Wastage major cause for soaring food prices

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Asia and Africa are teaming up with places with agricultural resources and potential to develop agriculture?

Yes, most Middle Eastern governments are fully cognizant of the growingly more serious challenge of ensuring food security for their populations. And yes, given the fact that most countries in the Middle East are food-resource-deficient and rely on sizable imports, this issue is more critical for them than for most other countries in the world. Each of these countries has taken significant measures to address this challenge in the past, and they will continue to do so in future. However, most measures in the past were aimed at achieving self-sufficiency, albeit to the extent possible, in producing major food items. These efforts were successful to some degree and resulted in the creation of many sizable indigenous production facilities that now meet part of the domestic demand for a number of food items. But these measures, being very expensive in terms of costs and national resources (e.g. non renewable water resources), are not sustainable in the future. Lately, the focus was shifted to acquisition of production assets in resource-rich countries. But this strategy has its own drawbacks and still cannot guarantee off-takes during critical times of supply shortages. So, the quest for solutions continues and remains a prioritized issue for policymakers in general.
We are living in an era of food shortage, rising food prices and rising energy costs. What can the public and private sector do to address the issues?

Currently, the world produces enough food to feed its population. Rising food prices are a result of significant wastage, temporary bottlenecks in supply, increasing costs of production, rising alternative demand for food crops from the bio-fuel sector, and an expected rise in future food demand due to increasing population, rising income and changing dietary habits. High prices, in turn, create uncertainty and panic that encourage speculation and hoarding, resulting in further increase in prices, making food unaffordable to millions that subsist below the poverty line. But, in future, unless significant measures are taken to increase the production as well as supply and access to food; actual food shortage on the world scale will indeed become a reality. Going forward, in order for food to be produced, accessed and afforded, a number of measures need to be taken. (a) Both the public and private sectors need to combine their resources and expertise in order to address the issue in a sustainable manner. Public sector needs to establish enabling policies and measures to pave the way for the private sector to play a more active role. Regulatory frameworks ensuring commercial viability of strategic projects to attract private sector resources and expertise need to be established. Public sector resources should be used to create structures that are catalysts for attracting multifold resources from the private sector for projects under, for instance, efficient PPP structures. (b) In order to achieve optimal production levels at lower costs, the issue needs to be considered in a regional context rather than each country merely attempting to achieve self sufficiency at high costs. Capital and technology need to be directed optimally into projects and countries that offer comparative advantages in terms of available resources, production costs, manpower, etc. in particular areas. This should then be complemented by encouraging and facilitating trade between food surplus and food deficient countries. (c) Most importantly, focus needs to shift to improving yields, increasing efficiencies and reducing wastage rather than merely bringing new land into production. The possible impact of increasing productivity levels of Kazakhstan's large tracts of wheat farmland, which currently stands at 1/8th of that generated in the Netherlands, cannot be overstated. Similarly, sizeable additional quantities of fruits and vegetables can be available for both domestic consumption and exports, if over 30 percent of all produce currently being wasted in countries like Pakistan, Bangladesh and Indonesia can be saved. Saving large quantities of grain currently lost in transportation and storage will also, to quite an extent, arrest the commodity price increases. This requires a holistic focus effectively and efficiently covering the whole food value-chain rather than a myopic focus on increasing production capacities.
What can private investors do to address the issue?

Private investors' interest and participation cannot be realized unless their investment criteria are satisfied. There is a growing realization on the part of policymakers that the private sector needs to play a key role in the development of, and promotion of efficiencies in, the food sector. However, most governments have still not been able to bring about private investor' active involvement in the sector. Private sector needs to take advantage of the various governments' heightened attention to the issue of food security and their stated intentions of playing an enabling role for private sector's large-scale involvement. But rather than waiting for the public sector's lead, this is the time when private operators and investors need to proactively guide and advise the policymakers toward measures that result in making strategically important food and agriculture projects viable for their participation. The governments need to be convinced that commercial viability is important not only to attract private sector's capital and expertise, but also for long-term sustainability of these projects. Project structures need to be developed and proposed to the governments wherein national strategic objectives can be promoted whilst generating required commercial returns for credible private investors. It is more convenient, flexible and politically less sensitive, if the cross border investment for food is done directly and exclusively by the private sector.