Climate Change may affect food prices over the next 10 years

ROME: Food and Agriculture Organization of the United Nations has expressed concern that declining prices could thwart international efforts to eradicate hunger and extreme poverty unless steps are taken to guarantee decent incomes and livelihoods for small-scale producers.

FAO Director-General José Graziano da Silva, while addressing a high-level meeting on agricultural commodity prices, told Agriculture and Trade Ministers and other government officials and experts, that food prices are believed to be back to their long-term downward trend in real terms as supply growth outpaces demand.

This follows the price surges experienced during the 2008-12 period and a prolonged period of volatility in food markets. “As policy makers, you are confronted by the challenge of keeping nutritious food affordable for the poor, while ensuring good incentives for producers, including family farmers,” he added.

#Climate actions to change our world: here’s what you can do to help preserve the earth’s natural resources https://t.co/7bc4yuQwhE #WFD2016 pic.twitter.com/gOjV5ou1eU

— FAO Newsroom (@FAOnews) October 3, 2016

“Low food prices reduce the incomes of farmers, especially poor family farmers who produce staple food in the developing countries. This cut in the flow of cash into rural communities also reduces the incentives for new investments in production, infrastructure and services,” he said.

He underscored the need to consider the current decline in agricultural commodity prices in the context of the international community’s efforts to achieve the 2030 Agenda for Sustainable Development and the Sustainable Development Goals.

However, he alsosaid that FAO seeks to boost its modeling systems to better understand possible price swings and changes in trends and assist countries to formulate appropriate policies, to better develop future scenarios on the long-term behavior of agricultural commodity prices.

The meeting noted that the OECD-FAO Agricultural Outlook points out the high probability that over the next 10 years some abrupt price surges may occur mainly as a result of climate change.

 

Make trade work for all

In a video address to the meeting, World Trade Organization (WTO) Director-General Roberto Azevedo said that “under the right circumstances” trade provides people with opportunities to join global markets and helps to create incentives for producers to invest and innovate.

The “historic decision” struck in Nairobi in December 2015 by WTO members to eliminate agricultural export subsidies, according to Azevedo will “help level the playing field in agriculture markets, to the benefit of farmers and exporters in developing and least-developed countries.”

Evolution of #trade in #ag products by region – @OECD #UNFAO #AgOutlook https://t.co/D3XGzGmb89 #commodities pic.twitter.com/oADQ0GrolA

— FAO Newsroom (@FAOnews) October 3, 2016

For his part, Graziano da Silva pointed to the potential of trade in contributing to global food security and better nutrition, specifically underlining its potential role as an “adaptation tool” to climate change.

This means that countries that are projected to experience decreasing yields and production due to climate change, will have to resort to the global markets to feed their populations.

He also noted that increased openness to trade “can also bring risks”. If not well managed, it “can undermine local production and consequently the livelihoods of the rural poor”.

The elimination of agricultural export subsidies that affect prices in global markets could be one way to improve trade so that it benefits small farmers in developing countries and creates prosperity in rural areas.

Social protection

Since demand is one of the most powerful drivers of food prices, it is essential to make it more remunerative for producers, yet affordable for consumers. Thus it is necessary  to promote and strengthen targeted social protection programmes and other schemes such as food vouchers.

De Silva added that the aim of these polices is to build a virtuous cycle of local production and local consumption, but to succeed  they need strong collaboration between the institutions responsible for agriculture, rural development, trade, the environment, nutrition, health and social security.