Australia’s worst drought on record has slashed its exports of wheat. After America, Australia is normally the second largest exporter of grain, and in a good year it would hope to harvest about 25 million tonnes.
The country however remains in the grip of the worst drought in a century, which is why the 2006 crop yielded only 9.8m tonnes. Global wheat stocks are at their lowest levels since 1979, and the ongoing Australian drought is one of the reasons why.
New South Wales, Australia’s food bowl, is full of water-starved farms and huge empty grain silos. Some of the larger grain silos are only a tenth full when normally at this time of the year it would be half-full of grain, much of it waiting for export.
Solutions to combat rise in world food prices?
According to the Food and Agriculture Organisation of the United Nations (FAO), world food prices rose by almost 40 percent in 2007. Both EBRD and FAO believe that there is significant untapped agricultural production potential in the Eastern Europe and Commonwealth of Independent States (CIS) region, especially in countries such as Kazakhstan, Russia and Ukraine.
Senior government officials from Eastern Europe and the former Soviet Union met in London this week with executives from the private agribusiness sector to seek concrete proposals to boost agricultural investments and unlock unused output potential. Organised by the European Bank for Reconstruction and Development (EBRD) and FAO, participants explored options to foster better cooperation between the private and public sectors to facilitate this investment.
One of the key messages at the conference: it is crucial to increase investments not only in the primary agricultural sector but also in the whole infrastructure of agriculture, as well as in the processing industry.
In these countries around 23 million hectares of arable land were withdrawn from production in recent years. At least 13 million hectares could be returned to production, with no major environmental cost.
In a speech delivered by Charles Riemenschneider, Director of FAO’s Investment Centre, FAO Director-General Jacques Diouf called for courageous steps to be taken now to help unlock the untapped agricultural production potential, noting that current predictions for CIS grain production point to a rise of seven percent to 159 million tonnes between 2007 and 2016.
“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.
For up to date information on the global food outlook visit the FAO’s World Food Situation.
For an example of their ‘situation reports’ see Extreme Cold Exacerbating Poverty and Food Insecurity in Central Asia.