Global food supplies are sufficient to meet the calorie requirements of all people if food were distributed according to needs. Per capita food supplies are projected to increase further over the next twenty years.1 Thus, the world food problem now and in the foreseeable future is not one of global shortage. Instead, the world is faced with three main food-related challenges: widespread hunger and malnutrition, mismanagement of natural resources in food production, and obesity. This article deals with the first two only.

While rapidly increasing yields per unit of land in large parts of East and Southeast Asia, the United States and parts of Europe reduced the expansion of agriculture into new lands and had positive effects on biodiversity, wildlife, soils and forests, they also introduced large quantities of chemical pesticides and caused water and soil degradation. In many other areas, including sub-Saharan Africa, stagnating yields combined with rapid population growth forced farmers into new lands poorly suited for agriculture, causing deforestation and land degradation. The challenge confronting us is to continue the expansion of food production to meet future demand without negative effects on the environment.

The other challenge is to assure that everyone has access to sufficient food to live a healthy and productive life. Elimination of food insecurity, hunger and malnutrition, in a manner consistent with an ecologically sustainable management of natural resources, is of critical importance. The failure of about 800 million people to meet food needs is a reflection of widespread poverty, which in turn is associated with a very skewed and deteriorating relative income distribution.

Although some progress has been made during the last twenty years, the future is not bright. At the World Food Summit in 1996, high-level policy makers from more than 180 countries agreed to the goal of reducing the number of food-insecure people by half, to 400 million, between 1990 and 2015. At the follow-up Summit in 2002, policy makers from the same countries reaffirmed the goal. Unfortunately, action does not seem to follow rhetoric. In the 1990s, less than one third of the countries managed to reduce the number of food-insecure people, while one half experienced an increase.

The design and implementation of food and agricultural policies for the future should pay particular attention to eight driving forces:

• increasing globalization;
• technological change;
• degradation of natural resources and water scarcity;
• rapidly changing consumer behaviour;
• emerging and re-emerging health crises;
• rapid urbanization;
• national and international instability and conflict; and
• changing roles and responsibilities of key actors.

Globalization has benefited hundreds of millions of people, but many others have been made worse off. Effective food and agricultural policy and institutions are needed to complement and guide globalization to achieve sustainable food security. It is of critical importance that the industrialized countries phase out trade-distorting agricultural policies, including those providing subsidies based on quantity produced or acreage used. Industrialized countries have repeatedly committed themselves to open their markets for exports from the world's poorest countries.2 However, very little progress has been made.

In addition to high tariffs, countries of the Organization for Economic Cooperation and Development impose a variety of non-tariff barriers, including food safety and sanitary levels that few developing countries can meet. These barriers for commodities and products from developing countries, such as foods and textiles, should be eliminated gradually, along with subsidized exports and non-emergency related food aid. It is particularly critical that tariff escalation related to the degree of processing of agricultural commodities be phased out as soon as possible. Tariff escalations are in stark contrast to efforts by development assistance agencies and national governments of developing countries to promote employment-generating, value-adding processing of agricultural commodities as a tool for development and poverty reduction.

In the case of developing countries, investments in public goods and institutions to promote effective and efficient private markets, rural infrastructure, credit and savings institutions, primary education, primary health care and publicly funded agricultural research to generate knowledge and technology for the smallholder farming community are essential for them to facilitate economic growth and poverty alleviation and to reap the benefits from trade liberalization and other aspects of globalization. Policies and institutions are needed to facilitate access by women to land and purchased inputs.3 The de facto importance of women in agriculture should be recognized by eliminating discriminatory policies and practices in land tenure and access to credit, inputs, technology, extension and education.

Under-investment by developing countries in agricultural research is another serious bottleneck to productivity increases and competitiveness. They invest 0.6 per cent of the value of agricultural output on research, compared to 2.6 per cent in industrialized countries, if only public funding is considered.4 If private research funding is added, the difference becomes much larger.

Rapid scientific and technological developments in molecular biology, information, communication and energy are placing new demands on government policy to guide the design and utilization of these new scientific and technological opportunities for the benefit of farmers, consumers and natural resources, while managing new risks and uncertainties. The impact of the new technology on people and their food security will, to a very large extent, depend on accompanying policies.5 Currently, action by Governments, the for-profit private sector and civil society tends to be excessively influenced by ideology and unsubstantiated claims about risks and opportunities. The lack of appropriate facilitating and regulatory policies and related low levels of public investment in public goods creating research is a major reason why potential benefits from the new technology are not reaching low-income people in developing countries.

Much of the technology needed by smallholders is of a public goods nature and unlikely to be produced by the private sector. There is an urgent need for substantial increases in public funding of agriculture research for smallholder farming in developing countries. Research aimed at biofortification, e.g. improving the nutritional value of staple foods, offers a particularly exciting opportunity for reducing micronutrient deficiencies.

Policies and new institutions are urgently needed on intellectual property rights questions, biosafety and food safety regulations, facilitation of markets for improved seed, solar panels, cellphones and other information and communications technology, and a variety of facilitation and regulatory policy issues.

Failure to achieve yield increases on land that is well suited for agricultural cultivation has pushed farmers into areas less suited for agriculture, causing deforestation, land degradation and the unsustainable exploitation of surface and groundwater. On the other hand, efforts to expand yields have frequently been based on the excessive and inappropriate use of fertilizers and pesticides, which in turn has damaged the environment. The challenge to policy makers is to put in place institutions and incentives that will guide farmers towards productivity increases compatible with sustainable management of natural resources.

Concerns are growing about the extent and rate of soil degradation and its effects on agricultural productivity and the preservation of natural resources, including biodiversity. Overgrazing, soil mining for nutrients, deforestation and inappropriate agricultural practices account for most of the degradation. These problems often result from inadequate property rights, poverty, population pressure, inappropriate government policies and lack of access to markets, credit and technologies appropriate for sustainable agricultural development.

Competition for water is becoming more acute, increasing the potential for conflicts between sectors, and water wars between countries. Efficiency of water use in agriculture, industry and urban areas is generally low. Degradation of land and water resources through water logging, salination and groundwater mining is mounting, while the excessive use of water in some locations causes a lack of access to water elsewhere.6 In many locations, water is still treated as goods, with little or no clearly defined property and user rights. Policy reforms are needed to provide secure water rights vested in individuals or groups of water users that increase incentives for investment, improve water use efficiency, reduce the degradation of the environment and encourage flexibility in resource allocation. Irrigation infrastructure and management should be turned over to water user associations where well-defined rights provide incentives for user groups to economize on water. Governments should reform distorted price incentives and reduce or remove subsidies to prevent overuse or misuse.

Much of the current debate about agriculture and the environment is based on the implicit or explicit premise that productivity increases in agriculture must necessarily harm the environment. This is a false premise. In fact, when productivity fails to increase, the resulting poverty and struggle for survival are much more likely to result in negative environmental effects. Improved production methods and appropriate use of inputs and technology can boost productivity and benefit the environment, whether in developing or industrialized countries. The challenge is to help farmers design and implement such win-win solutions.

While population growth, increasing urbanization and changes in prices and household incomes continue to be the principal driving forces behind changes in food demand in developing countries, other factors are taking on increasing importance among the non-poor in both developing and industrialized countries. The most important are increasing concerns about food safety and the related increases in demand for organically produced food, identity preservation, natural foods and the increasing desire to consume locally produced food. European and to a lesser extent American consumers are complementing their market power with the exercise of power over the regulatory and other policy processes. Nowhere is this more obvious than in the case of European consumer reaction to genetically modified food. These changes in consumer behaviour raise a number of policy issues.

Within the context of increasing globalization, one of the policy questions deserving additional analysis relates to food safety concerns as a function of income level. While food safety problems are more severe among the poor in developing countries, one of the ironies of recent developments is that high-income people in industrialized countries express much more concern about food safety than the poor. They are frequently facing a trade-off between food safety and food security in the sense that higher levels of safety are likely to be translated into higher prices and therefore lower real purchasing power among the poor who frequently spend 50 to 80 per cent of their income on food. When these trade-offs occur at a level above the most basic requirements for food safety, one of the globalization-related policy questions is whether different standards are compatible with globalization, and if not, who sets the standard. A related question is whether very high levels of food safety standards in industrialized countries are in fact being used as non-tariff barriers towards developing countries that wish to export but cannot meet the high standards.

The tragic pandemic of HIV/AIDS, persisting threats from malaria, re-emergence of tuberculosis, widespread prevalence of micronutrient deficiencies, and epidemic expansion of overweight and obesity causing a variety of chronic diseases compromise food and nutrition security in both developed and developing countries. In addition to the welfare effects on those affected, the global health crisis contributes to rising health-care costs, labour shortages and declining asset bases. Labour scarcity and low productivity among people affected by HIV/AIDS, along with the disintegration of rural and urban households, call for very different food and agricultural policies and research priorities, with focus on labour-saving rather than labour-using technologies and food safety nets for displaced individuals as well as affected households.

Innovative policy research and interventions are urgently needed to slow down and reverse the strong trend of increasing overweight and obesity. Such interventions should focus on changing consumer behaviour through the dissemination of information, price incentives and peer pressure similar to those used to reduce smoking. Research to alter the composition and taste of food, along with regulation of corporate behaviour on advertising and promotion, should also be pursued.

During the next twenty years, the urban population of developing countries will double, while the rural population will increase by only 4 per cent. In 1975, about a quarter of the population of developing countries resided in urban areas; by 2015, it will have increased to one half.7 This rapid urbanization will present new challenges to providing employment, education, health care and food in urban areas. Poverty and undernutrition are also increasing at a faster rate in urban areas. Policies and programmes are needed to reduce the cost of food to urban consumers and create income-generating opportunities for them, provide low-cost efficient safety nets and stimulate the generation of social capital, provide acceptable and affordable child-care substitutes, ensure the safety of prepared and processed foods sold in the streets, improve primary health care, water and sanitation services, and enforce property rights for low-income urban people.8 Government intervention may also be needed to counter dietary changes towards excessive sugar, oils and fats resulting from more severe time constraints, greater exposure to advertising and easier access to fast food and processed foods.

Armed conflicts continue to cause severe human misery in a large number of developing countries. About half of African countries are currently experiencing some form of instability or armed conflict. While humanitarian assistance may be effective in providing food and shelter for the many millions of refugees and displaced persons, policy action is needed to deal with the underlying causes. Recent research shows a clear causal link between poverty, hunger and natural resource degradation on the one hand, and the probability of armed conflict and instability on the other.9 While these studies have been undertaken at the national level, it is reasonable to hypothesize that continued extreme inequalities and poverty among nations, along with further information on globalization, will lead to similar relationships at the international level. Widespread hunger, hopelessness and lack of social justice generate anger and provide a perceived justification for international instability and terrorism instigated and supported by non-poor individuals and groups. Failure to recognize and deal with these underlying causes of instability will render ineffective much of the current investments in military solutions, intelligence and other protective measures.

The roles of the State, market, private voluntary organizations and for-profit private sector have changed markedly both internationally and in countries exposed to globalization, structural adjustment and related policy and market reforms. However, lack of knowledge about the proper role of each of these agents in the new socioeconomic and political environments within which many countries find themselves is a major bottleneck to successful transformation. The failure to arrive at proper roles and appropriate institutions is a major reason why reforms have been disappointing in many developing countries.

The role of the public sector appears to be shrinking in many aspects of food security, while civil society and the private sector have taken on increasing importance. While such a shift may be appropriate, recent research and experience clearly show the importance of an effective public sector in many areas related to food security. Among the areas affected are agricultural research to develop appropriate technology for small farmers, rural infrastructure, health care, education, development and enforcement of a legal system, and the creation of public goods in general. Market liberalization and globalization require new institutions, rules and regulations. An effective government is needed to facilitate privatization and guide the transformation of the agricultural sector in a direction beneficial to the poor.

The impact of governance-including democracy, adherence to human rights principles, the rule of law and empowerment of civil society-on transaction costs and efficiency of food systems and poor people's access to food should take high priority, and efforts should be made to identify appropriate governance structures. Current efforts in many developing countries to decentralize public sector decision-making and resource allocation are hampered by a lack of understanding of how best to implement local government action.

Market liberalization often assumes that the private sector is capable and willing to take over the roles traditionally managed by the Government. Where that assumption has been taken too far, the elimination of inefficient government agencies and institutions have not been replaced by effective public goods creation, and the private-sector performance has been disappointing. Where market fundamentalism has directed economic reforms, the results have also been disappointing. Strong and effective public sectors are essential for successful privatization. Private sector agents and non-governmental organizations must be held accountable for their actions nationally and internationally, and institutional innovation is urgently needed for this purpose.

Eliminating hunger, food insecurity and malnutrition is humankind's foremost challenge. Failure to meet the challenge will result in continued high levels of unnecessary human suffering, foregone economic opportunities for both poor and non-poor, and an increasingly unstable world.