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Published On  Dec 11,  2011
   
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Priceless Farmers versus Penniless Urbanites

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

Global economic turbulences have turned debates back to the basics. Systemic fundamentals are being tested with forces of reorientation, and what used to be exclusive talk in expert corners is now ending up in parliaments and public gatherings.

News anchors across the world are acting as part-time economists with tolerable but sometimes annoying mistakes in analysing economic crises. It is as if the global ship is sailing through turbulent waters and all the passengers are looking for solutions to stabilise its journey.

One such effort of discussing global food price volatility was an event organised last week by the Technical Centre for Agricultural and Rural Cooperation (CTA) located in Brussels, Belgium. By bringing global agricultural experts under one roof, for a day, to discuss the increasingly variable global food prices, the discussion aimed to create a consensus about causes of the imminent problems of the global belly.

Situated at the heart of the shattering eurozone, the CTA feeds global policymaking with a closer look at agricultural issues that often gets overlooked by European bigwigs with Nostradum suits. In dealing with the issues of price volatility, the latest Brussels Development Briefings were led by marginal interests.

Urbanites crave lower prices, while farmers wish for higher returns. Politicians want the deal settled peacefully, whereas academicians wish to reduce the cost of the transactions. As often is the case, however, the many dancers do not dance in harmony and the floor gets chaotic.

As it appears, the global debate on agriculture is deprived of the valour of practical experience. As a renowned expert puts it, the system is structurally biased towards transitory interests with agriculture receiving little of the public financial steam. Even when it comes, it overburdens weak institutions that channel it for easy decisions, such as ordering massive import consignments, rather than reorienting the basics of investment.

With over 70pc of household incomes directed at buying food, the talk of the briefings is no longer distant from domestic headlines. It embraces the worries of the emerging African middleclass, the marginalised poor, the insecure rich, and whoever else does not fall into these categories. Issues of stabilising the food supply for the ever-expanding global belly, which has seven billion sub-bellies to feed, feels so familial that the voices at Brussels could rightly be heard in Addis Abeba.

Increasing food prices is the daily reality of urbanites, with no foreseeable structural solution other than increasing supply.

Surely, the Ethiopian government has remained so very devoted to agricultural development that a salient transformation is happening. Yet, productivity has remained so low that the return on investment is yet to materialise.

Experts agree that enhancing productivity is no singular objective. It rather demands a comprehensive approach of redressing climate change, food market instabilities, financial sector functions, and urban-rural linkages.

Sure, it all looks rosy in the blueprints. It is not unreachable, either, as countries, such as Ghana and Ethiopia, have evidenced.

Away from the usual tune of export earnings, however, the recent briefings have introduced concrete evidence the reoccurring price volatilities after the global food crisis of 2008. Global food markets went bust so abruptly that the poor were left in the margins of global crisis stocks. Public investment regimes were left exposed, so much so that it came to be known that they were swimming naked.

For African farmers, the bust was a rare opportunity to witness the real prices of their produce. It was a reminder of the sheer size of structural bias in the sector, within which they were losing.

In contrast, urbanites understood that they did not have a reliable buffer to sail through these kinds of shocks. It was shocking for investors that an immediate revival of agricultural investment from Middle East and Asia flocked to African countries, not to mention Ethiopia.

As responsive as the change was, it could not be sustained, experts proclaim. Indeed, it required cool heads that could think above the reach of the waves. Yet, all available voices were highly concentrated, vehemently partisan, poorly informed, and problem-oriented.

Even after three years, systemic stability is so distant that global policymaking fights the very fire of 2008. Inflationary spirals have continued to send shocks into the spines of public investment regimes, household budgets, and farmersí investments.

Increasing input prices are worsening the situations of poor countries.

The widening mismatch between demand and supply of food underlies the spiralling inflation of food items. Certainly, it is on the supply side of the equation that tangible policy actions could be taken. But, it all takes time.

Creating a responsive global food supply calls for enhancing agricultural productivity, experts agreed at the briefings. Uncertain is the question of how many delegates will take the assignment home to effectively lobby for concrete policy actions. But, at least, the CTA serves the purpose at the European capital.

Closer, to home the governmental plan envisions doubling agricultural production by 2015. Huge efforts of farmer mobilisation are going on, with local government officials directly engaged in the monitoring and evaluation of progress. With the past year spent on preparation, a lot is expected in the years to come. Eventually, inflation stays in the kitchen.

Although no easy answer might be availed for the issue of price volatility, gatherings such as the one organised by the CTA, are essential to ring the alarm bell calling for harmonious policy action.

After all, is harmony not also volatile?        

 

By GETACHEW T. ALEMU
Getachew T. Alemu is the Op-Ed Editor for Fortune. He can be contacted at getachew@addisfortune.com

 
 
 
 
   
   
   
 
 
 

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