Food policymakers’ dilemma

THE dilemma for food policymakers was never clearer.

Within days of the European Commission suggesting it might cut food production in order to protect the environment and take action against climate change, the United States Department of Agriculture released a shock crop estimate, cutting expected maize yields by 4%

While discussions continued across Europe on agricultural policy reform, global grain traders were scrambling to secure food supplies, scared by the prospect of maize stocks sinking to a 14-year low in the US, the world’s biggest supplier of this important food grain.

Futures markets reflected the gravity of the reduced crop forecast in the US, by boosting the maize price by the biggest daily increase since 1973, sparking worldwide fears of a repeat of the food crisis which occurred in 2007-08.

Global food security worries have risen since the failure of the Russian grain crop. Nevertheless, cutting food production is one of three options being considered by the EU, the world’s largest food exporter.

It is traditional that the European Commission leaks a near-final version of its Common Agricultural Policy reform proposals, and it appeared last week, triggering debate on the final version expected in mid-November.

The commission said three broad reform options merited consideration. The third leaked proposal responds to more radical reform demands, by advocating a move away from farmer income and food market support, and focusing entirely on environment and climate objectives.

The commission said this option offers the advantage of a clear policy focus, but would significantly reduce EU food production, and the number of and the income of farmers, and cause some land abandonment.

It will certainly, as intended, get the EU Council of Agriculture ministers talking, and the MEPs and other EU institutions who will decide the final policy over the next year.

But policy makers will have to listen to other voices rather than choose from the Commission’s tempting menu of three options (the other options could be summed up as leaving the CAP alone except for a little tweaking, or major overhaul to make the CAP more sustainable and better balanced and a better fit for scarce EU funding).

Other voices include UN Food and Agriculture Organisation senior grain economist Abdolreza Abbassian, who said this week that anything other than a record crop is now a global problem, because of the need to meet rising food, livestock and ethanol fuel demand. “We need a record crop every year. If not, we are in trouble,” he said.

He would hardly agree with EU moves to cut food production.

Hopefully, policy makers will keep an eye on the latest Global Hunger Index, the statistical tool measuring progress and failures in the global fight against hunger. Last week, it showed the number of hungry people growing to more than a billion last year, and 29 countries with “extremely alarming” or “alarming” levels of hunger.

Nevertheless, there is a strong lobby in the EU less interested in producing food and more interested in agriculture making a bigger effort in line with the ambitious EU energy and climate agenda? Maybe it can be left up to the US instead to cut back their ethanol industry, which consumes more than a third of the US maize crop (unfortunately, it is more likely Washington will go for an increase in the amount of ethanol to be blended into gasoline, from 10% to as much as 15%, creating extra demand for maize). Of course, the Americans believe advances in genetic modification will meet the growth in demand. That is not yet an option in the EU, unless serious hunger reaches Europe. We can only hope that the 27 member states make the right decisions on agriculture.


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