The lasting solution to food security
By Taro Aso, Prime Minister of Japan
6 July 2009
Food security will be the highlight of discussion when the heads of 27 countries and 11 organisations meet on Friday on the occasion of the G8 L'Aquila Summit. I expect substantial progress be made, particularly on aid to countries affected by the food crisis, delivering the commitments of the last year's Hokkaido Toyako Summit. In L'Aquila, I will be making a new proposal to promote responsible foreign investment in agriculture, in the face of the so-called "land grabs" - the growing trend for large-scale investment in farmland across the developing world.
A year has already passed since this phenomenon first gained attention; meanwhile new land-related deals continue to hit the headlines and international organisations have published reports. The UN special rapporteur advocated the need for principles, and the African Union discussed the issue at its summit last week. What is needed now is a leadership to rally the concerned parties to work together and frame a coordinated global response. Actions must be taken without delay. Japan, as the world's largest net food importer and a major donor in agricultural development, believes it has a role to play.
Global food security has predominantly been understood as a question of distribution. Food supply has been taken for granted in countries of the North thanks to the relatively stable market situation that prevailed over the past decades. Meanwhile, for large swathes of the developing world, food shortage has been a chronic problem for decades.
However, the inherent uncertainties about the supply-demand situation were brought home to us by the recent price spike and ensuing outbreaks of social unrest across the continents. Export restrictions imposed by grain exporters raised fears among importing countries that they could no longer rely on world food markets and provided the immediate cause for a rush to land seizure. At the same time, the magnitude of the price surge poses a grave threat to human security; globally, the undernourished will soon surpass 1 billion mark.
Is the current food crisis just another capricious vagary of the market? If anything, evidence seems to suggest that we are in the midst of a tectonic transition into a new equilibrium, reflecting the economic, demographic, climatic and ecological reality of the new millenium.
If that is the case, food security can no longer be just a matter of famine relief efforts or development aid. The question must be re-addressed: how can we expand food production beyond the traditional boundaries, both economically and geographically, in order for the entire world to live sustainably? Japan's cooperation with Brazil over the past three decades to transform Cerrado, an arid semi-tropical region of Brazil, into one of world's most productive farmland is a prescient milestone.
It is in this context that we should be assessing the investments in farmland across the developing world. The heart of the matter is, we should see this not as a zero-sum but as a win-win situation. In addressing risks and opportunities posed, Japan advocates a comprehensive approach to enhance agricultural development through increased investment while mitigating negative impacts that may accrue therefrom. We think a regulatory approach is not desirable, as it may suppress benign investment.
There are three basic perspectives to approach this issue. Firstly, investment will be the only viable solution for a sustainable future. Goodwill charity and generous giving alone cannot be a lasting solution to food security. President Abdoulaye Wade of Senegal called for "help to stand up policy, a help for self-assistance." Responsible agricultural investment, which Japan champions, is based on the same philosophy of self-help, supporting recipient countries to raise food self-sufficiency and develop a strategy to achieve economic growth through renovated agro-industries.
Secondly, international agricultural investments, particularly when sovereign interventions are made, must be transparent and accountable. The Japanese government is currently working on its own codes of conduct, which will be the part of our public-private partnership strategy to be announced shortly.
Thirdly, since lasting investments will in the final analysis be driven by the market, we must work to restore confidence in the market and trade, taking into consideration the concerns of food-importing countries prompted by the proliferation of export restrictions.
Embracing these perspectives, Japan believes that a set of principles for investors and recipient governments should govern international agricultural investment to promote responsible behaviour and sustainable farmland resource management. The principles should be legally non-binding but have a flexible methodology for monitoring adherence. In our view, they should include, among other things:
a) Transparency and accountability
When investment deals include large-scale land acquisition or leasing, investors should ensure that key stakeholders, including local communities, are properly informed about the project plans and their possible consequences. Agreements should be subject to public disclosure.
b) Respect for rights and benefits of local population
Investors must respect the rights of local people affected by investment projects, in particular land rights including common property rights. They should also ensure that the benefits arising from investments are properly shared with local communities in the form of employment, infrastructure, skills and technology transfer.
c) Developmental and environmental impact assessment
Investment projects need to be integrated into recipient countries' development strategies and environmental policies. To this end, there should be impact assessment and monitoring.
d) Food security
Investors must take into account the food supply and demand situation and agricultural-food policies in recipient countries. Foreign direct investment must not aggravate local food insecurity.
e) Market principles
Deals for land and products should adequately reflect fair market values. Trade arrangements must adhere to the WTO rules.
Japan will work with key partners to develop a global platform to agree on the principles and compile relevant information and good practices. The process of forming the platform will be open and inclusive, expanding on the ongoing activities of organisations such as the World Bank, FAO and the AU. We propose to invite interested parties to meet on the occasion of the upcoming UN General Assembly in September. We need a grand coalition with a common vision, for our interests are all entwined.
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