Where to invest and how to finance investments for improving food security and sustainability is perhaps the greatest challenge policy makers are facing. Lists of investment needs are long and range from farm level to infrastructure to storage facilities to markets.
In this context, globalisation brings a new dimension in the discussion on prioritising investment and financing taking into account complicated Global Value Chains (GVCs) that dominate world trade and international agricultural markets. This new perspective was discussed in a Workshop a few weeks ago in Athens .
Food security is a stated objective in virtually every country and has been elevated even at the G20 level. Despite previous efforts these two issues, food security and sustainability, remain unsettled, in particular, in the MENA region. These countries, not only have to produce more food to accommodate rapidly rising demand, but food systems are, also, under severe stress due to climate change, a diet shift to animal products and resource degradation. After the food crisis of 1970s, the downward trend in food commodity prices in the 1980s and the 1990s led to complacency. However, at the turning point of 2002 a food price trend reversal was observed that is maintained in the last decade, initiating a renewed interest on food security. However, this time the global terrain is different. Globalisation has elevated a large part of the global population to affluence changing consumption, production and trade patterns, and significantly affecting population well being everywhere. Moreover, achieving food security is the second of the UN Sustainable Development Goals.
Methodologically, food security has been analysed, up to very recently, using traditional food-supply demand balances at global, national or even at household level. The objective was to address issues of chronic or transitory food insecurity, purchasing power, financing of food imports, buffer stocks and commodity price volatility. However, over the next three-four decades the problem of food insecurity gets increasingly complex, in particular for the MENA region because it should be considered within the context of climate change, resource constraints and institutional arrangements, at a time of an accelerating economic and social transformation due to globalisation. MED-SEC organised a Workshop to discuss these issues. The discussion focused on three areas: (a) Food security in the new global context of a shifting market environment, globalisation and global value chains, (b) investment along the agricultural value chain, supply chain competitiveness and innovation, and the increasing productivity, and (c) agro-food value chain finance.
The conclusions could be summarized as follows: (a) food security and sustainability are becoming very serious concerns, in particular in MENA where food demand is increasing rapidly, more than 50% of food consumed is imported, and the agro-food system is under severe stress, (b) the concept of Global Value Chains has many advantages in the analysis of policy measures at the entire spectrum of the agro-food chain, which is not possible with traditional analytical methods, and (c) new innovative tools are needed to increase productivity, address credit constraints and mobilize small producers for increasing incomes and access to markets. There are, however, other important issues, not discussed in the Workshop, that should also be considered, such as the efficiency of distribution chains in reaching households in need, the impact of micro-finance for generating purchasing power, the importance of price and income volatility, risk mitigation policies, as well as the importance of GMOs for global supply-demand balances. Such a new perspective gives a different direction in the research agenda on food security, sustainability and globalisation.
