Subsidies not helping – UN

GOVERNMENTS would achieve much better results in the fight against poverty and hunger if they spent less on short-term relief measures like subsidies and more on longer-term items such as agricultural research, a United Nations agency said yesterday.

Many developing countries help farmers buy seeds and fertiliser at discounted prices.

In Zambia, 37% of the agriculture budget was spent in this way in 2005, while in India the share was as high as 75%, according to 2002 data.

“Such subsidies may be politically popular, but they are not usually the best use of public funds,” the UN Food and Agriculture Organisation (FAO) said in its annual report titled The State of Food and Agriculture.

Shifting just 10% of agricultural spending away from sub- sidies, in favour of “public goods” such as research on more efficient farming, better roads and education “would increase per capita agricultural incomes by 5%”, the FAO said.

Separately, the Rome-based agency said its international food price index dropped by 3 points to 211 from October to November – a five-month low.

“Except for dairy, international prices of all the commodity groups . . . fell in November, with sugar undergoing the sharpest dip, followed by oils and cereals,” the FAO said.

Boosting agricultural output and keeping food prices low is key to reducing hunger and poverty.

In October, the FAO estimated that 868 million people – 12.5% of the world’s population – did not have enough to eat over the 2010-2012 period.