World Food Prices

My Lords, I am very new to this brief and have tried to prepare for this event, but I did not work out how many questions there would be. I have done a quick calculation and if I answer them all, they will get 10 seconds each. I thank the noble Lord, Lord Taverne, for initiating this debate and other noble Lords for their contributions. The points they made were extremely important. I agreed with officials beforehand that we will produce a comprehensive response and try to pick up all the points. Therefore, I shall speak but briefly on each contribution. The noble Lord, Lord Taverne, made the point, which the Government entirely accept, that the key to the future is agricultural research. We are committed in DfID to a £1 billion research strategy over five years and £400 million of that will be spent on agriculture. DfID research will support new technologies, including GM and the development of sustainable agricultural practices. The overriding objective is to safeguard human health and the environment. We support the involvement of GMOs only as long as international rules are followed. Our work is targeted at helping developing countries make their own decisions about GM technologies. It is fair to say, however, that we accept the view of the noble Lord, Lord Taverne, that the debate has become too polarised and, while these technologies are probably not a silver bullet, the debate is too important to continue in that way. We should encourage ourselves and the world fully to understand the potentials of these technologies. The noble Lord, Lord Taverne, mentioned the Gates Foundation. DfID supports work with that foundation and the Consultative Group on International Agricultural Research. I am afraid that my expertise—or even my brief, to be fair—does not trespass far into the areas raised by the noble Lord, Lord Grantchester. I accept his general proposition and that of other contributors that agriculture in the UK and worldwide requires a joined-up policy on farming, land, water and, indeed, energy. The noble Lord in part touched on protectionism. The Government are absolutely clear that protectionism in the long term and short term does not contribute to solving this problem. The free movement of goods, particularly food, around the world and the bringing down of trade barriers are the keys to the long-term feeding of the world and the long-term health of its economies. The noble Earl, Lord Selborne, touched on water in particular. The Government support the Commission for Africa report which called for significant increases in investment in irrigation. The work of the Met Office’s Hadley Centre touches on this area. It is committed to improving the granularity of long-term meteorological forecasting in the area of climate change, because it is important that infrastructure is targeted in the right places, and infrastructure for water will never be cheap. It is important to recognise that over and over again you come back to research being the necessary starting point for sensible investment in any areas necessary to address this problem. I thank the noble Lord, Lord Bilimoria, for his input. It was said earlier that the CAP had done some good things over the years but, frankly, it now stands in the way of trade liberalisation. None of us can comfortably live with the very seizing concept of $2 a day for a cow, compared with $1 a day for a person. The Government are committed to as rapid a reform of the agricultural policy as is possible. It is important, however, that we keep coming back to some of the points made by the noble Lord about the importance of moving Western technology to the developing world. World organisations have reacted quite well to this latest shock. The World Food Programme has asked them for more funds; it has received more funds. Although that is still a short-term approach when we must focus on the medium and long term, I think that the developed world's response to the crisis has in many ways been commendable. The noble Lord touched on the importance of science, a general view which we totally support. He touched also on the issue of GM foods. I thank him for his support for the general concept of a rational debate. We are involved with the World Bank, which is committed to increasing significantly its investment in agriculture. It has announced a package of another £1.2 billion for short and long-term initiatives. The noble Lord reasonably asked why we did not see the food crisis coming. My notes say, ““We did””. Well, yes. Last year’s World Bank development report focused on the need to ramp up the investment in food and agriculture. Last year the EU and the World Bank announced plans to double expenditure. The UK led an international response, and the Prime Minister initiated an open letter to the G8 urging a co-ordinated response. I will return to that point. The noble Earl, Lord Sandwich, asked whether the Government are responding promptly to short-term needs. I think that we have. He asked about a number of specific areas, including Afghanistan and Ethiopia. We have reacted in all those areas and will touch on those in our written response. I liked his reference to the World Bank programme and the 10 points. It is crucial to centre on the Doha round; we cannot afford not to be successful there. Although it is a difficult time for the world as we run up to the US elections, much of the world sees the importance of reform. There is no question but that the Government will press this point in the G8. We all must hope for an effective way forward. The noble Earl’s specific question—I shall ensure that it is covered more precisely later—was whether the World Food Programme’s call for exemptions in export bans should move forward. We agree that export bans should be lifted for the World Food Programme and for all food exports. The Government particularly encourage the World Food Programme to buy its food locally. Bans stop that trade. It is by spending money locally that we can keep the local infrastructure healthy. We have responded to food crises, particularly in Ethiopia, where we have specifically focused £25 million for the crisis in addition to our £91 million. This is a safety net programme which we think is particularly important. I shall return to that point. After a general review of the challenge, the noble Lord, Lord Haskins, touched on the issue of bigger and smaller farms. Our experience suggests that, certainly initially, value is created and aid provided if smaller farms are made more productive. We think that the key is not so much changing the shape of farming in the developing world but making it more productive. We certainly agree with his general view that protectionism and trade bans are wrong and that success in the world trade talks is essential. We come back to the basic point that the scientific contribution is one of the greatest contributions that the developing world can make to meeting this challenge. We take a partly contrary view on the issue of large versus small farms because our focus is very much on rural farms, some 80 per cent of which are in poor countries. We think that the priorities are access to better fertilisers and seeds, social protection programmes—a point which the noble Baroness, Lady Rawlings, covered—and improving the quality of the land. The noble Lord, Lord Alton, mentioned the difficult position regarding the Rome summit. Zimbabwe is a member of the Food and Agriculture Organisation and, as with all United Nations organisations, it had the right to be at the summit. President Mugabe did not meet any members of the UK delegation. Zimbabwe is a very sad situation and we continue try to help the people of Zimbabwe with direct aid provided through NGOs. We are sad that that aid activity has for the moment been suspended. The noble Baroness, Lady Northover, covered a number of points. If I answered all of them, I think that it would use up all my speaking time. She made the important historical point that successful agriculture has to come before successful industrialisation. I agree with her that the development of social protection programmes provides a safety net which gives countries the confidence to go forward. I also note her points on gender. DfID’s response is very much one which works through women. In developing societies women are particularly at risk. Conversely, they have a particularly strong capability to bring improvement. The noble Baroness, Lady Rawlings, properly differentiated between immediate aid and longer-term programmes. We agree. However, we should have some confidence that the demands for more money from the World Food Programme have been met. We must thank Saudi Arabia for a very big contribution. However, the real solutions will be found in the longer term through both science and longer-term investment. We have also had a sort of biofuels debate. I do not think that we should throw away biofuels. There have been some adverse consequences, but those have not come without balancing benefits. We initiated the Gallagher review, which has now reported, and for the moment we are at the limit of how much biofuel we intend to use in the UK. Everyone is looking increasingly to the new generation of biofuels which will be much more ecologically acceptable as the way forward. Noble Lords have expressed how difficult this crisis is for the poor. Poor families in the UK notice world food prices more than do others in this country. Around the world, however, 850 million people do not have enough, in some cases spending 90 per cent of their budget on food, and they are really suffering. Some of these people live on 50p a day. I have tried to envisage what that must mean, thinking that 50p must buy much more in the developing world. Sadly, it does not buy a lot more. It means having only one meal a day and spending most of the day looking for food. The Government have been quick to act. The Prime Minister wrote to leaders of the G8 calling for international action to combat the impact of world food prices. By May, the World Food Programme’s emergency appeal had been fully funded. It was a great achievement. However, it was a short-term response. We are also working towards a longer-term solution, and thriving agriculture is the cornerstone of that solution. Food aid saves lives in an emergency. In the medium term, safety net programmes that make small payments to the poorest families on a regular basis can prevent life-threatening famine returning. However, in the longer term, the only solution is to increase agricultural productivity. In some ways, we forget our own history; developed societies have been able to achieve their developed status only by developing successful agriculture, the foundation on which both life and development are built. Increasing agricultural productivity has the highest pay-offs in terms of reducing poverty. Evidence from Asia and Africa shows that, with improvements in agriculture, you also get improvements in other areas of the economy. In Zambia, $1 of additional farm income creates a further $1.50 of income outside agriculture. The green revolution has tripled cereal production in Asia over the past 40 years. Unfortunately, these benefits are not flowing through. Growth is stalling in south Asia and African agricultural growth is still too low. People now have less to eat than they did 30 years ago. At last month’s Rome food summit, the UK called for international action to double agricultural output in Africa, to double agricultural growth in Asia and to double investment in agricultural research. The UK is making a substantial financial contribution to these targets. We have committed more than £500 million to a package of measures including agricultural research and technology development. Safety net programmes are in place in Ethiopia, Mozambique and Bangladesh. This will not be enough by itself, however. The UN has set up a task force to see what is needed. The UK is calling for a global partnership for agriculture and food to take this forward. We want to work with our partners around the world, with the World Bank, the United Nations, international agricultural research organisations and the private sector. We want to work together towards the same goal, and to hold each other to account. Most important of all, however, is our partnership with the Governments of the countries in Africa and Asia whose citizens we are working for. They are ultimately responsible for increasing the food security of their citizens and they must lead these plans. To their credit, African Governments have already committed to increasing the proportion of their national budgets allocated to agriculture and rural development to 10 per cent. Some, such as Ethiopia, have reached that target; others, such as Malawi, are well on their way. The UK supports regional organisations, such as the African Union’s comprehensive African agriculture development programme, to work with these governments. Through this, African Governments are committed to raising agricultural productivity by at least 6 per cent per year. There is much to be done. We are working closely with colleagues, other donors and governments to include international organisations and the private sector. We will use the G8 summit next week to get the backing from the world’s major economies for the international response. I thank the noble Lord, Lord Taverne, for initiating this debate. It is gratifying to have consensus that there are things to be done, and that we are willing to commit the resources to do them. The House properly holds the Government accountable for how we do that but it is good to be in a place where we all share a common aim.