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Food security efforts should focus on energy independence, not food or energy subsidies

Countries that rely heavily on food imports and foreign oil are particularly sensitive to food price spikes, which helped catalyze Middle East and Bolivia unrest (see Middle East unrest holds lessons for South America: indicators for political vulnerability) Such dependence limits the government’s ability to shield the poor, which is a short-term strategy regardless. Investing in agricultural innovation and energy strategies that don’t rely on subsidies will be key for long-term stability.

Gonzalo Alcade of FORO writes,

“Sensitivity to global food prices…appears to be true of any country, like Bolivia, that suffers entrenched poverty and relies heavily on food and fuel imports. The confluence of these factors severely limit a governments' ability to shield the poor from rising prices, leaving such countries open to social unrest. In both Bolivia and the Middle East, protests against food prices quickly expanded to target other longstanding social and political grievances

In a turbulent global context, food prices are becoming more volatile9 (see figure 1) and evidence points to a long-term increase in food prices. However, rising food prices will affect South American countries in different ways. All countries now must carefully examine their food security strategies and adjust them to the reality of higher and more volatile food prices.

Food and energy subsidy schemes that benefit millions of poor citizens may only be useful in the short term and are likely unsustainable in the longer term; unlike oil-rich countries, most other nations cannot drain their international reserves indefinitely.

Implications

Instead of subsidies, governments should focus on long-term investment in agriculture and pro-poor policies.

Therefore, just as governments must address inequality, employment, and poverty through adequate economic and social policies, they must address food security with long-term policies investing in agricultural productivity and innovation. These policies must aim to protect not only the extreme poor, but also the millions of people whose living standards have improved with economic growth but are still vulnerable to poverty.

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Sources:

FORO March 2011 pages 4-5:
http://newsletters.clearsignals.org/FORO_Mar2011.pdf#page=4

UNDP, Informe Nacional de Desarrollo Humano para Bolivia 2010, online at: http://idh.pnud.bo/index.php?option=com_hello&view=hello2&Itemid=56&id=6

Organización de las Naciones Unidas para la Agricultura y la Alimentación, “La volatilidad de precios en los mercados
agrícolas”. Informes de Política 12, available online at: http://www.fao.org/economic/es-policybriefs/es