What is in this article?:
- According to a mid-October report by the Global Harvest Initiative, feeding a burgeoning world population in coming decades will be a daunting, but achievable, task.
- Released at the World Food Prize in Des Moines, Iowa, the 2012 Global Agricultural Productivity Report calls for more research and the expansion of free trade and planting of GMO crops.
Market forces, climate change
Delgado also addressed climate change. “We still don’t understand a lot about climate change, but it’s another game-changer. … There all these game-changers out there that will provoke reactions among the decision-makers in the world that, by and large, based on experience, will make things worse.
“What we really need is a world that overcomes trust barriers and gets solutions where a market solution works out better for everyone, especially for the very poor. The non-market solutions, if you’ll excuse the language, really screw the poor.”
That’s what happened in 2008 and 2010 when “large chunks of the world – especially, the better-off world – isolated themselves from the markets. All the market adjustment to high prices, both in production but especially consumption, is borne by those who can (afford) it the least.”
Delgado pointed out that when the price of grain goes up very few, except the poor, are terribly impacted. “It’s the people in rural Ethiopia who spend 80 percent of their total livelihood just getting basic calories. They’re the ones who do the price adjustment at the end of the day.”
While the GHI report doesn’t take into account the impact of climate change on food production specifically, Delgado dove right in. “As an individual, as a personal statement, I don’t think the political leadership in northern countries really gets it. I really don’t. … The reason is political leaders respond to body politics and body politic doesn’t get it.
“At some peril to myself, I’ll tell you a story. (The World Bank) did a World Development Report, which is our signature thing, on climate change. The first draft came out … and I was the designated commentator, in house, (representing agriculture).
“I went into the internal meeting and asked to speak. I said, ‘Climate change is really important to agriculture.’ There was a set of blank looks from people who were basically environmentalists. You know, ‘Why would agriculture have any interest in climate change?’ … This was news.
“Now, if you go to central Vietnam everyone from the prime minister down to the man in the street – urban or rural – everyone is very concerned about climate change. The way it looks now, the ocean will be into the mountains of Laos in no time. They’ll be underwater.”
Delgado provided another example that, while not specifically on climate change, “can tell you what can happen: Almost all the growth in grain exports … since 1990 have come from the Black Sea region and … Latin America. Their market share has gone from something like 11 percent to 29 percent. Those are areas naturally, historically, farm more subject to climate interference with harvest than traditional grain-exporting areas.
“So, even without climate change, that’s one of the factors – and you could see it clearly in 2010 – major disruptions in supply. This will continue over time.
“If you add in climate change, which we think impacts variable climate areas even more than stable climate areas, it will get much worse. Scientists tell us we’ll be lucky to get away with 2 degrees centigrade (in change). It’s actually happening faster and worse than we thought.
“As a body politic, we don’t get it. I don’t think there’s anyone more than aggies that worry about that fact.”
Are we trying to solve problems that structurally can’t be fixed by using the current set-up?
“Supply chains, back when we all used to live in villages, you went to whoever sold what you needed,” said Delgado. “I need a cup of milk and I’ll come to you and the milk will be fresh and I have reasonable assurance it’s this morning’s milks and not last night’s and that there won’t be too much water in it. If there is, I won’t come back or talk to you again.”
Now, that immediacy and connection to agriculture is being stretched. There are long supply chains that “raise all kinds of food safety issues,” he continued. “You’ve got all sorts of quality issues. As supply chains become longer and more anonymous – and that’s what the implication of the trading world is – and where (non-visible) traits matter in products … you need some process of certification. You need some form of institution. In Economic jargon, they’re transaction costs that call for an institutional solution.”
Nowhere is that more true than for a small player. “So, as supply chains become much more anonymous and we worry about food security of the poor, we must think much more about the kind of institutions that fill the new needs occasioned by the lengthening and more anonymous world we live in.”