "reverse the overall decline of aid and investment in the agricultural sector." The commitment, however, failed to list any specific dollar amounts with a timeline.

Despite commitments, pledges, and grandiose communiqués by rich donor nations to challenge hunger at numerous international summits, world hunger persists. The problem lies in the fallacious explanations for the food crisis, and in the promotion of market and technology-based solutions to the problem.

With hunger framed as a crisis of demand and supply, the proposed solutions have primarily focused on boosting agricultural production through technological solutions like genetic engineering (GE) and chemical inputs. The G8 has also focused on removing supply-side constraints to ensure access to food through the liberalization of agricultural trade. Yet these very proposals contributed over the last several decades to undermining food security in the developing countries in the first place.

Free Trade = Freedom from Hunger?

While pledging commitment to fight hunger, the 2008 G8 communiqué reiterated its continued support for "the development of open and efficient agricultural and food markets." Ministers at the G8 Farm Conference in 2009 also recommended open markets, urging an "ambitious conclusion of the Doha Round" of the World Trade Organization (WTO) as the solution to the food crisis.

A recent speech by Pascal Lamy, the director general of the World Trade Organization (WTO), also reflected this G8 logic that international trade will help solve the global food crisis. Lamy claimed that increased competition reduces prices and thus enhances the purchasing power of the consumers. Secondly, he argued, trade helps transport food from places where it can be produced efficiently to where there is demand.

This assertion that free trade will help solve hunger, however, is based on amnesia. Liberalization of agricultural markets has yet to deliver on the promised or expected gains in growth and stability in the developing world. In a submission to the Commission of Sustainable Development (CSD) in May 2009, the United Nations' special rapporteur on the right to food, Olivier De Schutter, pointed out that the multilateral trading system is "heavily skewed in favor of a small group of countries, and in urgent need of reform." He was referring to how rich countries have used their heavily subsidized agriculture to help secure markets by flooding developing countries with cheap farm imports, making subsistence farming uncompetitive and financially unstable.

The dumping of cheap, subsidized food has converted developing countries that had once been self-sufficient, and even net exporters of agricultural products, into net importers. In the 1960s, developing countries had an overall agricultural surplus of $7 billion. By the 1970s, with the increase in imports, this surplus had shrunk to $1 billion. Most of the 1990s and 2000s saw developing countries turn into net food importers. In 2001, the deficit grew to $11 billion.

The worst impact of the indiscriminate opening of markets has been felt in the rural areas, where agriculture is the main occupation for most of the poor as well as a source of purchasing power. Increased imports have not increased food security in these areas. Also, the notion that further liberalization of agricultural markets increases access to food belies the fact that most people in countries classified as having "widespread lack of access" are unable to procure food because they don't have enough money.

At the national level, the increased dependence on food imports has made developing countries more vulnerable to high prices. In 2008, for instance, many developing countries experienced shortages because the markets on which they have come to depend underwent changes in national food supply policies. The U.S. and European bio-fuel policy is a case in point. Corn production dedicated to bio-fuels, instead of food, increased scarcity in terms of both its market availability and food aid availability.

Also, measures previously available to governments to soften the effects of price volatility — such as controlling import and export volumes, managing domestic stocks, using price control and price support tools, consumer subsidies, and rationing systems — have been criticized or discouraged for distorting free trade. Free-trade advocates have deemed export bans of food, imposed by some 40 countries, including India, Egypt, and Vietnam in 2008, responsible for increasing prices. But these measures sought to protect national populations, especially the poor and vulnerable, against the global agricultural price shocks by ensuring national food availability below world prices before allowing exports to other countries

Freedom From Hunger through Technology?

After nearly two decades of declining aid for agricultural development, commitments to reverse the trend have become common at international summits. Olivier De Schutter, in his submission to the CSD, cautioned that increased investments in agriculture, while necessary, must be thought through carefully. The issue isn't one of merely increasing budget allocations to agriculture, but rather "that of choosing from different models of agricultural development which may have different impacts and benefit various groups differently," he said.

The first element of the food security initiative to be announced at the G8 meetings reportedly will focus on improving agricultural productivity and development. The G8 Farm Summit in April 2009 also promoted a technological agricultural revolution, for instance in genetically modified (GM) crops, to increase agricultural productivity in response to hunger.

A big player promoting genetic engineering as the panacea for global hunger has been the United States. During the Summit, U.S. Secretary of Agriculture Tom Vilsack warned that failure to boost agricultural productivity would cause fresh social unrest and urged the G8 to back the use of science in agriculture, including genetically modified organisms. On his return from Italy, much to the delight of biotech companies such as Pioneer Hi-Bred and Monsanto, Vilsack pledged to bring a "more comprehensive and integrated" approach to promoting agricultural biotech overseas.