Food security - not an EU problem
09 February 2011
Supranational policies are hampering the fight against world hunger, argues Dr Valentin Zahrnt
World food prices are on the rise again. In December 2010, they exceeded the dramatic peak they had reached during the global crisis in 2007/08. Add to this, threatening megatrends such as population growth and climate change.
Then consider recent natural disasters like the severe drought in Russia or the once-in-a-century flooding in Australia, both countries being major staple food exporters. Many politicians and officials now have an uneasy feeling that the spectre of famine might yet come to haunt Europe again.
As a result, the European Commission has concluded that the common agricultural policy must preserve the EU's production potential ''so as to guarantee long-term food security for citizens''. Similarly, agriculture ministers from 22 member states claim in a joint declaration that ''only an ambitious, continent-wide policy can safeguard Europe's independence''. But surprisingly, there are no contingency scenarios or calculations to substantiate this perceived threat.
Only the British Department for Environment, Food and Rural Affairs has conducted a food security assessment. Its conclusions are clear; there are no discernible dangers for the UK. Brussels-based think-tank the European Centre for International Political Economy has now carried out such an analysis for the entire EU – arriving at the same conclusion. It provides some food for thought – demonstrating the case against food security concerns.
For cereals deliver the brunt of a European's calorie intake. At its lowest point during the last two decades, in 1992, more than 500 kilograms of cereals were produced per citizen in the EU. Approximately 4000 daily calories per person – or twice the recommended intake – were available from cereal production alone, even during the weakest production year.
Today, households spend on average 12 per cent of their income on food and non-alcoholic beverages. This is extremely low by historical standards, but it still greatly exaggerates the EU's vulnerability to food price increases. Expenditures are driven up by luxurious consumption habits and high markups for processing, transportation and retail selling.
At farm-gate prices, EU citizens could pay for their calorific needs with less than 1 per cent of their income. Looking at the global history of famine, it is evident throughout the last century production shortfalls that provoked hunger have mostly been man-made. Natural causes such as bad weather have also played a role. But the main culprits have been war, civil unrest and dictatorial regimes that experiment with policies or punish parts of the population.
This is an important lesson; if natural causes were not the main cause of famines in the 20th century, it is unlikely that they will be the catalyst for problems in the 21st-century. Especially in Europe, with its highly-advanced technological base.
Therefore, the EU does not depend on imports for its food security. In any case, most imports are not staple necessities - but luxury items including coffee, tea and flowers. Nevertheless, it is worth mentioning that food imports are reasonably reliable. And world food trade is expanding; the number of countries with strong exporting capabilities is increasing, while export restrictions are rare and limited in scope and key EU trading partners have stable, liberal trading regimes.
Furthermore, food is a homogenous good traded on markets – that is, any one supplier can easily be replaced by another. The claim that the EU should massively invest in food security – and current subsidy and tariff levels result in massive costs – builds on attitudes like ''better safe than sorry'' and ''you never know''.
There are a number of threats out there about which we cannot have absolute certainty - attacks by Martians, killer mummies from the pyramids and dinosaurs escaping from Jurassic Parks. Serious policy makers have to analyze and weigh these risks. European food security does not pass the test; there is no reasonably discernible threat during the coming decades.
World hunger though remains a serious concern. Farm income and price support in the EU is at best an absurdly inefficient approach to contributing to global food security, if its net effects are not outright harmful. Investments into agricultural research, farm advisory systems and improvements in agricultural property rights and rural infrastructure in developing countries promise much higher returns in the fight against hunger.
Moreover, further liberalisation of EU agriculture would create a signal for developing countries to abstain from expensive and distorting interventions in their own markets. The divide between the rhetoric and reality of food security in the EU policy debate is amazing – and daunting. Reform of agricultural policies, which absorb more than 40 per cent of the union's budget, will be at the center of the EU's quest for a new long-term budget after 2013. Hopefully, politicians and officials will base their decisions on sound evidence rather than mistaken fears.
Dr Valentin Zahrnt is a fellow at the European Centre for International Political Economy and editor of www.reformthecap.eu
World food prices are on the rise again. In December 2010, they exceeded the dramatic peak they had reached during the global crisis in 2007/08. Add to this, threatening megatrends such as population growth and climate change.
Then consider recent natural disasters like the severe drought in Russia or the once-in-a-century flooding in Australia, both countries being major staple food exporters. Many politicians and officials now have an uneasy feeling that the spectre of famine might yet come to haunt Europe again.
As a result, the European Commission has concluded that the common agricultural policy must preserve the EU's production potential ''so as to guarantee long-term food security for citizens''. Similarly, agriculture ministers from 22 member states claim in a joint declaration that ''only an ambitious, continent-wide policy can safeguard Europe's independence''. But surprisingly, there are no contingency scenarios or calculations to substantiate this perceived threat.
Only the British Department for Environment, Food and Rural Affairs has conducted a food security assessment. Its conclusions are clear; there are no discernible dangers for the UK. Brussels-based think-tank the European Centre for International Political Economy has now carried out such an analysis for the entire EU – arriving at the same conclusion. It provides some food for thought – demonstrating the case against food security concerns.
For cereals deliver the brunt of a European's calorie intake. At its lowest point during the last two decades, in 1992, more than 500 kilograms of cereals were produced per citizen in the EU. Approximately 4000 daily calories per person – or twice the recommended intake – were available from cereal production alone, even during the weakest production year.
Today, households spend on average 12 per cent of their income on food and non-alcoholic beverages. This is extremely low by historical standards, but it still greatly exaggerates the EU's vulnerability to food price increases. Expenditures are driven up by luxurious consumption habits and high markups for processing, transportation and retail selling.
At farm-gate prices, EU citizens could pay for their calorific needs with less than 1 per cent of their income. Looking at the global history of famine, it is evident throughout the last century production shortfalls that provoked hunger have mostly been man-made. Natural causes such as bad weather have also played a role. But the main culprits have been war, civil unrest and dictatorial regimes that experiment with policies or punish parts of the population.
This is an important lesson; if natural causes were not the main cause of famines in the 20th century, it is unlikely that they will be the catalyst for problems in the 21st-century. Especially in Europe, with its highly-advanced technological base.
Therefore, the EU does not depend on imports for its food security. In any case, most imports are not staple necessities - but luxury items including coffee, tea and flowers. Nevertheless, it is worth mentioning that food imports are reasonably reliable. And world food trade is expanding; the number of countries with strong exporting capabilities is increasing, while export restrictions are rare and limited in scope and key EU trading partners have stable, liberal trading regimes.
Furthermore, food is a homogenous good traded on markets – that is, any one supplier can easily be replaced by another. The claim that the EU should massively invest in food security – and current subsidy and tariff levels result in massive costs – builds on attitudes like ''better safe than sorry'' and ''you never know''.
There are a number of threats out there about which we cannot have absolute certainty - attacks by Martians, killer mummies from the pyramids and dinosaurs escaping from Jurassic Parks. Serious policy makers have to analyze and weigh these risks. European food security does not pass the test; there is no reasonably discernible threat during the coming decades.
World hunger though remains a serious concern. Farm income and price support in the EU is at best an absurdly inefficient approach to contributing to global food security, if its net effects are not outright harmful. Investments into agricultural research, farm advisory systems and improvements in agricultural property rights and rural infrastructure in developing countries promise much higher returns in the fight against hunger.
Moreover, further liberalisation of EU agriculture would create a signal for developing countries to abstain from expensive and distorting interventions in their own markets. The divide between the rhetoric and reality of food security in the EU policy debate is amazing – and daunting. Reform of agricultural policies, which absorb more than 40 per cent of the union's budget, will be at the center of the EU's quest for a new long-term budget after 2013. Hopefully, politicians and officials will base their decisions on sound evidence rather than mistaken fears.
Dr Valentin Zahrnt is a fellow at the European Centre for International Political Economy and editor of www.reformthecap.eu
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