Introducing Growbag, a round up of new research on food, farming and climate by guest blogger Richard King

August 5, 2011

     By Duncan Green     

RichardKingI can’t keep up with the flood of research on the issues related to the GROW campaign, so my ever-hungry colleague Richard King is riding to the rescue…… This occasional ‘blog series is a nutritionally dense (but non-exhaustive) collection of links, highlighting major recent publications and miscellaneous happenings that are relevant to Oxfam’s GROW campaign. Like any growbag, this series requires planting and watering (to overextend a shocking pun). Seedlings for inclusion in future posts (along with any suggestions for improvements) can be emailed to Let’s get started: 1. ‘Price volatility and food security’ – UN Committee on World Food Security’s (CFS) High Level Panel of Experts on Food Security and Nutrition (HLPE) The report considers the causes and solutions to higher food prices and higher levels of food price volatility. It proposes three different explanations for recent international food price increases. “The first explanation defines food price rises as a problem of agricultural price volatility‘ (implying that high prices will not last) and as a quasi-natural and permanent problem of agricultural markets. The second explanation points to the existence of periodic international food crises (1950s, 1970s, and present) and claims they can be explained by the dynamic of investment in agriculture. The third explanation sees current price increases as an early signal of coming and lasting scarcities on agricultural markets. The report does not choose between these three explanations. Instead, it emphasizes their complementarities. For example, the need for significant public investment in agriculture will be conceived of differently if the third explanation (coming scarcities) is taken into account. The main concern here is that short and medium-term measures should be compatible with and even contribute to resolution of the long-term problems.” Grow logoKey policy recommendations to address price volatility and its consequences for food security fall under six objectives: – Building a food security oriented trading system – Precautionary regulation of speculation – International coordination of national storage policies – Food reserves and the World Food Programme – Refocusing public investment to achieve long term food security – Curbing the growth of developed country demand for agricultural products One aspect of the report that has been widely picked up on is the relative contribution to growing cereal consumption of biofuels and emerging markets’ demand for food. From Triple Crisis: “…despite continued claims that growing demand for meat in China and India is driving food and feed demand, the growth in demand for cereals, excluding biofuels demand, averaged 1.3% since 2000, only slightly higher than in the 1990s and slower than in the previous three decades. Biofuels demand added half a percentage point to that global demand.” Thus, one of the report’s more striking recommendations is “Given the major roles played by biofuels in diverting food to energy use, the CFS should demand of governments the abolition of targets on biofuels and the removal of subsidies and tariffs on biofuel production and processing.”  The similarities with the earlier inter-agency report for the G-20 are striking. 2. ‘Policy Solutions to Agricultural Market Volatility’ – ICTSD This takes a more pessimistic view of what is doable in the face of price volatility: “A review of possible options for reducing volatility on international markets shows that none of them is likely to work… The conclusion is as disappointing as it is important. There is no effective way of doing much about price behaviour on world markets for agricultural commodities. These markets will continue to exhibit volatility, including the occasional extreme price spike, and there is no recipe against that malady. The only available policy response, then, is to try and minimize the negative implications of volatility.” Developing countries, it seems, have more limited options: Trade policies can help shield domestic markets from international volatility, but they can’t target the most vulnerable and they exacerbate international instability. Domestic market interventions are deemed ineffectual, as are national stock policies (though there may be a role for emergency stocks in import dependent countries). Social safety nets can help poor consumers ride out the storm, but they need to be implemented when the sun is still shining, not when the storm is raging. run_sheep_run3. ‘Price formation in financialized commodity markets: The role of information’ – UNCTAD UNCTAD makes the case for “soft regulation” of financialised commodity markets (increased transparency of both physical commodity stocks, and in financial exchanges and OTC markets; tighter regulation and limits on financial players’ positions). It also suggests considering a financial transaction tax to slow down investors’ activities in financial commodity markets. Why? Because, in the absence of full information, financial traders are like rampaging sheep (above): “Trading decisions are… taken in an environment of considerable uncertainty. In such a situation, it is rational to follow other participants’ trading decisions… In an environment of herd behaviour there are limits to arbitrage. Acting against the majority, even if justified by fundamentals, may result in large losses, often of borrowed money. It may therefore be rational for market participants to ignore their own information and follow the trend.” 4. ‘A Warming Planet Struggles to Feed Itself’ – New York Times “For nearly two decades, scientists had predicted that climate change would be relatively manageable for agriculture, suggesting that even under worst-case assumptions, it would probably take until 2080 for food prices to double. In part, they were counting on a counterintuitive ace in the hole: that rising carbon dioxide levels, the primary contributor to global warming, would act as a powerful plant fertilizer and offset many of the ill effects of climate change. [the ‘carbon fertilization effect’] Until a few years ago, these assumptions went largely unchallenged. But lately, the destabilization of the food system and the soaring prices have rattled many leading scientists.” 5. ‘Biofuels and Climate Change Mitigation’ – World Bank “If biofuel mandates and targets currently announced by more than 40 countries around the world are implemented by 2020 using crop biofuels cartoonfeedstocks, and if both forests and pasture lands are used to meet the new land demands for biofuel expansion, this would cause a net increase of greenhouse gas emissions released to the atmosphere until 2043, since the cumulative greenhouse gas emissions released through land-use change would exceed the reduction of emissions due to replacement of gasoline and diesel until then.” Pretty remarkable finding. However, “if the use of forest lands is avoided by channeling only pasture lands to meet the demand for new lands, a net increase of cumulative greenhouse gas emissions would occur but would cease by 2021, only a year after the assumed full implementation of the mandates and targets.” Better. But this would still require mass-scale livestock intensification and much-improved productivity on remaining pasturelands to prevent second-order, knock-on deforestation by people who would otherwise be using the pasture lands given over to biofuels. And there’s still the small issue of having enough land to feed 9 billion people by mid century… 6. Meanwhile, a report for ICTSD ‘The Impact of US Biofuel Policies on Agricultural Price Levels and Volatility‘ finds that US ethanol subsidies may have artificially inflated maize prices by as much as 17 percent in 2011.  7. ‘Protein efficiency per unit energy and per unit greenhouse gas emissions: Potential contribution of diet choices to climate change mitigation’ – Food Policy journal Interesting new paper on the impact of our dietary choices on climate change. Looking at the production and transportation of 84 common animal and vegetable foods to a port in Sweden, it finds “animal-based foods are associated with higher energy use and GHG emissions than plant-based foods, with the exception of vegetables produced in heated greenhouses.” Importantly, it also considered the nutritional value (in terms of protein) of the foods per unit of energy and GHG emitted. “Whether in terms of energy spent or emissions of GHGs, this study showed that the efficiency of delivering protein… was much higher for plant-based foods than for animal-based. In addition, plant-based protein had the specific attribute of increasing efficiency with increasing protein content of the food. Therefore, strategies aimed at feeding a growing world population and reducing contributions to climate change should include measures to encourage a more vegetarian diet with the focus on consuming vegetable products with high protein content, such as legumes, nuts and grains.” For further analysis related to this, see the excellent Food Climate Research Network]]>