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Symposium 2010

Proposal - Idea: Creation of global fund for food security

The Challenge

It is becoming increasingly difficult to satisfy the rising global demand for food in a sustainable manner. A number of factors contribute to uncertainty about the world’s ability to meet the food ...

It is becoming increasingly difficult to satisfy the rising global demand for food in a sustainable manner. A number of factors contribute to uncertainty about the world’s ability to meet the food demand of an increasing population: average living standards are rising; land use is shifting from agriculture to urban and industrial uses; the production of nonfood crops for biofuels is on the rise; investments in increasing agricultural productivity are growing slowly; water and arable land are increasingly becoming scarce; and global warming is making it more difficult to produce food in some poor countries. Moreover, the food price crisis of 2008 added fuel to the fire and put food security on top of the policy agenda.

Background: Malthus's grim predition that the world will run out of food has long been delayed by yield improvements and productivity gains. However, the marginal increase in food productivity from the application of technology is now in the decline. Along with this declining marginal increase in supply, there are considerable demand pressures, as the population in emerging markets change their dietary requirements due to moving up the nutritional chain. These two factors, pose a real and significant threat to food security, especially for the more marginalized sections of the population. Food inflation is further being exacerbated by the investments from speculative funds and the use of some edible crops like corn, maize and sugar, for the production of fuel. The increasing trend of global land grab for corporate farming will further limit the access of poor to food resources. As the prices of food items increase, millions of people, especially in Africa and Asia will find it unafforable, hence creating a human disaster.

Cause of the problem: I believe that inequitable distribution of arable land, water, and basic mineral resources like Potash can further exacerbate the situation. China which has 20% of world's population, only has 7% of world's arable land. Similarly fertilizer like Potash which is necessary for the growth of crops, is controlled by two trading groups. Countries like Pakistan are expected to run out of arable land due to change in weather patterns. Countries and companies which control arable land, fertilizers and water, can control the rest of the world. This can even lead to wars for access to food resources. The current concerns in China about the takever bid by BHP for Potash Corp is an example of this trend. Similarly, World Bank's report regarding Global farmland grab illustrates the key threats emanating from the global trends in the food market.

Idea: I propose the creation of a global food fund. Currently countries like US maintain their own food supply reserves which they use to control the prices of agriculture output. Food crops are even thrown in the sea in order to artifically support prices! A global fund or reserve should be created, in which every member country should contribute according to their excess output (output in excess of domestic demand). This food stock reserve should be used to either control prices and/or directly provide food to regions where there is risk of famine. Giving cash to such regions is sometimes counterproductive, since it leads to further increase in the prices of essential commodities. A global fund for food security can be created at multinational level, similar to the IMF.

World bank should encourage new construction of Dams and water reservoirs in developing countries. In recent past World Bank and other multilateral agencies stopped financing new dams projects in developing countries due to environmental concerns. However, it has proven detrimental for availability of water when it is needed. Recent floods in Pakistan have proven that due to insufficient water reservoirs floods have inundated many towns and brought huge human sufferings. Had Pakistan been provided financing in 90’s at least 3-4 dams could have been built. World bank is still reluctant to finance dam projects.

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