Food Rights and Responsibilities: Life in a Time of Food Price Volatility.
Findings from the Second Year of Research
Oxfam, IDS (Institute of Development Studies)
The gradual globalization and liberalization of international trade did not produce the expected results in terms of poverty and food insecurity reduction. The hyper-volatility of food prices has led to the creation of “under-development traps”, which impact the development momentum of LDCs, and specially undermine farmers, who account for over 70 percent of the workforce in these countries.
A four-year study conducted jointly by the NGO Oxfam and the IDS on the impact of food price volatility on daily lives highlights the reality of food rights in the field. The defenseless populations in LCDs are living the consequences of this price volatility context on a daily basis––such as the impact on family, professional and social lives––in spite of a general impression of lower prices. In fact, despite downward price variations, prices remain high compared to previous years. And the only thing we can certify today is the volatile nature of global agricultural and food markets.
In such environment, this new overview, which we are excerpting below1, brings to light the lack of public responsibility and the inability of markets to meet these challenges.
Yet, fighting volatility and food insecurity requires promoting a global governance system based on agricultural market regulation as a prerequisite condition to development. Just as for energy and water, the agricultural sector is highly strategic, and will undoubtedly be a source of conflict and a subject of power challenges.
momagri Editorial Board
Global and national food prices
Help Yourself! Builds on findings from last year in an increasingly vivid picture of how people live in a time of food price volatility, and the implications for human wellbeing and development. Last year’s report, Squeezed, argued that while food price changes no longer came as a shock, their cumulative adverse effects meant relentless pressures on home life, work life, and social relationships. With the memory of global price spikes so fresh, even the prospect of rising wages (more in some countries and sectors than others) is not enough to ensure people feel properly food secure; gnawing food insecurity and the sense of never getting better off lingers.
The weakness of public accountability for food security would matter less if people felt that markets were doing the job of guaranteeing access to good food. However, complaints about volatile and rising food prices continue to be a feature of everyday life according to the research from 2013. This will surprise policy makers; in world markets the overall impression was of falling prices, improving stock levels, and (perhaps premature) optimism that price volatility that has been so marked since 2006 – was coming to an end. Both the FAO and World Bank composite indices show average global food prices were lower in 2013 than in 2012 or 2011. Generally favourable weather conditions and stock levels, particularly in the main exporting countries, kept staple prices down. Soya bean was the only major food commodity group for which prices rose. It helped that oil prices, a major driver of higher prices in previous years, did not rise much overall, and fertilizer prices dropped. But even with such favourable conditions, world food prices remained high in real and nominal terms. By the end of 2013 the FAO and World Bank indices were still only 14 and 17 per cent below their all-time highs.
National market prices partly reflect these shifts towards stable and lower prices compared to recent years. Prices are still high compared to pre-2006 levels, but FAO national figures indicate they moved only slightly in 2013 in most of the countries in this study. However, local prices reported in the research communities were often high, increasing and unaffordable. Global, national, and local prices may diverge because:
• International price data focus on staple carbohydrates, but diets include sources of protein, fat, and micronutrient-rich foods;
When we look at food and consumer price indices (CPI), we get a picture that contrasts starkly with the global panorama. Both food and general consumer prices have increased in all the ten countries since early 2012, particularly in Ethiopia and Pakistan. Only in Bangladesh did food prices rise more slowly than general consumer prices.
• Official data sources often monitor wholesale rather than retail prices – as recorded in previous years, people believe that retailers can, and do, raise prices regardless of underlying costs;
• Idiosyncratic and localized factors such as weather events influence local market prices;
• Local markets are integrated into global markets to different degrees, so the level of price transmission from global and national markets to local prices will be uneven (as was discussed in more detail in last year’s report, Squeezed).
1 The entire document is available from: http://www.oxfam.org/sites/www.oxfam.org/files/rr-help-yourself-food-price-volatility-year-2-050614-summ-en.pdf