Ecosystems and Poverty

Since the 29th July 2008 and lasting through to August 8, The Economist is hosting an online, Oxford-style debate on whether or not rising food prices can have an upside for humanity. Since food prices are related to the discussion on agriculture and farming we thought Ecosystems and Poverty readers would want to know about the debate and participate.

The proposition is: “There is an upside for humanity in the rise of food prices.” According to the Economist:

Although we can never overlook the grave situation posed by rising food prices, we hope to dissect the issue and view it from fresh perspectives to see if it can have a positive impact. For example, do rising food prices benefit farmers? Can they lead to development of safe, genetically modified foods which in turn can help developing nations with marginal farmlands become self-sustainable? And are the shorter-term pains of creating biofuels worth the longer-term gains of reduced transportation costs?

Moderator John Parker feels that “there is always some sort of upside. The question for the audience is how big, and whether it is big enough to be meaningful.”   Pro and Con experts, Homi Kharas, Senior Fellow at the Wolfensohn Centre for Development at the Brookings Institution and Joachim von Braun, Director General, the International Food Policy Research Institute (IFPRI) spar off in opening posts followed by rebuttals (August 1) and closing statements (August 6). A winner will be determined by popular vote and announced on August 8.

My take on this?  There are always winners and losers.  The question is which shade of grey is it, rather than a straight yes/no answer. 

I lean towards the cons.  For middle-income farmers in developing countries (and there are many millions of these), if they play it right they can benefit greatly from rising food prices, but they really do need to play it right.  Unfortunately, and I have seen this first hand, food prices have increased massively at the global and national scale, but locally the price at farm-gate for some products has not changed much.  In some cases it has even gone down (e.g. sugar in Colombia - 7% reduction in price for producers).  Potential is there in most cases, but farmers need to be agile and adapt to a new production system - higher input costs, and for many products, higher prices at the farm-gate.  On the whole, middle0income farmers stand to benefit in the mid- to long-term.

However, there are still large percentages of the population in some cases who are very poor (see dollar per day indicators).  They typically have small farm sizes, lack of access to markets, technologies and information, and have no money to invest.  They also, as Joachim von Braun points out, are in many cases net consumers.  These people, the poorest of the poor, find it hard to adapt, and face severe barriers to capitalise on increased food prices.  This portion of the population will no doubt suffer, while the rich are largely unaffected, leading to an increase in inequality.  My personal opinion is that high inequality is almost worse than high net poverty in a country.  It leads to civil unrest in many cases.  So I don’t see a net benefit here - I think the world is worse off with the rise in food prices, especially thanks to the speed at which they rose. 

But enough from me.  Check it out and participate!

Check it out and participate!