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GLOBAL FOOD CRISIS
Presentation by: Angela Wauye
(Action Aid Kenya) At Global Education
Workshop, YMCA, NAIROBI
GLOBAL FOOD CRISIS
• Over 1 billion people are chronically hungry. This is around 1
in 6 people in the world – or over 15% and is more than the
populations of USA, Canada and the European Union
combined.
• This means since 2008 the numbers who are now chronically
hungry has grown by about 275,000 people every single day.
• According to figures released by the FAO on 19th June 2009,
the total of undernourished people has risen to 1020 million,
an increase of 100 million since 2008.
• Malnutrition is the direct cause of five million child deaths
every year, or more than one in three of all children who die
before their fifth birthday. Those who survive suffer
irreparable harm.
Global Food Crisis….(2)
• Some 470 million farms - 85% measuring less
than two hectares - produce 80% of the
world's food and in many cases their share of
global production is growing.
• Resource-poor smallholder families make up
75% of the world's poor, half of the world's
undernourished, 75% of Africa’s malnourished
children, and the majority of people living in
absolute poverty.
Global Food Crisis…(3)
• Between 2006 and 2009, some 15-20 million hectares of land
in developing countries – an area the size of France - has been
taken over by foreign food exporters.
• In 2006, donor spending of $3.9 billion was almost half the
level of spending of $7.6 billion in 1980 (in constant dollars).
This was a fivefold reduction over this period.
• Bail-outs in the US and Europe has seen US $15.6 trillion
pumped in a rescue strategy to salvage big private sector
firms & banks from economic crisis.
• How about the case of poor smallholder farmers and
remotest rural communities rendered bankrupt by food,
fuel, water, climate and economic crisis?
Low food stock & volatility on food
markets
 The low global grain stocks make the world, and
importing countries extremely vulnerable to any
shock in supplies. As a result of demand and supply
influences, the 2007/8 year end world stocks fell to
their lowest levels in 30 years. The US department
for Agriculture reported the lowest levels of wheat
stocks in 50years against a growing demand. Major
grain producers, such as India and Pakistan, resorted
to export restrictions to secure domestic supply,
further exacerbating rising prices.
Global stock market trends
• A shift in the investment strategy of many hedge
funds and mutual funds towards commodity future
markets in the past year is also having an effect on
prices. When futures prices bumped up a year ago,
the low dollar encouraged large fund managers to
invest in agricultural markets, thus further raising
prices. It is estimated that investors have poured
billions of USDs into the commodity markets, causing
the prices for products to swing wildly.
Growing demand for animal feeds
 High economic growth in populous countries
including China and India is contributing to a
significant and sustained increase in global
consumption of meat and dairy products. As a
result, animal feeds now account for a larger
proportion of grain utilization than direct
human consumption.
Fluctuations in energy markets
• High crude oil prices and growing demand for bio
fuels combined with speculation. Crude Oil prices
rose from USD 80 per barrel in October 2007 to over
USD 115 per barrel in April 2008. Rising energy costs
affected the entire value chain of food production,
from fertilizers to harvesting to storage and delivery.
The rising crude oil prices have, thus, led to
increasing interest in and demand for bio-fuel
produced from carbohydrate rich crops such as
sugarcane, wheat and maize.
Summary of Causes of Global Food
Crisis
• Low investment (both public and donor aid) in
agriculture and food security (esp smallholder
agricultural production systems);
• Low food stocks and volatility of food markets;
• Global stock market trends;
• Fluctuations in energy markets & high cost of crude
fossil fuel/energy (depleted resource)
• Focus on Bio-fuel production
• Climate change induced effects;
• Growing demand for animal feeds.
TAKE A PAUSE
Extracts from Articles
• Kenya expects $500 million (€389.4 million)
worth of foreign investments in biofuel crop
production over the next two years, a
government official has announced.
• Romano Kiome, permanent secretary in the
agriculture ministry, says five multinational
firms from the US, Japan, and the UK had
applied to be considered in a government
land-lease scheme.
Extracts from Articles
• Crops such as jatropha, croton, sweet
sorghum and sugar will be planted, creating
jobs and eventually lowering energy costs in
east Africa's biggest economy.
• 'We are taking the production of biofuels in
the country very seriously. We believe that if
we link up with the private sector, we will
benefit in terms of jobs creation and
production of diesel,' Kiome comments.
Extracts from Articles…2
• Under the arrangement, firms like Japan's
Biofuels International will lease land in various
parts of the country. 'We will give them a lease
for a given period of time depending on the
investment. We shall look at the internal rates of
return of those projects,' Kiome adds.
• Approximately 500,000 acres have been
earmarked for the companies and Kiome
estimated over 100,000 jobs would be created as
a result of the initiative, including farmers who
will be outgrowers.
Extracts from Articles…..3
• The companies will sell the fuel locally or
export it, although the government is still finetuning laws governing that area. 'We still have
to finalize the bio-fuels policy with the ministry
of energy so that we know how it will be
marketed,' Kiome remarks.
The land deals...(1)
• Madagascar was poised to sign a 99-year
agreement to rent 1.3 million hectares of land to
South Korea's Daewoo Logistics Corporation to
plant maize and palm oil for export;
• Food-importing countries with little arable land,
mainly in Asia and the Middle East, are
increasingly looking overseas to secure food
supplies after the prices of staple foods rocketed
last year.
The Land deals..(2)
• But the practice has drawn criticism that it harks
back to colonial-era "plantation agriculture"
where rich outsiders force subsistence farmers
off fertile land to grow export crops.
• Now the Daewoo plan, the largest in Africa
covering an area of roughly half of Madagascar's
current arable land, has been put on hold after
the Malagasy people protested that it would
make them a "South Korean colony".
The Land deals...(3)
• "We are in big trouble with the government of
Madagascar," said Shin Dong-hyun, the general
manager of planning and finance at Daewoo
Logistics Corporation.
• "The process was ongoing, but it has suddenly
been stopped because of media reports. Those
reports have made Madagascan people very
angry because it makes them ashamed for being
a part of what they say is a neo-colonial system."
The Land deals....(4)
• The company had planned to grow maize and
palm oil on vast commercial farms for export
either back to South Korea or to sell at
international markets to raise funds to buy other
food for its domestic market.
•
• Kenya, Sudan, Ethiopia and now Madagascar
have all recently offered vast tracts of farmland
for lease, hoping to cash in on a growing trend
whereby developing countries from Ukraine to
Cambodia offer fertile land to the highest bidder.
The Land deals...(5)
• Qatar plans to lease 40,000 hectares along Kenya's coast to grow
fruit and vegetables for its own citizens, in return for building a £2.4
billion port close to the Indian Ocean tourist island of Lamu.
•
Abu Dhabi announced discussions with Sudan to rent 30,000
hectares of land watered by the Nile to grow its own maize and
alfalfa. Senegal is also said to be hunting for a similar deal.
•
The idea, which has been called a "new scramble for Africa", is not
without its critics, who question why Africa should lose valuable
farmland when it is chronically short of its own food.
The Land deals...(6)
• Jacques Diouf, the head of the United Nations
Food and Agriculture Organisation, has called the
land deals a type of "neo-colonialism".
• "It's clearly a good sign that these developing
country governments are looking to more longterm ways to benefit from their agricultural land,
but at the moment these deals all look far more
lucrative for the buyer than for the seller," said
Duncan Green, the head of research at Oxfam.
BIO-FUEL TRENDS
Drivers of Bio-fuel
• Increase in global energy demand
projected to increase by 53% by 2030 .
The global demand will move from 84
million barrels to 116 million barrels per
day, according to Energy Outlook 2006.
» Economic expansions in China & India
» Energy security considerations by G 8 countries
OECD nations.
» Geopolitical Issues
Global Trends of Energy Crops prices
• Global increase in commodity and energy
crop impacting on the following value chains;
Small Holder
Feedstock
Producer
»
»
»
»
Food Economy
Transportation
Water resources
Energy Security
Multinational
Commercial
Feedstock Production
• International Food Policy Research Institute
US estimates bio-fuel will impact food prices
significantly (2006);
» Global Corn prices rise by 20% by 2010 and 41% by 2020
» Global Oilseed Prices rise by 26% by 2010 and 76% by 2020
» Global Wheat Prices rise by 11% by 2010 and 30% by 2020
EU – BIOFUEL TARGETS ...(1)
• In 2003 the Bio-fuels Directive on the
promotion of the use of biofuels and other
renewable fuels for transport, set out
indicative targets for Member States. To help
meet the 2010 target – a 5.75% market share
for biofuels in the overall transport fuel supply
– the European Commission adopted an EU
Strategy for Biofuels, along seven policy axes
EU – BIOFUEL TARGET...(2)
• The EU is supporting bio-fuels with the aim of reducing
greenhouse gas emissions, boosting the de-carbonization of
transport fuels, diversifying fuel supply sources, offering
new income opportunities in rural areas and developing
long-term replacements for fossil fuel.
• EU plans to imposed a compulsory 10% quota of biofuels in
all petrol and diesel by 2020, a central plank of its
programme to lead the world in combating climate change;
• Under the proposals, to be turned into law within a year,
bio-fuels are to supply a tenth of all road vehicle fuel by
2020 as part of the drive to slash greenhouse gas emissions
by 20% by the same deadline
EU – BIOFUEL TARGET...(3)
• The EC is proposing that the overall impact of
biofuels - produced from biomass from
rapeseed, corn, sugar cane or palm oil - results
in carbon dioxide cuts of 35% compared to
fossil fuel equivalents.
Smallholder farmers producing energy crops
across the feedstock spectrum are affected
Cassava
Sweet
Sorghum
Canola
Smallholder
farmer
s
Soya beans
Switch
grass
Sugarcane
Jathropha
Corn
Wheat
Projected Increase in energy crop
production up scaling
• Policy Shifts in favor of biofuels and renewable energy.
» Energy policy
» Agriculture policy and resource allocation
» Regional policy framework, support biofuel trade and
distribution infrastructure
Experts predict that most of the Greenfield production
will take place in the tropics and sub-tropics.
»
»
»
»
14 million hectares jathropha in India
120 m hectares of biofuel in Brazil
400 m hectares of biofuel across 15 African countries
1.4 million hectares of reclaimed desert land in Egypt
Africa’s Food Security & Bio-Fuel
Debate
• Africa is being viewed by many as having huge
potential for bio-fuel production given its vast
land;
• Corporatization of land becoming a big issue
in Africa;
• Competition between land for food and land
for agro-fuel production. Are our priorities
right with more than 230 million Africans
hungry and malnourished?
Kenya, Food Security & Bio-Fuel
Debate
• About 20% of Kenyan land mass considered
arable for crop production;
• Government gone public to promote bio-fuel
production;
• Government sets aside 500,000 hectares of land
formerly under ADC for bio-diesel production;
• A conservative figure of 10 million Kenyans are
said to be suffering acute hunger and
malnutrition;
• Government leasing out land to foreigners for
bio-fuel production;
Why Bio-fuel is not a solution to food
insecurity?
• the rapid expansion of bio-fuel production pushes
out other farming elsewhere causing
deforestation, loss of wildlife and huge social
problems, including violent conflicts and forced
land evictions.
• knock-on effects such as rising food prices
• negative impacts on soil, water, and biodiversity;
• Shifts investment focus away from food
production to agro-fuel;
Way forward
•
•
•
Governments should impose immediate moratorium on
further expansion of industrial, monoculture agro-fuel
plantations. Elimination of financial and other incentives
(such as targets) encouraging the large scale development
of agro fuels.
Need for a policy and legal framework on Bio-fuel and
institute a participatory policy formulation process;
Enforceable code of conduct in relation to land deals for food export
in Africa. It must also include prior informed consent, fair and
adequate compensation for affected communities before assessing
the effect of any potential deal on food security, hunger and rural
livelihoods. No deal should be approved where there is any adverse
impact. UN is best placed to establish this code.
Way forward…2
• Stop imposing trade rules and economic policy conditions undermining
African countries from supporting smallholder farmers and agriculture.
Commit to ensuring that all trade agreements uphold the right of
developing countries to protect their smallholder farmers and labourers
through local agriculture and industrial development.
• Increased quantity and quality of funding to agriculture and food
security programmes. The minimum amount of financial investment
needed to end hunger is US$ 30 billion per year.
• African Governments must allocate at least 10% of national budgets to
agriculture and food security.
• Need to place an overwhelming focus on sustainable smallholder
production systems and approaches targeting particularly women
farmers, poor smallholder farmers and remotest of communities.
Way forward…..3
• Need for an ambitious post-Kyoto deal reducing greenhouse
gas emissions from developed countries by at least 40 per
cent below 1990 levels by 2020 and global emissions by at
least 80 per cent by 2050. This in line with the latest science
which shows this is necessary to avoid the worst impacts of
climate change. This must be agreed before or at Copenhagen
UN climate change conference (COP15/CMP5) in December
2009.
• The Climate offenders (esp G8 members) should honour their
commitment to fund climate change adaptation separately
from their ODA commitments. By 2020 developing countries
will need US$182bn per year to finance climate change
mitigation and adaptation in developing countries, of which
the ‘fair share’ for G7 countries is about 143bn.
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