Food and Fuel Challenges on the World Markets

The issue of food security has for too many years been absent from the international agenda. Food prices were declining while the world enjoyed overall strong economic growth. Much, but far from enough, was achieved in terms of reducing hunger and poverty. Now we face a new ‘generation’ of problems, as it so well was underlined by President Medvedev in the plenary session.

Only last week I joined Dr. P chauri, Chair of the Intergovernmental Panel on Climate Change, at a climate and business conference. He reminded me that the Climate Panel’s main message is not one of hopelessness, but one of optimism. Yet it is a guarded optimism. In particular, energy-producing countries are reminded of their obligations and responsibilities.

Food security puts the solidarity of the international community to the test. Politicians and business representatives alike need to find sustainable ways to grow, to manage and to distribute the world's food resources.

At the same time, there is growing awareness about the linkage of food and energy on world markets. Global wealth and development increase the demand for almost every kind of raw material. Several countries struggle with the two-fold challenge of managing both rising food and energy prices.

The immediate challenge for the international community, is to develop and implement measures to prevent the increasing prices from reversing progress in fighting poverty and instability. We are currently considering how Norway can best support global efforts to mitigate the impact of the rising prices for those countries and populations that are worst affected.

Analysts and international news media are offering a number of reasons why this crisis has occurred. This is a complex picture indeed, as is well known to this audience. Let me just point to two major factors, as we see them. 

The rapid growth in emerging markets is one of these. With so many people moving out of extreme poverty in high growth economies like China, India, Nigeria and Ghana, growing demand is a trend we must expect to continue. It is, however, a fundamentally positive development, as it indicates significant success in one of the most important challenges the global community is facing: The fight against poverty.

The other factor is the rapid increase in the demand for biofuels. We realise that policies to stimulate biofuel production can be a double-edged sword for the countries living at the sharp end of the commodities crises. Still, this is not a reason to abandon the ambition to develop low-emission biofuels. On the contrary, we need to strengthen our research and innovation efforts to develop new generations of such fuels, based on for instance agricultural waste, marine resources or low-quality wood fibres.

I believe that there is enough land globally to provide both food and biofuels. What we need, however, are appropriate international guidelines for biofuel production, to prevent excessive competition for good land.

We have to break the negative food and fuel cycle. We must invest in technological solutions that meet with the world’s growing food and energy demand, without compromising the climate. This is the common task we all face.