Ladies and Gentlemen,
A very good morning to all of you.
First of all, on behalf of my FAO colleagues and myself, allow me to convey warm greetings and welcome you all to Bangkok and to this Regional Consultation on Policy and Programmatic Actions to Address High Food Prices in Asia and the Pacific Region. We are greatly honoured and privileged to have you all here attending this important event, despite of short notice and your busy schedule. I also wish to acknowledge with special gratitude the participation of many senior officials including Ambassador Cousin from US Government.
The Asia and Pacific region, as you all know, has achieved dramatic progress towards reducing poverty and hunger in the past three decades. Economic growth and per capita GDP growth in this region has far exceeded other regions in the whole world. More recently, the region’s economic performance in the wake of the global financial and economic crisis has been one of the bright spots in the world economic recovery.
However, let us not forget that the fruits of economic growth have not been shared equally across countries and among the people within the countries of the region. As a result, widening inequality and disparity is seen in many countries in this region. The Asia-Pacific region as a whole is more or less on track to halving the proportion of the population living on less than 1.25 dollars a day, but not the proportion in hunger which increased to 18 percent in 2009 as a result of the food and financial crises, and is now down slightly to 16 percent against the MDG target of 10 percent to be achieved by 2015. Moreover, the absolute numbers are very large: 947 million people still live in poverty in the region, down from 1.5 billion in 1990. 578 million people are still undernourished and nearly 100 million children under 5 years of age are underweight. Most of the poor and undernourished in this region live in rural areas and depend, in one way or another, on agriculture for a living. The problems of vulnerable population, especially pregnant women and lactating mothers, children under age five and other disadvantaged groups call for special attention for targeted safety net interventions.
The FAO food price index rose to 236 points, its highest level ever, led by sugar prices, vegetable oil prices and cereal prices. Within cereals, wheat prices on international markets rose by 7 percent in February from previous month, 75 percent higher than a year earlier, but still 25 percent below peak in March 2008., while international bench mark rice prices were stable and remain low in February, about 4 percent below one year ago and 42 percent below the peak of May 2008. Maize international prices have increased sharply by 9 percent in February in one month, which stood 77 percent higher than one year ago and exceeded the historical record in June 2008. This was also associated with recent sharp increase in crude oil price, corresponding to rising bio-ethanol prices for which maize is one of the main sources. This maize price increase would likely to have serious implications for livestock product prices as maize is an important component of animal feed.
In this context it should be remembered that what concerns consumers is not the prices paid in international markets, but rather the prices they pay in their local markets. And these have risen sharply in many countries. For example, in Indonesia and China retail prices of rice reached record highs in January 2011 and were 23 percent above their levels of a year earlier, while in Bangladesh they were 33 percent higher.
You would recall that the combination of food price and economic crisis of 2008-09 pushed additional over 100 million into chronic hunger.
We are experiencing a potential risk of similar serious set back due to recent high and volatile food prices. For the poor, who are already spending 60 to 70 percent of their household budgets on food, even a small increase in food prices can be catastrophic. The rioting in Mozambique last September, caused by a 30 percent increase in the price of bread – among other things – is a reminder that food price stability is a pre-requisite for social and political stability. This point has been reinforced by recent events in the Middle East.
While debates over the causes of this and the earlier food price crisis continue, there is one thing that can and must be said. The neglect of agriculture and food production by the international community and national governments must come to an end. This is a prerequisite for dealing with food price spikes.
The proportion of ODA meant for agriculture declined from nearly 20 percent in the early 1980s to barely 5 percent today. Moreover, the proportion of government budgets devoted to agriculture and rural development in developing countries has also declined sharply over the same period.
A major consequence of this has been the steady decline in the growth rate of crop yields. Maintaining yield growth is particularly important in this region, where there is very little scope for further increases in the quantity of arable land. Yet wheat yields are increasing very slowly at a rate that is barely one-third the rate that prevailed during the Green Revolution in the early 1970s. The yield growth rate for rice has also declined by a similar magnitude from its peak in the mid-1980s.
I do not need to remind you of the importance of increasing agricultural productivity and production. World population is projected to grow to 9.1 billion by 2050 from 6.9 billion today, with the majority of the increase occurring in developing countries. At the same time, people’s incomes are rising with economic growth, and that also raises the demand for food. FAO’s projections indicate that world food production will have to increase by 70 percent by 2050 to meet the increased demand. In developing countries, it has to be increased by 100 percent. This is admittedly a difficult task. However, one should remember that during the Green Revolution, cereal production was tripled in 40 years. Surely, it should be possible for us to double cereal production over the next 40 years by 2050, if we maximize our wisdom of science and technology gained from past experience, and if sufficient resources are invested in agriculture.
FAO advocates a twin-track approach to hunger reduction in which measures to increase productivity, especially of resource-poor farmers and landless labourers, are complemented by measures to broaden direct access to food for the most needy, while promoting their contribution to national food production growth and improve their income on sustainable basis. These measures need to be implemented in the context of an enabling policy environment, in order to ensure the maximum impact of public resource mobilization on hunger and poverty reduction as well as sustainable use of the resource base.
This requires first and foremost, mobilizing political will and building up global awareness and solidarity. It is also critical to harmonize global policies on trade, markets, and food and energy security.
Secondly, policies must aim at achieving broadly-based, inclusive economic growth. This requires, in particular, actively promoting gender equality and empowering women in agriculture and rural employment. Gender equality is not just a lofty ideal, it is also crucial for agricultural development and food security. Women play a vital role in generating household income and building up assets. Simply giving women the same access as men to agricultural resources could increase production on women’s farms in developing countries by 20 to 30 percent.
Minimizing post harvest losses is another high priority, since 20-40% of foods are lost after harvest.
Policies must also focus on strengthening the ability of poor rural communities to respond to natural disasters, new pressures, uncertainties and shocks and to develop and conserve natural resources.
Increasing agricultural productivity of resource poor farmers, including women farmers, will require increased public and private sector investment in infrastructure development – irrigation, roads, marketing infrastructure, storage infrastructure to reduce post-harvest losses, etc. – as well as value chain development. Investments in agricultural research and development are essential because the payoffs to such investments are very large.
However, these measures will take a long time to have a significant impact on hunger. Hungry people cannot wait, so direct and immediate action to establish sustainable, targeted safety nets for the poor and vulnerable groups is required. These include targeted direct feeding programmes, such as school meals; food-for-work programmes to provide support to poor households while developing useful infrastructure; and income-transfer programmes, such as conditional cash transfers and cash voucher schemes.
To repeat what I said earlier, we cannot allow the food price crises from 2007-08 to occur once again, nor should we abandon all hope of meeting the MDG 1 target. In considering measures to prevent such crises from recurring, it is vital to recognize that no individual country can solve the problem on its own. We are all interdependent and we all have much to learn from one another. At the same time, we must recognize that there is no single unified solution that works for all countries.
Keeping these points in mind, we decided to hold this Consultation so that we could exchange information, learn from each other’s experience and deliberate on the actions that we will need to take, by ourselves and also in cooperation with other countries and regional organizations, development partners, international agencies, civil society and others.
It is my hope that by the end of this Consultation we will all have achieved a better understanding of the nature and causes of rising food prices and of potential solutions. I also hope that you will have a better appreciation of the resources that are available at the national and regional levels from development partners, in addition to domestic resources. This will be of great help to you in devising policies for ensuring that the 2007-08 food price crisis will never happen again.
Millions of poor and undernourished people in this region – and in other regions – stand to benefit if we can draw the right lessons and implement them. I wish you all success in your deliberations.
Thank you very much.