Disproportionate allocation of ODA, a major cause of food crisis

Accra, April 20, GNA - The disproportionate allocation of Official Development Assistance (ODA) to key sectors such as agriculture is a major contributory factor to the current world commodity rising prices, UNCTAD Secretary General, Dr. Supachai Panitchpakdi has noted. He observed that ODA's contribution has been declining over the years, especially the aid to agricultural research which has fallen from 50 percent in 1992 to about 20 in 2004. "Only two percent is devoted for agric education and one percent for agric extension services." Addressing a pre-UNCTAD press conference on the food crisis in Accra on Saturday, Mr. Supachai said "another major indication about the crisis is the apparent increase in maize production world-wide, mainly for bio-fuel, which has resulted in substantial shortage of maize as staples."

He said the lack of developmental state, which is manifested in the very little attention being paid to agricultural activities by African governments, and trade-distorting subsidies were equally to be blamed for the crisis.

Dr. Supachai said besides, growing world population, there is a shift in the global consumption structure from traditional staple foods to high value foods such as diary products, which has also caused increase in the demand for milk products.

Another significant trend, he noted, was the massive exist of people from the agricultural sector to urban areas to seek wealth from other non-food growing sectors. 'This is the first time the world is witnessing such a thing and it will certainly contribute to the rise in food prices.

Dr Supachai said there was the need to restructure international aid allocation needed in areas such as agriculture in the Least Developed Countries (LDC).

"Short term solutions are needed to the food crisis, but let us also not overlook the permanent and long term solutions when we can find them," he said.

The UNCTAD boss said experience had shown that, the market alone cannot provide stability in prices, and therefore there was the need for state or governments to support sectors, especially the agriculture which is the mainstay of most LDCs' economies.