If farmers can cut their losses, it will actually go a long way to addressing the problems of supply.

Professor Paul Teng, Senior Fellow at the S. Rajaratnam School of International Studies

A blistering drought in Russia, devastating floods in Australia and the threat of a poor winter wheat crop in China have raised concerns about a spike in global food prices. Extreme weather events, high oil prices and increased demand are among factors that have raised some prices to their highest levels since the UN Food and Agriculture Organization (FAO) began calculating its food index in 1990.

 

Increased international prices for foods such as sugar, grains, oilseeds, onions and chillies have pushed some 44 million people below the poverty line since last June, according to the World Bank. Fortunately record rice production and the largest carry-in stocks in eight years have resulted in only moderate changes in prices of this crucial commodity.

 

With these issues in mind, officials held high-level meetings in March in Washington D.C. on implementing APEC’s food security action plan. The plan, endorsed last year by APEC ministers responsible for food security, emphasises the need to expand supplies, markets and trade of food across the region. Discussions between government food regulators, scientists, academics and bio-technology industry representatives focused on ways to increase agricultural productivity and improve trade and investment facilitation.

 

At a meeting of the APEC High Level Policy Dialogue on Agriculture Biotechnology, (HLPDAB) officials were told that higher food prices may be here to stay. For decades, farmers have been productive, keeping the world in surplus food at low prices. But rising demand has caught up, in part because income levels in developing economies are increasing, pushing up demand for meat and other commodities.

 

By 2050, world food production will have to jump by 70 percent, according to the FAO. The world population is expected to hit 9 billion people by then. Larger shares of crops will be diverted to feed animals, as more people add protein to their diets. Disruption to production because of climate change will heighten supply concerns.

 

“Prices of major grains will rise significantly because of climate change,” says Gerald Nelson, senior research fellow at the International Food Policy Research Institute in the United States, who spoke at the forum.

 

“Maize prices for example will rise by 50 percent by 2050 anyway. But with quite a substantial range of climate change scenarios, there will be an 80 to 130 percent increase between 2010 and 2050.

 

“In other words, prices will go up because of more people and higher incomes. Add climate change to that, and you’ll get another big bump on the price increase,” Professor Nelson says.

 

Boosting productivity is particularly critical in the APEC region, home to some of the world’s fastest growing populations, and where half of the world’s grains are already produced. [1] Many APEC economies also rely on each other for some food supplies, with intra-regional trade comprising 67 percent of total APEC trade. [2] Ongoing work to break down trade barriers and strengthen food markets is therefore vital.   

 

“From a food point of view this (intra-APEC trade) will continue. Natural disasters will continue and even increase, so we will continue to rely on trade for food,” says Margarita Escaler, another speaker at the dialogue, from the National Institute of Education at Nanyang Technological University in Singapore.

 

“Eliminating trade barriers and enabling freer access to goods will only benefit economies, particularly developing economies. APEC needs to continue to work to make food flow as easily as possible in the region,” she says.

 

Biotechnology to boost production

 

One way forward is cooperation on policies across the region on bio-engineered plants, such as pest, drought and salinity resistant and nutritionally-enhanced crops.  Seven APEC economies grew 54 percent of the world’s genetically engineered (GE) crops in 2010 or 80.4 million hectares out of 148 million hectares, Dr Escaler says. These figures are expected to rise, as economies, especially developing ones, increasingly turn to GE foods to help increase supply. The number of GE traits in commercial crops is expected to jump globally from 30 to 120 by 2015.

 

“Right now, I think a lot of the regulatory systems are not equipped to handle what’s coming,” Dr Escaler says. “Regulations need to be transparent, flexible and streamlined, without compromising safety, because biotech is so fast moving. There is no stopping the future, so our regulations need to be able to deal with this.”

 

Different rules and regulations among APEC economies for cultivating, importing and exporting crops can be a significant barrier to trade. One example is differing policies for dealing with low level presence (LLP) of GE plant materials in food products. LLP refers to the unintentional or inadvertent mixing of a grain commodity with small, insignificant quantities of another. It occurs as an unavoidable consequence of moving crops through the supply chain from farmer to consumer.

 

Crops approved in one economy may not be approved in another, or approvals can take disparate time frames in different economies. Economies’ risk assessments can be based on dissimilar data and inputs and different LLP thresholds and testing procedures may apply.  Exporters and importers are therefore subject to a variety of uncertainties and risks.

 

“It is virtually impossible to harmonize all of these GE regulations across the region. There are sovereignty issues, politics and differing priorities. But when it comes to the science-based and risk assessment procedures, there can be common ground. The amount and type of scientific information required to determine the safety of a product is where I think we can get some harmony,” she says.

 

APEC will continue to bring together policy makers and public and private sector experts to further develop regulatory frameworks in this important area.

 

Cooperation and Technology Transfer

 

Boosting production means significant investments in agriculture. At the G-8 summit in 2009, economies pledged to spend $22 billion on agricultural development in the world’s poorest economies. Professor Nelson told the Washington meetings that developing economies worldwide need to spend an extra $7 billion per year to hike production to meet future demand. This includes investment in research, infrastructure and a range of possible “climate smart” farming techniques to increase sustainability and make agriculture more resilient to climate change.

 

“We need to get serious about restarting our investment efforts in agricultural productivity which includes improving infrastructure such as roads as well as irrigation efficiency, depending on where you are in the world,” he says.

 

APEC is pushing ahead with initiatives to help economies advance their agriculture sectors and increase farm incomes, with the Agricultural Technical Cooperation Working Group leading the way. Three projects are planned this year, including a conference in Yangzhou, China in November for member economies to learn, share and transfer agricultural technology used in the region. Separately, Japan is planning development of a website portal so that member economies can share information on research results, statistics of economies, best practices and other topics.

 

Addressing crop losses, particularly those suffered by thousands of farmers in developing economies, is one key way of improving productivity and increasing supply , says Professor Paul Teng, Senior Fellow (Food Security) at the S. Rajaratnam School of International Studies in Singapore. “It is common for farmers in the region to experience 30 to 50 percent losses before harvest,” he says, because of a lack of proper pesticides and methods for pest control, low quality seeds, available water and irrigation and other reasons. Public and private investment to improve the skills and knowledge of farmers in developing economies, as well as increasing their access to finance and better technology are crucial.

 

“The bottom line is this - much of the potential and actual loss occurs before the crop is harvested,” Professor Teng says. “If farmers can cut their losses, it will actually go a long way to addressing the problems of supply.”

 

Food security remains on the APEC agenda in May when policymakers and experts meet in Big Sky, Montana on the sidelines of the 2nd APEC senior officials meeting for 2011. A workshop will be held, for example, on managing food incidents. Separately, a high-level dialogue between senior APEC officials and the private sector will focus on the need for market-based solutions and unimpeded trade, reduction of losses, innovation (including plant biotechnology) and public-private collaboration for the way forward.



 

 

 

[1] Niigata Declaration - APEC Food Security

[2]Report from the Policy Support Unit on trade creation in the APEC region