Celebrating 90 Years - Foreign Policy Association

Creating Shared Value and
Food Security
108 | FOREIGN POLICY ASSOCIATION
(Continued)
the form of floods and droughts, play a role, the
largest single cause for our current predicament
is a combination of poor judgment and irresponsible
decisions made by policymakers around
the world. We have caused this mess, and the
good news is that we have the capacity to fix it.
There are four major obstacles to longterm
global food security that I would like to
focus on: 1) protectionism, 2) lower agricultural
productivity, 3) expanding use of biofuels, and
4) overexploitation of our most precious natural
resource: water.
First, protectionism. Some of the blame
for our current state of affairs lies in failed and
misguided agricultural policies and protectionist
trends that governments around the world
have adopted. The failure of the Doha Round
of World Trade Organization negotiations, for
example, can be attributed in great part to the
refusal by developed countries to let farmers
in developing countries compete on an even
playing field.
There are four major obstacles to
long-term global food security:
1) protectionism, 2) lower agri-
cultural productivity, 3) expand-
ing use of biofuels, and 4) over-
exploitation of our most precious
natural resource: water.
It is shocking to me that despite
the advances in new technologies
and their availability, our ability
to produce food is actually on
the decline.
In the Organization for Economic
Cooperation and Development (OECD) alone,
agricultural support amounts to over $340
billion. This kind of agricultural protectionism
fundamentally hurts farmers in the developing
world by shutting them out of the most lucrative
markets and hurts global consumers by
artificially maintaining inflated prices for goods.
As a company, Nestlé continues to oppose
these types of trade-distorting subsidies.
Second, decreased agricultural productivity
globally. It is shocking to me that
despite the advances in new technologies
and their availability, our ability to produce
food is actually on the decline. For decades,
productivity growth in agriculture far exceeded
productivity increases in manufacturing and
services, thanks to better technology, greater
professionalism, specialization, and the food
industry’s efforts to create a more efficient
supply chain. As a result, between 1950 and
1990, the average inflation-adjusted price of
agricultural products, indexed to wages, fell by
approximately 75 percent. Since food is the
largest single expenditure for poor households,
this sustained decrease in pricing was a major
contributor to alleviating poverty.