Food crisis and World Bank

The FAO Chief Jacques Diouf recent comments on World Bank and the IMF policies are responsible for dismantling systems to protect farmers has introduced a new chapter to the ongoing debate on food crisis.
It is true that the donor-led policies led to the green revolution, it is equally true that their later policy changes left governments in the developing economies vulnerable to food shocks and troubles.Take the case of Green Revolution that was introduced in the late 1960s and its impact on rice cultivation. Farmers in these economies has had been immensely benefited. Thanks to the introduction wonder seeds such as IRRI-8 and IRRI-20 during Boro (winter) and Aman season (rain-fed). In fact the adoption of new technology averted widespread starvation and helped millions of people to escape hunger. Later, IRRI became the darling of Asian rice growers.
.The wonder seeds is also known as high yielding variety primarily implies use of improved variety of seeds, water, fertilizer and pesticides etc.The cultivation of the same variety during rabi season ( winter) needed deep-tube well, shallow tube well and areas under irrigation projects. The donor agencies played a contributory role in this context since the new variety needed a lot of money requiring credit and supportive investment from the government on flood control and irrigation.
At the later stage it was thought that money saved in subsidy would be reinvested in agriculture, but that did not happen. Interestingly despite the success of green revolution, the contribution of capital increasing land and labour productivity are low because of average savings and capital formation of rural areas are low in certain regions on account of limited average income from agriculture. This should have been considered as an ongoing process.
The World Bank and the USAID then advised the governments to phase out such programmes on the ground that these were not being properly targeted and leakage was high. Take the case of Bangladesh. Reports were prepared with the help of policy entrepreneurs. For example, an IFPRI study funded by the USAID argued that there is a glut of food production worldwide as evinced from the downward trend in the real price of rice and wheat in the world market and building of huge food stocks in neighboring India. Thus emphasis was given on economic efficiency in managing the food programme.
“The emphasis was then that the government can move from a policy of self-sufficiency to self-reliance with the underpinning idea that instead of producing its full requirement of food itself, it can look for import of food grain which was then cheaper on the international market," according to eminent economist Mahabub Hossain . In general the governments in developing economies took the advice and dismantled the food stocking and marketing infrastructure.
In the context of South Asia, public investments in agriculture are declining, and the annual increment to gross capital formation in agriculture is now lower than in the early 1980s. This trend is same across all economies More interestingly, increasing shares of total public expenditure on agriculture are allocated to input subsidies (on fertilizers, electricity, irrigation, and credit, for example), rather than to productivity-enhancing investments such as research and public investment in irrigation.
Experts argue that the differences in yield are due to poor water management. Irrigation, drainage and flood control investments can alter the water regime and in the process the plight of millions of small farmers. In other words, the two issues are inter-related, one with excess water regime and the other with shortage of water regime. Together, they constitute the concept of water management. The high magnitude of poverty in this region is partly explained by poor water management. The problem is that the said policy entrepreneurs are actually confused with the differences.
In the name of cost, agriculture became neglected by many international development agencies such as including the World Bank, IMF and the Asian Development Bank. In addition farmers’ lobby from US, Canada and Australia played a big role in this change of heart of their governments. The farmers' lobbies argued that the dip in international food price led to their ventures unprofitable and influenced their governments to stop funding Green Revolution.
In recent time many developing economies are transforming and in the process this has created shortages in food grains in order to fulfill the demand of new high value agriculture –with fast-growing urban incomes. Now we have new realization that achievement of MDG goal and poverty reductions are correlated.
The said policy entrepreneurs are vocal now for revival of agriculture. But it has huge cost such as starvation, malnutrition and death. Indeed, the governments of low-income food importing countries are beginning to learn a lesson from the present crisis .It is not wise to depend on the international market for food security as food exporting countries shut their doors as and when there is a crisis in the supply side.