Oxfam Novib’s Tom van der Lee writes that development aid should not only support small-scale farmers, but should find links with climate change, land grabbing, biofuels policies, and price volatility.
Our food system is inequitable and unsustainable. 870 million people go to bed hungry every day. Already, we are stretching the boundaries of the earth. As the world’s population is growing, wealth is increasing, and diets are changing, demand for food, fuel, and animal feed is rocketing. The increased demand for biofuels is another factor driving increased competition for land, water, food, and natural resources.
We are entering an age of crises: of food price spikes, of oil price hikes, of scrambles for land and water, of creeping, insidious climate change. The good news is that it is possible to pursue human development and ensure food security for all, in ways that will both keep the planet within essential ecological boundaries and end extreme poverty and inequalities. The recent global online debate on the Future of Agriculture organized by Oxfam showed that many people from a wide variety of actors worldwide are interested and willing to work on a different and more sustainable and equitable agricultural future.
More than 21 authors from all sectors worldwide were involved in the debate, which is still ongoing. In short complementarities between different production systems, actors and strategies are a must to break out of the status quo. To get there a change is needed in the vested interests that defend the status quo. For instance, 90% of global grain trading is controlled by just three big companies (Cargill, Bunge and ADM); four firms control 50% of seed sales globally and six firms control 75% of agro-chemicals. We must take immediate steps in five interlinked areas. We have to step up investments in small-scale farmers, end land grabbing, stop climate change, change biofuels policies, and reduce price volatility. In my contribution to this online debate I will explain this further and indicate how Dutch policies can be improved.
Investing in small scale farmers: Hunger, vulnerability and poverty are concentrated in rural areas. And this is exactly where solutions are to be found. Currently 500 million small farmers in developing countries support almost two billion people. They do so against all odds. They do not have the access to markets, to finance and subsidies, infrastructure and technologies enjoyed by large farms. Small farmers in Brazil and China are still the main providers of food for the country. And while less input-intensive, more climate friendly agricultural practices are not exclusive to small farmers, they are often well suited to this scale of production, and easily adopted.
Throughout the developing world, there is huge untapped potential for yield growth in small scale agriculture based on low external input and based on the knowledge base of local communities. Investments are needed to tap this potential. It is particularly important to invest in female farmers. If women had the same access to resources as men, they could boost their yields by 20-30%. The Dutch government does acknowledge the importance of investing in small-scale agriculture, but clear targets are missing, as are instruments to ensure our aid reaches small-scale and particularly female farmers, and to monitor that aid provision. Governments of developing countries should increase their investment in agriculture to 10% of their national budgets.
End land grabbing: Over 200 million hectares of land deals have been identified since 2001 – an area almost the size of Western Europe. The majority of these deals have been concluded since 2008, as the financial crisis has stimulated investors to look for new opportunities. Many investors are only purchasing land for speculative purposes, anticipating price increases in the coming years. The rights of the people living off the land acquired are often not respected. In many cases they are forced to leave their land without proper free, prior and informed consent or compensation. The international community has agreed to voluntary standards to prevent land grabbing, and the Dutch government has played a positive role in realising these standards. The challenge for our government is to ensure these standards will be respected by our development partners as well as by Dutch companies investing abroad.
Change biofuels policies: If the land used to produce biofuels for the EU in 2008 had been used to produce wheat and maize, it could have fed 127 million people for the entire year. According to current EU policies, 10% of transport fuel must be made up of biofuels. Currently over 90% of biofuel is made from crops. The demand for biofuels has many adverse impacts. It contributes to land grabbing – about two thirds of the land deals identified over the past 10 years are related to biofuels production. It also leads to volatile food prices. Estimates for the role of biofuels in the 2008 food price spike are in the range of 20 to 30%.
Furthermore, while it is often thought that biofuels help fight climate change, the opposite is true, as biofuels production displaces other agricultural production into “carbon sinks” – forests, peatlands and grasslands. The European Commission has now proposed a cap for crops-based biofuels of 5%. While it is positive that the Commission finally recognizes the negative impact of biofuels on food security, since many countries – including the Netherlands – are still blending less than 5%, this means there is still room to burn more food in our petrol tanks. In December the Dutch government stated that it will do everything it can to prevent this, but it would be better if it would actually agree a much lower target.
Tackle climate change: Climate change poses a great threat to food production. Estimates suggest for example that rice yields may decline by 10% for every degree Celsius rise in dry-growing season minimum temperatures. Moreover, climate change will increase the frequency and severity of extreme weather events such as heatwaves, droughts, and floods, which can wipe out harvests at a stroke. The Dutch government should do much more to fight climate change and as a first step, should go back to the previous target of reducing greenhouse gas emissions by 30% in 2020 (rather than 20%).
The need to manage price volatility: Food prices are on the rise and are increasingly volatile. Over the next two decades, prices for commodities such as rice, wheat and maize are forecast to rise between 60 to 80% – not even taking into account the impact of climate change. Such price rises hit the poorest people the hardest, as they spend up to three quarters of their income on food. Increased food prices and price spikes are related to many factors, including growing demand, the lack of food reserves, the dependency of the food system on oil for transport and fertilizers, the demand for biofuels, and climate change – think of the droughts in the US last summer, and the impact this has had on crop production and prices of corn, soy and wheat.
Excessive speculation is another driver of food price spikes. Holdings in commodity index funds – the principle vehicle for pure financial investments in agricultural commodities – rocketed from 13 billion US dollars in 2003 to 317 billion in 2008, as investors stampeded to a safe haven from capital markets in meltdown. Regulation of food speculation is clearly needed.
Ensuring food security in a resource-constrained world is perhaps the greatest challenge of our time. The Netherlands is well placed to play a positive role in addressing this challenge. For the Dutch government to become a real champion in promoting food security in a resource-constrained world, it will be necessary not just to ensure that our development aid is used to support small-scale and particularly female farmers, but also to address related challenges such as climate change, land grabbing, biofuels policies, and price volatility. Investing in research that adds to the experience and knowledge of those 500 million smallholder farmers, who often survive against all odds using age-old refined and complex knowledge systems will be a large step towards viable solutions.