Resist the farm lobby, invest more in research: economist | Asia Pacific

Resist the farm lobby, invest more in research: economist

Resist the farm lobby, invest more in research: economist

Updated 5 February 2014, 14:26 AEDT

An authority on agricultural production has warned against governments boosting rice prices, to keep the farming lobby happy.

In a keynote address to the Australian Agricultural and Resource Economists Society, Professor Peter Warr stressed that food is not a 'normal commodity' and therefore cannot be substituted or traded for political purposes.

Professor Warr says evidence indicates that expansion of agricultural output through research is linked to reducing hunger and under-nourishment.

Presenter: Sen Lam

Speaker: Peter Warr, John Crawford Professor of Agricultural Economics at the Australian National University, Canberra

WARR: Food is not just one more good (product), it's a commodity for which there's no substitute. So it doesn't matter how much you have of other stuff, if you don't have enough to eat, then you're in serious trouble and in the long term, if you don't have enough to eat, you're going to die.
LAM: So are there signs that nations are ignoring this fact, that there might come a time when some countries might no longer be able to feed themselves?
WARR: Yes, the point that has really been neglected long term, is that in order to overcome the problem pointed out by Thomas Malthus more than 200 years ago, that is, that  we're going to run out of food and starve long term. The way to overcome that is to invest in agriculture, to invest in infrastructure that's needed for raising productivity in agriculture, and in particular, to invest in agricultural research. 
Now, in the recent decades, that's been neglected. There's been insufficient investment, particularly in agricultural research, that's my point.
LAM: And what are the signs in our region - the Asia-Pacific region - are countries producing enough food?
WARR: Well yes ..  hunger has declined in Asia, in fact of all regions of the world, the number of hungry people has declined in Asia over the last 20 years, but in the rest of the world put together, the number of hungry people has actually increased, particularly in sub-Saharan Africa.
Now the Asian countries, particularly China and some other countries of Asia, have invested in agricultural research, but many have not. 
And Western countries, Australia, Canada, United States, they have invested insufficient in agricultural research to maintain the growth of agricultural productivity long term.
LAM: What about countries like Thailand and Japan, where rice production is intimately linked to politics, where the farming lobby is strong. What impact does it have on food affordability and food security?
WARR: Right. Well, I think that is a very important question. 
What the politics has done in Japan, Korea and increasingly in other Asian countries is to approach the problem of agriculture and food, through raising the domestic price of food within the country. Part of the reason for that is to assist domestic farmers. 
What's problematic about that is that when your approach to agriculture is by raising domestic agricultural prices, you raise the cost of food to poor consumers within the country. So although you help large numbers of poor farmers, that's true, you also harm larger numbers of domestic consumers.
LAM: So you're saying that such interventionist actions can have a negative impact on food security?
WARR: Yes, indeed. It certainly assists farmers and that's why the governments do it, that's why the Thai government has this rice pledging scheme. It's to assist the poor farmers who are one of its major sources of political support.  But it does so, in the Thai case, at the cost of huge subsidies that have to be borne by the government and at the cost of domestic consumers within the country, because they have to pay more for rice within the country. 
And this is also the policy of other South East Asian countries. Indonesia increasingly is going down that same path.
What I'm trying to distinguish is two ways or raising agricultural production, one, you raise the domestic price and encourage the farmers to produce more, but that raises the cost of food to consumers. 
The second, you improve the productivity of domestic agriculture - that enables you to increase food output, without raising the domestic price.
LAM: But that higher price for the farmers.. does that not also result in a stockpile? So surely that's good in terms of food security, to have a store of rice grain?
WARR: Well, Thailand's problem is not food security. Thailand has a massive stock of rice as you correctly point out. Some estimates have put it as much as 20 million tonnes of rices now in storage in Thailand. They don't know what to do with it. They're major exporters of rice. But  there is a problem of making rice affordable to domestic consumers and their policy goes against that.
LAM: Do you have a message for the governments of the region, in terms of securing a future where malnutrition and hunger can be addressed?
WARR: My main message is that the important thing is to raise the productivity of agriculture within your country, so that more food can be produced without raising the domestic price. 
I do not think that the approach of raising agricultural production through increasing the price within the country is the right policy, because of the harm that it does to domestic consumers. It lowers the food security of domestic consumers when you raise the domestic price, that's my point.

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