Higher Food Prices Can Help to End Hunger, Malnutrition and Food Waste

  • by Andrew MacMillan (rome)
  • Wednesday, June 25, 2014
  • Inter Press Service

Any customers who give thought to how and where all the different foods are produced and end up in their shopping trolleys will start to uncover a rather disturbing situation.

They will find that in most countries, people working at all levels in the food system – in supermarkets, in meat processing and packing plants, as fruit harvesters or farm labourers, or as waitresses in fast-food restaurants – are among the worst paid of all workers.

Andrew MacMillan Andrew MacMillan

They will discover that many of the skilled families that run the small-scale farms that produce most of the world's food live precariously  They are exposed to multiple risks caused by fluctuating markets, pests and diseases and extreme weather problems, whether frosts, hailstorms, floods, typhoons or droughts.

They will also learn that in most developing countries hunger is heavily concentrated in rural areas, where some 70 percent of the world's 842 million chronically hungry people live, largely dependent on farming, fishing and forestry. Much urban poverty results from people fleeing rural deprivation. And many of the conflicts that threaten global stability have their origins in areas of extreme poverty.

It seems dreadfully wrong that the very people who produce so much of our food should be those who suffer most from deep poverty and food shortages.

One reason for this apparently unjust situation is what economists call asymmetrical relationships in the food chain. For instance, supermarkets engage in cut-throat competition for customers by lowering their prices, reducing what they pay to their suppliers who, in turn, cut back on their workers' pay.

Most governments like to keep food prices "affordable", claiming that it makes food accessible to poor families, thereby preventing hunger and malnutrition. The main policy instruments used by rich and emerging nations include tax-funded subsidies that compensate their farmers for low-priced food sales. They also set low taxes on most foods.3

The idea that low food prices will reduce the scale of the hunger problem is flawed since the main reason for people being hungry is that they cannot afford the food they need, even when prices are low.

Rather than, as now, shielding all consumers from paying a full and fair price for food, it seems to make more sense to let prices rise and increase the food buying power of the poor. As Fair Trade customers have discovered, higher retail prices can be passed back to all those involved in the food production chain, especially farm labourers. They probably offer the best market-driven option for cutting rural poverty and hunger.

But to eliminate hunger quickly, income transfers, targeted on poor families and with their value indexed to food prices, are also needed, at least until countries begin to manage their economies more equitably.

Policies that support low food prices, apart from exacerbating rural hunger, also add momentum to the other big food-related problems now facing the world, including:

  • The serious mismatch between healthy diets and what people choose to eat as their incomes rise. This is most visible in the rapid rise in over-consumption of food, leading to more than 1.5 billion people being overweight or obese, creating a massive future health burden and huge losses in human productivity. It also shows up in the fast growth in demand for foods with high environmental footprints;
  • The horrendous wastage of food at retail and household level, amounting to about 30% of output in industrialised countries (or more than the total annual net food production of Africa!);
  • The rapid expansion of non-sustainable intensive farming systems. These are placing huge stresses on the increasingly scarce natural resources needed by future generations to meet their food needs – soils, fresh water, forests, marine fish stocks and biodiversity. They are also stoking the processes of climate change by generating large green-house gas emissions.
Many people think that the big food challenge for the future will be to produce enough to feed the hungry. Closing the hunger gap for over 800 million fellow humans, however, can be done today if we are willing to take direct measures to improve food access.

When I calculated what this would take, I was surprised to find that enabling all the world's hungry to rise above the hunger threshold would raise demand by under 2 percent of present global food production.

Others see population growth as the main concern. Birth rates are dropping fast, but obviously further reductions will make the task of feeding the world easier. Interestingly, much of the growth in the number of mouths to feed – from 7 billion now to 9 billion in 2050 – will come from people living longer, the positive result of better hygiene, health and education.

The reality is that we who already have more than enough to eat and those who expect to emulate our unhealthy diets as their incomes rise are the main culprits, accounting for about half of the 60 percent increase in food demand forecast by the Food and Agriculture Organization (FAO) for 2050!

What seems to be needed now is to mainstream the concepts of fairness,healthy eating and sustainability throughout the food management system. We could usefully adopt the aspiration of the Slow Foodmovement that "all people can access and enjoy food that is good for them, good for those who grow it and good for the planet."

Already many developing countries, inspired by the success of Brazil's Zero Hunger programme, are starting to move in these directions. They are linking expanded social protection for poor families and the buying of food for school lunches to the promotion of small-scale sustainable farm development.

But industrialised countries must also deliver on their responsibilities for cutting their negative impacts on food management which hurt not only their people but also the rest of the world. A first move could be to redirect existing farm subsidies towards promoting healthy eating, cutting food wastage, and accelerating the necessary shift to farming systems that are truly sustainable from technical, environmental and social perspectives.

Rises in retail food prices would be part of the adjustment process, with consumers meeting a progressively rising share of "full and fair" production costs. Though they may complain, this should be readily affordable both for the hundreds of millions of people who typically spend less than 20 percent of their disposable income on food. It will also be accessible for poorer families when they are served, as we propose, by expanded social protection.

If you think about it, it is a small price to pay for a healthier and safer world for us and our children! (END/COLUMNIST SERVICE)

© Inter Press Service (2014) — All Rights ReservedOriginal source: Inter Press Service

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