What are these lessons?

We have to make sure hard lessons are learnt from the global food crisis. If not, the next crisis is only a matter of time. UNCTAD Secretary-General Mr. Supachai Panitchpakdi High-level meeting on food security for all Madrid, 26 January 2009

A crisis may be exacerbated by speculation on the commodities and financial markets

First, the effects of speculation in commodity markets, which is increasingly recognized as having played a major role in the build-up of the price bubble in summer 2008, must be urgently addressed. As we learn more about the precise origins and mechanics of the global financial crisis, as well as the interrelated nature of investors´ portfolio decisions, the need for greater regulation of global financial markets is increasingly well understood. Taking into account the devastating effects that speculative inflows into markets for basic commodities can have on prices, and thus affordability for the poor, the need for improved regulation and protection seems even clearer in the case of commodity markets. More work is needed on how best to achieve this aim without being overly disruptive of healthy trading activities. Trading companies and other private sector entities can help design such a system.

Countries that depend exclusively on imports for their food are extremely vulnerable - a lesson driven home by the export restrictions imposed by some food-exporting countries last year

The second lesson is one that was painfully learnt by many food-importing countries during the crisis: that even if it appears that basic food products are available on world markets at low prices, it does not pay to ignore your own agricultural production capacities. As prices shot up, food-producing and exporting countries began imposing export bans, and the prevailing mood was one of "each man for himself". While this caveat is not meant as a call for self-sufficiency, it is an important thought to bear in mind, also in the context of the current thinking on policies for domestic production of essential food products.

Persistent agricultural subsidies in the developed world are distorting international food prices and discouraging production by farmers in developing countries

The third lesson that ought to be highlighted is the need for increased and sustained investments in agricultural production, extension services and infrastructure. As is now widely accepted - even if not always acted upon - it was the relative neglect of the agricultural sector in many developing countries, especially in Africa, that caused productivity to decline and supply capacities to wither away. Just consider that Africa as a whole used to be a net food exporter as late as 1988, but has since become a net food importer. UNCTAD research has also shown that in the least developed countries, the agricultural sector was actually more productive 50 years ago than it is today. The reasons for this must be sought not only in the dwindling availability of arable land, but also in the competition from subsidized food exports from developed economies; the abolition of institutional support measures, such as extension services or subsidies for farm inputs; and declining aid and investment, including for agricultural research and development.

The greater emphasis now being placed on official development assistance for social development and humanitarian aid, while clearly justified, has resulted in less aid going to the productive sectors and agriculture, with devastating effect

In recent years, assistance from both bilateral and multilateral development partners has been directed towards social sector and emergency aid, while minimizing investment in productive sectors, such as agriculture. Between 1980 and 2002, for example, multilateral institutions cut official development assistance spending on agriculture from $3.4 billion to $0.5 billion (a decrease of 85 per cent). Bilateral donors reduced spending from $2.8 billion to $1.7 billion (a decrease of 39 per cent).

All of these factors must be addressed if we are to help developing countries build their production and supply capacities in agriculture and guarantee not only greater resilience in crises but also improved food security in the long term.