x Abu Dhabi, UAEFriday 28 July 2017

Food prices are basic ingredient of future stability

The G20 finds itself talking about food shortages at each meeting it holds but has yet to deliver on promises it provided two years ago. The problem isn't going away.

One could be forgiven for asking what the current wave of global unrest has to do with the price of eggs. But it is not just the price of eggs; wheat, cooking oils and other staples have all become more expensive in recent months. The UN's measure of average global food prices is now just 3 per cent below its peak in 2008.

As the G20 met in Paris at the weekend, food prices were high on the agenda, just as they were in Pittsburgh when the group gathered in 2009. At that meeting, in response to the price spikes that set off riots from Mozambique to Haiti, the G20 established the Global Agriculture and Food Security Programme. Members of the G20 pledged close to $1 billion (Dh3.67 billion) to help farmers gain access to markets and better tools to increase yields on their lands.

From the recent instability, it is easy to see that the programme's goal to insulate countries from price spikes has not been achieved. Little more than a third of the $1 billion has been delivered. Members of the G20 with the fastest growing economies, such as Brazil and China, did not even pledge any assistance. This is an area where those two nations, where grinding poverty is not such a distant memory, can be at the vanguard. China's enormous foreign reserves might be put to use in investing in food production abroad.

The problem is not going away. Food supply will have to increase 70 per cent by 2050 to meet demand, according to UN estimates.

While Africa presents many development challenges, there are also opportunities. While foreign aid has often been necessary to stave off crises on the continent, it has largely failed to help African countries become self-sufficient. Here, both G20 and Gulf nations have a role.

The UAE and its neighbours already invest in African food production; that effort could be strengthened by improvements to the infrastructure that connect farmlands to markets. After two decades of stagnant investment, new efforts could dramatically increase yields of African crop land. Millions of Africans would benefit and expansive new resources would be available to world markets.

Persistent food shortages are not just a danger to Africa. The rest of the world won't be spared their de-stabilising effects unless countries spend more on food production, investing both at home and abroad. All nations, especially the wealthiest, must understand the risks that rising demand for food present to the global economy.