Risky Business: The future of agriculture

Posted December 10, 2012 by Sophia Murphy   

MarketsClimate ChangeFood securityMarket speculation

Ferry crossing the Bani river to reach the market. Image: Oxfam

Hard on the heels of Oxfam’s Food and Gender Discussion Blog, in which ten experts provided ten views over ten days intended to reframe food security from the perspective of women’s rights and women’s agency comes another Oxfam online forum for debate on agriculture called "The Future of Agriculture."

The series will explore four issues:

  1. Farmers’ knowledge as the driver of innovation and investment;
  2. Women’s land ownership;
  3. Farming’s dependence on fossil fuels; and
  4. Effective risk management systems.

As with the series on food and gender, the discussion aims to generate bold proposals, in this case to meet increasing world demand for food in a way that eradicates hunger and preserves the environment.

I had the privilege to contribute to the debate, and my essay (one of twenty or so to be featured over the next two weeks) has been posted as one of two to kick off the discussion. Below are some excerpts from my contribution—I do hope you will find time to read and respond as the debate unfolds.

Agriculture is a risky business. At the mercy of inclement weather and pests, a frequent casualty of war, and subject to its own particular demand constraints and market failures, agriculture merits a branch of economics all to itself. The risks are not just economic: they also link to biological diversity and natural resource management, to culture and social relationships.

The risks are political, too; most farmers are subject to relatively strong government involvement in their sector—which is not surprising because everyone has a stake in agriculture. Beyond the essential fact that agriculture is fundamental to our survival, agriculture matters because it is a powerful motor for the eradication of poverty.

Two particular kinds of risk pose very modern versions of age-old challenges. The first is climate change—humankind has always been at the mercy of the weather, but today we are also directly responsible for making the weather less predictable.

The second is price volatility. In an era of globalized markets, deregulated capital flows and free trade, economic forces are linking farmers from disparate parts of the world as they have never been linked before.

Risk-management systems should not encourage a farmer to take unwarranted risk. Farmers should be responsible for making good business decisions about their operations, not encouraged to take unnecessary risks as the shallow loss insurance programs proposed in the 2012 U.S. Farm Bill would. But the systems should be strong enough to protect farmers and their households from destitution, especially where the risks involved are outside farmers’ control, as is the case with climate change and international price volatility.




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