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Worsening factors

High prices on commodity market

In 2009, global cereal production reached 367 kg1  per person, or 1 kg per person per day, which could be considered as 75 per cent more than the basic nutritional needs.2  Moreover, statistics show that, between 1992 and 2009 global food production grew at an average annual rate of 2.8 per cent while annual population growth rate averaged 1.4 per cent.3  But this cereal availability does not ensure food security, partly because in 2010/2011, 54 per cent of global cereal production was used for purposes other than food (animal feed and agrofuel production mainly). Between 2008/2009 and 2010/2011, the amount going for non-food uses rose by 5.8 per cent while cereal production for food purposes increased by only 2.5 per cent.4

The strong growth of the urban middle class population in emerging countries leads to a higher demand for meat. Cereals stocks are reallocated to meat production, where 7 to 10 kg of cereals are needed to produce 1 kg of meat. Currently, annual grain consumption per person varies from 180 kg, as in India, to 725 kg, as in the United States of America where consumption of meat and diary products is high.

Also a number of developments on the food supply side contribute to pushing food prices up:
• The upward trend of energy prices is increasing cereal production costs, especially for the top producer countries whose agriculture is based on high energy inputs;
• Shocks affecting major cereal producers, such as droughts in Ukraine in 2005 and in Australia in 2009, and fires in Russia in 2010, have increased the volatility of commodity prices;
• Agrofuel production is increasing prices by drawing land away from food production.

Between March 2007 and March 2008, global food prices increased by an average of 43 per cent. This triggered food riots in many countries as the urban poor and even the urban middle class could no longer buy the food they needed, or were forced to spend almost all their income on food. In January 2011 the world food prices were only 3 per cent below their 2008 peak.5

This price volatility induces speculation. As an illustration, financial trades on commodity markets rose from EUR 13 billion in 2002 to EUR 205 billion in 2010. Although there still is no study showing clearly the extent to which speculation impacts on prices, it is admitted that stronger regulation schemes have to be put into force.6 

Lack of investment

Structural adjustment plans enforced by donors in the 1980s and 1990s imposed drastic institutional changes too quickly for Governments to be prepared for switching from a state-based system to a market-based system. The share of overseas development assistance dedicated to agriculture has dropped from 19 per cent in 1980 to 5 per cent in 2010. Agriculture has been neglected for years despite the fact that 70 per cent of the population lives in rural areas in many developing countries. The provisioning of public goods can no longer be guaranteed. The lack of proper storage, the degraded roads, and technical training increase the transaction costs of local markets.


Governance issues and land grabbing

The governance issue is critical in many States. Even though the need for public and private investment in agriculture is obvious, corruption, legal weaknesses, lack of reliable credit and insurance systems all discourage private sector investments in agriculture. After the food riots in 2008, the hoped-for increase in private investments suddenly emerged in the form of land grabbing through purchases or rentals.7  A World Bank report confirms that in 2009 some 45 million hectares of land were sold in developing countries, 10 times more than in the previous decade. Every year an area of land greater than the arable area of France is the object of negotiations that could lead to sale to investors attracted by the potential profits resulting from the upward trend of agricultural commodities, or to foreign Governments that rely mainly on imports to feed their people, that aim at ensuring their own food security or that want to preserve for human consumption the 1600 litres of water required to produce 1 kg of wheat.8  In any case, this land grab is aiming at agricultural production for export purposes.

The lack of negotiation capacities of Governments facing investors has turned opportunities for investment into a threat of land grabbing, causing serious disadvantages for the host country and its population in the form of loss of land for its own food production, removal of the supply for local markets and hence increased prices, landless farmers adding pressure on the remaining land, migration patterns, etc.

 

Lack of regional cooperation

These institutional weaknesses at national level affect the capacities for integration opportunities at subregional and regional level, The Sahel and Western Africa Club of the Organisation for Economic Co-operation and Development (OECD) analysed several subregional cross-border trades of crops yet to be better controlled and improved. These studies revealed both the potential for integrated policies in favour of food security and the limits of the involved States to implement them.9

Conflicts

Securing access to natural resources in a context of environmental and demographic pressure, social pluralism and inequities, as is the case in many developing countries, leads inevitably to conflicts, from local disagreements between farmers and pastoralists, to civil wars. Political instability is a cause and a consequence of the adverse conditions existing in the drylands. It is a cause, because land tenure is not secured, which prevents local farmers from investing; such a situation draws people into deep poverty as they try to survive by exploiting their natural resources. It is a consequence, because as water and land become scarce, access to them means power.

 

Migration

Food production in the drylands is further challenged by migration. Many young and productive men have migrated to the bright lights of the cities, and also to other countries or even to other continents. According to Cour (2001-cited in Requier-Desjardin and Bied-Charreton, 2009), even with a population growth rate of 2 to 3 per cent, geographical areas identified in figure 7 as 3 and 4 (more affected by desertification) will lose population to areas 1 and 2. The estimated repartition of population is supposed to evolve from 60 per cent for areas 1 and 2 and 40 per cent for areas 3 and 4 in 1930, to 72 per cent for areas 1 and 2 and 28 per cent for areas 3 and 4 in 2020.10

The four main West African demographic zones

Source: Requier-Desjardin and Bied-Charreton, 2009 based on Cour J-P, 2001. “The Sahel in West Africa : countries in transition to a full market economy”, Global Environmental Change, 11: 31-47.

 
Harsh labour conditions and lack of investment lead to lack of perspectives in the rural areas, where food production has then to be ensured mainly by older people, women and children. Labour migration is an economic strategy for diversifying incomes and lowering agricultural risks. However, because remittances are exclusively financial resources, the impact on the diversification of income depends on the “capability” to access the market. Because of the current economic crisis, in many cases the loss of labour, which directly affects food production, is not compensated by the remittances sent by migrants. The evidence of the impact of remittances on poverty reduction is far from obvious and is often linked to the nature of the migration and the initial assets of the household in production factors.11

 

Climate change

Climate change has a disproportionate effect on dryland areas. The perception of farmers and herders is that rainfall has become less predictable and more extreme. The number of prolonged drought periods (14 days and more) within the rainy season has increased, which has had a negative impact on crop yields. Drought in 2011 in the Horn of Africa is said to be the worst this region has experienced in 60 years.12 The frequency of extreme climatic events, such as droughts and floods, is predicted to increase by 20 per cent in some areas over the next century.13 Another study concluded that by 2080 average temperatures will increase by 4.4°C and average precipitation by 2.9 per cent. Global agricultural output potential is likely to decrease by about 6 per cent, or by 16 per cent without carbon fertilization. The literature suggests a decline in agricultural production of up to 60 per cent for several African countries.14

 

 

Footnotes

1   Source: UNCCD; Data: WorldDataBank (<http://data.worldbank.org/>), accessed August 2011.
2   350 kcal for 100g of cereal-equivalent; 2000 kcal per day as basic need.
3   Source: UNCCD; Data: WorldDataBank (<http://data.worldbank.org/>), accessed August 2011.
4   FAO, Food Outlook, Global market analysis, November 2010 and June 2011. <http://www.fao.org/giews/english/fo/index.htm>.
5   World Bank Food Price Watch February 2011. <http://www.worldbank.org/foodcrisis/food_price_watch_report_feb2011.html>.
6   G20 (2011): Action Plan On Food Price Volatility And Agriculture. Meeting of G20 Agriculture Ministers Paris, 22 and 23 June 2011. Ministerial Declaration. <http://agriculture.gouv.fr/IMG/pdf/2011-06-23_-_Action_Plan_-_VFinale.pdf>.
7  Michel Clavé (2010): Les cessions d’actifs agricoles à des investisseurs étrangers dans les pays en développement. Éléments de diagnostic et pistes de recommandations. With assistance of Blandine Barreau Patrick Brouchet Dominique Auverlot. Paris. <http://www.strategie.gouv.fr/content/rapport-les-cessions-d%E2%80%99actifs-agricoles-des-investisseurs-etrangers-dans-les-pays-en-devel-0>.
8   Mekonnen MM and AY Hoekstra. 2010. The green, blue and grey water footprint of farm animals and animal products, Value of Water Research Report Series No. 48, UNESCO-IHE, Delft, Netherlands
9   <http://www.oecd.org/document/1/0,3746,fr_38233741_38246823_38441793_1_1_1_1,00.html>.
10   Cour J-P, 2001. “The Sahel in West Africa : countries in transition to a full market economy”, Global Environmental Change, 11: 31-47, cited in Requier-Desjardin and Bied-Charreton, 2009, “Evaluation des couts economiques et sociaux de la degradation des terres et de la desertification en afrique”, Contrat AFD / UVSQ n° 210 du 07/12/2004.
11   Wouterse F and J Taylor. 2008.  Migration and Income Diversification:∗Evidence from Burkina Faso. World Development 36 (4), 625–640.
12   Somalis displaced by drought hit by Mogadishu rains, BBC, 16 July 2011.
13   <http://www2.ucar.edu/news/2904/climate-change-drought-may-threaten-much-globe-within-decades>. 
15   Cline WR. 2007. Global warming and agriculture: Impact estimates by country.Washington,D.C.: Center for Global Development and Peterson Institute for International Economics

 

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