Rethinking food security strategies in times of climate change

Von Christine Chemnitz und Tilman Santarius

Erschienen als: Chemnitz, Christine/ Santarius, Tilman: Rethinking food security strategies in times of climate change: the case for regionalization of agricultural trade and local markets. In: UNCTAD Trade and Environment Review 2013. Genf, S. 280-285.

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In many developing countries, agriculture is the main source of rural livelihoods and the foremost provider of employment. More than one third of the world’s population derives its livelihood from land, growing food for their families and for local markets – primarily staples grown mainly on small land holdings. Thus, small farm systems de facto remain the backbone of food security in developing countries even today.

However, rural poverty and rural hunger are widespread, and the majority of all poor and hungry people worldwide live in rural areas (IFAD, 2010). To address this situation, governments need to rethink current food security strategies. Since the 1980s, policies concerning food security have been increasingly trade-oriented. Due to low world market prices, cheap imports of food products have been favoured over national production for achieving food security. Moreover, it was a common belief that overall economic growth would automatically lead to the alleviation of hunger (FAO, 2008), and that the integration of small and medium farmers into export-oriented, global value chains would help reduce poverty and hunger in developing countries.

Yet, looking at small producers and the food security situation in various developing countries today, overall, this strategy did not deliver. On the contrary, food insecurity and poverty in rural areas have increased in recent years (FAO, 2008). Small producers have faced multiple crises, among them high price volatility, the economic downturn due to the global financial and economic crisis, and weather extremes due to climate change – which have exacerbated each other (Fan and Heady, 2010). Since small producers often have limited adaptive capacity and resilience to adequately react to external shocks, the level of uncertainty, in particular, threatens their economic situation. All signs point to this level of uncertainty increasing as a result of a worsening of anthropogenic climate change in the coming years and decades.

Therefore, it is necessary to rethink current food security strategies, including the role and system of agricultural trade in the light of global warming. Food security strategies now have to cope with three challenges: (i) agricultural production is becoming increasingly affected by changing climatic conditions; (ii) in parallel, agriculture markets are being destabilized by climatic impacts; and (iii) at the same time, agriculture has to contribute to mitigating climate change and must augment its carbon sink capacities, rather than remaining a major source of greenhouse gas emissions. Given these challenges, food security strategies that rely on trade and that push for the further integration of developing countries’ food production systems in the global market are not appropriate.

In this paper, we first analyse how the present system of globalized agricultural production and marketing exacerbates anthropogenic climate change, and why small producers that are integrated into global value chains are particularly at risk due to climate change. We then discuss how the current pattern of agricultural trade and production should be modified in order to stop the vicious circle of increased trade-orientation exacerbating climate change, and increased climate change endangering small farmers’ food security. Finally, we present policies for a regionalization of agricultural trade flows and the integration of smallholders in local and regional markets.

The global agricultural trading system is contributing to climate change…

Humans have exchanged agricultural products ever since they started farming. The main purpose of those trade flows was to supplement the diet with products that could only be grown in other climatic zones and geographical settings. With trade liberalization, trade in agriculture started to serve an additional purpose: to advance economic efficiency through increased competition among producers worldwide. Agricultural production can respond to increased competition in a number of ways, two of which, in particular, can have negative impacts on climate, namely an expansion of the area under cultivation, and specialization and intensification of production processes.

The expansion of agriculture is the main reason for the clearing of primary forests, and for the conversion of natural prairies for crop growing or livestock grazing, as well as for the draining of wetlands for irrigation and cultivation (CBD, 2003). Today changes in land use in agriculture and forestry, as well as emissions from farming and livestock, contribute over 30 per cent of global anthropogenic GHG emissions, releasing in particular methane, nitrous oxide, and, to a lesser extent, carbon dioxide (Solomon, et al., 2007; see also the comment of GRAIN in chapter 1 of this Review). The conversion of tropical forests and savannahs into agricultural land is particularly emission-intensive, primarily due to the burning of the biomass originally existing on the land, and to the release of organic carbon stored in soils (Steffen, 2004).

Besides the conversion of land for agriculture, increased specialization and intensification of production, which enables farmers to participate in global markets, generally entails the greater use of pesticides, fertilizers, water and fuel. Huge amounts of greenhouse gases are emitted through the production and use of external inputs, such as agro-chemicals, farm machinery and pumped irrigation. In the United States, for example, farm inputs account for more than 90 per cent of the total direct and indirect energy used in agriculture (Saunders, 2004). Likewise, downstream emissions increase as the processing, packaging and retailing of food items that are exported become more energy-intensive.

At the same time, increased competition is likely to undercut less intensive farming practices that sustain a broad variety of crops, hedges, trees and cultural landscapes, and thus threatens small-scale, site-oriented, integrated farming systems, particularly in developing countries (CBD, 2003). For instance, with animals moving from pastures to intensive feed-lot production, and the number of cattle, pigs and poultry steadily increasing to meet growing meat-based diets, more methane is released from enteric fermentation and animal waste; in contrast, grass-fed animals emit less methane than livestock that is fed on a high protein diet (Saunders, 2004; Kotschi and Müller-Sämann, 2004; see also comment by Idel in chapter 2 of this Review).

In addition to the impacts of climate change from intensification and expansion of agricultural production for export, the overall volume of transport increases as trade grows. Average distances of food shipments are set to grow even more, as fresh fruit reach Europe from India, for instance, and soybean shipments from Brazil to China rise. However, the explosion of food miles is the Achilles’ heel of global value chains in agriculture, making them vulnerable to steep rises in oil price and the impacts of climate change.

…while climate change is endangering small producers

Notwithstanding these environmental challenges, and a growing awareness of climate-change-related issues, efforts to integrate small and medium producers into global value chains continue unabated. Marketing chains are being improved and small producers are being encouraged and assisted in complying with international private and public food quality and safety standards (see, for example, Humphrey, 2005; and Pingali et al., 2005). Small producers in global value chains have always faced certain risks because usually they are the least powerful and most vulnerable players in the chain, and because they are price takers for both their production inputs and their output. Moreover, they are often confronted with a fragile balance between a) production for the market, and thus income generation, b) production for their own consumption, and c) household expenditure for food. However, these three aspects are increasingly affected by changing temperatures, more frequent weather extremes such as droughts or heavy rains, and growing instability of ecosystem services. Thus climate change has become an important factor in destabilizing the fragile food security situation of small producers in global value chains.

Looking at smallholders’ production for the market, participation in global value chains often demands specialization in a few cash crops and an intensification of production. As a consequence, many farmers have given up more diversified production systems, such as mixed cropping. However, mixed cropping is much better suited to coping with the impacts of climate change. In contrast, if weather extremes or newly introduced parasites hit the few cash crops grown in specialized farms, producers risk a total loss of their harvest. Furthermore, as specialization is at odds with sustainable land and water management, it decreases rather than builds-up soil fertility. And a poor soil structure risks erosion and reduces the soil’s ability to capture water and store carbon. This too weakens the ability of the production system to cope with extreme droughts or heavy rains. Sustainable soil and water management are undisputedly among the most important elements for agricultural adaptation and for the resilience of small producers.

As specialized smallholders must rely on buying their own food from the market, they risk being hit twice by the impacts of climate change. An increasingly volatile and fragile global food production system due to climate change means that small producers face a higher risk not only of production losses, but also of sharply increasing food prices. The volatility of food prices has increased tremendously over the past few years, in part due to harvest losses resulting from climate change. Yet, several studies show that high prices on world markets are seldom passed on to benefit small producers, but they are often transferred directly to consumer prices (see, for example, Jha, 2007; and Höffler and Ochieng, 2009). Thus small producers face the prospect of having to spend more money to buy their food while their incomes either fall or remain stagnant.

Rethinking the economics of developing countries’ food systems

Over the course of the past few decades, various concepts and strategies have been developed that both reconcile agriculture with ecological cycles and at the same time give small producers greater economic stability and make them more resilient. Examples of such strategies include resource-conserving agriculture, agroecology and organic agriculture (see, for example, Altieri and von der Weid, 2000; Pretty, 1995; and Pretty et al., 2006). The FAO has recently called for a significant transformation of the agricultural sector in order to meet climate change and food security challenges. The FAO’s concept of “climate smart agriculture” aims to sustainably increase productivity, enhance resilience (adaptive capacity), reduce GHGs (mitigation), and thus contributes to the achievement of national food security and development goals (FAO, 2010).

However, these strategies mark only the beginning of a sustainable reform of the food system. As they neglect to take trade and economic conditions into account, they risk succumbing to high price volatility, import surges and unregulated competition, as well as to the overwhelming power of food companies (e.g. processors, retailers and distributors.) in the global trade arena. Increasingly, this is occurring even in the newly globalized market for organic produce. As long as market incentives remain unchanged, investments in business-as-usual practices will continue.

A sustainable transformation of small farm systems in developing countries will only succeed if it is integrated into overall agricultural and food development strategies. Issues concerning the agricultural trading system, as one of the major drivers of the existing food production system, need to be linked to the debate on agriculture’s contribution to adaptation and climate change mitigation. Since trade liberalization and export orientation tend to undermine adaptive strategies and encourage input-intensive, “climate-unfriendly” farming, the sustainable transformation of the agricultural sector requires a fundamental rethinking of current trade policies.

The principle of “economic subsidiarity” offers guidance for this transformation (Sachs and Santarius, 2007). Economic subsidiarity implies that economic exchanges in the food system should be carried out preferably at the local and national levels, while exchanges at the continental or global level should have only a complementary function. Economic subsidiarity aims at localizing economic activities whenever possible and reasonable, and is committed to shorter rather than longer commodity chains. Instead of endangering small producers through volatile world market prices and making them the hubs for the extraction of capital, goods and resources, the regionalization of trade flows could serve as a catalyst to spur sustainable development at the local level. It will be successful particularly if production involves forward and backward linkages with other sectors of the local economy, such as with local input providers, processors and traditional retail outlets. If smallholder agriculture is well integrated into the local economy, and rural non-farm employment in the production of off-farm goods and services is stimulated, the regionalization of trade flows will contribute significantly to poverty alleviation and overall economic development (see also, FAO, 2005).

Policies to promote sustainable local food systems

In order to launch a transition towards a (re-)regionalization of trade flows, and to foster short production chains, policy changes are required at subnational, national and international levels. At the national level, first and foremost governments must ensure that they are allowed sufficient policy space vis-à-vis existing bilateral and multilateral trade obligations. This includes allowing governments adequate space to stabilize domestic food prices and protect small farmers from excessive price volatility. Countries also need to be able to implement policies and measures that chart their own defined paths to sustainable agriculture and food systems (see this chapter’s lead article by Li and Khor). Policy space not only requires more flexibility in the use of tariffs, quotas and other border control measures, but also ensuring against constraints imposed by bilateral and multilateral agreements on domestic regulatory competence or on investments which influence the agricultural sector’s production structure.

The main task at the subnational level is to enable small farmers to regain long-term access to their domestic and local markets. First and foremost, this includes policies that go beyond trade, which protect the land rights of communities and their access to basic natural resources, and especially those that strengthen women’s rights and land entitlements. Policies should promote a decentralized rural infrastructure to foster local marketing and ensure that rural and urban areas are sufficiently connected so that the hinterlands become the main suppliers of food for towns and cities. Most importantly, small farmers should be supported in achieving a “critical economic mass” through associative forms of economic activity, such as cooperative forms of production, storing and marketing. Developing-country governments as well as international donors should provide institutional and financial support, including public finances for micro-credit and loan programmes, to foster such associations.

Furthermore, a range of policies that have proved viable in the past could accelerate the transition from conventional to more sustainable farming practices. For instance, penalizing polluters with taxes and levies will induce them to reduce their emissions. Subsidies for fertilizers and pesticides should be abolished, and taxes on fertilizers and other industrial farm inputs imposed or increased so as to accelerate the transition towards farming practices that cultivate on-farm nutrient cycles. Furthermore, governments could foster the development of sustainable agricultural  process and production standards, including standard monitoring and verification schemes. The implementation of such schemes could be supported by low-interest loans for investing in sustainable farming practices, offered by communities, national governments and international donors. If farmers’ training and field schools for sustainable farming practices are supported, and if the capacities of local NGOs are scaled up, this will catalyse further activities in the farming communities and generate local ownership  in the process. Last but not least, communication strategies that provide better information to the public could promote a shift in consumption patterns towards more sustainable and locally produced food items.

The transition towards more sustainable food systems can be further advanced through a set of policies at various multilateral forums. In particular, policies that make long-distance transportation more expensive could contribute significantly to the (re-)regionalization of production chains. Since agricultural trade is very transport-intensive, the expansion of global markets and value chains would not have been profitable if freight costs had been high. In particular, foreign products can compete in domestic markets (e.g. Brazilian chicken legs competing with local poultry in West Africa) only if transport costs are low; otherwise, the lower marginal production costs abroad would soon be negated by higher transport costs. Over and above the rising oil prices that can be expected in the face of the global peak oil scenario, measures to internalize environmental costs in transport prices should be pursued. For instance, the inclusion of air traffic in the European Emissions Trading Scheme has been a first step into this direction. Additional measures could be advanced through negotiations at the United Nations Framework Convention on Climate Change, the International Civil Aviation Organization, the World Maritime Organization and the “Rio+20” Earth Summit scheduled to be held in Rio de Janeiro in June, 2012.

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