David M Malone* argues that it would be unwise to believe food price hikes are a thing of the past Among the reasons for the crisis in global food supply and prices is the fact that global grain stocks have been dropping for years. Meanwhile, prices of some commodities have been rising progressively. The price of rice, for instance, quadrupled over previous years. Global demographics have increased pressure on both stocks and prices. Further, welcome economic success in much of the developing world, including Egypt, has altered eating habits. The stampede into bio-fuels in the West, in order to supplement finite oil and gas supplies, also handicapped food production. Agricultural productivity and food security are complex challenges, not least because they relate intimately to issues such as water management, soil degradation and regeneration, climate change, the consumption preferences of the growing global middle class, and international trade arrangements. And in spite of terrible famines in Africa and the threat of hunger elsewhere, agriculture has largely fallen off the map of global concerns since the early 1980s. But decreased global investment in agricultural research and development over the past two decades can be reversed. Bad policies, adopted in panic or ignorance, can be stopped. Export embargoes and increased export taxes reassure in the short- term but create distortions worldwide and undermine access for the poorest countries and consumers. India and China provide examples of what happens when different approaches to agricultural development are applied. On one hand, India's key economic reforms of the early 1990s centred on liberalisation favouring the manufacturing and services sectors. These were tremendously successful but little was done for agriculture. China, on the other hand, starting its key reforms earlier, focussed first on agriculture. China's approach was to raise agricultural production by encouraging multiple experiments at the local level -- simply put, it learned by doing. Only after it was clear what worked did Beijing launch a nationwide reform process that succeeded dramatically in raising production and decisively reducing rural poverty. India was once at the apex of international achievement in agricultural innovation. Drawing on a wide variety of international grain types, pioneers of high yielding hybrid seeds were able to achieve in the 1960s and 1970s a real "green revolution", boosting agricultural productivity at an impressive scale and making the country fully self-sufficient in its main food requirements for the first time in modern history. Scientific innovation was supported by energetic government policy. But then, as so often after success, attention and focus faded. India remains, in good years, capable of meeting its main needs and simultaneously of earning sizeable sums from agricultural exports. Rather, it is the combination of Indian demographics with the growing success of the country's overall economy and environmental stress that demand attention. Increasingly prosperous Indians will be eating more -- and probably wasting more also, as do middle classes everywhere. Egypt has been quite successful in expanding its agricultural production in recent years. Thirty years ago, Egypt imported roughly 70 per cent of its wheat. Today, it normally imports only around 45 per cent. But precisely because the Egyptian economy also has been performing better in recent years -- hitting a growth rate in 2007-2008 of 7.2 per cent, not so far behind India's much admired 9.2 per cent -- food consumption patterns have also been changing. Increasingly the middle class consumes meat, which requires a high input of grain and the import of much "red" meat. Egypt has performed well in reclaiming desert lands for large-scale agriculture that is economically more viable than the excessively sub-divided family plots in the Nile Valley and Delta could ever be. But there is a limit to how much more land can be reclaimed for agricultural purposes without better water management schemes. In spite of much effort, irrigation remains inefficient in much of Egypt's agriculture. Further, in the Nile Valley and Delta, there is an urgent need to provide residents with better non-farm livelihoods that will induce people to stay in rural areas, knowing that they can derive a good living from higher-paying activities such as food processing. In this regard, in an insightful strategy for sustainable agricultural development through the year 2030, the Agriculture Research and Development Council of Egypt argues that Egyptian agricultural production needs to move up the value chain. A good start has been made in horticulture, with large markets normally available to Egypt in Europe and in the Gulf, although European demand for cut flowers may diminish significantly during the current economic downturn. But Egypt can do more and better in the lucrative areas of fruit and vegetables. Egypt worries about self-sufficiency in food, as do many other nations. And yet its subsidy system, an important one for the poor, is wildly dysfunctional, with the rich also benefiting from subsidies, and much of the subsidised bread thought to be consumed by livestock rather than people. The system needs to be better targeted, squarely at poor communities. Many developing countries, including Egypt, offer admirable human capital: optimistic, hard working, and, given a chance, entrepreneurial. But fulfilling their agricultural potential will require sound government policies, determined implementation and greater attention to more sustainable growth of farm produce. If the economic crisis gripping the world distracts attention from medium and long- term challenges, such as agricultural productivity growth, its damage will be compounded well into the future. * The writer is president of Canada's International Development Research Centre, which provides financial support for scientific and other policy-relevant research in the developing world.
