Feeding the world's poor

Another government inspired barrier to agricultural development is foreign food aid.

ACCORDING to the founder of Microsoft, Bill Gates, of all the interventions to reduce poverty, improving agricultural productivity is the best. Nothing else works as efficiently.

He speaks from experience. His Gates Foundation, to which he has contributed US$28 billion of his wealth, is either the largest or second largest philanthropic organisation in the world, funding thousands of projects mainly aimed at enhancing healthcare and reducing extreme poverty.

Gates says the foundation’s agriculture program has become one of its biggest and fastest growing due to huge results. Without the agriculture program he says, “We don’t see a way of achieving our goals, where kids can be healthy, their brains can fully develop, and they can have a chance to live a normal life.”

"Most of the poor people of the world are farmers —farmers with very small plots of land, who have to deal with a great deal of uncertainty because they don’t know what their yield is going to be, and in many years they are making just enough, or not even enough, to have the food that they expect," Gates said.

"The metrics here are pretty simple. About three-quarters of the poor who live on these farms need greater productivity, and if they get that productivity we’ll see the benefits in income, we’ll see it in health, we’ll see it in the percentage of their kids who are going off to school. These are incredibly measurable things.

"Once you get the right seeds and information—a lot of it can be left to the marketplace. This is a place where philanthropy and government work, and market-based activity, meet each other."

Gates made these comments at an International Agriculture and Food Security Briefing in Washington. He was arguing for increased funding of research, from both the public and private sectors, but being in the US Senate building it was inevitably the former that was on his mind.

Many others think it would be a good idea to increase public funding of agricultural research too, not least the scientists and public servants whose jobs depend on it. And perhaps there is an argument for a certain amount of funding of basic research that the private sector would not undertake because there was no prospect of a commercial return. I can think of quite a few less deserving things that receive funding.

But there are a couple of areas where only governments can act, which would make a huge difference to the poor farmers of the world without spending a cent of taxpayers’ money.

It is a simple fact that even if Gates is successful at delivering improved seeds and knowhow to poor farmers, and they are able to produce a surplus to sell, they face enormous barriers trying to sell it.

Many countries either reject imports of agricultural produce from developing countries or impose enormous tariffs, making them uneconomic. Even more impose insurmountable biosecurity hurdles that have the same effect.

An example of this is Australia’s approach to the importation of bananas from the Philippines. The Philippines can export to New Zealand, Japan, Korea, the Middle East, China and soon the USA, but not Australia. And yet Filipino banana growers are mostly dirt poor and would greatly benefit from access to a regional market like Australia.

There are hundreds of similar examples around the world. Poor countries struggling to emerge from subsistence agriculture are denied access to major markets due either to outright protectionism or protectionism masquerading as biosecurity.

Another government inspired barrier to agricultural development is foreign food aid. Australia is not the worst offender, but a good example of what can happen was seen last year when a cargo of export sheep was diverted to Pakistan after being rejected by Bahrain. The sheep were cruelly destroyed at the instigation of local sheep suppliers who did not want to see their businesses destroyed.

Food aid floods the local market and causes a dramatic drop in prices, undermining struggling local producers. Indeed, many do not survive, leading a need for more food aid to avert famine. The aid can actually destroy any chance of a prosperous local economy from being established.

Gates concedes that it’s not enough just to come up with new seeds and information, and acknowledges that land policies, extension policies, research policies and acceptance of GMO techniques are also important. If he had added free trade to that, it would have been a complete list.

  • David Leyonhjelm has been an agribusiness consultant for 25 years. He may be contacted at reclaimfreedom@gmail.com
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    David Leyonhjelm

    David Leyonhjelm

    has worked in agribusiness for 30 years and is a Senator for NSW representing the Liberal Democrats.
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    READER COMMENTS

    qlander
    29/08/2013 5:58:09 AM

    They don't need greater productivity - they need to be paid for what they produce now. More food just makes sure there is enough of an over supply to keep it cheap for the worlds wealth. Farmers are poor but not hungry, it's the urban poor who are hungry. Buy food a fair price from the farmer and give it to the urban poor if you must. But turn off this path of trying to make food cheap enough, for the urban poor to be able to afford it.
    John Newton
    29/08/2013 6:26:37 AM

    I fell of my chair. Here's me, a Green, agreeing with the head of the Stop The Greens party. As long as those improved seeds aren't genetically modified -which does nothing for yield and everything for the profits of the biotech companies – I agree wholeheartedly. Let the small farmers farm sustainably and for their immediate communities. That's what evert report on the matter has said for the last 20 years
    John Niven
    29/08/2013 6:40:03 AM

    Of course increased productivity is the answer for subsistence farmers. It is NOT the answer to profitability of commercial market reliant Agriculture. Not sure of the purpose of this article perhaps the annals of Disneyland.
    David Leyonhjelm
    29/08/2013 7:47:43 AM

    John, Gates says (and I agree) that GM technology is essential if productivity is to be increased. It is well proven that it increases yield and makes more profits for farmers than for biotech companies. As for being a Green, you are not following the party line. The Greens oppose free trade (as do the Nationals and Katter) and prefer protectionism. They also favour low productivity agriculture including organic. You'll lose your membership card at this rate.
    Lincoln
    29/08/2013 8:06:42 AM

    Last night Ruddy commented on the need for an overhaul of supplier-retailer trading terms. Hoo bloody ray. qlander makes the most valid point re the need to receive a fair and sustainable price instead of simply hiding behind shareholder expectations. Before GM there is Genetic enhancment, that is the develoment and enhancment of existing plant DNA potentials. Government Funding for research and development will keep these advancments in the public domain instead of being locked away for the rich and famous.
    Bosco
    29/08/2013 11:03:57 AM

    Read these two books. The world can already feed itself. But it's more profitable to keep one half hungry and the other half thinking they might miss out. http://www.amazon.com/Betting-On- Famine-Why-World-Still-Goes-Hungr y-Jean-Ziegler/dp/1595588493/ref= as_li_ss_tl?ie=UTF8&camp=1789&cre ative=390957&tag=130489b2r-20&cre ativeASIN=1595588493&linkCode=as2 http://www.amazon.com/Merchants-G rain-Profits-Companies-Center/dp/ 0595142109/ref=sr_1_1?ie=UTF8&qid =1377744444&sr=8-1&keywords=merch ants+of+grain
    Peter Sands
    29/08/2013 11:28:20 AM

    Gates is pushing Monsanto - Nothing else.
    John Niven
    29/08/2013 12:55:28 PM

    Armchair experts and dreamtime policy makers simply draw a line under disasters such as the Wool Reserve Price Scheme and any other Govt Sponsored market Failure and the farmers and communities are left to pick up the pieces. David, I suggest you buy your own farm.
    Lisa
    29/08/2013 2:18:04 PM

    Totally agree with Peter Sands...it is not hard to read between the lines of anything Gates says/writes really.......It is all about the almighty dollar & nothing else.......
    Duncs
    29/08/2013 2:40:24 PM

    I don't disagree with John's sentiment whatsoever. But I do feel for the purposes of integrity and transparency that he should declare that he is running as a political candidate at this Federal Election (Senate - Liberal Democratic Party). It would help clarify to what extent his discussion here reflects policies he may pursue if elected.
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    Agribuzz with David LeyonhjelmCommentary, news and analysis with agribusiness consultant David Leyonhjelm. Email David at reclaimfreedom@gmail.com

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