The high agricultural commodity prices of the past few months have brought welfare gains to many agricultural exporting countries. But are local farmers also profiting from this development? How are the increased prices impacting on the world’s supply of food? And what role does climate change play? These were the questions tackled in Berlin in mid-May 2008 during an event entitled “Booming commodity markets – an opportunity for the world’s farmers?” which was hosted by Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ – German Technical Cooperation) in collaboration with the German Farmers’ Association.

The likelihood of extreme weather events will increase as global warming progresses, especially in those regions of the world with the greatest number of undernourished people, suggested Dr. Hermann Lotze-Campen of the Potsdam Institute for Climate Impact Research. He called for adaptation strategies to be implemented in order to cushion the effects of the resultant crop losses. He envisages these in technology, (social) security systems and in trade. For example, boosting innovation could minimise production risks and increase harvests. Insurance systems (including crop insurance as a safeguard against extreme weather events), based perhaps on microfinance, could be extended to help mitigate the risk of income loss. The researcher further advocated a diversification of international trade relationships. With a view to bioenergy, he underscored that climate policy should be linked to land-use policy.

Dr. Hans-Joachim Preuß, Secretary General of Welthungerhilfe, pointed out that about half of the 850 million chronically hungry people worldwide are small farmers. Many are forced to buy extra food and are thus bearing the brunt of the current price development. Speedy action is therefore needed in the form of food aid, cash transfers in urban areas, more free school meals in both urban and rural areas (which would also encourage more children to attend school) and food-for-work programmes. At the same time he emphasised that upgrades to infrastructure such as road construction, electricity supply, water supply, storage facilities and communications, agricultural research and institutional promotion (e.g. cooperatives) would make agricultural production more sustainable. Access to resources such as land, water and agricultural services also needs improvement. This is the only way to ensure that farmers in the developing countries have an opportunity to profit from the current high prices.

Not only have food prices soared worldwide, but also the prices for agricultural inputs, making them unaffordable for many small farmers. If the current situation does not change, another 1 million people around the world could soon be going hungry, estimates Dr. Christoph Kohlmeyer, Head of Division at the German Federal Ministry for Economic Cooperation and Development (BMZ). In addition to the emergency aid for the poorest of the poor, priority must be given to helping farmers in the developing countries to start cultivating their fields again. It is also important that the extremely overheated markets cool down. Some food exporters such as India, China, Vietnam and Zambia have either suspended food exports or imposed export duties in a bid to safeguard domestic supply. According to Kohlmeyer, this is exacerbating the situation in neighbouring countries which depend on imports, and the resultant shortages are driving up world market prices even further.

(sri)