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Developing its own agriculture was important for a country to reduce hunger, the agricultural economist told the Rabobank F20 summit in Sydney. But those that also used heavily protectionist policies were reducing hunger at a lower rate than those that didn't.
Food security is back on the world agenda after a spike in world food prices in 2007-08, says Warr. The price of rice tripled, the price of wheat and corn doubled. The "real" price of commodities had come down dramatically over the last century, but volatility is a worry to food importing countries.
Asia has two thirds of the world's hungry people but it is also making the most progress on hunger. Over the last 20 years worldwide the number of hungry people in the world has declined by 150 million, but 850 million are still hungry. Sub-Saharan Africa is the worst performer.
Increasing agricultural infrastructure and increasing domestic output by protecting local industry against imports are two policies operating throughout Asia in varying degrees.
Progress on reducing hunger varied greatly in Asia. China has a higher proportion of undernourished than India but the rate of decline was similar in both countries. Thailand and Vietnam had dramatically reduced undernourishment. Thailand has gone from 44% in 1990 to about 8%. Vietnam was similar; for Indonesia and the Philippines the progress has been much slower.
"Indonesia and the Philippines are the two countries who have used protectionism as a way of stimulating their agriculture; it has not worked," Warr says.
His statistical analysis of the causes of undernourishment show it is not the rate of growth of GDP in a country but the rate of growth in the agricultural component of GDP that is the important factor. Lower food prices reduce the rate of undernourishment. Some poorer farmers in protectionist countries may get higher prices and some benefit but more poor consumers are affected negatively.
In Indonesia, for instance, urban people, farm labourers and even 51% of producers of rice are net buyers – only when they produce enough for themselves first do they have something to sell. "When the price of rice goes up that hurts all those net buyers; it benefits only net sellers," he says.
"There are two ways of stimulating agricultural output. Improve agricultural productivity: that improves food security unambiguously as it increases the availability of food without raising the prices. And there is protecting the agricultural sector: that is Indonesia's policy – they have banned the import of rice forcing up the domestic price by 40%, reducing the food security of all those net buyers.
"There is nothing wrong with the goal of food self-sufficiency but the effect depends on how you try to achieve it." If your methods result in rising domestic prices you worsen food security.
Key points
- Two thirds of the undernourished people in the world are in Asia.
- Hunger has declined faster in Asia than the rest of the world.
- Undernourishment is significantly reduced by increasing agricultural output within the country itself.
- The volume of international trade is not enough to deal with the problem of 850 million hungry people.
- Important in reducing undernourishment is to raise agricultural production but not to have a protected agricultural sector.
