“Food system needs loosening”

Brussels, 16 October 2008: In the 7th Brussels Briefing on rising food prices, ODI‘s Steve Wiggins gave a brief historical analysis of the food system, the production and market trends.

Observing the global cereal production, the world food system has functioned very well. Until the 1980s, cereal production yearly increased 2,8 %, which surpasses the rate of population growth. Since then, the growth in cereal production was only marginally lower than population growth.

In his view, the ‘triggers’ of the current food prices crisis include:

  • harvest failures in Australia, Russia, Ukraine – a  supply side failure
  • changing demands, in particular, rising oil prices have stimulated increasing demand for biofuels which push up the prices, for example, of maize.

These together led to a degree of panic: export restrictions by producer countries, re-stocking (richer countries imported more than usual, just in case), and perhaps, speculation on commodity futures markets.

What needs to be done?

Arguing that the basic problem is a lack of resilience in the global food system, he called for the system to be “loosened up”, making space for us to better handle harvest variability. This is particularly critical as our climate begins to change. Part of a resilience strategy requires that we, over time, build up stocks and reserves to cover the bad years.

He also advocated greater efforts to increase the annual growth in agricultural production (of staple crops) – 2% growth per annum should be sufficient. Finally, the larger issue of hunger and malnutrition must be tackled.

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