Food security a concern: ASEAN can help

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The future of affordable food supply in the world is bleak: The World Bank in its latest “Food Price Watch” report released in November 2012 said that a “new norm” of costlier food was setting in globally and is threatening to increase hunger and malnutrition in the world’s poorer regions. This also means that food imports for the more arid countries in the world, notably those in the GCC region, will become more expensive and more challenging.

by Arno Maierbrugger

Qatar, along with the other Gulf Cooperation Council states, is growing visibly worried about food security, understandably as the country has to import up to 90 per cent of its food. Qatar has already set up a task force for food security to study the future implementations of rising food prices and the feasibility of greater food self-sufficiency. There have also been claims that Qatar together with other GCC member countries should draw up a unified food security strategy within the bloc and invest in farms abroad to minimise risks of food undersupply.

Indeed, there needs to be a strategy to avoid what happened in 2008 and 2009, when all came together: The financial crisis, rising oil prices, trade restrictions and increasing demand for biofuels, a combination that drove up food prices sharply. Even though the GCC countries are not financially restricted, such a situation is a wake-up call for food security planning.

ASEAN and the Southeast Asian region as a whole have traditionally served the rest of the world, and the Gulf region in particular, as a food basket. It would make great sense if the GCC countries now tighten their relations with ASEAN in the food sector. Thailand, for example, has amassed a large surplus of rice in 2012 due to a maladaptive internal subsidy policy, and seeks to sell off millions of tonnes via government-to-government contracts. While investing in farmland in Southeast Asia remains a thorny issue – as announced, though not yet heavily realised purchases and consequent cultivation on other sovereign states’ lands arguably create more questions and problems than they solve –, politicians have suggested that GCC investors lease food silos or invest in food manufacturing joint-ventures or halal industry parks which are a growth sector in the region. Well-structured food trade policy between the GCC and ASEAN could balance the volatile price development of food for the benefit of both parties.

However, it has also to be seen that in the ASEAN region new wealth and burgeoning populations have increased domestic demand for food too, which should lead to a debate in the GCC on the need for longer-term strategic food reserves and where to get it from. In any case, it remains a priority issue to stop making the Gulf region susceptible to external food price shocks and possible undersupply. With an expected population growth in the GCC from 40.6 million in 2010 to 45.6 million in 2015, according to the Asian Development Bank, food consumption will grow in line, which is not just a threat, but also an opportunity to develop a sustainable strategy together with ASEAN partners.

This comment is Inside investor’s weekly contribution to Qatar’s leading newspaper Gulf Times and is published every Sunday.

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Reading Time: 2 minutes

The future of affordable food supply in the world is bleak: The World Bank in its latest “Food Price Watch” report released in November 2012 said that a “new norm” of costlier food was setting in globally and is threatening to increase hunger and malnutrition in the world’s poorer regions. This also means that food imports for the more arid countries in the world, notably those in the GCC region, will become more expensive and more challenging.

Reading Time: 2 minutes

The future of affordable food supply in the world is bleak: The World Bank in its latest “Food Price Watch” report released in November 2012 said that a “new norm” of costlier food was setting in globally and is threatening to increase hunger and malnutrition in the world’s poorer regions. This also means that food imports for the more arid countries in the world, notably those in the GCC region, will become more expensive and more challenging.

by Arno Maierbrugger

Qatar, along with the other Gulf Cooperation Council states, is growing visibly worried about food security, understandably as the country has to import up to 90 per cent of its food. Qatar has already set up a task force for food security to study the future implementations of rising food prices and the feasibility of greater food self-sufficiency. There have also been claims that Qatar together with other GCC member countries should draw up a unified food security strategy within the bloc and invest in farms abroad to minimise risks of food undersupply.

Indeed, there needs to be a strategy to avoid what happened in 2008 and 2009, when all came together: The financial crisis, rising oil prices, trade restrictions and increasing demand for biofuels, a combination that drove up food prices sharply. Even though the GCC countries are not financially restricted, such a situation is a wake-up call for food security planning.

ASEAN and the Southeast Asian region as a whole have traditionally served the rest of the world, and the Gulf region in particular, as a food basket. It would make great sense if the GCC countries now tighten their relations with ASEAN in the food sector. Thailand, for example, has amassed a large surplus of rice in 2012 due to a maladaptive internal subsidy policy, and seeks to sell off millions of tonnes via government-to-government contracts. While investing in farmland in Southeast Asia remains a thorny issue – as announced, though not yet heavily realised purchases and consequent cultivation on other sovereign states’ lands arguably create more questions and problems than they solve –, politicians have suggested that GCC investors lease food silos or invest in food manufacturing joint-ventures or halal industry parks which are a growth sector in the region. Well-structured food trade policy between the GCC and ASEAN could balance the volatile price development of food for the benefit of both parties.

However, it has also to be seen that in the ASEAN region new wealth and burgeoning populations have increased domestic demand for food too, which should lead to a debate in the GCC on the need for longer-term strategic food reserves and where to get it from. In any case, it remains a priority issue to stop making the Gulf region susceptible to external food price shocks and possible undersupply. With an expected population growth in the GCC from 40.6 million in 2010 to 45.6 million in 2015, according to the Asian Development Bank, food consumption will grow in line, which is not just a threat, but also an opportunity to develop a sustainable strategy together with ASEAN partners.

This comment is Inside investor’s weekly contribution to Qatar’s leading newspaper Gulf Times and is published every Sunday.

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