IFPRI moots steps to curb global price rise

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New Delhi, May 18: This global food crisis is a complex problem that cannot be solved with simplistic approaches. More effective and coherent action is needed now to help the most vulnerable populations cope with the drastic hikes in their food bills and to assist developing countries with strategies to increase agricultural productivity, according to the director-general of the International Food Policy Research Institute (IFPRI), Joachim von Braun IFPRI is one of the 15 affiliated institutions of the Consultative Group on International Agricultural Research (CGIAR) “We call for a short term emergency package to stem the tide of the humanitarian crisis. We also call for a resilience package to strengthen the capacity of poor people,” said von Braun.

According to Braun the emergency package consists of donor governments providing increased assistance for poor people’s food and nutrition, removal of subsidies on bio-fuels and excessive blending quotas of ethanol with gasoline, freezing bio-fuel production at current levels, enacting a moratorium on the use of grains and oil seeds for bio-fuels.

At the same time, there needs to be support for development of bio-energy technologies that do not rely on food crops, he said and added that a moratorium on grain-based bio-fuels would quickly unlock these commodities for use as food. “This measure might bring corn prices down globally by about 20% and, as a consequence, decrease wheat prices by about 10%,” he said. The IFPRI director-general also said that countries should not impose export bans or impose high tariffs as these measures were likely to backfire by making the international market smaller and more volatile. Export restrictions have harmful effects on import-dependent trading partners. For example, export restrictions on rice in India affect Bangladeshi consumers adversely and also dampen the incentives for rice farmers in India to invest in agriculture, he said.

Regarding price controls, von Braun said that it reduce farmers' incentives to produce more food. On the other hand, the elimination of export bans would stabilize grain prices fluctuations, reduce price levels by as much as 30% and enhance the efficiency of agricultural production, he said and called for providing improved seeds, fertilizer, credit, and other resources to small-scale farmers in developing countries would quickly improve production, increase incomes, and lower prices.