Director-General’s ADDRESS for the World Food Day Observance
Plenary Hall, 17 October 2011
Her Excellency Michelle Bachelet, former President of the Republic of Chile and currently
Under-Secretary-General and Executive Director, UN Women
His Excellency Franco Frattini, Minister for Foreign Affairs of Italy
His Excellency Francesco Saverio Romano, Minister for Agriculture, Food and Forestry Policies of Italy
His Excellency Archbishop Luigi Travaglino, Permanent Observer of the Holy See to FAO
The Honourable Mayor of Rome, Gianni Alemanno
Your Excellencies, Ladies and Gentlemen,
I declare this Thirty-first World Food Day observance, on the occasion of the sixty-sixth anniversary of the founding of the Food and Agriculture Organization of the United Nations, now open.
First of all, I wish to inform you that a last-minute difficulty has prevented His Excellency Teodoro Obiang Nguema Mbasogo, President of the Republic of Equatorial Guinea and incumbent Chairman of the African Union from travelling to Rome to honour this ceremony with his presence. He has however asked his Minister for Agriculture, whom I welcome here, to represent him and deliver his message on this occasion.
I should also like to thank her Excellency Michelle Bachelet, former President of the Republic of Chile who is currently UN Under-Secretary-General and Executive Director of UN Women, who has agreed to be with us today, as she can give witness to the primary role that women play in agricultural development, a crucial factor in the achievement of the World Food Summit target and the Millennium Development Goals.
This year’s World Food Day has a special significance as it marks the 60th Anniversary of the transfer of the Organization from its initial headquarters in Washington DC USA to Italy, following a decision taken by the 5th session of the FAO Conference in 1949 to move the Headquarters from its temporary location to Rome, in these beautiful and functional premises which were graciously provided by the Italian Government. .
It gives me a great pleasure to seize this opportunity to renew, on behalf of FAO, its Member States and staff as well as on my own behalf, through His Excellency Franco Frattini, Minister for Foreign Affairs and The Honourable Mayor of Rome, Mr. Gianni Alemanno who is an old friend of FAO, along with His Excellency Francesco Saverio Romano, Minister for Agriculture, Food and Forestry Policies, whom we are privileged to have them all with us today, our deepest gratitude and sincere thanks to the Government and people of Italy for their continued generosity.
As you are all aware, the World Food Day theme this year, “Food prices: from crisis to stability” has been selected to focus on a trend which has an impact on universal food security.
The world today faces continuing concerns about high food prices and food security. The last year has been marked by a continuation of the extreme swings in food prices seen since 2006. A few months of calm came to an abrupt end last year when from July onwards unfavourable weather hit crops in major producing countries. By the end of the year grains prices soared to what they were at the peak of the 2008 food crisis.
Those high prices in 2008 pushed an additional 80 million people into hunger, increasing the number of hungry and malnourished to almost one billion. That is around one sixth of the world’s population.
Volatility in food prices challenges the fundamental human right to adequate food. High and volatile prices not only increase, but also deepen poverty and food insecurity. The impact of food price volatility falls heaviest on the poorest – especially the urban poor and the landless – who may spend as much as 75 percent of their income on food.
High food prices reduce the poor’s purchasing power and lead to irreversible harm. They reinforce poverty traps as physical and human capital is eroded and spending on education is cut. For poor food producers, price volatility increases uncertainty and deters the investments essential to increasing food production and reducing vulnerability. For governments, increasing and volatile food import bills threaten exchange reserves and disrupt development budgets and slow growth and development.
The resurgence of high food prices in 2010 awakened fears of a repeat of the 2007-08 food crisis, threatening increasing food insecurity, rampant food price inflation and civil unrest. Fortunately, the worst fears have not materialized generally, but high and volatile agricultural commodity prices are likely to persist and continue to challenge the ability of consumers, producers and governments to cope with the consequences.
Many factors have contributed to rising prices and volatility. In the past, real agricultural prices trended downwards as technical improvements augmented yields and production faster than population and income growth increased demand. But now markets have tightened as investment and supply growth have slowed while demand has continued to grow rapidly, reducing stocks to uncomfortably low levels. High rates of economic growth in emerging economies have boosted commodity demand. There has also been increasing demand for some agricultural products as feedstocks for biofuel production, which has expanded significantly as a result of subsidies and mandates. Biofuel production links agricultural prices and markets more closely to energy markets and volatile oil prices.
The recent volatility has its origins in fundamental factors such as weather shocks in key producing and exporting countries coinciding with very low stock levels. But it has been made worse by the closer linkages between agricultural and energy markets on the one hand and the speculative trading in the agricultural commodity futures markets on the other hand. This situation has forged closer links between the prices of agricultural commodities and those of financial assets. It has been exacerbated by trade policy measures such as export restrictions introduced by some countries.
To move from the risk of recurrent crises towards stability and reliability in world food markets, there is a need for more transparency in international food markets.
The experience of the 2007-08 food price crisis and today’s soaring and volatile prices have exposed weaknesses in information concerning world food supply and demand, a lack of reliable indicators of when crisis threatens and a lack of policy coordination to avoid individual country responses turning a bad situation into a crisis.
This food price crisis also exposed the lack of preparedness and low level of resilience to international food price surges. Strategic emergency food reserves can help ensure food security in the face of shortfalls in availability. By exploiting synergies with well-designed and well-targeted safety nets they can reduce the exposure of vulnerable people to volatility. More effective internationally coordinated and market-based financing mechanisms can also help ensure short-term food security in hard-hit low income food importing developing countries, which face food import financing difficulties.
FAO has worked together with other International Organizations to produce an Interagency Report to the G20 on Food Price Volatility. This report recommended the creation of an Agricultural Market Information System (AMIS) to be based here at FAO, in order to improve information and transparency and promote policy dialogue and coordination at the global level. Better information and enhanced transparency will reduce volatility and the incidence of panic-driven price surges and permit better informed policy decision-making. AMIS will provide the basis for global food market alerts to price surges, operating as an international early warning system. The meeting to launch this system has already taken place.
International and national actions can indeed seek to mitigate food price volatility and its impacts on vulnerable people. However, what is needed is to build long-term resilience. The background to the devastating impact of soaring and volatile food prices on the livelihood of the poor is 20 years of under-investment in agriculture and neglect of the sector. Investing in agricultural productivity growth and resiliency is paramount to addressing food price volatility. For the majority of poor countries a healthy agricultural sector is essential to reduce vulnerability to international price volatility, to overcome hunger and poverty and to also provide the platform for wider economic growth. The current situation in the Horn of Africa should be seen as a lesson to address both the immediate and long-term responses to the crisis and the need for predictable financial resources to tackle the root causes of famine and food insecurity.
Investments in research and development targeted on small producers’ needs must be stepped up to restore productivity growth. Improved infrastructure, institutions and governance at local, national and international levels are also vital. At the 2009 World Summit on Food Security, FAO called for increased investment in agriculture to produce more food where the poor and hungry live. More than $80 billion of additional investment is required annually in agriculture and downstream activities to ensure food supplies for the world in 2050. To finance such investments, national governments will have to contribute significantly. They also have, through good governance and sound structural policies, to promote an enabling environment for the private sector to invest. In addition, the share of official development assistance destined for agriculture has to be significantly increased since it is currently at six percent and remains stubbornly inadequate.
If world leaders respect the decisions already taken, generate the necessary political will and provide adequate financial resources, food security will be achieved and the succession of crises affecting most severely the poorest populations which we are experiencing periodically would be avoided to ensure political stability , world peace and security. On this World Food Day, the time has come to take action and implement policies that will enable all farmers of the world, in developing and developed countries alike, to face equitable conditions through mechanisms that do not distort markets.
The world has the knowledge and financial means needed to ensure food security for all, and thus a more stable world. Now is the time to make it happen.
Thank you for your kind attention.
