Overcoming the World Food and Agriculture Crisis through Policy Change and Science

Today’s acute world food situation is shaped by volatility of food prices, low growth in agricultural productivity, and severe constraints on access to investment capital for agriculture. The sharp rise in global food prices in 2007–08 severely undermined the nutrition security of the poor, provoked social and political instability, and increased competition for already limited natural resources. The crisis, however, also renewed the focus on food and agriculture in national and global agendas, after decades of policy neglect and underinvestment in agricultural science, rural infrastructure, and rural institutions. India has responded particularly strongly to the challenges in the world food system with policy actions that will be discussed here in a global context. Many studies have shown that spending on agricultural research and development (R&D) is one of the most effective types of investment for promoting growth and reducing poverty. For example, for every 1 million rupees spent on agricultural R&D in India in the 1990s, 323 poor people were lifted above the poverty line (Fan, Gulati, and Thorat 2008). Yet global investment in R&D has been stagnating, and current levels are hardly suffi cient to work at the frontiers of science. This past underinvestment is now evident in the slow response of agricultural production in much of the developing regions to surging food demand and in the failure to prevent food price volatility. To serve as long-term insurance against emerging risks, including climate change, R&D investment needs to be ahead of the curve. Now that the global fi nancial crunch and economic slowdown are letting the air out of the food price bubble, concrete policy changes and investments must be made to overcome the food crisis and allow the world food system to face new challenges and respond to new opportunities. As policymakers consider policy and investment options, the following patterns of consensus, and lack of consensus, are evident: First, there seems wide agreement that innovations in agricultural practices and science have crucial roles to play in boosting agricultural growth, coping with and recovering from the current world food crisis, as well as preventing similar crises in the future. Second, there is also broad agreement that science alone cannot change the world food situation, but that institutional innovation and change must facilitate farmers’ profi table use of science and technology by reducing the transaction costs of gaining access to innovations and the impediments to selling the increased production in better market conditions. Third, however, there is little agreement about the best designs of these institutional arrangements in specifi c contexts: for instance, scales in farming and food industries; contract and cooperation choices; roles of public and private sectors along the food value chains; market and trade arrangements; taxation, subsidies, and pricing; public sector actions in agriculture at central or local government levels; and civil society’s roles. Fourth, it seems that—although there is underinvestment in food and agricultural science and technology—innovation in institutional arrangements are lagging behind even more, and hinder progress in the use of technology and in reducing hunger through public and market-based actions. This paper focuses on these issues and how they may be addressed. An international perspective is taken here, with some focus on South Asia’s rich experiences. The discussion of these issues is connected to a policy proposal to overcome the world food and agricultural crisis, composed of three sets of needed complementary actions: