Exerpts from a presentation by Unilever's CEO Paul Polman at City Food Lecture, London, January 18th, 2011
Food Security in a Changing Climate
Market distorting subsidies
My third practical proposal for action centres on eliminating market distorting subsidies.
There are still a number of areas where food security is jeopardised by well-meaning but ill conceived
state intervention.
The instance I want to highlight is biofuels and particularly first generation biofuels which use food
crops such as corn, sugar and rapeseed oil as feedstocks.
There is nothing inherently wrong with biofuels. Hopefully they will have an important role to play in
reducing emissions in the future.
Indeed, second generation biofuels – which use crop waste or algae as feedstocks – already look
very promising.
But the biofuel subsidies in some developed economies are distorting the market. Since 2003 the
area of land under cultivation for biofuels has more than doubled to 25 million hectares. Already 30%
of the US maize crop and two-thirds of EU rapeseed is used for fuel.Disturbingly however a number of studies have shown that many of these first generation biofuels
have a negative greenhouse gas balance which means that, contrary to the claims made for them,
they result in more rather than less climate change.
And, of course, the rush to biofuels risks reducing further the land and water available for food -
thereby exacerbating the problem of food security.The harsh reality is that biofuel policies in the EU and the US are ill considered and are producing
perverse outcomes.
Freeing trade
My fourth and last proposal for action centres on the need to free up trade in food and agricultural
products.
The fact is that even those governments in Europe and the US that are most vocal in their support of
free trade are often lukewarm about liberalising their own agricultural sectors.
The OECD calculates that agricultural support in the EU amounted to $120 billion in 2009, with the
US figure being around $30 billion. These vast sums of money are anti-competitive and for the most
part discriminate against the poorest nations.The World Bank estimates that global free trade could lift as many as 500 million people out of
poverty and expand developing country economies by $200 billion each year. This would do far more
than any aid initiatives to help meet the Millennium Development Goals.
Free trade in agriculture is especially vital to the poorest countries because it’s often the only
economic sector with export potential. If we could eliminate agricultural subsidies and tariffs,
developing countries would receive almost two-thirds of the gains.
http://www.cityfoodlecture.com/download/city_food_lecture_2011_paul_polman.pdf
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