Investing in agriculture for food security

Investment in agriculture
According to FAO, in spite of the importance of agriculture as the driving force in the economies of many developing countries, this vital sector is frequently starved of investment. In particular, foreign aid to agriculture has shown marked declines over the past 20 plus years. Foreign aid to the sector fell dramatically, from a total of over $9 billion per year in the early 1980s, to less than $5 billion in the late 1990s. This trend is continuing. Meanwhile, an estimated 854 million people around the world remain undernourished.

Feeding a population expected to swell from 5.7 billion in 1996 to 9.8 billion by the year 2050 will require rapid increase in food production, mostly through increasing output from land already being cultivated. FAO projections indicate that the required gains can be achieved, but only with increased and better directed investment in agriculture and rural development.

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The World Food Summit (WFS) 1996 has set the target of halving, no later than 2015, the number of undernourished people. To achieve that goal the needed total gross investment in agriculture of the developing countries, including primary agriculture as well as storage, processing and support infrastructure, has been estimated by FAO at $180.4 billion annually for the period up to 2015.

The share of public expenditures on agriculture in total government expenditures shows wide variation, with the observations ranging from 0.015% to 23%, and the share being lower than 10% in 90% of the countries for which data are available. Despite the dependence of poor countries on agriculture for incomes and food security, public expenditure for agriculture, whether measured in relation to agricultural GDP or to agricultural labour force, is lower in the category of countries with highest prevalence of undernourishment.

Most of the world's farmers are small-scale farmers. As a group, they are the biggest investors in agriculture. They also tend to have inadequate or precarious access to food themselves. If they can make a profit with their farming, they can feed their families throughout the year and reinvest in their farms by purchasing fertilizer, better quality seed and basic equipment.

Food security
Food security is defined at the WFS 1996 as: Access by all people at all times to the food needed for an active and healthy life. The three key ideas underlying this definition are: the adequacy of food availability; the adequacy of food access, i.e. the ability of the individual to acquire sufficient food; and the utilization of food i.e. equal access to food having nutritional balance by all members in households, particularly in poor households.

Developed countries produce 43 percent or so of cereals while their population is 22 percent or so of the world population. Food insecurity is endemic in the low income food deficit countries (LIFDC) in Africa and Asia. The LIFDCs spend more than 50 percent of their import bills on cereals. Available information suggests that among the LIFDCs, Asian share is decreasing while African share is increasing.

Availability of food grains or even total food does not in itself guarantee food availability for households or individuals. Food insecurity is endemic in poor households in LIFDCs as well as developing countries due to income poverty i.e. lack of purchasing power of the poor households to procure required food from the market at the ruling prices.

There are pockets of food insecurity in even the richest countries because food security at the national level does not mean that every household in the country is food secure. The meshes of the safety net may be too large to prevent some individuals and specific groups of individuals from falling through and government policies in several industrialized countries have tended recently to increase the mesh size. A proportion of the population can be living in absolute, not just relative, poverty.

Bangladesh situation
Since pre-historic days, agriculture has been the main source of livelihood for the vast majority of the people of the geographical area that now constitutes the sovereign Bangladesh. Agriculture has continued to be the lifeline of the economy the country. Farmers themselves are the biggest investors in agriculture. Through their investment and hard labour, they have, in the past thirty plus years, more than doubled the production of food grains (rice and wheat) to feed the nation.

Admittedly, the successive governments adopted policies for promotion and development of agriculture; but the ground realities are that investment to agriculture in the form of subsidy, support services like supplying fertilizer, diesel and electricity for producing agricultural crops, in particular, high yielding varieties (HYV) boro and aman rice, are quite insufficient for this vital sector of the economy. Farmers had to even give their lives for demanding electricity to irrigate their boro crops.

It is a fact that the government has increased subsidy to agriculture sector to some extent in the recent years. Subsidy to agriculture was increased to Tk 1,100 crore in 2005-06 from Tk 300 crore in 2003-04. In 2006-07, subsidy to agriculture stands at Tk 1200 crore i.e. addition of Tk 100 crore only compared to last year. This is quite insufficient when high prices of agricultural equipment, fertilizer, diesel, electricity, etc are taken into consideration. Access to agricultural credit from the financial institutions is cumbersome.

The need for agricultural research can hardly be over-emphasized. The development of HYV rice by our agricultural scientists has been instrumental in the increase of rice production. But our success in other varieties of crops is insignificant. Paucity of funds has been primarily responsible for this. So far, allocations of funds for agricultural research have been 0.5 percent of agricultural GDP against the internationally recommended allocation of at least 1.0 percent of agricultural GDP.

"Despite significant progress in domestic food grain production, poverty and food insecurity problems are massive in the country. Approximately half of the population lacks resources to acquire enough food and consequently remain below the poverty line," says the much-talked-about PRSP.

A recent study by the BIDS in cooperation with the Chronic Poverty Research Centre of the UK reveals that 24 percent population of Bangladesh live in extreme poverty. These are the people who are called ultra-poor, and according Household Income $ Expenditure Survey (HIES)-2000 of the BBS, these wretched people stood at 20 percent of total population in the year 2000.

The important causes for food insecurity in about "half of the households" in the country are: (i) the rate of increase in annual food grain production is below the annual growth rate of population; (ii) availability of other varieties of food such as fish, livestock and poultry, vegetables, etc is much below the demand; (iii) lack of purchasing power of poor households to have access to required food ; (iv) incapability of the ultra-poor comprising the destitute, sick, old and infirm to participate in income generating opportunities; (v) inadequate food safety net programs: (vi) irrationality in intra-house food allocation; (vii) dietary imbalance; and (viii) storage, processing and cooking practices affecting food utilization.

To conclude, food is the most important of all the basic necessities of life, and it is agriculture that produces food. So, there is need for investment in agriculture globally, especially in the least developed and developing countries, for producing more food to drastically reduce malnourishment and hunger globally. Millennium development goals (MDG) include, among others, reducing by half the proportion of population who suffer from hunger by 2015. The observance of the World Food Day will be meaningful if the stated objectives can be achieved.

M Abdul Latif Mondal is a former Secretary, Ministry of Food.