In 2012, the French-Dutch academic network organized a "Young Talent Meeting" on the topic
World Food Shortage: Rethinking solutions, reshaping the future
This event took place in Wageningen in October 2012. I was invinted to collaborate as a French Youg Talent, and contributed to the sub-theme Find ways to combine worldwide production growth and sustainability.
Below is a personnal synthesis on the topic, along with the Poster I made for this event.
Find ways to combine worldwide production growth and sustainability
Vincent Martinet (INRA Economie Publique)
Food is not as any good. As water and energy, it meets a human basic need. Being short on food can cost ones’ life.
Setting the world food shortage issue back in a temporal perspective, the past decades have been characterized by a trend of increasing global production and decreasing prices. This was made possible by productivity improvements on the one hand, and by trade on the other hand (to say nothing about high level of public support to production in some countries). Trade in a context of globalization of agricultural markets led to economically efficient regional production specialization. It generated gains, especially for consumers who benefit from low food prices. In a shorter term, however, the conjunction of high demand and supply shocks due to environmental and production uncertainties results in periodic food shortages in some regions. These shortages are due to the fact that food supply cannot go up immediately in response to prices increase (production is seasonal) and demand does not go down much when prices go up (bellies have to be filled on a daily basis). As a consequence, prices fluctuate and may increase sharply, limiting the access to food markets for some populations, mainly because of poverty. A strong dependence on imports may worsen the situation when export bans or restrictions are unilaterally decided by large producers. Dependence is the counterpart of the gains from trade. In the long-run, the increasing demand in a context of global changes (either environmental, such as climatic changes, or economic, such as the competition for land and agricultural products) is going to exacerbate the tension on the food markets. A necessary response to this challenge is to produce more food. So, how to find ways to combine worldwide production growth and sustainability?
The issue is to sustain (or increase) food production over time while respecting the other environmental and social objectives of a sustainable development. A solution may be to define minimal outcomes (agricultural, ecological and economic) to be sustained over time. These objectives can be formalized by imposing sustainability constraints on the production system and defining a viable development path satisfying all the sustainability objectives over time.
A first challenge is to cope with the vulnerability of some developing regions to food shortages. Life sciences teach us that diversity provides an insurance to resist to shocks and improve resilience of ecosystems. So does the economics of risk, regarding portfolio management. Worldwide food production could be based on regional agricultural systems producing a diversity of goods rather than being based on a worldwide market favoring specialization and economic profitability. Imposing staple food production constraints at regional levels is a way to limit the effect of global supply shocks. Doing so, even if a region is not self sufficient it would be less affected by food crises. Of course, this would increase food prices, but such policies already exist to limit the energetic dependence.
A second important concern is that sustainable agricultural production should account for environmental and ecological conservation objectives for at least two reasons. First, these are sustainability objectives in and of themselves, and agricultural production should participate in the global efforts to achieve them. Second, an agricultural production system relying on healthy ecosystems would be more resilient to environmental shocks. Preserving the ecosystems and biodiversity may require to limiting agricultural expansion and intensification. These constraints would induce an additional cost to food production. There will be trade-offs between the conflicting issues of producing more food and preserving the environment. Here again, the objectives should be defined by a political process at a regional level, accounting for the diversity and specificity of production systems.
Paradoxically, the proposed long-run solutions to overcome world food shortages would come at a cost. Food prices would likely be higher during non-crisis periods than they would be without imposing these sustainability constraints. The resulting production system is, however, more likely to mitigate the effects of crises, and even to reduce their probability of occurrence. In other words, it would be more resilient to shocks. Moreover, higher prices would provide incentives to produce more and would induce technological progress. They may also favor the economic viability of staple crops production systems and their local development against cash crops.
Are we willing to bear that cost? It implies spending a slightly larger share of income on food, and thus reducing marginal consumption on other goods. This is a regular welfare loss, in particular for the regions the more exposed to food shortages. In return, one gets the benefit of limiting food shortages, which are associated to large occasional welfare losses.