CAN GLOBAL FOOD "GIANTS" HELP REDUCE POVERTY IN THE THIRD WORLD?

The 21st century is expected to be dominated by the poor and famished farmers of the third world because many global food processors need precious raw materials for their manufacturing programs which cannot be met entirely from their patrons in the wealthy nations. While country to country exports do involve many developing countries which are strong in some agricultural produce, the new initiative by some of the internationally strong branded products manufacturing companies to tie up with farmers and farmer organizations for direct access on a long term is a welcome development. Whether it is due to supply compulsions or genuine desire on the part of these MNCs to help the farmers of the third world countries is immaterial as long the latter is benefited. Many developing countries in Asia, Africa and South America are expected to benefit from the new perception on the part of the big food industry players. One can only hope that the new relationship will be of longer duration based on mutual respect and appreciation rather than the old colonial mindset. 

"While governments and non-profits have a critical role to play in reducing poverty and hunger around the world, it is becoming clear that the global food and beverage companies may have an even stronger hand to play. The sector is powerful and highly concentrated with a just a few companies controlling thousands of brands around the world. Nestle, once a mere chocolate company, is now the world's largest food and beverage company with 6000 brands including coffee (Nescafe), breakfast cereals (Cheerios), and nutrition bars (PowerBar). Kraft Foods sells snacks in 170 countries, including brands such as Nabisco and Cadbury. PepsiCo is now a larger "food" company than a "beverage" company with global brands like Frito-Lay and Quaker Oats. These global companies are buying the ingredients (corn, rice, wheat, cocoa, etc.) for food products on an enormous scale, but not from small farmers in the developing world who make up the majority of the world's poor. They turn, instead, to farmers in Australia, South Africa or the U.S. -- rather than their counterparts in Ethiopia, Haiti or South Sudan. Thus, poor farmers lack dependable buyers that could give them fair prices and a consistent market, helping them and their families out of poverty. Given that subsistence farmers comprise 70 percent of the world's poor, improving their income is our best strategy for reducing global poverty".

The new trend in leasing of land in the third world countries for agricultural activities is like a double edged sword that can be dangerous or beneficial depending on the conditions of lease. While using the land in third world countries exclusively for 100% export may attract criticism if the local population is starved of food, it can be a boon in raising the land productivity to unimaginable levels by using modern techniques of cultivation. The contract system of engaging farmers to raise particular crops for dedicated use by the industry giants on a long term basis can be another route for boosting farmer incomes in the lessee country besides receiving high quality inputs and training for producing crops of particular specifications required by the manufacturers. It is imperative for western nations that they engage the developing countries in genuine partnership through mutually beneficial organizational linkages on a long term basis.

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

ESCALATING FOOD PRICES-A BLEAK GLOBAL SCENARIO!

Can responsible governments play with the lives of their people by not taking corrective policies to prevent food shortages and escalating prices unaffordable to billions of poor people? This a critical poser coming from some of the most respected aid agencies across the world after helplessly watching the continued rise in price of most food staples during the last few months. According to FAO the world stock of food grains can reach critically low levels this year if there are production shortfalls in major producing countries like China, India, Russia etc this year and the writing on the wall is clear as reflected by the 2.2% jump in the food price index recently reaching an all time high in two decades. It is not the producing countries which face the problem posed by high food prices as they take corrective measures to moderate their exports but many poor countries, not self reliant in the food front, will have to bear the brunt of the problem because of high global prices for these food grains.

"Global food prices have reached their highest point in 20 years and could increase further because of rising oil prices stemming from the unrest in Libya and the Mideast, a U.N. agency warned Thursday. Skyrocketing food prices have been among the triggers for protests in Egypt, Tunisia and elsewhere, and raised fears of a repeat of the food price crises in 2007 and 2008. Some experts point to key differences compared to those years: for one, the price of rice, an important food security commodity, is much lower today. Still, Oxfam called the hike "deeply worrying." The Food and Agriculture Organization said in a statement that its food price index was up 2.2 percent last month, the highest record in both real, inflation-corrected terms and nominal terms since the agency started monitoring prices two decades ago.It also was the eighth consecutive month that food prices had risen, the Rome-based agency said. In January, the index had already registered a record peak. The increase was driven mostly by higher prices of cereals, meat and dairy products, FAO said. Sugar was the only commodity of the groups being monitored whose price hadn't risen. Global oil prices, which increased on concerns about the potential impact of supply disruptions following unrest in Libya, are a crucial variable. "Unexpected oil price spikes could further exacerbate an already precarious situation in food markets," said David Hallam, director of FAO's trade and market division. "This adds even more uncertainty concerning the price outlook just as plantings for crops in some of the major growing regions are about to start."

It is true that countries like India, China and Russia do clamp on exports when significant production shortfalls take place but one has to understand their compulsions to protect their people from shortages and consequent rise in price with potential for causing political and social unrest with lethal consequences. The nexus between fossil fuel price and food price is a little difficult to understand though there is the convenient explanation that fossil fuel is involved in a big way in grain production, storage, transport and wholesale as well as retain marketing. What about diversion of food grains for bio-fuel production? Of course this is also an area of great concern since it is well known that more than 40% of corn production in a country like the US, is diverted with government blessings, for bio-fuel conversion. Against such a bleak scenario it is time that agencies like FAO, WHO, UNICEF, WTO and others sit with governments of some major countries to evolve a practical long term solution so that such contingencies as being faced now, do not pose grave threat to global peace.

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com