World Grain Forum 2009
Saint Petersburg, Russian Federation, 6-7 June 2009
Statement of Dr. Jacques Diouf
Director-General,
Food and Agriculture Organization of the United Nations (FAO)
Excellencies, Ladies and Gentlemen, the world is going through a financial turbulence that has led to a serious economic setback. But this must not mask the global food crisis which has shaken the international agricultural economy and proven the fragility of the global agricultural system.
The present situation of world food insecurity is of particular concern. In 2007 and 2008, mainly because of high food prices, the number of hungry people in the world soared by 115 million.
Preliminary results of work conducted by FAO show that the financial and economic crisis could drag more than 100 million persons into chronic hunger. In other words, the world has today about 1 billion hungry and malnourished people, that is 15 percent of total population.
As of last month, 31 countries are in a situation of food crisis requiring emergency assistance. Of these, 20 are in Africa, nine in Asia and the Near East and two in Central America and the Caribbean.
This dramatic situation is occurring in a state of abundance of international resources and when trillions of US dollars are being spent to stimulate the world economy.
The gravity of the current food crisis and the difficulty to face it is the result of 20 years of under-investment in agriculture and negligence of the sector. The share of agriculture in official development assistance fell from 17 percent in 1980 to 3.8 percent in 2006 and international and regional financial institutions saw a drastic reduction in the resources allocated to the activity. This is in sharp contrast with the reality. Agriculture provides the livelihood for 70 percent of the world's poor. It contributes about 10 percent of GDP and accounts for more than half of total employment in developing countries.
We can all agree that there is no food security without grains. Given their importance, the analysis of supply and demand of grains can serve as a good barometer for monitoring global food security.
Cereals are by far the most important source in terms of calories with 46 percent of food consumption at the global level. Food use of cereals has kept increasing, albeit at a decreasing rate. In developing countries it is providing more than 52 percent of total calorie intake. Cereals also represent a significant source of animal feed, with some 35 percent of total cereal consumption used as feed.
The world of grains has gone through tremendous transformation in recent decades. Technological advancements helped in reducing the cost of production of the global food basket by almost 50 percent over the last three decades, which rendered significant improvements in food supply to meet demand. Consequently, prices fell on average by 2 to 3 percent per annum in real terms.
However, even in those years, millions continued to suffer from hunger because of lack of access as they were too poor to afford even the so called "cheap food". And unfortunately not all countries which could produce their own food were able to do so. They could not get access to modern inputs nor afford to compete with the highly subsidised production in OECD countries. This explains why within few decades, only a handful of countries became prominent suppliers of food while most countries have become increasingly more dependent on world markets for their food consumption.
The events of the past two years served as the wake-up call. The increase in food prices begun in 2006, it accelerated in 2007, and peaked by June 2008. This meant that within only two years, international prices of basic food commodities rose by about 60 percent while those for grains doubled. Average prices of food are still 17 percent higher than in 2006 and 24 percent higher that in 2005. In addition, the "stock-to-use" ratio for cereals in 2007/08, at 20.2 percent, was at its lowest level in 30 years.
The food crisis has taught us that to defeat hunger, we have to deal with its root causes and not to continue coping with the consequences of past mistakes. "Business as usual" scenario simply cannot continue.
We have to build a more coherent and effective system of governance for world food security; we have to correct the policies and international trade system that have resulted in more hunger and poverty; and we have to allocate proper funding for agriculture in developing countries for investment in rural infrastructures and to ensure access to modern inputs and assistance of adequate institutions for small farmers. But we also need to guarantee food safety and quality and address new threats of transboundary pests and diseases of plants and animals.
Excellencies,
Ladies and Gentlemen,
The world has to secure the food security of the one billion hungry people and also double food production to feed a population projected to reach 9.2 billion in 2050. And this has to be achieved in the face of several challenges: including demographic and dietary changes, climate change, bioenergy development and natural resource constraints.
I trust that this Forum will offer a venue for an objective and frank dialogue to tackle the issues facing the world grain economy in the context of ensuring food security for all, today and tomorrow.
Thank you for your kind attention.