EDITORIAL - The food crisis and Jamaica

As this newspaper reported yesterday, Jamaicans should begin to brace for a food-price spiral, starting, perhaps, with wheat products.

While it has not yet disclosed the level of the hike, Jamaica Flour Mills, a subsidiary of the big United States agro-processor, Archer Daniels Midland, indicated there will be a jump in the price of its products.

Next month's hike is unlikely to be the last. And flour is not the only commodity whose bar codes will ring up higher numbers at checkout counters. Nor is Jamaica unique in this respect. The development is international.

Indeed, the spiral in food prices that began towards the end of last year is beginning to mirror the crisis of 2007-2008.

For instance, in January, the food-price index of the United Nations Food and Agriculture Organisation (FAO) rose 231 points, its highest since the FAO began keeping such records two decades ago.

Corn, soybean and palm oil, for example, rose in price by more than seven per cent per month in the last quarter of 2010. Not much has changed since then.

"Global food prices are rising to dangerous levels," Robert Zoellick, the World Bank's president, remarked last week.

"The price is already pushing millions of people into poverty and putting stress on the most vulnerable, who spend more than half of their income on food," Mr Zoellick said.

In other words, the world's 925 million hungry people should reach more than a billion by year end. In fact, the price hikes have already pushed 44 million more people into extreme poverty.

These statistics, and the food crisis, more broadly, raise serious policy questions for Jamaica, not least being about food security.

First, the current price hikes, coming so quickly after the last one, suggest that the crisis of three years ago was no one-off event. The world is faced with a long-term problem of security and fighting hunger.

In our own case, this is happening in a situation of increasing poverty - now at 16 per cent, against nine per cent four years ago. This sharp jump in the number of poor people is the result of economic stagnation and increased joblessness.

Yet, two years ago, Jamaica had a food-import bill of around US$900 million, of which, by some estimates, up to a fifth could be substituted.

Boost agro-processing

At present, though, agriculture accounts for around seven per cent of national output and employs approximately 225,000 persons. Less than 40 per cent of the country's agricultural production finds its way to further processing, against 80 per cent in the United States and 65 per cent in Mexico. When such value-added production is taken into account, agriculture's contribution to GDP is closer to 12 per cent.

The opportunities for job creation and, in the context of the global environment, food security, are clear. The Government has a responsibility in the circumstances to create the policy environment to drive the sector, including, if necessary, providing protection.

But this is an issue not only for Jamaica, but the entire Caribbean Community. Indeed, food security must be on the agenda of the leaders at their summit next week.

In that context, President Bharrat Jagdeo's initiative for agriculture should be a beacon.

The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.