Al-Ahram Weekly Online   12 - 18 August 2010
Issue No. 1011
Published in Cairo by AL-AHRAM established in 1875

Food crises and national security

Only an integrated Arab union can provide food security for all, writes Mohamed Abdel-Maguid*

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Many countries are in the grips of a severe food crisis. Perhaps the most telling indication is that around 30 countries recently have experienced mass protests against rising food prices. The Arab region is no exception, to which testify the outbreak of violent disturbances and rapid government action to calm discontent. It is little wonder, therefore, that in the Arab world, as with elsewhere, urgent attention has turned to both the theoretical and applied dimensions of food security and agricultural development.

INTERNATIONAL ROOTS: It is generally accepted that the food crisis has globalised origins. According to the IMF report on Global Economic Horizons 2008, the increased use of food crops to produce biofuel was responsible for 50 per cent of the rise in the prices of basic food commodities in 2006 and 2007. Commodity speculation on the stock market has since exacerbated the problem. After the real estate bubble burst in mid-2007, investment funds and securities turned to commodities to compensate for their losses in the real estate market, translated into rising food costs.

Another major contributing factor was the sudden rise in transportation costs following the 90 per cent spike in global oil prices in May 2007. Food prices were also driven up by such phenomena as improved standards of living in such developing countries as China and India and the consequent increased demand on livestock and primary materials, the rapid decline in the value of the dollar, and shrinking water resources due to climate change and poor weather conditions resulting in lower agricultural yields in some parts of the world.

THE FOOD MAP IN THE ARAB REGION: The Arab region currently imports about half of its primary food supplies. The Arab balance of trade deficit in primary food commodities climbed to $23.8 billion in 2007, or up by 29.3 per cent from the previous year. Arab countries are heavily dependent on imported foodstuffs, especially those that are prevalent in daily diets among the poor in particular, such as grains and sugar.

The grain deficit makes up 55 per cent of the Arab food gap. Meanwhile, the disparity between the agricultural growth rate and growing demand on agricultural products has reduced self-sufficiency levels in a number of foodstuffs: in grains it dropped from 54.9 to 48 per cent and in wheat it dropped from 57.3 to 46.8 per cent in 2007. According to the Arab Organisation for Agricultural Development, the combined Arab food deficit rose at an average rate of $15.7 billion a year between 2000 and 2006.

Moreover the forecast remains bleak. The Arab Human Development Report produced by the UN Development Programme and the Arab League indicates that the Arab hope for food self-sufficiency remains out of reach, even if two Arab countries -- Syria and Sudan -- have attained self-sufficiency in grains. There has been no significant improvement since 1990 on the ratio of undernourishment. The report further warns of the growing risk of undernourishment in the least developed Arab countries, and especially those that are plagued by political and environmental crises such as Sudan, Yemen and Somalia.

Against the backdrop of the global food and fuel crises, the Arab countries that are also vulnerable at present are those with the highest poverty rates, high food import rates and low or non-existent petroleum exports. The foremost challenge of these countries is to sustain economic stability while simultaneously minimising the effect of rising food prices on the poor.

The urgency of the problem cannot be overstated. The Carnegie Report of 2008 notes the following developments for that year.

Egypt: A five-fold increase in bread prices triggered mass disturbances in 2008, resulting in 11 dead. In response, the Egyptian government allocated $2.5 billion in its next budget to bread subsidies, banned rice exports and charged the army with the preparation and distribution of bread to the poor. In addition, it authorised a 30 per cent hike in public sector salaries.

Jordan: The price of primary foodstuffs skyrocketed 60 per cent in a single year. Nevertheless, the country did not experience a repeat of the widespread disturbances that erupted in response to the food crisis in 1996. In addition, in early 2008, severe budgetary constraints forced the Jordanian government to lift fuel subsidies. However, the government simultaneously took the precautions of raising public sector salaries, abolishing taxes on primary food commodities, and strengthening the social safety net for the poor.

Morocco: In the wake of violent protests, the government was forced to retract a 30 per cent hike in the price of bread. The unrest led to numerous arrests and stirred fears of a repeat of the riots that swept Casablanca in 1981 as the consequence of rising food prices.

Algeria: The government authorised a 15 per cent raise in public sector salaries in response to the doubling prices of cooking oil, sugar and flour. It was unable to use its oil and gas revenues to offset the problem because most of these revenues are committed to the payment of the country's foreign debt.

Yemen: Soaring wheat, rice and cooking oil prices triggered violent unrest. There were predictions that the country's record inflation rate and rising food prices would lead to a six per cent rise in the prevalence of poverty.

Lebanon: In response to a 30 per cent rise in the price foodstuffs in the last quarter of 2008, the Lebanese government raised the minimum wage from $200 to $300.

Syria: A 20 per cent rise in food prices spurred the government into increasing public sector salaries by 25 per cent.

The decline in food self-sufficiency threatens food security that, in turn, is a major component of Arab national security. Food security is a society's ability to secure its needs for basic food commodities through local production or importation. Not all basic food needs have to be produced locally, but when a society is heavily dependent on imports to meet these needs, as is the case with Arab countries, other considerations come into play.

The first is the degree of flexibility a country has with respect to such imports. When they consist of such sensitive commodities as grain, for example, which forms a major component of their people's diet and the supplies of which cannot be easily reduced, flexibility is limited.

The second is the fact that the global food market is monopolised by a handful of nations and multinational corporations, which give them considerable influence over the market and put them in a position to use food as a political weapon.

The third is leverage power, which in the Arab case is weak, not only because of the political and economic sensitivity of food supplies but because Arab governments interact with the powers that control the world food markets individually rather than collectively.

ARAB FOOD SECURITY: The world food crisis, which reached its peak in 2008, focussed Arab attention on the question of food security. Soaring commodity prices forced Arab governments to reduce imports, reduce customs on food imports, place restrictions on food exports, increase subsidies and raise public sector salaries. However, as such measures failed to solve the problem, governments were forced to revise their strategies.

One factor that drew the attention of development experts was patterns of food consumption. For example, the per capita consumption of grain products in the Arab world is considerably higher than that in the US and the reverse applies to the consumption of meats and fruits. The only similarity is in the consumption of poultry, eggs and sugar, the rates of which are roughly equal in the US and the oil producing Gulf countries.

The real and more immediate danger threatens those densely populated countries with heavy balance of payments deficits, notably Egypt, Jordan, Syria, Tunisia and Morocco (in spite of the fact that these are the region's most important agricultural countries). Facing a graver threat are the least developed and poorest Arab countries: Sudan, Somalia, Mauritania, Djibouti and Yemen. Although these countries have predominantly agricultural economies, the obstacles to agricultural production and financing agricultural development have aggravated the gap between food supply and needs to the degree that portions of their population face famine.

Unfortunately, food aid in these cases can be a two-edged sword. While alleviating severe famine it can also create changes in food consumption patterns that are difficult to reverse. Yemen and Sudan, for example, aid in the form of wheat flour led to the abandonment of the cultivation of maize and barley, which had traditionally been used to make flour. In addition, food aid can be used as a political tool, a famous example of which is the US's threat to cut off food aid in response to the Arab oil exporting ban in 1973.

Such dangers gave rise to increasingly urgent calls to promote Arab food security through greater self-dependency. Unfortunately, the trend has so far failed to move beyond the individual country level towards the creation of systems for pooling collective Arab resources. Consider, for example, that in spite of the region's enormous oil revenues, there are huge tracts of cultivable land that remain untapped. Of the region's 301 million acres of cultivable land, only 47.4 million are being utilised for agriculture, and even this area is not fully exploited.

THE CHALLENGES: There are many impediments to Arab food self-sufficiency. Environmental factors pose one of the greatest challenges. Only about 14.1 per cent of the total land area of the region is suitable for agriculture, and of this only about 35 per cent is actually under cultivation. To a considerable extent this is due to scarcity of water resources. In spite of the fact that the region is home to more than 4.5 per cent of the world's population it possesses only about one per cent of the world's renewable water resources. The per capital share of this is about 1,000 cubic metres a year, compared to the global per capita average of 7,000 cubic metres.

Most of Arab agriculture is also vulnerable to climatic changes, which fluctuate considerably from one year to the next. At the same time, the inefficient use or misuse of water resources and the trend away from rainfall to irrigated agriculture and the consequent rise in demand on water resources, particularly subterranean water resources, have exacerbated the problem.

The astoundingly rapid population growth in the past decades further compounds the problem. In 2010, the population growth rate climbed to around three per cent, which is higher than the growth in agricultural production during that period and signifies a broadening gap between food supply and demand.

A more complicated challenge to food self- sufficiency is comprehensive development. In developing countries, as a rule, development strategies have tended either towards industrialisation and import substitution or towards export-led economic growth. In both, agriculture was relegated to the back burner or, at best, a supporting role. As a result, the important ways that the agricultural sector interacts with other economic sectors were overlooked and insufficient attention was given to agricultural research and development. Although there were some exceptions, the general trend defied what has now become an economic development maxim, which is that any industrial revolution must be preceded by decades by a green or agricultural revolution, as occurred in China and Japan.

The neglect of the agricultural sector in development strategies and in the early phases of the food crisis was instrumental in aggravating the Arab food deficit. Meanwhile, short-sighted agricultural policies failed to reduce dependency on imports.

Although environmental and demographic factors and developmental orientations help account for the current state of food security in the Arab region, another contributing cause is the uneven distribution of natural, human and financial resources. As fate would have it, most agricultural resources (water and cultivable land) are situated in those countries that have meagre financial resources whereas the region's vast oil wealth his situated in those countries where water and cultivable land are most sparse. As the situation stands, all the money of the oil-rich countries cannot secure food self- sufficiency based on local production while the majority of cultivable land in the other areas remains unexploited or poorly utilised due to the lack of sufficient funds. Nevertheless, this grim irony points to the solution.

THE WAY OUT: The Arabs need to take urgent steps towards integration, especially with respect to agricultural development. Unfortunately, they lack the political will, responsible governments and forces capable of propelling them towards this end, which has become the only way out from the economic, political and social problems that plague the Arab nation.

Achieving food security is vital to Arab countries and should not be left to chance or control by factors outside the Arab world. Immediate action must be taken to ensure sustainable food security by devoting more attention to the agricultural sector, broadening its scope and enhancing its productivity. Although its food deficiency is growing, the Arab world still possesses the capacities and resources not only to fill the gap but also to realise an exportable surplus. As suggested above, one of the prime keys is to work with the regional matrix of abundant untapped cultivable land and abundant oil revenues.

However, this requires an entire shift in outlook. Instead of merely scrambling for short- term solutions to sudden exigencies, the Arabs need to think in the long term. They need to take definitive strategic steps towards pooling their energies into a single force that will give them the necessary collective thrust to forge an economic bloc capable of proving its muscle in this age of economic blocs. Only such a bloc will ensure their ability to protect and optimise their resources towards the realisation of higher standards of living and a better quality of life for their people. At the same time, by making the food security of individual countries a pan-Arab priority, they will free the Arab region from dependency and protect Arab dignity and autonomy from the threat of the "food weapon".

Towards these ends they must focus on several critical issues: the efficacy of the agrarian sector that suffers from shortages in financing, difficulties in accessing markets and poor educational and training systems; the decline in agricultural productivity due to massive rural to urban migration and to the neglect of agricultural and rural development; scarcity in water resources and cultivable land; and the efficacy of the energy sector. Regarding the latter, the rate of energy consumption with respect to GDP is one of the highest in the world, even with respect to countries of the Organisation for Economic Cooperation and Development. The Arab world's addiction to cheap energy hampers the competitiveness of the agriculture sector in non-oil exporting countries.

EFFECTIVE ACTION: Although Arab governments have recently succeeded in quelling discontent stemming from the sharp increase in food prices, the measures they took will not yield lasting results. In part this is due to restrictions on their budgets, most of which suffer severe deficits. They also lack flexibility in budgetary allocations, the largest chunks of which are taken by salaries and wages, defence and security spending, and interest payments on the national debt.

Given these budgetary constraints, the only way these countries can sustain a high level of social care services and good quality social safety nets is to cut expenditures on public utilities, roads and transportation services, and infrastructure. However, such measures would be detrimental to other sectors of the economy. Nor, for that matter, is this the best time for governments to raise taxes as a means to increase their revenues. Simply put, there is no quick and easy solution to the problem of rising food costs, not even in the short run, which means that the non-oil exporting countries, in particular, are facing the spectre of more frequent and more widespread displays of public anger at threats to their wellbeing.

Clearly, it is time for Arab governments to take radical measures. Individually, they need to overhaul their agricultural policies, introducing tax breaks, easy-term loans and other such incentives to spur investment in agricultural development, develop effective mechanisms for increasing domestic production, and redistribute roles and responsibilities in rural districts. They must simultaneously enhance and broaden their social safety nets to protect the more vulnerable sectors of society, such as the poor and limited- income sectors.

In tandem, they need to enhance competitiveness by dismantling existing monopolies and facilitating the creation of consumer protection associations. At the regional level, Arab countries must begin to pool their resources into integrated agricultural development projects in order to expand the area of Arab land under cultivation and to augment water resources. They should also examine ways of asserting pressure on developed nations to revise their policies with regards to food production and foreign aid.

* The writer is a researcher at Al-Ahram Centre for Strategic and Political Studies.

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