This initiative calls for $15.0 billion in spending over the next three years with the U.S. and Japan each contributing $3-4 billion. The money would fund agricultural projects in developing countries providing farmers with seed, fertilizer, equipment and water management. Funds could also be provided for longer-term investments in research on new plant varieties, agricultural storage and marketing infrastructure to provide access to markets in urban areas, The World Bank will have a key role in coordinating the funds to maximize their effectiveness.
A recent report from the UN Food and Agriculture Organization estimated that 1.02 billion people are undernourished, an increase from 854 million two years ago, the result of higher food prices and lower incomes due to the worldwide economic recession. The FAO report noted, “The increase in undernourishment is not a result of limited international food supplies. Recent figures of the FAO Food Outlook indicate a strong world cereal production in 2009, which will only modestly fall short of last year’s record output level of 2,287 million metric tons.”
Some might note a paradox. Why support increased food production to reduce hunger if there is no shortage of grain? The answer is that 70 percent of the world’s poorest people live in rural areas, mostly on farms. Subsistence farmers with no off-farm employment are not plugged into national markets, much less international ones. A report from the Chicago Council on Global Affairs titled “Renewing American Leadership in the Fight Against Global Hunger and Poverty” explained, “The source of these problems is not fluctuating food prices on the world market, but low productivity on the farm.” Their problems must be addressed at home with improved seeds, including biotechnology, fertilizer, pesticides and basic farm equipment. Once they can feed themselves, then they need access to urban consumer demand to join the market economy.
While the 1.02 billion hungry people are spread throughout the world, they are concentrated in the Asia/Pacific region with 62.9 percent of the total and the Sub-Saharan Africa region with 26.0 percent. The next largest region is Latin America and the Caribbean at 5.2 percent. Sub-Saharan Africa and Asia/Pacific will have radically different ways of dealing with hunger. Sub-Saharan Africa has about 11 percent of the world’s population and 11 percent of the world’s arable land. They will be able to feed themselves with improved production practices and marketing infrastructure to move food within countries and among countries.
The Asia/Pacific region has 53 percent of the world’s population, but only 29 percent of the arable land. Over 2.3 billion people live on less than $2.50 per day and probably at least 70 percent are farmers and others living in rural areas dependent in part on farming. Many of these farms are 1-3 acres and will not provide adequate incomes even with improved production practices. Some farm families will exit fulltime farming to earn most of their income from non-farm sources. Countries in the Asia/Pacific region must improve production practices and expand international trade to import food and to earn incomes to pay for the food.
These are not complicated economic policy issues. President Obama was quoted last week saying, “We need tried-and-true agricultural methods and technologies that are cheap and are efficient but could have a huge impact in terms of people’s day-to-day well-being.” The Chicago Council report focused on Sub-Saharan Africa and South Asia, but its findings could be applied around the world. They had five broad recommendations: (1) increase support for agricultural education and extension, (2) increase support for agricultural research, (3) increase support for rural and agricultural infrastructure, (4) improve the national and international institutions that deliver agricultural development assistance, and (5) improve U.S. policies currently seen as harmful. Private groups like the Bill and Melinda Gates Foundation have been working effectively on these issues in recent years.
Trade policy as it relates to the Asia/Pacific region and other areas short on arable land is also not complicated. Pascal Lamy, Director-General Director of the WTO, said it well in May to the International Food and Agricultural Trade Policy Council, “…global integration allows us to think of efficiency beyond national boundaries. It allows us to score efficiency gains on a global scale by shifting agricultural production to where it can best take place.” The same economic conditions are true in non-agricultural trade. Developed and developing countries need to return to the Doha Round of WTO trade policy negotiations to work on an agreement that provides increased access to markets for agricultural and non-agricultural products.
Focusing on long-term productivity of farmers is critical, but the more immediate needs of the hungry cannot be ignored in the transition. The World Food Program of the UN is estimated to be about $4.5 billion short in funding this year. The U.S. remains the largest single country contributor of food aid at about $2 billion per year including the cost of shipping food to the recipient countries.
No one should assume that $15 billion over three years will somehow end hunger in the world. It can only help point in the direction of needed changes. Low food prices for 20 years led to the easy solution of providing food aid rather than staying the long course of productivity improvement by limited resource farmers. Developed country assistance providers and recipient developing countries need to take this aid effort as a call to a clearer understanding of problems and solutions. There are plenty of studies available that suggest viable solutions and groups interested in providing operating programs. It is time for national political leaders to jump start the process and see it to conclusion. Hunger in rural areas has to be solved in those rural areas.