Hundreds of billions are wasted on distortionary subsidies. Yet we have solutions for market-based pathways to correct this with transparency about true prices.
Last month’s first UN Food Systems Summit saw some 51,000 people participate, to find solutions for our stressed global food supply. Among the salient recommendations is a game changer: that true pricing of the food supply is essential. COSA President Daniele Giovannucci concurs: “Hundreds of billions of dollars are wasted on distortionary subsidies that help to hide dangerous externalities that ruin soils, exacerbate our climate, and keep people poor”.
One of the recommended market-based pathways is through the provision of transparency about true prices of products. We would add that this transparency must include not just the externality costs but also an understanding of the effect of low prices on the farming communities who produce our food. The majority of the global working poor now work in agriculture (World Bank, 2016), so raising millions out of poverty is at stake.
That work on transparency is already starting. The FAO’s Chief Economist Maximo Torero is spearheading a new global data platform to fundamentally alter transparency, and data availability. COSA is coordinating with the ICO and nearly 50 stakeholders to launch a program to build the institutional capacity in dozens of countries for credible and transparent metrics. With support from the German Government (BMZ and GIZ) work will soon start to understand the actual costs of sustainable production and to measure how efficiently value is distributed between the farmer and others in the supply chain. More donor support will be vital to further the work. In developing countries, institutions need the right metrics to measure consistently in order to have not only accuracy but also comparability across producing countries and regions. This will accelerate our mutual learning.
The program exemplifies the increase in collaborative partnerships. The Food Summit’s Scientific Group led by former IFPRI Director General Joachim von Braun, writes that “Improved international cooperation and coordination of the food system is necessary, including the establishment of a comprehensive monitoring, evaluation and early warning system with comprehensive indicators, transparency and commitments of all stakeholders”.