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MANAGING VULNERABILITY AND RISK TO PROMOTE BETTER FOOD SECURITY AND NUTRITION (CFS:2010/8)

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COMMITTEE ON WORLD FOOD SECURITY

Thirty-sixth Session

Rome, 11-14 and 16 October 2010

POLICY ROUNDTABLE

I. CHALLENGES

1. Life is an inherently risky business - each one of us is exposed to an array of risks1 every ay. These risks range from the likely to the unlikely, from the immediate to the slowly developing threat. Risks range from eating unsafe food to crossing a road and being hit by a vehicle; from being in the epicentre of an earthquake to living in a remote rural area reliant on subsistence rainfed agriculture where the rains never arrive. When the risk becomes a reality, the key question is how vulnerable2 are we to the shock - to the new reality?

2. While we may all face the same risks, we do not share the same vulnerability should the risk become a reality. Poverty is a fundamental determinant of the level of vulnerability, not only to any shock, but also to the ability to reduce the risk, or mitigate or cope with the consequences. Gender is another determinant - men and women, boys and girls have different exposure to risk and different vulnerabilities. Only a woman faces the biological risk of pregnancy and child birth, but this becomes a gender issue in countries where women's low social and economic status leads to poor provision of ante natal care and health services for safe deliveries. In many households when food is scarce women sacrifice their own consumption for the sake of their husbands and children. For the world's poor and food insecure their poverty not only increases but magnifies their vulnerability. The poor person who ate unsafe food, has no access to health insurance, takes medical care where it can be obtained leaving them vulnerable to unqualified medical provision and possibly counterfeit drugs.

3. This vulnerability of the poor was made all too visible by the recent crises, often referred to as the three Fs - food, fuel and financial. High fuel prices not only led to higher production costs, to changing production incentives for some food crops given increased demand from the bio-energy markets, but to increased costs of importing foods for low income food deficit countries. Climate related issues not only impaired production of some food staples, such as wheat, in key production areas for the global market but devastated national staple harvests of rice in parts of Asia leaving countries import dependent at a critical time. The financial crisis led to high degrees of liquidity in financial markets and fuelled speculation in agriculture commodity markets exacerbating price volatility. Between May 2007 and May 2008 the volume of globally traded grain futures and options contracts increased substantially, along with the monthly volume of futures trading to open interest3.

4. There is widespread recognition that, beyond market fundamentals, a 'new' set of forces are in play. Greater linkages between the agricultural, energy, financial and currency markets together with the wider macroeconomy, render agricultural markets much more vulnerable to external shocks.4 What made the 2007/08 price spike exceptional was the concurrence of so many of them, on the back of climatic disturbances to crop production around the world. For the world's food insecure it became the perfect storm that resulted in more than 100 million additional people becoming poor and hungry, a global total now in excess of 1 billion people5.