ARAB ECONOMIC, SOCIAL AND DEVELOPMENT SUMMIT
Kuwait, 19-20 January 2009
Economic and Social Forum; 17-18 January 2009
Session III - "Food Security in the Arab World"; 17 January 2009
Jacques Diouf, Director-General
Food and Agriculture Organization of the United Nations (FAO)
Mr. Secretary General of the League of Arab States,
Honourable Ministers,
Excellencies,
Ladies and Gentlemen,
It is a great pleasure for me to be with you today and deliver a keynote speech at this timely debate on "Food Security in the Arab Region".
I would like to express my profound gratitude to His Excellency Amre Moussa, the Secretary General of the League of Arab States, for his kind invitation and for the opportunity to address this prestigious gathering on such an important topic.
(The global food crisis)
The world today is in a severe financial and economic crisis. It was preceded by a food crisis that disrupted the international agricultural economy and highlighted the fragility of world food security. It has also showed us that reviving local food production is the only viable and lasting solution to the fight against hunger. We must therefore invest more in agriculture.
The food price crisis has had dramatic economic, social and political consequences. In 2007, mainly because of high food prices, the number of hungry people in the world rose by 75 million instead of declining by 43 million to achieve the commitment of the 1996 World Food Summit. In 2008, a further increase of 40 million people is expected, bringing the total number of people suffering from chronic hunger to 963 million. This means that almost one billion people (or 15 percent) out of the 6.5 billion world population is undernourished.
International prices of major food commodities have come down since July 2008, but the price index is still 17.5 percent above the level of 2006. The crisis is thus far from being over. Reduced food consumption even for short periods can have long-term consequences. Further, with un-replenished cereal stocks, unprecedented high levels of food prices in local markets, high input prices, the global credit crunch and the economic slowdown, food security continues to be under serious threat.
(Food insecurity in the Arab region)
For the region, FAO's report State of Food Insecurity in the World (SOFI) 2008, which was launched last October, reports 31 million of hungry people in the Arab countries, that is 10 percent of total population. This represents an increase of 6 million over the World Food Summit reference period (1990-92). The prevalence of hunger is notably high in Yemen and Sudan, at 32 percent and 21 percent respectively.
Arab countries are in general vulnerable to fluctuations in international commodity prices because they are heavily dependent on imported food to meet their needs. They import more than 50 percent of the food they consume. Over the last 30 years, Arab countries' per capita production of cereals, which are the main staple food, dropped by 0.3 percent annually, while consumption increased by 0.6 percent. The situation triggered a rise in imports by 170 percent to 64 million tonnes in 2008 from the 1980 level. The region's cereal import bill stood at 25.5 billion US dollars in 2007/08, compared to 11 billion dollars in 2003/04.
The disparity in access to food among the 22 countries of the Arab League is wide, and the conflict zones in the region, notably in Iraq, Lebanon, Palestine, Somalia and Sudan are grounds for serious concern.
In addition, the financial crisis could have serious implications for food security in many countries of the region. The tight credit situation may restrict access by some countries to finances, thus limiting their ability to import food. Arab countries could have difficulty financing their cereal imports through debt and may face increased fiscal pressure. Also, some of the region's oil exporters who are facing the challenge of diminished export revenues because of falling oil prices, could see the impact more clearly in 2009.
(The way forward for the Arab region)
Demand and supply factors are increasing the risks of food insecurity in Arab countries. Urbanization, population and income growth are strong in these countries and will increase the demand for food. On the other hand, supply-side constraints in the Arab countries could limit their ability to increase cereal production.
Demand for food in Arab countries is projected to grow substantially to the year 2030 and beyond, but production is not expected to keep pace. Demand for cereals is projected to increase by 48 percent, meat by 104 percent and milk by 82 percent. Unless corrective measures are undertaken, this would result in increased dependence on food imports by the region, exacerbating its food insecurity situation and increasing its exposure to food availability and price shocks.
Limited water and land resources represent the main obstacle to increasing agricultural production in the Arab region. With less than 2 percent of the world freshwater resources and rapid increases in its use, water has become increasingly scarce in the region. The region's per capita renewable water is projected to fall to below 500 cubic meters by 2050, compared with a world average of 4 800 cubic meters per capita. And the situation could be aggravated by climate change.
The region has very little fertile agricultural land, which is rapidly degrading because of urban expansion, soil erosion and salinization. Projections indicate that by 2050, per capita arable land will drop to 0.12 hectare, down 63 percent from its level in the 1990s compared with a world average of 0.21 ha/capita.
Boosting agricultural productivity is therefore the only solution to increase local production and reduce dependency on imports. Emphasis must be put on raising crop yields and value per unit of land and water. Naturally, this will require increased and sustained investment in infrastructure, technology, research and extension. Investment should be boosted particularly in water control and irrigation systems, soil management practices, seed production and multiplication facilities, storage, roads and transport infrastructure, and marketing and rural credit services.
Investment in agriculture from both domestic and external sources remains low in most countries of the region. In the Near East, as in other developing regions, overall external aid to agriculture has been falling since 1995. External assistance to agriculture for Arab countries fell from 1.6 billion dollars in 1994 to 0.6 billion in 2004 (1995 basis), which means a reduction of 62 percent in real terms. Aid from Arab donors, including OPEC, decreased by 28 percent over the same period. It is crucial that governments forge ambitious policies to raise the share of agriculture in total expenditures. It would also be essential for the OPEC countries to increase their support to agriculture by allocating more funds to the sector. Governments should also develop innovative strategies to encourage private sector investment in agriculture and to foster private-public partnerships in the field.
In the immediate term, the focus should be on vulnerable groups through strengthened safety nets and on smallholder producers by improving their access to essential inputs - seeds, fertilizers and animal feed. In fact, in response to the high food prices, FAO launched in December 2007 an Initiative on Soaring Food Prices (ISFP) with the aim to quickly boost food production in the most affected countries by facilitating access to inputs by small farmers. Smallholders usually make up the majority of rural populations and enabling them to increase their production contributes to food security. Under this initiative, FAO has received requests for assistance from over 90 countries, and input distribution took place or are programmed in almost 80 of them.
However, even with productivity gains, the Arab world will likely remain an importer of food products in the future. Other options could be pursued to ensure the food security of the region through agreed arrangements. Countries in the region, in particular oil exporting, who have the financial resources and managements capabilities can enter into mutual partnership agreements with countries who are rich in land, water and human resources to produce food. Such joint ventures should be not only economically viable, but politically and socially sustainable. This will lead to a win-win situation and also to balanced international relationships for sustainable agricultural development and food security. FAO has completed studies in this area and stands ready to assist the region in accomplishing such arrangements.
Excellencies,
Ladies and Gentlemen,
(Action at the global level)
We must also work together at the international stage to forge broad consensus on the final and rapid eradication of hunger from the world. We must not only ensure the food security of the 963 million hungry people, but also feed a world population that will reach 9 billion in 2050. Also we must ensure that the global financial crisis does not make us forget about the hungry and the poor who need urgent and continued attention.
That is why I have proposed the convening in 2009 of a World Summit on Food Security. The Summit should ensure greater coherence in the governance of global food security and lay the foundation of a new system of agricultural trade that offers farmers in developed and developing countries alike the opportunity to earn a decent living. Farmers should earn comparable incomes to their fellow citizens in the secondary and tertiary sectors, if they are to produce more and better. To this end, we must have the intelligence and the imagination to devise agricultural development policies, rules and mechanisms that will yield an international trade regime that is not only free, but also fair.
The Summit will also have to find 30 billion US dollars per year to build rural infrastructure and increase agricultural productivity in the developing world. In the immediate term, an "Early Reaction Fund" should be envisaged to revive local agricultural production in the case of crisis, particularly in low-income and heavily food-importing countries.
Excellencies,
Ladies and Gentlemen,
The time for talk has long past and the time for action is now. The events of the past two years have reminded us just how urgent a massive acceleration of investment in agriculture has become. It is the duty of all parties - governments, regional and international institutions, technical and financial partners, the private sector and civil society - to build the conditions for the economic, social and environmental viability of such investment and to realize the objective of adequate food for all.
For its part, FAO is committed to the fight against hunger and poverty, and will do all it takes to achieve the universal goal of hunger eradication in a sustainable way.
Thank you for your kind attention.