For the past couple of years, governments have been focused on the financial crisis. But there's another crisis heading our way: The food price crisis. And that, says Stuart Clark, Senior Policy Advisor for Canadian Foodgrains Bank, also has the potential to threaten global stability and security -and Canada's agricultural trade interests, too.
"Canada has made major investments to ensure that Canadian agricultural products are some of the best in the world," Clark says. "But the wild and rapid fluctuation in world food prices is threatening those investments."
If customers who buy Canadian food can't be assured of predictable prices, they may try to make other arrangements such as renting or buying agricultural land in nearby developing countries, he says, adding that while this hasn't happened to Canadian exports yet, "several North African customers are doing that now with land purchases in Mali, Ethiopia and elsewhere."
Today's food prices are a reflection of what people think will happen to food availability in the future, Clark notes.
"When a crop failure is foreseen in one place, the market, through rising futures prices, will appropriately send a signal to other producing areas to make up the deficit," he says, noting that's what happened following last summer's Russian drought and crop failure.
But, he goes on to say, "if there is an element of panic among buyers, combined with excessive speculative activity, the signal will be too strong and will result in a price spike. In response, farmers in Canada and elsewhere may overreact and make large investments to increase their production, only to face a long price slump when they overproduce for the real demand."
The challenge facing Canada, and other countries, is to bring stability to food prices, he says. But how to do that?
Making agriculture more resilient in the developing world in the face of more unreliable weather patterns is part of the answer, Clark states.
"Many organizations, including the Canadian Foodgrains Bank, are working on locally adapted methods of drought proofing and increasing the amount of carbon stored in the soil," he says, adding that "the results are promising, showing that yields can be increased and, as important, protected during droughts."
This work is 小蓝视频 supported by the Canadian government, he says, acknowledging Canada's recent decision to make agriculture and food security one of three Canadian aid priorities.
But helping farmers in the developing world adapt to changing climate is only one part of the solution, he says.
"We also need a reliable world food reserve that is available to the international market," he says. "Such reserves would be an important way of calming fears when food prices begin to rise, thereby preventing sudden spikes."
If there is a real global food shortage, he notes, such a reserve can "provide a quick response, something that can't be done by the normal market mechanism of stimulating next year's production."Another part of the solution to price rises is to create ways for governments to adjust biofuel production, he says.
"If prices threaten to become unstable, some of the crops destined for biofuels could be redirected to food and feed purposes," Clark suggests. "Similarly, if food prices threaten to slump, these biofuel mandates could be readjusted upwards to redirect some supplies back into biofuels."
In June, the G20 agriculture ministers will meet in Paris to address this problem. "As a major exporter, Canada has a strong reason, and a good opportunity, to support moves that ensure reliable global food supplies at predictable prices," Clark says. "At the same time, Canada would also be contributing to reducing the threat of increasing hunger, something all Canadians would support."
