Building Four Betters – Agrifood Systems
By Dr QU Dongyu, Director-General of the Food and Agriculture Organization of the United Nations
This year’s World Food Day marks 80 years since the founding of the Food and Agriculture Organization of the United Nations (FAO), whose mandate from the outset has been to ensure humanity’s freedom from want.
Today, around 8.2 percent of people face chronic undernourishment. That compares to roughly two-thirds of the global population living in areas with inadequate food supply in 1946, as revealed by the first World Food Survey conducted by FAO in its first months of existence. Moreover, in 2025, even with a population more than three times as large, the world produces more than enough calories to feed everyone.
As we mark this day and reflect on challenges past, present and future, I am reminded of one conclusion from that long-ago survey: “The choice is between going forward and going backward.”
FAO and its member countries have achieved a lot: eliminating the rinderpest virus, establishing the Codex Alimentarius food safety standards, nearly tripling global rice yields since setting up the International Rice Commission in the late 1940s, negotiating international treaties on fisheries practices and genetic resources, setting up early-warning monitoring schemes to mitigate the risk of pests and plant and animal diseases, establishing and hosting the Agricultural Market Information System to support trade, and the development of dietary guidelines to tackle not just stunting but also the world’s growing overweight trend.
When desert locust outbreaks started in 2019 – coinciding with the hardest times of the COVID-19 – $231 million was mobilized to mitigate a crisis that ultimately saved $1.77 billion in losses and secured food for more than 40 million people across 10 countries.
Credit for such achievements goes rightly to our Members who have been steadfast in their support of the idea that a world without hunger is a better one for everyone, rich or poor, North or South. These and other successes show what is possible when nations pool knowledge and resources, when there is political will, and when effective partnerships are forged.
Sustaining the spirit of cooperation that has existed for the past eighty years is increasingly urgent; the global agrifood system is more interconnected than ever with more than a fifth of all calories crossing international borders before being consumed. At the same time, threats to those agrifood systems from climate shocks, pests and diseases, economic downturns, or the fallout from conflict, respect no borders and can unwind years of progress against hunger and malnutrition. As we see today with the spread of highly pathogenic avian influenza, more commonly known as bird flu, Fall armyworm and locust, no single country can combat such transboundary threats by working alone.
We must ensure that the more than one billion people working in the agrifood systems that feed us all have the resilience to withstand and overcome the risks they constantly face.
We have the technologies, proven financial mechanisms, along with enabling policies, know-how and the capacity to rapidly achieve the goal of ending hunger. Enabling access to markets is key both to mitigating inequalities that erode resilience and to getting food to where it is needed. Full market participation means access to drought-resistant seeds, sustainable fishery and forestry norms, agreed phytosanitary standards, digital technologies, innovative resource-management tools and early-warning systems.
We have a framework in place to scale up and accelerate our task. The FAO Hand-in-Hand Initiative identifies and prioritizes investment opportunities in places where poverty and hunger are highest and agricultural potential is the greatest. The FAO One Country One Priority Product initiative promotes unique national agricultural products to drive sustainable agrifood systems and rural prosperity. The South-South and Triangular Cooperation programme recognizes that many developing countries have become major players in global development and economic governance and supports investment and partnership. The Digital Villages initiative aims at enabling farmers around the world to use digital technologies, expanding access to e-commerce opportunities and reducing the digital gap. And the G20 Global Alliance Against Hunger and Poverty unites countries and partners to mobilize action and investments for ending hunger and reducing poverty worldwide. These and many other tools work when they are deployed efficiently and effectively, and they work even better when consistently and coherently applied.
At FAO, we channel this vision through the Four Betters: Better Production, so farmers can produce more with fewer resources; Better Nutrition, because quality matters as much as quantity; a Better Environment, to sustain healthy ecosystems and their multiple benefits; and a Better Life for all, so rural communities can build dignity and opportunity. Together, the Four Betters ensure that no one is left behind.
If we choose not to pursue these goals, we will go backwards. Eighty years on, hunger is still with us, but it is not inevitable. With shared purpose, we can – we must – move forward. With continued collaboration, we can finish the job of ending hunger. For a better food-secure future for all.
Category: International
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OpEd – World Food Day 2025 : Let us be better together
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Stand with Ogoni Peoples on the upcoming 30th Anniversary of Ken Saro-Wiwa and the Ogoni Nine: “No Justice on Pundered Lands!”
PRESS RELEASE
September 23, 2025 – The International Indigenous Peoples Movement for Self-Determination and Liberation (IPMSDL) stands in solidarity with the Indigenous Ogoni peoples and their allies across the globe in launching this year’s commemoration of the 30th anniversary of the martyrdom of Ken Saro-Wiwa and the Ogoni Nine. Ken Saro-Wiwa and the Ogoni Nine were brutally executed on November 10, 1995, by Nigeria’s military dictatorship in collusion with corporate oil giant Shell.
The Ogoni Nine were executed for demanding justice, dignity, and the right of the Ogoni people to live free from ecological destruction in their own lands. Through the Movement for the Survival of the Ogoni People (MOSOP), Ken Saro-Wiwa together with Ogoni leaders gave voice to the cries of peoples whose rivers had been poisoned, farmlands had been rendered barren, and air had been choked by incessant gas flaring.
Their demands were clear and just: self-determination, environmental remediation, and economic justice. But their courage and clarity threatened the powerful nexus of oil corporations and the Nigerian state. Their murder exposed the depths of imperialist corporate greed and state repression, transforming the Ogoni struggle into a symbol of Indigenous Peoples resistance against ecological plunder.
Three decades later, justice remains elusive. In 2011, the United Nations Environmental Programe (UNEP) confirmed catastrophic levels of oil pollution in Ogoniland, with carcinogens in drinking water recorded at 900 times above safe standards.
Yet cleanup efforts are at a glacial pace, the Nigerian government has failed to contribute, and Shell continues to evade full accountability. Instead of ensuring justice, President Bola Tinubu is now pushing for the resumption of oil exploration in Ogoniland, ignoring UNEP’s findings, court rulings, and Ogoni people’s clear rejection.
“This clean-up must be scientific, transparent and independently monitored with local communities fully involved… Anything less is an insult to the memory of those who died demanding justice, and a continuation of the very injustice that Ken Saro-Wiwa fought and died for. It will be a dance on the grave of Ken Saro-Wiwa,” said Celestine Akpobari of Miideekor Environmental Development Initiative and Ogoni Solidarity Forum – Nigeria during the launching’s press conference.
“Ken Saro-Wiwa and the Ogoni Nine gave their lives to demand justice. They are our inspiration in the annual IP Heroes Day celebration lead by IPMSDL every November 10. Their blood waters, our self-determination struggle,” said Beverly Longid, IPMSDL Co-convener. “Thirty years later, the Niger Delta is still bleeding. The Ogoni people are still fighting the battle against imperialist and corporate greed and state repression. As Indigenous Peoples, we clearly say no more poisoned river, not one more stolen land, life and future.”
The 30th anniversary commemoration coincides with the upcoming COP30 in Brazil, offering a crucial moment to connect the Ogoni struggle with the broader global climate movement. For IPMSDL, the story of Ogoniland exposes the limits of climate summits dominated by corporations, business lobbyists, and state elites. Thus, it underscores the urgency of highlighting “Self-Determination is a Climate Solution” not only during COP but more so in the everyday fight of Ingenous Peoples against the climate and ecological crisis. The Ogoni case is a stark reminder that climate justice cannot be achieved without Indigenous Peoples’ justice for all those killed, criminalized, communities militarized and bombed in defense of their lands, territories, and resources.
“Ogoni land shows us what happens when Indigenous Peoples are denied self-determination. Corporations treat our lands as sacrifice zones, our people as disposable, our future as collateral damage,” said Jiten Yumnam, IPMSDL Co-convener. “The climate crisis is rooted in colonialism and corporate plunder using violence and fascism, militarization and wars. Our solution is self-determination because only free peoples living in genuine peace can protect their lands, defend their rivers, and safeguard the planet.”
As governments and corporations converge in Brazil for COP30, IPMSDL joins the call for international solidarity with the Ogoni people. Around the world, movements must rise to commemorate the 30th anniversary of Ken Saro-Wiwa and the Ogoni Nine, and all Indigenous Peoples martyrs and heroes.
This is not only about Ogoni; it is about defending the right of all Indigenous Peoples to determine their future, to live in clean and healthy environments, and to resist the imperialism that causes and worsen the climate crisis. -
Asian Development Bank (ADB) has appointed ICIMOD to act as one of three technical implementing partners
Press release
Kathmandu june 5 The Asian Development Bank (ADB) has appointed ICIMOD to act as one of three technical implementing partners in a major initiative designed to transform climate and disaster risk reduction in the Hindu Kush Himalaya region.
ICIMOD collaborates with ADB, engineering firm BGC, and a Swiss consortium supported by the Swiss Agency for Development and Cooperation on $6.52M initiative to build resilience in mountains.
‘BARHKH’ initiative will harness regional and local best-practice alongside Swiss expertise in disaster risk reduction, as minimal damage from last week’s glacier landslide disaster in Alpine village Blatten proves impact of Alpine approaches.
Initiative aims to build permanent capacity and increase access to investment and training to save lives and protect infrastructure in vulnerable mountain rang.
ADB’s Building Adaptation and Resilience in the Hindu Kush
Himalayas (BARHKH) initiative, launched in December 2023, with a total of $6.52 million funding for its first phase, $450,000 of which goes to ICIMOD, seeks to reduce the human and economic risks from the rising intensity and number of climate-induced mountain hazards in the region, including floods, landslides, and glacial lake outburst floods (GLOFs).
Switzerland, through the Regional Climate Action Partnership in the Hindu Kush Himalaya, has contributed CHF 2 million ($2.4M) to the BARHKH initiative. In addition, Switzerland is bringing in its decades-long expertise in climate change and disaster risk management through a range of Swiss institutions, including those from the private sector and academia. This collaboration aims to build on global knowledge and enhance regional capacity.
The initiative also seeks to cut the costs of disaster risk reduction for individual governments, promote climate resilient investments, and strengthen community resilience by developing shared data, systems on multi-hazard risks and multi hazard early warning systems, and with improved access to training, knowledge and finance.
The initiative sets out to build permanent regional capacity in interventions that address a spectrum of hazards, from floods, debris flows, landslides, glacial lake outburst floods to permafrost thawing.
nterventions will range from identifying disaster hotspots, reducing exposure, by using multi-hazard risk assessment to inform climate resilient investments, to ramping up early warning for early action, building impact-resistant infrastructure, insurance solutions, and increasing the effectiveness of operations, maintenance and finance plans.
In its first phase, which runs till October 2028, BARHKH focuses on Bhutan and Nepal. Phase two will focus on operationalisation, and scaling the initiative to additional countries, and sectors in the Hindu Kush Himalayan region.
”Our warming world is unleashing devastating hazards in our mountains. Even advanced economies are being stretche-we must act now to scale proven solutions across the HKH and we hugely applaud ADB for this initiative,” states Saswata Sanyal, Disaster Risk Reduction Lead at ICIMOD and Project Coordinator for BARHKH for ICIMOD.
”The escalating costs of disaster management and mitigation make it imperative for agencies and governments within and beyond our region to come together like never before – to ensure as many people and sectors as possible benefit from the best innovations and systems and techniques, at the lowest cost. We’re delighted to be among the technical advisers whose insights will advance disaster management and lower risk in this region.”
ICIMOD’s participation in this project was confirmed just days ahead of the opening of the Global Platform for Disaster Risk Reduction (GPDRR), the key fora for disaster risk experts to share knowledge, discuss development and trends. This year’s event, which closes tomorrow (6 June) is hosted by the Government of Switzerland.
”Mountain communities around the world, from the Alps to the Andes and the Himalayas, are threatened by increasing intensity and frequency of mountain-related hazards. Their lives, ways of life, culture, and heritage are all threatened,” the UN Office for Disaster Risk Reduction wrote in a statement in response to the glacier landslide which struck Switzerland last week.
”This tragedy could have been much worse if not for the quick actions of Swiss authorities, who provided early warning to the village’s residents and evacuated them, and their livestock, days ago. This is a testament to the power of disaster risk reduction in reducing loss of life and protecting livelihoods. Over the decades, the Swiss have developed significant expertise in managing mountain-related disaster risks and have been generously sharing it with countries across the world.
”With the hazard pattern changing so significantly with temperature rise, disaster management in the HKH is not yet where it needs to be,” said Declan Magee, Principal Economist and Team Leader BARHKH for ADB. “Huge knowledge exists in this region, and beyond it. This is a first crucial step towards pooling that knowledge base and technical expertise, building the appropriate capacity and leveraging the right investment and planning guidance to save lives, and safeguard economic development.
The press released has published in own authentic portal of ICIMODE. Nepal’ Offices. -
The third pressures are on Europe’s ground and surface water, lack of concrete action
Jan Plagge, President of IFOAM Organics Europe
Kathmandu june 4, IFOAM released a Press statement to reduction the pollution in Organic European responses.
BRUSSELS, 4 JUNE 2025 – IFOAM Organics Europe welcomes the European Commission’s Water Resilience Strategy, a necessary European response to the growing water crisis. The acknowledgement of the role of organic farming for water resilience in improving soil health, water retention and reducing pollution is a step in the right direction. However, the Water Resilience Strategy lacks overall ambition and concrete action to effectively restore and protect water resources, specifically from pollution from pesticides.
“The strategy explicitly highlights organic farming as a solution to improve water resilience. By refraining from the use of synthetic fertilisers and pesticides, and fostering soil health and biodiversity, organic farming is a key tool in tackling the water crisis and increase resilience to drought and floods”, said Jan Plagge, President of IFOAM Organics Europe.
However, the Water Resilience Strategy fails to address one of the major threats to Europe’s water bodies: pesticide pollution. Agricultural pollution, including from pesticides, accounts for one third of the pressures on Europe’s ground- and surface water, yet the strategy lacks concrete action to reduce synthetic pesticide use and prevent contamination from harmful substances like PFAS found in pesticides at its source.
“Leaving pesticide pollution out of the European Water Resilience Strategy is a major blind spot,” said Eduardo Cuoco, Director of IFOAM Organics Europe. “We cannot talk about restoring water quality while ignoring the impact of pesticides on our rivers, lakes and groundwater. With serious impacts on health and depollution costs, ranging from 5 to up to 100 billion a year for TFA (acid trifluoroacetic; PFAS residue) alone, it is not enough to clean up pollution, but we must prevent it in the first place.”
To be effective the EU must step up its efforts to address the major sources of water pollution and adequately support solutions like organic farming through a CAP that rewards farmers engaged in sustainability. press statement has published own authentic website. -
Significant Investment Opportunities Exist in Emerging Markets and Developing Economies
(IRENA : Director General Francesco
Kathmandu June 2, Abu Dhabi, United Arab Emirates. IRENA lauches a press own statement about the investment in energy sectors.
The Government of Brazil and the International Renewable Energy Agency (IRENA) will co-host the 1st Energy Planning Summit on 3–4 June 2025 at the BNDES Headquarters in Rio de Janeiro. The event will mark the official launch of the Global Coalition for Energy Planning (GCEP), a landmark initiative emerging from Brazil’s 2024 G20 Presidency to help close the investment gap in the clean energy transition through improved energy planning.
The Summit and the Coalition will contribute to building momentum ahead of COP30 in Brazil and other key global milestones.
“Although significant investment opportunities exist in emerging markets and developing economies, perceived risks remain a key barrier to investment, particularly from private sources,” said IRENA Director General Francesco La Camera. “Brazil has demonstrated how long-term energy planning, which incorporates investment-ready strategies, can help reduce those risks, attract private capital, scale up renewables, and strengthen local supply chains.”
“As GCEP Secretariat, IRENA will leverage its near-universal membership and extensive repository of best practices for renewable energy planning and modelling to support countries, particularly in the Global South, in developing energy strategies that align with national development and climate goals.”
H.E. Alexandre Silveira, Brazil’s Minister of Mines and Energy, said: “Promoting a just and effective energy transition necessarily requires recognizing the leadership of developing countries. By advancing the Global Coalition for Energy Planning, Brazil reaffirms its commitment to multilateral dialogue and to strengthening tools that connect strategic planning, public policy, and financing mechanisms in support of a more inclusive and sustainable energy future.”
This high-level event will bring together senior officials from energy planning and finance ministries in a structured dialogue to establish a new global platform for cooperation. Expected outcomes include agreement on priority workstreams, a roadmap for thematic coordination, and an initial mapping of partners ready to collaborate. By demonstrating how robust planning can reduce risks and unlock investment, the Summit aims to strengthen political commitment to use energy planning as a strategic tool to inform national and international development strategies.
Founding members and partners will sign a Letter of Principles at the Summit, outlining the Coalition’s shared vision and guiding priorities. -
Nepal’s First National Yak Day: Working together to protect the guardians of the high Himalaya
Kathmandu April 20, International Centre for Integrated Mountain Development (ICIMOD) Director General Pema Gyamtsho Release a press statment and said happya day of first yak on ocasssion of yak conference 2025, organizing conference of first time in Nepal, he said.
,.Today marks a historic and heartfelt moment for Nepal and for all those who call the mountains home. Nepal has made history as the first yak range country – or country in which yaks are found – in the Hindu Kush Himalaya to declare a national day dedicated to this magnificent species of long-haired domesticated cattle. This is a proud and timely recognition of the immense cultural, ecological, and economic value of yaks in our mountain regions.
In 27 mountain districts across Nepal, Indigenous Peoples and Local Communities – particularly Sherpa, Tamang, Thakali, Rai, and Limbu – have nurtured and protected yak herding traditions for generations. These communities are the backbone of mountain agropastoralism – which combines growing crops with raising livestock – their lives deeply intertwined with the rhythms of transhumance, the seasonal movement of livestock across mountain pastures. This unique system, recently inscribed by UNESCO as Intangible Cultural Heritage, is not only vital for food and livelihood security, but also for the sustainable management of fragile alpine ecosystems.
Yak: more than a mountain animal
Yaks are a lifeline for the people of the mountains. They provide meat, milk, fibre, manure for fertiliser and draught power for agricultural tasks such as ploughing, in some of the world’s most challenging terrains. They play a vital role in the high mountain communities – not just as a source of sustenance, but as a keystone of cultural identity and socio-economic resilience. Their hybrids have enabled access to wider resource areas across altitudinal gradients, helping agropastoralists adapt to their mountain environments. The ‘folk taxonomy’ – or the way people name and organise these generational hybrids is a fascinating expression of deep Indigenous knowledge – scientific, spiritual, and cultural all at once.
In many respects, the yak is an iconic animal and can be described as both the ecological and cultural architect of the Himalaya. Yak herding is deeply embedded in the traditions, festivals, and spiritual practices of Himalayan communities. Conserving yak is not only about protecting an animal – it is about safeguarding mountain livelihoods, Indigenous knowledge, and fragile ecosystems in the Hindu Kush Himalaya (HKH).
However, yak herding livelihoods are increasingly under pressure.
Climate change, shifting socio-economic patterns, and increasing restrictions on traditional mobility have placed immense pressure on yak herding systems. Rangelands are degrading. Genetic erosion is on the rise due to reduced cross-border exchange. And yet, the solutions are within reach – if we act together.
ICIMOD’s commitment to yak and rangeland resilience
At ICIMOD, we are proud to support the revitalisation of yak-based agropastoralism. Our work includes:
•Formation of the Nepal Yak Chauri Farmers’ Federation, a national platform uniting district yak networks to amplify herder voices. We have established a similar federation in Bhutan and are planning new federations in Pakistan and India, building a regional network of yak herders across the HKH.
•Supporting national partners to develop evidence-based policies and institutions for managing these lands to provide multiple benefits – livelihoods, carbon sequestration, water provisioning, biodiversity, and cultural tourism.
•Conducting dietary research to understand the nutritional needs and improve productivity of yaks in Bhutan, India, Nepal, and Pakistan.
•Addressing the seasonal feed scarcity, piloting winter fodder development initiatives to improve year-round nutrition for yaks.
•Mapping grazing areas and understanding pastoral mobility patterns, which are crucial for sustainable rangeland management and climate resilience.
•Piloting rangeland restoration activities to enhance pasture quality, support biodiversity, and secure the long-term viability of yak herding systems.
On this first National Yak Day, I call on all of us – policymakers, researchers, development partners, and mountain advocates to celebrate, support, and sustain yak herding in the HKH. Let us listen to the voices of herders, invest in their knowledge, restore their rangelands, and ensure that future generations continue to witness the majestic silhouette of a yak on a mountain ridge. ICIMOD stands committed to supporting our partner countries in promoting sustainable, climate-resilient agropastoralism in the high mountains of the HKH.
Nepal has shown the way by dedicating a day to honour the yak. Let this be the beginning of a regional movement to recognise and protect the high-altitude heritage of the HKH.
Let Nepal’s leadership in declaring this National Yak Day inspire the region. It is time to elevate the yak – a symbol of resilience, heritage, and harmony with nature – to its rightful place on the sustainable development agenda.
Let us not relegate the existence of this majestic animal and the beautiful landscape it occupies to photographs and paintings for future generations of the Himalayan communities. -
Rural Liberians are Transforming Agriculture and Changing Lives
Kathmandu Aprill 8, Rural Liberians are transforming agriculture and changing lives
Liberia West and Central Africa Rural businesses Nutrition Livelihoods
Although two thirds of Liberians are involved in agriculture, much of their food is still imported from abroad. Two decades after a devastating civil war, Liberia has progressed considerably, but remains heavily dependant on international assistance.
IFAD is working closely with the Government of Liberia, rural Liberians and international partners to transform the sector that lies at the heart of economic transformation: agriculture.
STAR-P is central to this collaboration. This programme is co-financed by IFAD and the World Bank through US$51.71 million in grants and highly concessional loans, along with in-cash and in-kind contributions by project participants and the private sector. STAR-P works with rural producers to introduce modern business and agricultural practices, create connections to markets and develop vibrant agribusinesses that transform the agricultural landscape.
Through greater agricultural production and prosperity, small-scale farmers and rural entrepreneurs can build the incomes and food security they need to withstand economic shocks.
For 35-year-old Hawa in the Lofa county of northern Liberia, this collaboration has been life-changing. “I felt lost and alone before the STAR-P project,” she says. A visual disability forced her to drop out of school and she struggled to earn a living by selling drinking water at a local market.
Hawa has set up a small business with her new income from rice production.
This changed when Hawa became one of 55 visually impaired people who united to improve their farming and marketing practices through the Lofa United Blind Association. The association members adopted improved agricultural technology with support from STAR-P, including training, inputs and quality seedlings to grow rice.
As a result, these members tripled the area they cultivate. They now produce enough to feed their families with a surplus to sell in the market. Hawa earned enough to reinvest her funds in a small shop, which gave her an added income stream.
Thanks to her facility with numbers, Hawa is now the chair and financial secretary of the farmers’ association. She has not only managed to send her three children to school, but also earns enough that she has returned to university herself. “I want to be a big accountant in the world,” she says.
Hawa works with other visually impaired small-scale farmers through the Lofa United Blind Association.
Making a healthier future
While Hawa is just starting her entrepreneurial journey, 29-year-old Mariam has a business that received an invaluable leg up from STAR-P. Back in 2021, she sold fruit salad and hand-squeezed juice to commuters from a small kiosk in Monrovia, the Liberian capital.
Mariam saw how expensive healthy eating was for many Liberians and dreamt of reaching more people. She finally had the chance to pursue her ambitions when, while browsing the internet, she learned about a grant competition administered by STAR-P to revitalize businesses in agricultural value chains during the COVID-19 pandemic. She applied and was awarded funds to purchase a blender and juicer.
Mariam has gone from selling her juice in one small kiosk to opening five new locations.
“Previously, I had to squeeze juices manually, which was time-consuming and inefficient,” she says. “Buying this equipment sped up my work and improved my customer service.”
Now able to serve more customers, Mariam’s business grew. She moved her stall to a new location near a prestigious hotel, where she marketed her healthy juice made from locally sourced ingredients. In 2023, Mariam received another grant from STAR-P that enabled her to expand to five locations with a team of 14 staff members, most of them women.
Mariam’s business has not only brought prosperity to her and her team. It has also created a reliable market for 20 farmer groups in three counties, from which she sources pineapples, cucumbers and watermelons. She’s now looking to expand further and market her juices to students in rural counContinue page 28
Rural liberians …….
ties. By investing in Mariam’s vision, STAR-P has strengthened an entire value chain.
Mariam has hired 14 staff members, most of them women, to support her growing juice business.
Mariam and Hawa are just two of over 40,000 small-scale farmers and rural entrepreneurs who have benefited directly from STAR-P, which built their capacity through agricultural assets and services, post-harvest processing facilities and improved agricultural technology. By growing their agribusinesses, these producers are not only increasing their own incomes and building resilience, but also ensuring that all Liberians have access to locally produced and nutritious food. -
Weather, rise in international agricultural commodity prices pose upside risks to food inflation, warns RBI in MPC Minutes
Synopsis
The Reserve Bank of India (RBI) maintained its repo rate at 6.50% while acknowledging softening food inflation. However, the MPC minutes cautioned about upside risks from weather and global commodity prices. The RBI emphasized its commitment to controlling inflation amidst global economic stability but with persistent geopolitical uncertainties.
Despite expecting relief, the Reserve Bank of India on Friday through its MPC minutes warned that adverse weather events and rise in international agricultural commodity prices pose upside risks to food inflation.
“Going forward, food inflation is likely to soften in Q4 with seasonal easing of vegetables prices and kharif harvest arrivals; and good soil moisture conditions along with comfortable reservoir levels auguring well for rabi production. Adverse weather events and rise in international agricultural commodity prices, however, pose upside risks to food inflation,” said the MPC Minutes.
The RBI in its outlook further said that the global economy remains stable with growth holding up amidst waning inflation, albeit at a slow pace. Geopolitical risks and policy uncertainty, especially with respect to trade policies, have imparted heightened volatility to global financial markets.
Earlier, the central bank on December 6 announced its latest monetary policy decisions with repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50 per cent. This followed a three-day meeting that began on December 4. The rate setting panel also decided to continue with the neutral monetary policy stance and to remain unambiguously focused on a durable alignment of inflation with the target, while supporting growth.
The recent spike in inflation highlights the continuing risks of multiple and overlapping shocks to the inflation outlook and expectations. Heightened geo-political uncertainties and financial market volatility add further upside risks to inflation, added the RBI in its MPC minutes.Further, RBI warned that high inflation reduces the purchasing power of both rural and urban consumers and may adversely impact private consumption. Saugata Bhattacharya, Dr. Rajiv Ranjan, Dr. Michael Debabrata Patra and former governor Shaktikanta Das voted to keep the policy repo rate unchanged at 6.50 per cent. Dr. Nagesh Kumar and Professor Ram Singh voted to reduce the policy repo rate by 25 basis points.
“The policy priority at this critical juncture has to be on restoring the inflation growth balance. The fundamental requirement now is to bring down inflation and align it with the target,” Das said as per the minutes of the December 4-6 MPC meeting released by the RBI on Friday.It was the last meeting of the MPC under Das, who demitted office earlier this month after completing an extended six-year tenure.