Food, when there isn’t enough
At a meeting in Dakar this past week, experts looked over a controversial new proposal from the United Nations World Food Programme (WFP) that would set up a new system for stocking grains in West Africa. Leaders of the economically powerful G20 countries lent their support to the idea recently in Washington DC.
The WFP would set up four food stocking facilities in Burkina Faso, Ghana, Mali, and Senegal that would hold up to 67,000 tons of food — enough, they estimate, for an emergency in West Africa for 30 days. An additional 60 day supply would be available through a ‘virtual’ system supported by private traders in the region. The reserve would cost $44 million to set up and would have an annual running cost of $16 million.
Setting up public food stocks is controversial even when crops are plentiful, and this proposal has already attracted some detractors. Many economists rightly fear that a giant stockpile of grains might skew global prices. Agricultural markets in many countries are monstrosities of complexity, thanks largely to government intervention. Less, not more, intervention would be better, the economists argue, and governments should not use a system of stocks to maintain arbitrary prices, distorting trade and production.
The World Food Programme’s scheme takes many of these doubts into account. Conceived as a compromise between experts skeptical of a heavy government hand and activists convinced that changes in international food prices need to be smoothed, the WFP’s proposal focuses on providing food for humanitarian relief only under specific international prices and conditions. It concedes to the experts that market prices shouldn’t be artificially fixed, while it appeases activists by acknowledging that something must be done.
Still, there are many caveats to a humanitarian food reserve. In a recent paper for the International Centre for Trade and Sustainable Development, Christopher Gilbert argues that if the vulnerable population is too broadly defined, markets may receive food in quantities that would hurt local farmers by driving down prices. He adds that poorly designed programmes are likely to affect the distribution of food across households, rather than the overall amount, leaving some better off than others.
Most importantly, he insists, governments should be careful not to do things that would be better left to the private sector. On this point, leaders could take a lesson from Asia where private stock holding is generally encouraged in times of plenty and discouraged in times of crisis.
Humanitarian food stocks make sense in times of crisis — as long as they don’t disrupt international markets or local farmers. The millions of people served by humanitarian agencies should get food when and where they need it: in West Africa, the WFP’s latest proposal could at last allow this to happen.
Published in The Express Tribune, October 13th, 2011.
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Something is fishy in this programmes from G20.
One of the solutions to food shortage is better distribution in a timely manner. If government has to procure food, it should do it outside the domestic market to make food cheaper domestically by increasing the local supply within reasonable means.
The author is correct in pointing out Asia. Though he did not name the countries, China and India are best examples. These countries had acute food shortages few decades ago, but are now self sufficient.