A new indicator will soon be available to jointly assess
a country’s food security
against the effectiveness of its economic system
by momagri Editorial Board
Beyond the economic turmoil it generated, the 2008 financial crisis also spawned the formal questioning of certain dogmas concerning both market operations as well as the beneficial consequences of some trade policies on economic development, especially in poorer nations.
This has been true for the impact of unfettered trade liberalization on food security. Long considered as the cure for most ills experienced by economies in terms of growth and development, the total liberalization of agricultural trade was supposed to improve the situation of poorer nations, both on the economic and food levels, without impeding that of more developed countries.
However, an increasing number of voices are now speaking to denounce this intellectually pleasing but wrong shortcut, as often highlighted by Olivier de Schutter, the U.N. Special Rapporteur for the Right to Food. While not the only explanatory factors, the growing liberalization of agricultural trade and the dismantling of regulatory mechanisms have been at the root of the increasing volatility of agricultural commodity prices since the early 2000s and have played a key role in the soaring global food insecurity. In a twist of irony, food insecurity started to increase in the aftermath of the Declaration of the Millennium Development Goals in 1995 and has not stopped rising since.
The very challenge confronting experts and decision-makers can be summed up as follows: How to maximize a country’s food security without impeding its economic effectiveness, and vice versa?
Solving that issue is crucial, since it conditions the procedures for ongoing negotiations, with at stake the effectiveness of structural policies conducted at the global level to reach a widely-shared goal: Generating “sustainable” growth and fighting world hunger.
Yet today, we do not have any monitoring indicator that acts as a bridge between the concepts of food security and economic effectiveness. In 2010 and to fill this gap, the think tank momagri initiated the design of a new indicator in the framework of the development of its project of rating agency. Its objective is to jointly assess a country’s situation with regard to its food security and the effectiveness of its economic system, so that it can benefit from a first-rate steering and decision-making assistance tool.
This indicator, which has been named OSE (Optimum Securité Alimentaire Efficience économique), includes each of the measures making up these two concepts. With regard to food security, we are talking about qualitative, quantitative, microeconomic and macroeconomic measures. For economic effectiveness, they involve price, price stability, low price volatility (an effective economy allows for immediate arbitration to smooth out price disparities through input and output in the sector), as well as economic growth.
The founding and modelization principles have been defined. The indicator’s formulas have been set. A representative sample including eight countries has been designed. Its design experts are currently conducting the needed sensitivity tests.
The first results will be published at the end of 2011 in a document that will also present the applied methodology, the underlying theories used and the founding principles that structure the indicator.
We will certainly keep you informed of the indicator’s results and related findings.