Part 4 transcript

Robert Manne:

In a moment, there will be time for questions.  I wondered if I could put one question to each of you that are very naïve questions because this is not my area of expertise at all.  I also should say something that I omitted to say, that we’ve had great support in this event from the Institute for Human Security, which is another of the initiatives recently at La Trobe University and Dennis, who’s in charge of that, can’t be here but I want to thank him and those others who are here from the Institute for Human Security for helping with this.

But my three naïve questions – I’ll do them one by one.  Maybe I’ll start with Tim.  This naïve question is to do with public opinion in Australia.  My guess is that, say, you talked about Millennium Development Goals, my guess is that five in a hundred Australians, maybe one in hundred would even know what you were talking about.  One of the things that’s really struck me about public life and political life in Australia is how little salience these questions have in public opinion.  So I wonder if you think that’s true, my statement, and also what can be done about it?  I know you do a lot. 

Tim Costello:

Yes, if only I knew the answer.  You’re absolutely right.  In fact, it’s even worse.  You’d forgive people perhaps for not knowing too much about the MDGs but when you ask them, how much does Australia give in overseas aid?  They will say, oh, about ten per cent.  Is that the right figure?  Yeah, yeah, that’s about right.  As we know, it’s .32 per cent so there is this huge mismatch in terms of what we think we’re doing and the reality.  The Millennium Development Goals, as we’ve pointed out, are off track, but at least the good thing about having goals is that we know we’re off track.  There are some leverage around them which is why we do talk about the MDGs everywhere.  My sense in Europe, certainly amongst corporate in Europe is that they understand the MDGs much better than the corporate in Australia.  We did some surveys and found that 40% of CEOs of the biggest FTSE companies in the UK knew of the MDGs.  In Australia it was 2 out of a hundred.  So we are really way behind in public opinion.  What can we do about it?  I mean, I have almost moved from arguing just charitable motives in Australia to arguing enlightened self interest.  I keep saying, we are in the region where most of the world’s poor live.  They’re a long way from Europe and Africa.  And in terms of the region that really helped us not go into a recession, Kevin Rudd injecting 50 billion in also helped, but it was the fact that in our region they kept buying our commodities. It’s actually in our enlightened self interest to say we will be investing as a good neighbour in our aid budget in your institutions, taking your poor seriously.  So it’s really just a tactical change, saying if the charitable motive doesn’t actually get this out here, maybe a bit of the self-interest also being there might get Australians at least thinking.

Robert Manne:

May, this is a question, as I said in the introduction, you’ve had a career trajectory which many of my best students would envy and would like to emulate.  Sisira said at the end of his talk that he hopes from the body is that they become involved in studying these questions and I imagine as an economist is was a bid to boost his faculty, but given that a lot of us and a lot of students here and elsewhere are not economists and can’t tackle the questions in that way, I just wondered if you have views on how those coming through universities now can help the sort of work you’re doing in Oxfam, and World Vision and elsewhere, in other words a practical question, what should young people who care about these issues and are not economists, what should they do?

May Miller-Dawkins:

Well, I think these questions certainly require engagement from all sides.  I mean, as Sisira said, you want all kinds of brains looking at these questions, and as Tim said, it’s a moral issue, so it’s an issue that as a society within Australia but more broadly we need to work out what our ethical belief and approach is to people’s access to food.  I would think, I firmly believe that people should engage with these questions, be engaged in public life, in local action, in our national politics, as active citizens, as part of this country, as much as they can.  And find a way to contribute.  And I think that might lead some people into an international arena and it might lead others to stay engaged here in Australia.  I mean, I think Tim’s right and we can look at enlightened self-interest but I think the other thing we’re looking closely at is, how do we strengthen the connections between citizens across different countries, so that it’s less about the aid chain being our government giving to another government giving to another organisation that engages with their citizens.  How do we shorten that chain and in that way actually try to shorten how we understand the accountability?  You know, if I know that my aid contribution through my taxes, if I actually had a feedback loop from people who could actually tell me what was happening to that and if I could feed back into that, that might actually change the public debate quite substantially.  Because I think the reason that we don’t see this as a moral issue is that it is quite far away and we do hear about it at a large scale through large scale statistics.  So I think trying to connect where people can here or overseas is the important thing and I would make a strong argument that actually part of what the economic crisis has shown us is that a lot of the orthodoxies of economists have … maybe has caused a lot of harm.  There’s a lot of very fundamentalist beliefs about how economic theory applies to reality that we’ve seen to fail quite spectacularly.  So we need a lot of critical voices asking a lot of questions every step of the way.

Robert Manne:

Sisira might want to say something about that as well, but I’ll ask my question but allow Sisira to say something about whether orthodox economics is under real challenge, whatever orthodox means is a hard question.  But I’m now addressing you as Professor of Economics and asking, demographers say, and I don’t know how they work this out, but I believe them, that there’ll be nine billion or more human beings by 2050.  Now there’s a few over six billion.  Is it possible for an economist to think about whether or not questions of food are going to become worse?  Or is that a kind of question that economists can’t tackle?  I’m not really asking for your predictions so much as whether it is in the capacity of economists with as much as they know to think about the future.  You’ve given I think a really masterly account of the last thirty or forty years of what’s happened, given that you had fifteen minutes to do it.  But can you think, it is possible for economists to think systematically about what happens now?

Sisira Jayasuriya:

Yes, I think we can think about it, but I would hate economists to think about something like this purely as economists sitting out in an ivory tower not interacting with other scientists and other researchers.  These are multi-faceted issues and they need multi-disciplinary approaches, because nobody has a monopoly on insights and ideas and certainly not on solutions.  I guess, to some extent my views are coloured too by, maybe this is my economics training, but also I have some background in at least reading history.  Technology has been very, very important.  And I don’t think that the planet cannot feed nine billion people but how it can be done requires investment, research, new technologies, sustainable technologies, how to do it with environmental sustainability, social and political sustainability – these are big issues and economists are thinking about them and here I must say the kind of economics that has failed pathetically in the last couple of years is not the economics that many of us and I’m sure that Paul sitting there instead of being Vice Chancellor could put on his economics hat would agree.  A lot of us would feel that, you know, most economists, sensible economists, from various paradigms, from Marxism to other schools of thought, have not subscribed to this view that markets will deliver optimal solutions for human beings, that they will not fail.  One of the best known Australian economists, Professor Max Gordon, said the other day, he said: “I have spent all my professional life writing about what to do when markets fail because if markets work, economists don’t have much to write about, nor to think about.”  So this paradigm which has said that markets will look after themselves, deliver all the solutions to all the human problems, is something very new.  Really, it gained eminence from the late 1970s onwards and gained an eminence that it should never have done.  So I’m quite happy to feel that economists can handle these things, but I think economists should handle them, should discuss them, work together with other disciplines and here, in terms of plugging ourselves, I must say that the job is taking an initiative, precisely because we are not, we don’t believe in economists doing things on their own, to actually develop programs at La Trobe which will be able to bring together people and give undergraduate training in politics, philosophy and economics together.  Thank you.

Robert Manne:

Now I think it is time to ask … if you want to ask each other questions, there will be time too but I think it would be fair now to ask if anyone in the audience would like to come to the microphone here, there is a microphone that we need you to come to to ask your question.  So if you could form an orderly queue …

Audience member:

This has been a very interesting debate and initially as I’ve heard each of you speak I’ve thought that most of us, that you would say that the big problem in the world is distribution and politics and not production.  Now as a scientist of course, I’m interested in production and often go out into the community and talk about improved science for better production but I must say people get very emotional and say, it’s just a problem with politics and distribution.  So that’s a bit defeatist for the scientists who are trying to do something.  So I really would like some discussion on what’s the major problem here, is it distribution or is it production?

Tim Costello:

Well, I think you’re hearing us say that since the Green Revolution there hasn’t been the investment in new technologies, in production, in how to feed the world.  So it’s not simply about politics and certainly this takes us into some very controversial areas, because some of the great promise in production is in GMO

areas and we know how emotional that debate is.  And most NGOs are trying to find a way to handle that issue which is incredibly alive and complex in the first world and holds out promise in terms of feeding far more people, the people we serve in developing countries.

May Miller-Dawkins:

I would say similar things.  It’s very clear that the rising hunger is not due to harvest failure or to production issues, that it is more due to distribution, to issues of volatility, to issues of politics and the failures of markets, so I think that is true and part of the emotion probably comes from  debate focussed on technical solutions to issues of hunger that might mask some of the power dynamics that are happening, both within the market and within particular societies where some people have access to food and others don’t.  But I think we would all agree that part of what we’re saying with the investment in greater research, greater investment in agriculture, is that it also needs to focus on, in our view, greater investment in small scale agriculture and increasing productivity of yields within small scale, not just within large scale agriculture and that that is one of the best hopes for people having a sustainable income and also sustainable access to food themselves.

Sisira Jayasuriya:

I agree with what has been said but I would certainly stress that we are not going to be able to feed fifty per cent more human beings over the next forty years without a huge increase in food production and doing it in a sustainable way is going to be very, very challenging and science has an absolutely central role in this.  But in terms of how you prioritise research in food, that’s another issue.  Do you prioritise research in cereals, or in livestock, fattening beef cattle?  These are issues, how you allocate your research funds.  So there is the science, and there is the politics.  Thank you.

Audience member:

Thank you very much to the panel.  Sometimes the problem is when food prices are too low and I’m thinking about the impact of NAFTA on the small farmers in Mexico when corn prices fell because of the dumping of American corn and they were unemployed and suffered from hunger because the food prices had fallen below their own cost of production.  In that context I draw attention to the current renegotiation of the so-called Trans Pacific Partnership which I suggest and I invite the panel to comment on is actually an attack on ASEAN in respect of the way in which ASEAN provides preferential treatment for the farmers of the ASEAN countries and that the intention of Australia and the US in pushing the Trans Pacific Partnership is to open up those markets to American and Australian agriculture.  This is an issue which is now before us and if that hypothesis is right, then it’s very important that the possible implications of this trade agreement, apart from destroying the Pharmaceutical Benefits Scheme, which is another one of the objectives, should be really examined very closely in terms of the likely impact on hunger in our region.

May Miller-Dawkins:

Yes, I think there are significant aspects of the trade regime and especially through bi-lateral and regional agreements beyond the global system that have had a real effect and as you were saying, one of the most harmful impacts has been the enormous subsidisation of food in the US and EU and then it’s dumping into local markets which has undercut … and at times completely wiped out, you know, if you look at something like Jamaica’s dairy industry which now just doesn’t exist, so all the milk is powdered milk from the States as opposed to local milk that the people used to be able to both have sustainably provided and also cheaply provided.  So we think one of the key changes that needs to happen in the global and any other trade agreement is to reduce or stop that kind of subsidisation as well as to improve the market access for developing countries into markets for their agricultural goods, and to look at how safeguards and special mechanisms are used to protect, so how we actually look at and design trade agreements so that countries still have policy space to respond in an appropriate way and we would agree that banning exports isn’t an appropriate way because of the knock-on effects into other food importing countries.  But certainly their ability to respond through directing investment in particular ways, restrictions of foreign investment or conditions on foreign investments and being able to put into place measures for health, safety and food security is really important.  I take your point on that particular agreement and I think it needs to be looked at in that way, but I also raise the negotiations with the Pacific for PACER plus, for the trade agreement between Australia, New Zealand and the Pacific, eleven countries in the Pacific are food-importing countries, and for seven of those five per cent of their imports are food, so there’s a really serious potential impact, and most of those countries rely to a much greater extent than other countries in Asia, Latin America or Africa for import tariffs to finance education and health.  And when you look at some of the modelling that’s been done around the trade agreement, while the Australian government has been arguing there’ll be an overall thirty per cent increase in trade, the gravitational model, it will go up, we’re not exactly sure how, and it’s very unclear where the benefit of that will go, but it’s highly likely that it’s going to go towards Australia and New Zealand, and so we would certainly support ASEAN, the Pacific Island countries, take a very strong position in trade negotiations about their national interests, and about protecting their policy space and we have for a long time been in favour of global negotiations for the reason that often in these regional negotiations the power imbalances do feed into bad deals for a lot of developing countries a lot of the time.

Sisira Jayasuriya:

I haven’t really looked at the latest negotiations that are going on.  I read Ken Davidson’s piece today in the Age but I haven’t really followed it carefully.  But the general point that agricultural markets, globally, are heavily distorted by developed country subsidies is an established fact and it has all kinds of bad effects.  But I must also point out that agricultural markets in developing countries are also systematically distorted by developing country government policies.  In fact, since the 1950s there has been systematic discrimination against agriculture implicit in the policies of developing countries both in Asia, Africa and in Latin America.  And that is a big issue.  The developed countries get a lot of attention but the developing country distortions both at the border in terms of international trade, and massive distortions internally.  For example, until very recently in India, you cannot move grain freely from one state to another.  So you could have starvation out here and surpluses out here and low prices.  So there’s a broader general issue.  There’s the international trade issue but there are also lots of domestic policy issues, the so-called behind the border issues, in terms of agricultural policy reforms that need to be undertaken in developing countries themselves.

Tim Costello:

Yes, well I just echo that and say I think it’s why we need students and others to take this up as a profession, to shine a light in here.  There are all sorts of distortions.  Generally I think we would all agree that getting a global Doha Round up, the sticking points in trade and negotiations are incredibly complex but the sticking points around the level of protection that the developed world enjoyed, so that we actually have this power, and the level of protectionism that developing nations are almost pleading for, as we say, no, no, no, it’s now free trade is a really architectural differentiation in terms of timing, phasing, power and politics and it’s labyrinthal in its complexity, but it needs advocates and students.

Robert Manne:

There’s another question here. I’ve got a couple which I’m going to ask in a minute.

Audience member:

Thanks for the opportunity.  I’m new at this.  I suppose I should declare … I have some concern about the reliability or our reliance on science and technology in order to find answers to very human questions.  So I’m just wondering – is it not possible to … we look at poverty as we look at hunger in a very big picture.  Is it not possible while there’s so much talk about concerns of people starving, literally starving, to not perhaps divide the idea of hunger into two areas, one at the most basic level, which is for the raw materials, and perhaps for the non-government organisations to take a bigger role in how those are dispersed; and at the manufacturing or the more technologically advanced processing of food, because there’s such a close connection between the market place and the governments – for that area to be in the hands of say the governments.  And for everyone to work together.  There seems to be so much overlapping of who does what, why they do it, where they do it … if you could divide, because we’re always dividing, we’re always stereotyping whatever, to divide the need for food into the staple and then into the more processed.  And somehow get people to have sustainability in the basics.  They don’t need it in, you know, homogenised and all these sorts of things, but in the basic things, I just find it astounding that so much talk and concern is expressed and so little seems to be able to be done because there are so many barriers.  So to break it down a bit more and perhaps deal in regional rather than look at global governments, the big marketplace, the multi-nationals, it’s the global.  Surely the regional, if it’s broken down, as I say, what is done with raw materials?  Perhaps the government could step in and say, you know, on a national concern, forty per cent must stay within our nation boundaries.  This will be divided up by non-government organisations of which they don’t have to have boundaries – they operate across the board as do the marketplace.  But governments seem to have to keep within their boundaries.  Surely there is a better way.  So I’d just like an opinion on my concerns. Sorry to have been long-winded about it.

Sisira Jayasuriya:

It’s a very difficult question to answer as an economist.  I confess I cannot immediately conceive of anything realistic, any mechanism realistically that can deliver that kind of outcome in that sort of form in the foreseeable future.  I suspect that the big issues of food and food security will be resolved in the global arena, international trade will play a very big role in this.    It will continue to play a very big role in this.  I cannot think of going back to small local communities, more or less self-sufficient in staple foods.  So the simple fact is that whilst the majority of human beings are no longer working in agriculture, it’s a myth that the majority of people work in agriculture.  Not even in the developing countries.  The majority of people are not in agriculture.  Somebody has to produce the food.  It has to be mediated through markets from production to distribution and it’s not going to be local communities looking after each other in that sense.  The world is both massively urbanised and urbanising at a very rapid rate.  Even in the rural areas, a large proportion of the population doesn’t work in agriculture.

May Miller-Dawkins:

I think that the reason that we focus quite a bit on some of the big global issues is that they are really making a difference when it comes down to an individual family or an individual farm.  You know, there are great potential benefits from having a more globalised world from access into international markets but there are also enormous risks and I think, I mean, what came through very strongly for us in doing our research is of course when you’re living with that experience and that vulnerability, you make no neat conceptual distinction between a price spike and an economic recession that means that you’re not earning money, because both of them mean you can’t necessarily afford the food.  You know, you can’t necessarily pay for school fees.  I guess we think some of those issues need to be fixed, need to be addressed, and power needs to be re-balanced if we’re actually going to see families have some more control over their own life.  But at the same time we think part of the answer is about … isn’t about going back to local communities and self-sufficiency and complete isolation, but it is about recognising the contribution of small scale agriculture into both food security and also into a vibrant set of local economies that do link into each other.  So a lot of the work we do is actually supporting small scale farmers improving their own productivity and yields, in looking at how they can cooperatively negotiate with middle men, because farmers are so often price-takers, by the time they’ve taken on loans to be able to afford fertiliser and other inputs, then the point at which they need to sell, they’re selling to whoever will buy it.  Or they don’t have great transportation to other markets, so by the time they transport it, they have to sell it.  In Tanzania people are still transporting things on their heads to a market where they then need to sell it before they go home.  So as price-takers we look a lot at how do we help farmers access markets in a more effective way to get a better price for their goods, to be able to have more purchasing power as a household, so that you stop being just price takers and you have … and net food purchasers, and you both become more sustainable in what you produce yourself but you also earn more income.  So we think there are things that you can do at a small scale local level to deal with some of these issues, but some more systemic issues are critical to whether or not people are going to have food security in the future.

Tim Costello:

Yes, just to put the problem in the big picture and say I don’t know of a mechanism either.  All NGOs are doing exactly what’s just been said in terms of trying to be local and responsive.  Within a global structure that we are locked into and tied to … it’s a wheel of destiny whether we like it or not … the Food and Agricultural Organisation, FAO, I think made the point that during the global financial crisis and after, and we’re in the aftermath now, most recession hit industries were functioning at about 60 to 70 per cent of capacity.  During that whole recession, the agricultural side was functioning at full capacity.  And what we now know is there isn’t that much fallow land left to plough and access left for agricultural expansion.  Which means if we get those price spikes again, the farm sector might not suffer the shocks of it.  So we have a very perilous, fragile, brittle situation here and we have to work at a global governance level because that’s the only way, as well as the local.  We can try and find a mechanism for this disjuncture between where the agricultural sector is at.

Robert Manne:

We’re just about to close up.  Can I ask one final question which has been begging to be asked and hasn’t yet been asked.  And for a quick response and then we should finish.  And the question is this – an obvious one.  How do you conceptualise the relationship between food security and global warming?  In other words, the word sustainability was occasionally dropped, but it’s far from clear to me how the questions of increased production and the question of the movement to a non-fossil fuel economy is going to happen.  It’s such a big question that I suppose I can only ask for brief answers before we finish up.  Perhaps we can begin with Tim.

Tim Costello:

Look, they’re two sides of the one coin.  The reality is the dependence on fossil fuels particularly oil, drove up fertiliser costs which was a major contributor to the food crisis.  The shift to bio-fuels, the cutting down of forests for farmland, I mean, this is absolutely two sides to the one question.  How we move to a growing economy that feeds nine billion people with sustainable technologies that aren’t dependent on fossil fuels is the gaudion knot we have to cut.

Robert Manne:

The fundamental question of our age really.

May Miller-Dawkins:

We agree with that but also just to say climate change just compounds everything we’ve been talking about as well.  You know, it affects agricultural yields.  When you talk to farmers and they say, well now I don’t know when to plant, you know, when weather becomes so changeable, when seasons aren’t predictable, it’s much harder to know when to plant, it’s much to actually therefore … you know, you’re subject to harvest failures which compound all of these other issues for individual farmers.  So it’s also going to have a profound impact on our ability to increase production in a sustainable way.

Sisira Jayasuriya:

I don’t really have anything to add to that.  That is the big challenge.  You know, water’s going to be more scarce, fossil fuels are going to be more expensive and we need to feed another fifty per cent of people over the next four decades.  And on diminishing arable land.  So to me without a huge leap in scientific technology of food production, we cannot do it.

May Miller-Dawkins:

Just to say one of the things we’re looking at really closely at the moment and where the politics absolutely come back into this is that there are now enormous land grabs going on.  You know, really significant tracts of land being bought up, particularly by China and the Gulf States, of arable land, often under contracts that are not made public, not transparent, and that’s so that countries can secure access to land, access to food, access to fuels, to bio-fuels and access to water.  And when we’re looking at the equity issues and the distribution issues of who has access to food, land, water in the future, I think we’re at a really critical moment now where we need to be shining as much light on that as we possibly can.

Robert Manne:

Thanks very much.  Well, it’s my duty to conclude proceedings.  A number of thanks.  Thanks again to the Institute for Human Security for co-sponsoring this event, thanks to the Vice-Chancellor Paul Johnson, very much, not only for coming here today and opening the session and also for the terrific support you’ve given this program which will continue.  Thanks to our three speakers.  I found it a fascinating and a deep discussion of an incredibly important issue.  And finally, thanks to you all for coming.  It’s because of the interest that members of the university show in these sessions that we hold them.  So now when you applaud the speakers you can also be applauding yourself.  Thank you very much.