Global Food Security

Jeremy Lefroy Excerpts

Thursday 9th January 2014 Westminster Hall

[Jeremy Lefroy (Stafford) (Con)]

It is a pleasure to serve under your chairmanship, Ms Clark. It is also an honour to follow the hon. Member for Edinburgh North and Leith (Mark Lazarowicz) and the Chair of the Select Committee, the right hon. Member for Gordon (Sir Malcolm Bruce). I would like first to declare an interest: in Twin, of which I am a director, an organisation that has pioneered the promotion of fair trade in the UK, and in Equity for Africa, which makes social impact investments in businesses, largely in Tanzania, some of which are agricultural producers.

As the Chair of the Select Committee said, global food security concerns us all. It is not just about developing countries. It concerns us all because, as the Prime Minister has said, in a world of plenty,

“a billion people around the world do not get enough food, and undernutrition holds back the growth and development of millions of children.”

The issue also affects us right here. The right hon. Member for Gordon has already referred to what happened in 2000, when we were on the edge of a food supply crisis as a result of the fuel strike. Shortages on the other side of the world raise prices here too, and when families are living at the edge of their budgets, as many do, an increase in the price of food cannot be accommodated.

I welcome the renewed emphasis that the Government have placed on supporting agriculture throughout the developing world, including enlarging the remit of the Commonwealth Development Corporation—now called the CDC—to look again at direct investments in agriculture. The CDC was a pioneer in investing in agriculture after the second world war, and many of those investments are still very productive, employing a lot of people in developing counties. The CDC rather lost its way on the issue of agriculture 15 or 20 years ago, so I welcome the return to its roots, along with investment in infrastructure and many other areas in which it has recently become successful.

Food security must be taken more seriously by all Governments, not just those whose people live daily with the consequences of shortages. We recently saw an example, to which both previous speakers referred, of a lack of seriousness when the European Union failed to introduce a food-based biofuel cap of 5%, which I believe the Government support and that was recommended by the Select Committee. Using precious land to grow food that is then inefficiently converted into fuel costs a lot of money in subsidies and pushes up food prices globally. As the Government support the cap, I urge them to call on EU member states to do the same, and as rapidly as possible.

In 2008, the sharp rise in the price of food arising from shortages led to hunger, hardship and civil disturbances in many countries. At that time, the world managed to rouse itself from its complacency and slumber, and took some important steps. The G20 formed the agricultural market information system, which includes the G20 plus Spain and seven other major agricultural exporters and importers, and of which the UK Government are a very active supporter. It analyses data on production, consumption, prices, stocks and trade and uses that analysis to prepare short-term market forecasts, which have made a great deal of difference. It also has a rapid response force, which meets as often as is necessary—I read “annually”, but I hope it meets more often than that, as it is supposed to be a rapid response force —to discuss policy co-ordination, which is vital. Given that one reason for the food price spike in 2008 was misinformation about the level of stocks in China, the system is a significant step forward and has helped to lessen the impact of more recent crises. However, we need more than information and policy about food supplies; we need action to react to crises.

The 2011 decision by the G20 to remove export bans or special taxes for food purchased for the World Food Programme was welcome. As the report makes clear, however, the hasty imposition of export bans still happens and makes difficult situations worse. This goes slightly beyond what the report says, but I would recommend that, led by the G20 and the United Nations, the World Food Programme should put in place plans with every state in regions likely to be affected by shortages, so that if a neighbouring country faces a crisis, countries could allow food to go where it is needed—instead of closing their borders for exports—in the full and confident knowledge that the World Food Programme would immediately support them with additional stocks if necessary to avoid a crisis for their own people. Export bans are based on the fear that a country’s own people will face shortages. That fear would be unfounded if the World Food Programme had definite plans in place, together with Governments, immediately to replace those stocks.

That brings me to the contentious issue of stocks, an issue about which the international community retains its worrying complacency. Our report recognised that

“maintaining large-scale food stocks can sometimes be problematic and costly”,

but we said that we believe that

“there may be a case for judicious use of stocks to relieve the tightness of markets.”

We recommended that the Government conduct further research, in particular to consider

“under what circumstances it would be appropriate for a national government to pursue strategic stockholding for national food security purposes.”

That was a modest but important recommendation that was rejected by the Government, who perhaps misunderstood what the Committee was really suggesting. I sometimes think that Governments—I am not referring to the UK Government—should take some time to read the book of Genesis to see what Joseph did during the food crisis that affected Egypt for many years. He suggested that emergency stocks be built up, which saw the country through a long period of famine.

Our proposal was not to manage prices on a day-to-day basis, in a way that would lead to the failed grain mountains and wine lakes that the Government response implies we were suggesting; it was specifically aimed at emergencies and food security when prices rocket. Indeed, the Government’s response states:

“Evidence suggests that emergency food stocks, which do not attempt to manage prices but provide food to the most vulnerable at times of crisis, are a more effective way of improving food security outcomes in developing countries.”

That is precisely the point. I do not believe that there is such a marked dividing line between stocks for emergency purposes and stocks to relieve pressure on prices. In countries where the cost of food forms a major part of household expenditure, a sharp price rise is a food emergency, because it means that an ordinary person without much money cannot afford to buy food, which makes the situation almost like a famine, even though food is around. This is such an important matter that I ask the Government to look again at their response. Later in their response, they made a sensible reply to our recommendation about emergency food stocks. I ask the Government to combine the two responses and examine how we can improve the world’s view, and particularly the UK’s view, about the handling of food stocks.

There have been major improvements in how crises are handled locally. The World Food Programme’s purchase for progress scheme, which aims to procure much more food regionally and locally, rather than shipping it in, is eminently sensible. It supports local food producers and does not distort the market. It enables countries to continue their normal way of life while helping to tackle a local or regional problem. Cash-transfer and voucher-based schemes, such as those already referred to in Ethiopia and elsewhere, are also effective, and the Department for International Development is rightly regarded as a world leader in such schemes. I commend those who are developing and implementing those programmes.

Two decades ago, development agencies substantially withdrew from programmes supporting agriculture, particularly small-scale agriculture, and it was left to non-governmental organisations and national Governments. It was thought that agriculture was perhaps a business of the past, that the problems had been solved and that they could concentrate on other areas. That was a big mistake, so it is good to see DFID once again strongly supporting investment in agricultural research and productivity.

As the hon. Member for Edinburgh North and Leith mentioned, the fair trade movement has made a significant contribution. Although it has concentrated on the cash crops, starting with coffee, cocoa, sugar and others, it has supported smallholder agriculture throughout the world. Let us not forget that most of the production of those smallholders is usually for their own local consumption of food crops, in addition to the cash crops that they have grown. We can rightly be, if not proud, then satisfied that the UK is now the world leader in fair trade in terms of volume of sales. It has adopted a pragmatic approach to fair trade, which is not viewed as an ideological subject, but one that promotes good quality and the interests of producers. That is why supermarkets have taken it on board. In other countries, the fair trade movement has perhaps rather shunned supermarkets and has hence deprived the smallholders of extremely large outlets for their produce. I reiterate my call for the Government to put their full weight behind Fairtrade fortnight in a few weeks’ time, because it is important that we do not lose the initiative that has driven the movement for the past 20 years to the position it now holds in this country.

We also need to recognise, as was said earlier, that smallholders do not fit into one category. They can be farmers with an acre or two, or they could have 10 or 20 hectares—in fact, we have many examples in this country that might be regarded as smallholders in developing countries around the world. They are not uniform. As my right hon. Friend the Member for Gordon, the Chairman of the Select Committee, said, this is not just about farmers subsisting in the bush. Many of them are substantial businesswomen and businessmen in their own right; they just happen not to have large expanses of land. At the heart of the matter is the ability or confidence of farmers to know that they own their land and have the rights to it in law.

I welcome the Department’s work on land tenure and rights, which are often fragile or non-existent. In 2011, the Select Committee saw the programme in Rwanda, which has now documented almost the entire country as far as leases or freeholds are concerned. As a result, everyone owning land and the millions of small farmers—men, women and families—know that they own the land, can develop it and are not at risk of having it arbitrarily seized. In addition, if they need to develop the land and have a good business case, they can go to a local bank and secure borrowing on it to increase, we hope, their incomes. DFID has also supported such work in India, Nepal and Mozambique. I hope the Department will extend that support to other countries, because it is rapidly building up world-leading expertise in land registration for smallholders. Indeed, I would go so far as to say that this is one of the best possible uses of UK taxpayers’ money that I have seen in DFID.

There is also the question of water resources. Water is a huge problem, and helping to discover and make best use of water resources is one of the greatest gifts we can offer. I therefore welcome the work being done to help countries to identify their vast underground water resources and exploit them for the benefit of the poor. I welcome the Unlocking the Potential for Groundwater for the Poor research programme, which is supported by DFID.

Rural infrastructure—irrigation, storage and rural roads—improves both pre and post-harvest production. The International Development Committee saw that in the Congo, where a 400-km earth road financed at a relatively reasonable cost by DFID meant that a journey that used to take about five days now takes two hours. Agricultural production can therefore be brought to market in a city such as Bukavu. Previously, that would not have been possible, and produce would have rotted on the way. Infrastructure should of course largely be the responsibility of national Governments, so I am glad that the UK is now supporting the comprehensive Africa agriculture development programme. The work can be done locally, perhaps with technical support from the UK, so will the Minister update us on any progress made on that programme?

Ultimately, agriculture is a business and a livelihood—something that brings in an income for hundreds of millions of people around the world. It is perhaps the business or livelihood in which more people are employed around the world than any other. That is why—given that over the next decade, according to some figures, we will have to create 1 billion new jobs globally, both to tackle current unemployment and for the new entrants into the labour market—agriculture is vital, because agriculture creates jobs effectively. In terms of investment, it is one of the most productive means of job creation.

I welcome the new FoodTrade initiative announced last year, which boosts UK investment in African regional staple food markets. Again, that could play a significant role. Will the Minister update us on how that is going? It is important that such initiatives, once launched—sometimes with great publicity—are followed through and are not left on one side, as can be the case on occasion.

Time and time again, speakers in previous debates have brought up the question of world trade in food products, which must open up. It is a great disadvantage to developing countries that their products do not have proper access—certainly not duty-free access—to many of the world’s richest markets. That is simply not acceptable in the modern world. By opening up the markets, we would see developing countries, which have a huge competitive advantage in agriculture, able to exploit that competitive advantage much better than they can at present, creating jobs, wealth and incomes for their people.

Climate change was touched on in our report. We did not have the time, space or, indeed, remit to go further than to say not only that it impacts upon food security, but that agriculture can make a massive contribution. On the one hand, I have seen for myself the effect of climate change on crop production—changes in the types of crop that can be grown, sometimes to the detriment of crop volume and productivity. On the other hand, agro-forestry can make a huge contribution to the world, although we do not place quite enough emphasis on it at the moment. Many countries are beginning to look into it as a means of job creation, resisting and countering climate change, and encouraging carbon sequestration.

Compared with a decade ago, and certainly two decades ago, the seriousness with which DFID and others treat agriculture has increased remarkably. That is welcome, but it comes not a moment too soon. A couple of hundred years ago, Malthus was wrong in his predictions, because the world woke up to the importance of improving productivity, investing in research and cutting protectionism. We can still prove the Malthusians wrong again, but only by doing the same: by investing in research to improve productivity and by cutting protectionism. DFID is doing a lot, if not most of that. It is not doing all of it—I have pointed out areas where there must be improvement—but it is doing most of it. I urge the Minister to keep going in the right direction.

--- Later in debate ---

[Lynne Featherstone]

I am coming to that. I have a whole list of points to get through. My right hon. Friend the Member for Gordon (Sir Malcolm Bruce) asked why it was that only 14 countries are in the programmes when there are 29 DFID countries. I hope to get to that.

The Government believe that functioning markets are a better way to manage food stocks than Government interventions. The hon. Member for Stafford (Jeremy Lefroy) made a number of points that went above and beyond the recommendations made in the report. One idea he mentioned was the World Food Programme holding universal stocks to improve availability. He also mentioned involving neighbouring countries and so on. As he said, those ideas go beyond the report’s recommendations. The evidence we have is that universal stocks are not the most effective use of money.

I will not return to the cap as an example, because it is clear that Members did not favour that view, but Malawi, for example, has recently had food shortages. They hold stocks, but when push came to shove and they looked at their grain stock reserve, it was not as high as they thought. Much of it had disappeared. There are a number of issues outside of simply whether stocks are held for emergencies. We do not have the evidence to say that that proposal is an effective use of money, but my experience is that a whole range of unintended consequences come from stockholding.

[Jeremy Lefroy]

I fully understand what the Minister is saying and agree that this is not an easy area. We received evidence from the deputy director-general of the Food and Agriculture Organisation. He said:

“The experience of the price spike and the impact of that in various countries related in large measure, in India and China in particular, to the ability to cushion the impact on their population by providing access to food at a lower price because of their grain reserve policies. Certainly in the 2008–09 experience, the impact on poor consumers in India and China was much less than it was in countries in Africa, for example, without the same capacity to do that.”

That is the basis of what we were saying.

[Lynne Featherstone]

I understand that there are differing views, but DFID does not have sufficient evidence and the evidence that we do have shows that attempts by Governments to manage price levels through public stockholding have not been effective in achieving food security objectives. For the moment, we will have to differ on this issue.

The issue of targets for food waste was mentioned. Our experience shows that the voluntary approach is effective and has allowed businesses to reduce waste and become more efficient. The hon. Member for Wirral South asked at what level we would change that. The Department for Environment, Food and Rural Affairs has worked successfully with industry on a voluntary basis through the Courtauld commitment to reduce supply chain food and packaging waste by 7.4% over the past three years. Household waste is down by even more: 15% since 2007. Our approach is having an effect and there is not an ultimate target where we will suddenly change horses. We agree that waste is a big issue and we are working through these voluntary mechanisms, which appear to be working.