Capacity Building: Canada's Role in Strengthening Food Security in the Asia Pacific
Posted on Sep 11, 2012 / Author: Phoebe Stephens / Tags: Global Economy, Human Rights and Development, Energy, Natural Resources and the Environment, agriculture, CIDA, development, food prices, food security, Kazan Declaration
Policy makers, academics and members from the business community are meeting later this month to discuss the future course of food security policy in Asia. An International Symposium on Food Security Policy will be held in Vancouver from September 17th to 18th, and shortly thereafter, APEC will host a Workshop on Food Security from September 25th to 27th in Tokyo. These upcoming conferences, combined with the fact that many cross-cutting issues fall under the banner of “food security,” naturally made me curious to learn about which topics are slated to receive the most attention from decision makers.
In general, environmental interests are high on the list in terms of Asia Pacific food security. Overfishing and access to freshwater resources are beginning to reach acute levels. Learning how to adapt agricultural production effectively to the vagaries of climate change is also increasingly significant. While these topics are undeniably worthy of focus, the uncertainties surrounding climate change and the long time horizons associated with ecological issues tend to make them easier for policymakers to disregard.
However, there is one aspect of food security in Asia which decision makers are increasingly unable ignore: the market. The issue of rising food prices reached alarming peaks during the 2007-2008 financial crisis. Although the topic of food prices isn’t being reported on as extensively as it was then, the severity of the situation nonetheless remains unchecked. Consider that in 2011, the FAO (Food and Agriculture Association of the United Nations) Food Price Index, which measures the monthly international price change of a basket of food commodities, exceeded its maximum value during the food crisis five years ago. More worrying still, the FAO predicts that high and volatile food prices are likely to persist until 2020. Despite growing controversy surrounding how to tackle the problem, there is a general consensus that food prices are one of the primary contributors to global food insecurity, particularly in developing countries.
In terms of impact, the Asian Development Bank has estimated that a 10% increase in domestic food prices could push 64.4 million people below the poverty line (at $1.25 a day) in developing Asia. Recognizing the severity of the situation, the 2012 APEC Ministerial Meeting on Food Security proposed a number of solutions in its Kazan Declaration on Food Security. One such solution included increasing market transparency and predictability through improved monitoring and information sharing mechanisms. To date, global governance bodies have shied away from any proposals that curb financial speculation in commodity markets.
Indeed, debate continues about the role of financial speculation in driving up food prices, but the evidence is hard to refute. After the deregulation of the agricultural commodity futures market in 2000, investment banks began to occupy an increasingly large share of investments. Farmers and food producers are now in the minority as financial players account for over 60% of investment in wheat futures. The increased presence of financial players in the agricultural commodities markets has created a mismatch between food prices and actual supply and demand.
In terms of global regulation, the G20 communique from the November 2011 Summit supports the adoption of position management powers by market regulators. Although the G20 endorsed the establishment of position-limits, which limit the amount of futures contracts each investor is allowed to hold, only the U.S. has adopted these so far. As it stands, food price regulation remains weak, with monitoring and information sharing offered as the main strategies to combat harmful price shocks.
This is where Canada comes into the picture. Canada has a strong track record in terms of building capacity in agricultural research and development, both nationally and internationally. The Canadian International Development Agency (CIDA) released its Food Security Strategy in 2009 in which sustainable agricultural development is included as one of its “three paths to action.” This particular aspect of its strategy involves building the information sharing capacity of farmers in developing countries, such as access-to-market information. CIDA is planning to participate in the International Symposium on Food Security later this month, and I imagine its representatives will be supporting such an approach.
Canada’s role in enhancing the future of food security in the Asia Pacific is likely going to feature heavily the idea of capacity building. Although I am pleased that Canada will be involved in such an essential part of supporting food security in Asia, I can’t help but wonder if these efforts will be futile in the face of continued unregulated financial speculation in commodity markets.
Would Canada’s efforts be better spent trying to push through regulatory reforms which have more teeth? Perhaps, or maybe the thought behind CIDA’s current strategy is that the chances of success are so low the only viable option is to stick with what we know - capacity building - and hope for the best.
The views expressed here are those of the author, and do not necessarily represent the views of the Asia Pacific Foundation of Canada.