FINDING THE RIGHT PRICE – international food prices in a time of uncertainty
Stu Clark, CFGB Senior Advisor
Is good news for farmers necessarily bad news for hungry people? Three years ago, and again recently, the media was full of stories about skyrocketing food prices and their impact in developing countries. It is widely known that food price increases were the match that set off the revolutions in Tunisia and Egypt. Certainly for those who spend 60-80% of their income on food any sudden increase has serious consequences.
But we have also seen almost three decades when agriculture, in part because of low food prices, has languished both in developing countries and in Canada. Prices that cover the cost of production are an essential element of commercial agriculture wherever it takes place. Right now many North American farmers are having difficulty deciding which of three or four highly profitable crops to produce and governments in developing countries are scrambling to strengthen their own agriculture sector. Some of them are expanding their extension services and agriculture related infrastructure while others are selling/leasing large tracts of land to foreign investors to set up large scale farms.
A recent paper produced by the Foodgrains Bank[1] argues that higher prices are a good thing for both farmers and, in the medium term, even for hungry people but the prices must become more stable and only change slowly over time – they must become less volatile. Higher prices create more employment in rural areas through both field work and related economic activity – a critical need in many parts of the developing world. Even in urban areas, wages will adjust to higher food prices if the changes are gradual.
So the question becomes how to reduce food price volatility. The new paper argues that a combination of policies are needed:
1. For Corn – as long as food crops are being used to produce biofuels, there needs to be policies to reduce the amount of biofuels being produced if the price of food rises too high too quickly. Various options such as variable biofuel mandates, call options on grain for biofuels, biofuel production capacity auctions are discussed.
2. For Wheat – it is well known that wheat prices become volatile when the global stock of wheat becomes less than 70 days supply. If the global stocks stay above this level the prices may move up and down but not rapidly. The paper proposes a new type of international wheat stock based on the principle of a fixed quantity rather than upper and lower prices.
3. For Rice – the international trade in rice is much smaller than other major crops and volatility could be managed with relatively small regional stocks such as currently being developed by the ASEAN region
4. For Soybeans – the volatility of soybean prices is based on a lack of information on soybean stocks, particularly in large importing countries given the concentrated character of global soybean trade. Improved information on global stocks will be particularly important for soybeans but will benefit the international trade in other major crops as well.
Prices are an important part of ensuring a well functioning international food system but increased investment in smallholder agriculture to raise food production and strengthen farm livelihoods is also essential.
FEED, SEEDS & OTHER TOOLS
Vanessa Brown, Logistics Officer
· In the fiscal year 2010/11, we approved $38 million of programming;
- A total of 135 programs were initiated in 35 countries, assisting over 2.3 million beneficiaries;
- $22.5 million was committed for food assistance; $13.5 million was committed for food security; and $2 million was committed for nutrition programming;
- 34,500 metric tonnes of food and seed were purchased locally in 22 countries on behalf of 11 members;
- 22,500 metric tonnes of cereals, 3,250 metric tonnes of pulses, 850 metric tonnes of oil, 6,900 metric tonnes of fortified foods, 600 metric tonnes of other food commodities, and 400 metric tonnes of seeds were purchased locally.
CULTIVATING UNDERSTANDING
James Kornelsen, Public Engagement
Plans are underway to have a People to People visitor from Ethiopia come to visit the Ontario region between the middle of August and the middle of September. By hosting a visitor you can travel to Ethiopia without even leaving your community! A Food Study Tour to Haiti is being planned for last two weeks of November and will visit projects supported by ADRA as well as the Christian Reformed World Relief Committee and Mennonite Central Committee. Find the application form and more tour details at www.foodgrainsbank.ca under Get Involved “Upcoming Study Tours”. Fast for Change increased its’ registrations last year by almost 30% and will again be inviting Canadians’ this fall to consider how we can live with others in mind when it comes to food and consumption.
A HARVEST OF CELEBRATIONS
John Longhurst, Director of Resources & PE
Please see below a sampling of news clippings that have come across my desk which demonstrate the variety ideas and vitality of communities that make the work of your CFGB possible. Thank you!
B.C. auction a success. The tenth annual Make a Difference auction in Abbotsford, B.C. raised $115,000 for the Foodgrains Bank. The sale, held March 24, featured the sale of flowers and tea cosies to kayaks, cheeses, fishing trips, a Vancouver Canucks hockey jersey and, of course, beef and dairy animals. Since beginning the sale has raised over $1 million for the Foodgrains Bank.
Money grows on trees. At least, that’s what happens at the First United Church in Owen Sound, Ont. For the past five years members of the church have hosted a ‘Toonie Tree’ campaign to raise funds for the Foodgrains Bank. From May through October, children in the congregation collect loonies and toonies in Foodgrains Bank baseball caps. The coins are then added to the tree, which, when full, can hold up to $2,000. The ‘Toonie Tree’ is a great example of what people can do to alleviate hunger, says church member Pat McDonough, who built the tree out of plywood and plastic tubes. “We often think we can’t do much with what we have, but everybody giving a little every week can add up,” he says.
Singing for Seeds. Over 300 people packed into the Cardigan, PEI Presbyterian Church April 3 for Sing for Seeds. The concert, which raised $2,500 for the Foodgrains Bank, featured East Coast Music Award Nominees and other performers and choirs. “I have been a member of this church all my life, and I don't remember this group being more excited about an event,” says Kent Myers, Foodgrains Bank Volunteer Coordinator and one of the concert organizers. “It felt wonderful to raise the profile of the Foodgrains Bank, draw attention to hunger issues around the world and share what we have been given by God with those who don’t have enough to eat.”
A JOURNEY TO THE GRASSROOTS OF HUMANITY a brief report of Susan Smith's recent trip to Ethiopia was also included in the newsletter. Susan's full report can be seen in an earlier posting on this blog.
ATTEMPT UPDATE
As many of you are no doubt aware, a group of Foodgrains Bank supporters are attempting a world record soybean harvest. Donations in time and inputs have been generous and 37 combines have already signed up.
The committee is now working with the grain industry to purchase the soybeans at a premium price of at least $20 per bushel. They are also inviting community groups, churches and individuals to support this project by purchasing virtual bushels through a $20 donation. These virtual bushels can be purchased on-line at http://www.foodgrainsbank.ca/harvest_for_hunger.aspx or by mailing a cheque to the CFGB office or Randy Drenth, H4H Chairman, 90010 Fordwich Line, Clifford, ON NOG 1MO
You can follow their progress at
KERNELS
Year End Numbers: The 2010-2011 fiscal year was the second largest in CFGB history. Of the approximate $ 9.2 million in grain and cash donations Ontario contributed more than 1/3. We are, as always, grateful for your continued hard work and generousity and humbled by your trust and support of the CFGB. Words cannot possibly express our appreciation for you compassion for those who are suffering. May you be blessed as you have been a blessing to others.
Annual Trillium Walk
MAY 14, 10 am- 3 pm
Once again Jim & Susan Smith invite people to
enjoy a walk through their woods and enjoy the
trilliums in bloom. They are located at 1107 – 8th Concession Brant Twp., RR 1, Cargill.
Lunch is available and all proceeds will be donated to the CFGB.
Semi-Annual Jubilee Acres Jamboree
MAY 29
Join us for an afternoon of fellowship, music &
dancing. The festivities start at 1 pm at the Knights of Columbus Hall, Hwy 9 south of Walkerton.
Admission is only $4. A buffet dinner will be served about 5 pm. Dinner tickets are available for $13 per person.
If you have a coming event you would like us to include in the summer Field Notes Newsletter please contact us in June. Or contact Emily Cain, Communications Officer, e_cain@foodgrainsbank.ca if you would like to have an event posted on the CFGB web site.
Visit www.foodgrainsbank.ca to sign up for Table Talk, the new bi-monthly e-newsletter.
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