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News : International Last Updated: Nov 16, 2009 - 2:12:35 AM


World Hunger Summit 2009: Nestlé chief attacks "well-fed activists"; FAO head says FDI in agriculture has tripled since 2000
By Michael Hennigan, Founder and Editor of Finfacts
Nov 13, 2009 - 5:53:31 AM

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Peter Brabeck-Letmathe, chairman of Nestlé - - the world's biggest food company.
The chairman of Nestlé, the world’s biggest food company, on Thursday attacked “well-fed activists,” whose hostility to new food technologies was exacerbating a global food crisis by slowing agricultural productivity. Also at a forum for the private sector in Milan, organised by the UN's Food and Agriculture Organisation (FAO) ahead of its World Hunger Summit due to be held in Rome next week, the agency's director general said foreign direct investment (FDI) in agriculture has tripled since 2000.

“It is disheartening to see how easily a group of well-intentioned and well-fed activists can decide about new technologies at the expense of those who are starving,” Peter Brabeck-Letmathe said in Milan.

Brabeck-Letmathe is a supporter of genetically modified (GM) food as was the recently deceased Dr. Norman Borlaug, the"Father of the Green Revolution."

Borlaug made the point that no current crops are as they were even 50 years ago, much less a millennium ago. Farmers and scientists have always experimented with ways of cross-breeding plants to make them more durable and able to produce more food and profits in shorter periods. That they used hybridisation techniques rather than gene splicing makes no difference to the safety of the finished product.

Last month in Ireland, the Green Party had the anti-science position of declaring Ireland a GM-free zone, agreed in the latest "programme of government."  It was a morsel for activists whose knowledge of the tropical world may derive from television programmes or packaged holidays, never mind the daily challenges faced by farmers with water shortages and insects, in such regions.

SEE: Global Irish Economic Forum and branding Ireland: Green Party minister Eamon Ryan is both for and against science

The Nestlé chairman said on Thursday that the annual rate of growth in agricultural yields was 2 per cent between 1970 and 1990 while the rate of population growth was 1.7 per cent a year.

However, since 1990 yields had been declining relative to population growth, and would continue to do so between 2009 and 2017, with the world’s population expanding at 1.1 per cent a year against agricultural yield growth of only 0.8 per cent.

The FAO estimates that global food production will have to increase 70 per cent for an additional 2.3 billion people by 2050 while at the same time combating poverty and hunger, using scarce natural resources more efficiently and adapting to climate change.

Investment of  $83bn a year to feed a growing population will be required and most of the money will come from the private sector, from small farmers to big agribusinesses. To address this, Nestlé have announced that it will invest more than $100m over the next decade with farmers in Côte d’Ivoire and Ghana - - which together account for 60 per cent of the world’s cocoa output - - to supply 38 million higher quality, disease-resistant plants to rejuvenate their farms and increase productivity. The Cocoa Plan, announced in October, aims to help address the key issues facing the cocoa farming communities that Nestlé works with.

Brabeck-Letmathe said it is necessary to generate reliable incomes for farmers, avoiding the approach with increasing subsidies and artificially high prices. Next, he believed that focusing on the affordability of food for low-income consumers is necessary. Highlighting the quality of food, including safety, is also an important role for industry.

He said that the most important challenge to sustainable production of food is water. In finding ways to overcome an unsustainable use of water in farming, he said: “We as a company were involved from the very beginning, and see a role for private companies with its own efforts and advice within the context of such a strategy,” and added that the second major challenge is being able to provide better and more stable incomes for farmers and rural workers. A solution would include creating a role for private companies to help farmers have access to markets over longer distances, while also maintaining higher value-added products, access to finance and inputs.

With privatization, globalization and the transformation of the food chain from the farm to the table, the importance of the private sector has increased, said FAO director-general Jacques Diouf, at an international private sector forum on food security, in Milan, Thursday, Nov 12, 2009.
The FAO estimates that in this year of global recession, the number of hungry people could increase by a further 100 million in 2009 and pass the one billion mark.

Jacques Diouf, the director general, said on Thursday, that it was encouraging that the private sector's interest in agriculture has increased. Foreign direct investment (FDI) in the sector tripled since 2000 from $1billion to more than $3 billion in 2007, though he noted that this still represents less than one percent of total world FDI inflows. 

He encouraged private companies to take a longer-term view of investment and business opportunities in developing regions rather than focussing on immediate needs.

Food Prices

The FAO said earlier this week in its latest Crop Prospects and Food Situation report that food prices in poor countries that are net importers of food still remain stubbornly high despite a good 2009 world cereal production.

Critical food insecurity is affecting 31 countries and they therefore require emergency assistance. In Eastern Africa, the situation is particularly serious as drought and conflict has put an estimated 20 million people in need of food aid.

Although international food prices have fallen significantly since their peaks a couple of years ago, wheat and maize prices strengthened in October and rice export prices are still way above pre-crisis levels, FAO said.

“For the world’s poorest people who spend up to 80 percent of their household budgets on food, the food price crisis is not over yet,” said FAO assistant director general Hafez Ghanem.
“It is now a global priority to increase investment in developing country agriculture in order to fight poverty and hunger.”

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