At a conference in London this week senior government officials from Eastern and Central Europe gathered to work out how to bring the region's arable land back into production. Through increasing investment in the agricultural sector, rising global food prices could be stemmed.
The meeting was organised by the European Bank for Reconstruction and Development (EBRD) and the UN Food and Agriculture Organisation (FAO). The main theme of the conference was to increase the level of cooperation between private and public sectors to boost investment levels in agriculture.
According to FAO statistics, world food prices rose by almost 40% in the year to December 2007.
Both the EBRD and FAO believe that there is significant untapped agricultural production potential in the CIS region that could be used to slow these rising costs. Over recent years, around 23mn hectares of arable land has been withdrawn from production, and the two organisations estimate that at least 13mn hectares could be returned to production with no major environmental cost.
Addressing participants, FAO director-general, Jacques Diouf, calls for a concerted effort to unlock this potential.
"But let us be bolder and imagine the removal of the institutional and financial constraints that limit production in the region. The region's cereal output and its contribution to world exports would then be well above those projections,” Diouf said.
EBRD president Jean Lemierre added: “There is now an urgent need for both the private and public sectors to work together to create the conditions for sustainable investment that will restore the primacy of this region as a crucial centre of agricultural production.”
A draft EBRD paper submitted to the conference noted that some measures introduced by governments in response to rising food prices, such as price controls and increased subsidies, have been counter-productive.
Instead, the EBRD has recommended that governments avoid using tactics that distort domestic markets or disadvantage producers and traders. Rather, it advocates increased investment in the agricultural supply chain.
The EBRD said it would target its investments to developing local supply chains to increase production and develop new rural financing instruments.
In its contribution to the conference, FAO underlined that government involvement is key. “A supportive institutional and regulatory environment is mandatory to attract private investment at all levels of the food chain. To achieve that, improving policy dialogue between private stakeholders and policy-makers will be instrumental,” a FAO paper stated.
Current estimates suggest that grain production in the CIS will increase by 7% to 159mn tonnes between now and 2016.
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