States of sustenance
Article published in the Review "Public Service" issue 17.
Notre Europe's Nadège Chambon and Marjorie Jouen discuss food security and the ways in which Europe can modernise its action to maintain it
'Global food security is a question of the utmost urgency for the European Union and calls for immediate and continual action to ensure food security for EU citizens and at global level.'
The Common Agricultural Policy and Global Food Security, Mairead McGuiness Report, adopted on 15th December 2008 by the European Parliament.
'If one can share the De Gaulle's vision that a country which does not provide for its own food needs itself is not a large country, then the justification of the CAP in the name of food self sufficiency cannot remain without criticism.'
Winters cited in the Common Agricultural Policy, p. 77, JC Bureau, La Découverte 2007.
Plunging agricultural prices since 2006 provoked hunger riots in nearly 40 developing countries in Latin America, Africa and Asia in 2008.1 Last June, 12 years after the World Food Summit, heads of state and government, ministers and representatives from 181 countries and from the European Community agreed to commit themselves to react with a 'high level declaration on global food security'.2 Today, more than 963 million people in the world suffer chronically from hunger in comparison with 860 million at the beginning of 2008.
'Food security', here understood in a strictly quantitative way, which signifies that food is available all the time, for everyone and in sufficient quantities, is becoming the subject of sustained attention on the part of decision-makers in developing countries. In Europe, serenity had won our spirits, which after 30 years of food abundance, were otherwise preoccupied with managing the surpluses of successful production - then excesses - from the Common Agricultural Policy. With these perspectives of market evolution, new generations of Europeans could soon find article 39 of the Treaty of Rome (1957), which stipulated most notably that the CAP guarantees the security of food provisions, strangely modern.
If food security takes on a new acuteness today, it still constitutes an old 'sea snake' of the agricultural debate. Economist Thomas R Malthus, in 'An essay on the principles of population in 1798', already theorised the likelihood of food resources not meeting need, taking into account the rhythm of population growth. Today, the certainty of food provision is again thrown into question in Europe because recent inflation of food prices is not cyclical.
Prospective studies on market evolution are, after inspection, often far from reality, which signifies that neither the size nor the true character of 'famines' can be precisely predicted. However there are two things we can be certain about regarding the contours of future agricultural markets. The first concerns the relationship between price increases in the medium term linked to demographic growth,3 consumption of meat products and of biofuels. The second certainty concerns the future instability of agricultural markets, which will see huge price fluctuations caused by tension from food availability and natural resources, diminishing world stocks and the interdependency of agricultural markets (this last factor realises that world prices are dependent on regional risks: a drought in Australia or a pandemic in Latin America impacts on price levels).
The reversal of this agricultural market tendency is in the process of taking place; certain outcomes can already be seen but the consensus around the lessons that can be taken from this is far from being reached. On the contrary, the sustainable perspective of rising agricultural prices contributes to rekindling a very lively debate on agricultural market regulation. One can easily draw the lines of separation, which are very close to those of the debate on the financial crisis. The opinions are much polarised, with on the one hand those tending to return to protectionism and on the other those in favour of a liberalisation of commercial agriculture without any conditions. Within this spectrum defined by these irreconcilable options, the positions fluctuate and the majority start to be displaced with the reappearance of famine epidemics.
What's more, in Europe, two threats to food security exist. On the one hand, the increase of food prices would certainly make higher the number of Europeans that can not afford to eat. On the other hand, food provisions could weigh far more heavily on farms in terms of exposure to price variations than on industry and services. The climatic and sanitary risks, often the root cause of considerable price variations, can, for example, reduce to nothing an entire year's work or even two consecutive years' work. Without any insurance system, without guaranteed prices, without stocks, etc. to absorb these variations, numerous farmers, the smallest first, are not able to deal with this drastic reduction in their annual revenue and cease their activity. For the farmer, the shutting down of a farm is almost definite. The know-how, the start-up investments and the necessary duration for a farm to become competitive are in fact very dissuasive for those who hope to enter this profession.
Since the market fails to guarantee the supply of a good or of an essential service such as food provision, regulation is necessary. In Europe, the question that food security poses does not imply that we should aim for self-sufficiency as certain people claim, but rather that we should take the necessary measures to correct the potentially destructive (closure of farms) or prejudiced (erratic price increase of foodstuffs) effects. In its report on the CAP reform 20134, Notre Europe proposes to implement the instruments of regulation without affecting the open market. Those instruments would allow us to ensure stable revenues to producers, less chaotic prices to consumers, and solutions to help the poorest of them. In the long term, these regulatory market instruments would allow us to maintain a sufficient agricultural production to feed the population.
The principle tool would be to put in place a safety net insuring minimum prices to producers in exceptional circumstances. An autonomous administrative authority, mandated by the community institutions, with the same powers as the ECB or EFSA, would be charged with defining the base prices. These prices would be initially based on average world prices over a number of years. The payments to farmers, deployed during periods of crisis, would be financed by funds recouped from farmers during more stable times. The mechanism would therefore be self-funding.
Besides this regulatory mechanism, a tool box - notably to cope with risk - is also proposed to maintain a sufficiently productive activity. One will equally note that to guarantee the food security of the poor populations in Europe, Jean-Christophe Bureau and Louis-Pascal Mahé suggest the creation of bonds guaranteeing access to food to these populations, based on the model proposed in the USA (food stamp).
In order to alert and to mobilise the political decision-makers, Robert B Zoellick reiterated his call in favour of a "new deal for a global food policy" in order to face the crisis. Rising food prices could in fact plunge hundreds of millions more people still into an even greater poverty, and move us even further away from achieving the Millennium Goals.5 These alerts have translated, following lively debate in the European Union, into the diversion of ‚¬1m of credits from the CAP destined for food aid going to developing countries. This should be underlined as a welcome contribution from the European Union.
At the same time, we saw the adoption of the 'health check' of the Common Agricultural Policy by the European Council on 20th November 2008, which, without claiming it, traces the perspective of a CAP reform after 2013. However, it does not mention the question of food security.
At the end of December, the European Parliament adopted, by a large majority, the report of Mairead McGuiness6, which encourages Europeans in a remarkably debatable manner to revise the CAP and the community politics to include food security. This report contributes to opening up a useful debate on the CAP reform, and the putting into place of a new European food and agricultural policy after 2013. Could the member states lead a responsible debate, and forget historical quarrels about the CAP in order to respond to long-term needs? The debates on the European Budgetary Revision in the months to come will only tell.