challenging opportunities from the food crisis

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CHALLENGING OPPORTUNITIES FROM THE FOOD CRISIS BY FOSTERING NEW EMERGING ECONOMIES
By Christian Louis

The current food crisis present new opportunities for farmers in agricultural oriented countries to grow crops for food, livestock feed, and biofuel production.

The global economy has created new opportunities for agricultural trade and food products.

Improvements in the agricultural sector constitute an important step in creating employment and income opportunities.

Agro-industry development has the potential to provide employment for the rural poor in either farm and off-farm activities such as handling, packaging, processing, transporting, marketing and distributing of food and agricultural products.

Increasing the market opportunities particularly for small-scale producers in rural areas, by improving their production, processing, marketing capabilities and sales channels, represent a strategy (if not one of the best) to increase income in Low-Income-Food-Deficit Countries and help their residents face the challenge of higher food prices.

However, countries with inefficient structures and lack of entrepreneurship could be left behind, unable to feed their population and later on, history books will report that these populations die from misery, internal conflict and diseases.

The cereal import bill of the world's poorest countries is forecast to rise by 56 percent in 2007/2008 and this comes after a significant increase of 37 percent in 2006/2007, said the Food & Agriculture Organization (FAO).

People in emerging economies like China and India are buying greater quantities of food, where many now have more cash to buy a lot more food. Increasing meat consumption, for example, has helped drive up demand for grain, and with it the price.

According from statistics drawn from FAO Reports, wheat prices alone have risen 92% in the past year; the price of corn has risen about 44% over the past 15 months.

In the USA, the cost of a gallon of milk increased 26 percent; eggs went up 40 percent; and a loaf of white bread went from $1.05 to $1.28 from 2006 to 2008. The U.S. Agency for International Development reports that the cost of providing wheat, corn, cereal and other foodstuffs to poor nations has gone up 41 percent since October 2007. Josette Sheeran, the Executive Director of the World Food Program said that a new face of hunger is emerging: even where food is available on the shelves, there are now more and more people who simply cannot afford it, because of poor revenue of simply lack of revenue.

Besides a contingency plan to face the current food deficit, programs and projects aim at increasing revenues in low income developing countries are very important and urgent to undertake.

These countries have to launch entrepreneurial initiatives in relation to their comparative advantages.

A country like Haiti, for example, based on its geopolitical position (close to the North American Market) could offer the following opportunities for entrepreneurs, industrials and investors:
- A source of raw materials for the second generation plants of biofuel production from cassava, sorghum and grasses
- A source of supply for ethnic fresh fruit and vegetable (mango, yams, pumkins

A source of high quality wild cocoa beans for the US chocolate industries
- A supply of Gourmet Specialty Coffee (The Haitian Blue and the Macaya Green)
- An Entertainment Center for those in needs to enjoy warm beaches, Natural Wild Spaces, Caribbean cuisine, and folkloric shows
- A source of cheap labor where small operators of the garment and artisanal industry who can not afford to go in India, China or Pakistan could subcontract orders.

Fifteen years ago, we would not have thought China, India, Brazil and Russia as magnet for Capitalist Investment.

People could not think neither that Haiti will be in the nest twenty years a magnet for Capitalist Investment.

To take full advantage of its comparative advantages, Haiti, needs a technocracy of committed independent entrepreneurs (well-established nationals and foreigners) connected to the global economy and working in synergy with the local Government and the Parliament.

This technocracy will convert into businesses the results of the activities of research/development already conducted by academic entities, Non-Governmental organizations and Government bodies.

The public sector including the local Government and the Parliament would establish the macroeconomic and regulatory framework allowing the technocracy to run its businesses.

The technocracy and the Government will rely not only on multilateral donors but also on international private capital markets to negotiate the required needs for financing.

One billion dollars would be sufficient as a start-up cost and the investment will be rewarded even on a private basis.

Haiti is reputed for instability and violence.

But, violence and conflicts in Haiti are based on the fact that people can not supply their family with the basic food and utilities.

When circumstances render it impossible to feed hungry children, passive citizens can very quickly become aggressive and violent with nothing to lose. If you ask those who visited Haiti in the 1970's or the early 1980's, they will tell you that Haiti is a beautiful warm country and Haitian People are very friendly and they found hospitality in Haiti.

If you ask those in the United States or Canada or France who use to hire Haitian People, they will tell you, Haitian People are hard workers.

Such a synergy between a technocracy of entrepreneurs (national & foreign) and the political bodies (local Government & Parliament) will demonstrate to policy-makers, private industry/investors and the International Community as a whole that linkages to the global market (in the case of Haiti to emerging agro-industrial markets) is a viable model for poverty reduction, rural development and benefits for international investors, food security and better management practices in Low-Income Countries.

As the US stock market struggles through a credit-induced malaise, investors increasingly are turning to emerging markets to diversify portfolios and cash in on those countries' growing economies, said Jeff Cox in a special to CNBC.com. Over the coming weeks and months, a number of interesting entry points will emerge for a number of these developing countries," Nick Chamie, chief emerging markets strategist at RBC Capital Markets, said on CNBC. Besides the BRIC Nations (Brazil, Russia, India and China), Chile and Mexico get also high marks.

Quincy Krosby, chief investment strategist at The Hartford said: "Emerging markets are going to be an extremely important part of any American portfolio," she says. "That's where the growth is, not just in terms of population and GDP, but the companies that are going to be some of the largest where market capitalization is concerned over the next 10 or 15 years will come from emerging markets, particularly from the Pacific rim."

Capital Seeds Corporation, April 14 2008, 10:10 PM

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