Private sector involvement in the agriculture sector will be key to ensuring the future security of global food supplies and unlocking major reservoirs of unused agricultural potential, EBRD President Thomas Mirow said in an article published in the Financial Times newspaper.
Mr Mirow’s comments came as Group of 20 Agricultural Ministers were discussing global food security issues at a meeting in Paris. He noted that the world was experiencing yet another major food price increase and that food demand was expected consistently to outstrip supply for a long period to come.
The 29 countries where the EBRD operates, especially the big three grain producers, Russia, Ukraine and Kazakhstan, have some of the greatest potential to increase food production globally, Mr Mirow said. EBRD estimates showed that grain yields alone could be increased by as much as 75 percent within the next ten years. Additionally, some 40 - 60 million hectares of extra land could be brought into play.
Outlining a way to achieve this, the President said, “If supply is to match rising demand, substantial investment is needed to increase productivity. Most of this can only come from the private sector.”
But he added that G20 leaders and international organisations could help by increasing investment and technical assistance, co-ordinating policy, supporting the transfer of technology and new methods of financing and providing training.
He also called on governments to take action, saying they should create a predictable policy framework that fostered private sector investment.
President Mirow stressed the importance of market-based pricing: “In the long run, general and large subsidies, widespread price controls and export quotas or bans discourage investment and constrain supply. In some countries, decades of price controls have led to a vicious circle of underinvestment, low productivity and high fiscal costs.” Certain segments of society could be protected from price rises by very specific subsidies, he noted.
He also called on governments to promote more market transparency and better risk management technology and urged greater public-private policy coordination – both nationally and globally.