The University hosted the 2013 Food Security Regional Dialogue in Medan, Indonesia on 26-27 June 2013. One of the outcomes is good policy guidelines for food security. This is to address one of the most debated questions of the decade: ‘how to feed the world?’
Delegates agreed that good policy should consider a regional view, the relevance and efficiency of the policy; targeting smallholders; producing information for evidence-based policy making; managing the political economy; forging partnerships; and taking a whole-of-chain approach.
A. Regional View
Assess the balance between supply and demand from a regional perspective, leading to a view on the value of a regional partnership to take advantage of trade opportunities, identify scope for gains from two way trade in food and the mutual interest in an open regime, avoid inward looking responses to food security concerns, understand the interests in foreign investment in food sectors in exporting economies, and the opportunities to coordinate, connect and establish international supply chains.
The food security issues differ between short run events and long run trends. The former may require action to smooth consumption of food, and to do so without a ‘panicked’ or non-cooperative response. The long run issues such as access to resources, climate change and structural issues within economies (demographic trends, structural change and shifts in consumption patterns) affect the availability of food. They are also resolved more effectively in this regional setting, which allows for trade and investment flows.
It should be recognised that there are now even more actors with an interest in food markets, including those who want to hold stocks or speculate about future price changes and the movement of food output to energy markets. The correlation of energy and food prices is now remarkable. Food policy makers now operate in more complex environment.
B. Making good policy
Policy must be relevant – different goals and challenges so local relevance is important, policy on food security will vary between economies but policy should be aligned to objectives; as a consequence there is also scope for capacity building by sharing experience on policy options which are relevant at different stages of development.
Policy must be efficient – its design has to consider its cost, including implementation, and its effectiveness and to do so from a social point of view which takes into account of distortions and effects on other sectors. Policy has to take account of stakeholder interests eg consumer vs producer interests.
C. Targeting smallholders
Adjustment options for smallholders are important. The priority is adjustment among those in poverty and those who are vulnerable to food insecurity. There is a case for policy support with a short term impact but it should also not impede long run adjustment to more productive activities. In some locations, continuing agricultural production will not be a solution.
Higher levels of human capital, through education, access to credit to fund investment, access to information and to technology (plus an understanding of barriers to adoption) all will be important.
In the short term efficiently designed cash transfer systems (as an instrument of social safety nets) can be used to support this process.
D. Producing information for evidence based policy making
Data relevant to the goals of food security will be important – good policy is designed with an strong empirical foundation. With changes in consumption structures and other structural changes, leading to changes in diet, this requires not just a view on the availability of traditional foods but also a view of the consequences of policy changes for nutrition.
Food security policy is also being designed in a situation where environmental and sustainability questions are more important, and measures of its impacts in that respect are important.
Food security includes the elements of food safety, which as supply chains become longer becomes an increasingly important issue. There is merit in developing measurable goals and timelines to monitor performance in these respects. That also means that the institutional complexity of the food security issue, as well as its data requirements, are extending beyond agriculture to health and the environment as well as trade.
E. Managing the political economy
Good policy may be understood by all parties but still not implemented because of the immediate political priorities and the weights on particular interests in the society. Or for the same reasons, policy even if designed with good intent may evolve or be captured by special interests, and in those same cases may then become unsustainable.
The adoption and continuity of good policy from a social point of view is more likely when there is transparency in decisions, targeting, that is, understanding of the policy targets and direct links to policy options as well as reporting on performance, provision of mechanisms for the interests of all stakeholders to be considered, regular processes of review, and adopting the principle of minimising distortions.
It is always important to test the case of intervention – in some cases while there may appear to be a case for intervention, the efficient response may be no intervention.
In many economies, there is also a conflict between top down and bottom up policy making. Decentralisation has many benefits but it also opens the scope for greater variation in the application of policy. Revisiting the allocation of responsibilities between levels of government, as well as capacity building, will help resolve this issue.
F. Forging partnerships
Food security issues in all economies will not be resolved without partnerships of governments and the private sector for example, in the organisation and delivery of R&D, the provision of infrastructure to support the supply chain, provision of technical assistance to smallholders (eg processors supporting their dairy farmers).
It will important to take into account the interaction between private and public activities, for example, stockholding and provision of risk management services (such as farmer output or income insurance related to weather). The consequence of crowding out private sector contributions should be considered when policy is designed.
At the same time, there is scope for cooperation in these areas, eg the provision of weather information by governments which support weather insurance programs. Or market outlook data that contributes to decision making about production and stockholding, but also provides a foundation for policy making. There is value in three way relationships between governments, universities and the private sector in basic and applied research.
G. Taking a whole of chain perspective
A more efficient chain linking farms and consumers makes significant contribution to food security, by lowering the costs, by reducing waste and loss, by providing signals to producers and creating variety, by linking small farmers to export markets and to higher incomes through modern channels. Value chains in many economies are developing rapidly, driven by market processes, and with significant consequences.
Government’s role includes the removal of barriers to this evolution, including commitments to competition in the provision of services that these chains require. These include services provided by international firms, and competition is supported by commitments to openness.
Some infrastructure will be provided by the private sector (eg storage) but higher level infrastructure like roads and electricity will involve governments. A good regulatory environment is important (with respect to the principles of good policy outlined above). Border administration also matters to avoid cost and delay. Supply chain governance is an important issue. In some economies, there is no obvious entrepreneurial leader in supply chain leadership, which in turn may be related to regulatory impediments on entry into the chain.
*These policy guidelines for food security were summarised by Professor Christopher Findlay (University of Adelaide).