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5 December 2014
Författare: Melinda Fones-Sundell

The Calm Before the Storm or Why the Economists Always Get it Wrong

Mmmm…bit of a restrictive environment for a blogger, but I will do my best to give you a flavor of the discussion without revealing who was discussing.  Let me say that the organizers managed to attract a wide diversity of representatives from academia, government, business and civil society—both as presenters and participants. And in usual British fashion, the setting was congenial and networking was subtly supported, in spite of coffee whose strength (or lack of it) prompted several participants to rush out to Starbucks in the interval. . .

Our first presenter spoke about the “calm before the storm”; meaning that things are calm on the food security front because the period of food price spikes which characterized 2007/2008 have subsided and prices are at a more “normal” level now.

But is the “storm” made up of price winds?  Do the billion or so inhabitants of the earth who go to bed hungry feel calm?

Speaker after speaker reiterates that food supply is NOT the problem underlying global food insecurity; it is rather access to food that is impeded by poverty and poor infrastructure.

“Food security is a political issue and is an issue of access, not of lack of production.  People are food insecure in countries with massive grain reserves.”

In spite of this recognition, the person in question goes on anyway to focus on the supply side aspects of food insecurity, probably because of their professional background.

So we discuss how price volatility for globally traded grains can be used as a proxy for food insecurity. (??!!)

This may work well for quantitative economic modeling purposes, but it is sadly unhelpful in addressing global food access issues.  And this, unfortunately, is the basis for one of the most used predictive models for coping with food insecurity. (A model whose visual presentation is very similar to the one used for Planetary Boundaries— imitation is the sincerest form of flattery)

Common sense can tell us that insecurity and volatility go hand in hand; the more that your situation changes and unexpected events occur, the more you see your world as a dangerous (or perhaps exciting) and unpredictable place.  Farmers are notoriously risk-averse and playing Russian Roulette with the food supply probably does not appeal to the rest of the population either. Thus we are able to drag the notion of the risk embedded in climate change and extreme weather events into the equation, but this was never dealt with in-depth, even in the session devoted to climate change issues.

Of course it is important to stimulate more intensive production on small farms, and there is a lack of investment both in production and research which needs to be addressed—but why do we not tackle the question of what really creates the volatility in the first place, i.e. markets?

I would argue that the more globalized a market is, the more open it is to volatility.  So why, then, is connecting smallholder farmers to largely unregulated global markets the “answer” to stimulating agricultural productivity? Strengthening the value chains for agricultural crops seems to be a priority among both presenters and participants, but then one presenter calmly reflects that “trade is a vehicle for food flows to those who can pay for food”.  What logically follows upon that is that increasing incomes will increase access to food, but if we knew how to do economic development already the world would not look as it does.

We were also treated to the view of the economists that resilience is largely an issue of being able to cope with price volatility. Thus trade, markets and value chains figure highly in the prescriptive suggestions. As an economist who can see that there is explanatory value in the perspectives of other disciplines,  I am left with the impression that “Increasing Resilience” and “Improving Food Security” should probably not be used in the same sentence if we seriously mean to tackle food security.

Several presenters did address the issue of consumer demand as a driver of food production and trade. Influencing consumer choice through nutritional information could have a profound impact on both the production of and demand for agricultural output.  This we discussed in great detail on the second day, so I will leave you with that and encourage you to read the next and final installment, which, happily, ends on a very constructive note, in spite of the fact that the coffee never got any stronger.

To the next part of the blog: All’s well that ends well, EVEN for the economist!

Melinda Fones Sundell, SIANI’s Senior Advisor reflects on ”Food Security: Mapping Risks, Building Resilience” conference held in London on the 1-2 December 2014. The reporting is based on what I can reveal from the discussions at Chatham House, a.k.a. the Royal Institute of International Affairs in London—famous for its “Chatham House Rule” which means that we who attend are free to use any information that we hear but may not refer to the participants, either by directly quoting someone or even referring to who is in the room.