RELATED EVENTS

Resources Mobilization to Ensure the Right to Food


Introduction

Some 70% of all poor and hungry people in the world are rural and the majority of the poor will remain rural for at least two more decades. Rural areas in developing countries are the best hope for solving the problem of world hunger and rural people must be at the center of all valid initiatives to reduce hunger. A rural focus of anti-hunger initiatives does not mean to neglect the growing urban poverty problem. The world's urban population will surpass the rural population between 2020-2025, but, in developing countries, urban poverty is seeded in the countryside. Rural poverty is the precursor of urban poverty if it accelerates rural-urban migration beyond the ability of cities to furnish jobs and infrastructure. It needs to be tackled now, and not later when an urban-dominated economy eventually creates the means to support the rural sector. The following discussion consequently assumes a rural perspective of the poverty and hunger problem.

Why apply a rights approach in food policy?

The persistence of hunger in a world of plenty and the slow progress of hunger eradication since the WFS in 1996 will, sadly, remain the key concern of the WFS;fyl. Spearheaded by the UN system and supported by many of the world's NGO and several governments in developing and developed countries, a rights-based approach towards hunger eradication, a right to food (RTF), long enshrined in International Law, has been gaining momentum in the years following the WFS. The recent upsurge of interest in the RTF is in part driven by two social developments:
1. The accelerating industrialization of food systems and the globalization of food trade is leaving behind those who are unable to participate for lack of land or other assets, skills, technology, market weight or ethnically and gender-based discrimination
2. The disastrous effects of the HIV/AIDS pandemic on the helpless victims and their families as well as on food supplies add special pressure to extend the RTF.

The rights-based approach obliges states, that have not yet done so, to establish food and nutrition objectives and introduce policies to meet them. A rights based approach to food security imposes obligations of the state towards its citizens, the rule of law and the involvement of the poor and hungry themselves in articulating, planning and implementation of anti-hunger programmes. In this sense the plight of the 800 million hungry people in the world is moved to a higher ethical and political level, making it more visible and compelling and prompting states and the international community into more forceful action.

Following the prevailing concept on food security, that is, availability, accessibility and stability of food supply, the key issue is entitlement to food (Amartya Sen) more than mere production1. A policy for the creation of food entitlements must therefore do one of two things: help the food insecure with their own production, if they are farmers, and, if they are not, with acquiring purchasing power to buy food in the market. This approach is however only part of the solution. A large number of food insecure and hungry persons cannot, in the short or medium term when they need it, be helped in this fashion. This is because there are market failures of various kinds, inequitable access to land, vulnerability to external shocks, illness, financial, social, educational, ethnic and gender-related exclusion, conflicts, natural disasters and failures in the intra-household food distribution.

Economic reasoning dominating development cooperation over four decades has promoted growth that kept the numbers of hungry in check. This has happened not without setbacks and could not prevent that a large number of hungry persons still remain behind. A reason why hunger reduction has not been higher on the agenda up to now is the failure to recognize chronic hunger as a humanitarian catastrophe, similar to war and major natural disasters which usually trigger prompt action, and instead to rely exclusively on economic recipes.

The human rights notion of food security cuts across any possible divergence between the economically determined, effective demand for food and the physiologically and nutritionally perceived food requirement. The RTF concept is neutral and overarching in that it recognizes the right for every hungry or malnourished person. As a human right, the RTF stands above the state whereas a food security policy is subject to political choice. Commitment, accountability, transparency and due process under international scrutiny are more compelling rules of conduct to governments under a human right than under a policy option.

The Right to Food - where it comes from and where it stands now

Human rights in modern times experienced their greatest advance during the European age of enlightenment. Human rights began as political and civil rights, later extended to economic rights. Legal experts insist that the body of human rights is a whole; there is no difference or ranking between political/civil rights and economic rights. As much as political rights cannot be enjoyed by people without a minimum standard of living, so are economic rights unattainable and not sustainable without political and civil rights such as freedom of expression, non-discrimination and democratic and due legal process. It is a moot question whether economic rights can be totally fulfilled. Their importance, as for political rights, lies in committing authority at all levels to specific patterns of behavior.

The RTF was originally included in Article 25 the Universal Declaration of Human Rights promulgated in 1948 and was more explicitly formulated in the International Covenant on Economic, Social and Cultural Rights (ICESC), approved in 1966 and in force since1976. Article 11 of ICESC states the right of everyone to an adequate standard of living including food. A number of other international agreements, conventions and laws deal with the RTF for special groups, for instance, the Convention on the Right of the Child. They may also protect the RTF indirectly, as in the case of Convention on the Protection of Migrant Workers, the Convention on the Elimination of all Forms of Discrimination against Women (CEDAW) and other ILO conventions. The ICESC has so far been ratified by 142 countries, but the acceptance of the RTF as legally binding, rather than broadly guiding, principle is not universal. Some key countries have still to ratify the ICESCR and few have amended national legislations to suit the Convention.

Compliance with human rights is monitored by the UN Commission for Human Rights and its `treaty bodies'. These are expert committees set up under the various human rights conventions. The human rights institution is serviced by a High Commissioner for Human Rights (HCHR) and a secretariat (Office of the HCHR/OHCHR) The Commission can appoint Special Rapporteurs for either, specific thematic areas or selected countries. It has appointed a Special Rapporteur for food, Prof. Jean Ziegler of Switzerland whose task is to help governments with the realization of the RTF. General Comment no. 12 (GC12) of 1999 on the ICESC, issued by the Committee on Economic, Social and Cultural Rights, the treaty body of the corresponding International Covenant recommends, inter alia, that states enact framework legislation for the implementation of the RTF that should describe the purpose, targets, timeframe and the means, including the role of the state, civil society and the private sector, of the realization of the RTF. States should also establish benchmarks against which progress in implementing the RTF can be measured and state performance be monitored. A special framework law is not the only possible way of implementing the RTF in national legislation. Effective welfare legislation in developed and several developing countries includes a RTF implicitly. The Special Rapporteur has therefore recommended, as an alternative, selective legislative reviews and amendments to existing legislation based on concrete identified obstacles.

FAO has an obligation enshrined in its Constitution to assist member states raise levels of nutrition and standards of living and thus ensuring humanity's freedom from hunger. The FAO-sponsored World Food Conference of 1974 adopted a Universal Declaration on the Eradication of Hunger and Malnutrition affirming everybody's right to be free from hunger and calling especially upon the developed countries to help eradicate hunger.

A step towards more effective implementation of the RTF is the voluntary NGO Code of Conduct on the RTF. It was drafted in 1997 and is supported by over 800 NGOs. It specifies in more detail the obligations of the different parties and is being used as an advocacy tool by NGOs. The NGO proposal of the Code of Conduct is being supported by several governments and is likely to be tabled at the WFS:fyl.

Definitions and Demarcations

GC12 to the ICESC has defined the RTF as follows (ECOSOC - E/C.12/1999/5, 12 May 1999):

"The right to adequate food is realized when every man, woman and child, alone or in community with others, have physical and economic access at all times to adequate food or means for its procurement. The right to adequate food shall therefore not be interpreted in a narrow or restrictive sense which equates it with a minimum package of calories, proteins and other specific nutrients. The right to adequate food will have to be realized progressively. However, States have a core obligation to take the necessary action to mitigate and alleviate hunger .........., even in times of natural or other disasters..... The core content of the right to adequate food implies the availability of food in a quantity and quality sufficient to satisfy the dietary needs of individuals, free from adverse substances, and acceptable within a given culture, (and) the accessibility of such food in ways that are sustainable and that do not interfere with the enjoyment of other human rights."

The RTF therefore involves economic and physical access to a balanced diet for everyone at any time within the cultural norms of their society and without withdrawing resources from other basic needs.

The RTF intersects with other human rights. These include the rights to health, education, work, social security as well as freedom of expression, association, movement, administration of justice and ultimately, the right to life. The RTF is also intimately linked with the Millennium Development Goals (MDG)2. The WFS goal of halving the number of undernourished people in the world by 2015 is an explicit target under the first MDG.

There is a close relationship between the RTF and poverty reduction that is becoming the guiding principle of international assistance agencies. Hunger is the major, but not only, manifestation of extreme poverty. Treating poverty, for many, means treating hunger. The cause-effect relationship is however complex: hunger is both caused by and contributing to poverty. In East Asia poverty has decreased faster than under- and malnutrition in the 1990s. Statistics show that worldwide 50% more people seem to be living in extreme poverty (less than US$1 per day), than suffering from chronic hunger. Evidence exists that the hungry disproportionately comprise women and children, pointing to deficiencies in intra-household food distribution, as well as minority groups. There are further hungry and malnourished people who do not fit the standard definition of poor. They may own non-performing assets that institutional or market failures prevent from being productively used, poor nutritional education or they may be living in remote locations without affordable access to adequate food. An essential pre-condition for anti-hunger strategies is therefore to develop measurable indicators that cheaply and quickly detect hunger in all its facets in order to target it within general poverty reduction programs.

What RTF is, what it is not and gray area

The RTF is in the first line an obligation of the state towards its citizens to create an enabling environment for the poor and hungry. Concerns have been expressed that a RTF could deplete the budgets of governments, overwhelm courts with lawsuits and cultivate a welfare mentality. It is the merit of Mr. Asbjörn Eide, former Director, Norwegian Institute of Human Rights, and member of the UN Sub-Commission on Protection and Promotion of Human Rights, to have conceptualized the RTF obligation and defused such concerns for all practical purposes. His analytical framework has now been adopted by the UN Committee on Economic, Social and Cultural Rights.

Accordingly, the obligation of the state to ensure the RTF is broken into a cascade of successively more intensive interventions when attempts to reach food security at preceding stages fail. The box below illustrates the relationships.

Level of obligation

Explanation

Respect

requires state to refrain from interfering directly or indirectly with the enjoyment of rights

Protect

requires states to take measures that prevent third parties from interfering with the enjoyment of rights

Fulfill

(a) facilitate

(b) provide

requires states to adopt appropriate legislative, administrative, budgetary, judicial, promotional and other measures towards the full realization of rights

requires states to directly provide assistance or services for the realization of rights

source: U. Kracht, A human rights-based approach to food and nutrition development - Reflections from the ACC/Sub-Committee on Nutrition, presentation at workshop during 17th International Congress on Nutrition, Vienna, August 2001

At the first three levels few financial resources are required, but instead a strengthening of policing and judiciary functions and formulation of appropriate policies, strategies and programs. Civil society and the private sector will, within their established roles, contribute much to food security provided the state creates and maintains the conditions for them to operate. Only the last level, provide, requires a pro-active role of the state in assuring access to food. The question whether this or previous stages should be legally enforceable is a matter of ongoing debate. In practice, the obligation to provide carries limited weight in countries that have still to implement the first three steps which would resolve most of their hunger problem. In other countries, that already enjoy an anti-hunger environment, there may however be a hesitation to embrace the concept of a residual, legally enforceable obligation to provide.

If the state is unable to provide it is expected to launch international appeals for food, agricultural inputs or other supplies needed in the fight against hunger. Although no legal sanctions are foreseen in international conventions to coerce states into implementing the RTF, the international attention a government attracts when not meeting its obligations is a forceful incentive to comply. The burden of proof lies with the state that it has taken the necessary action.

The cost of business as usual

Even though ultimately, the costs of hunger and malnutrition must be gauged in terms of psychological and physiological suffering and loss of human dignity, economic reasoning is being increasingly used in the advocacy for fighting hunger. Common sense suggests that a hungry person is less active and productive and that a hungry child learns less well. Chronic hunger causes long-term damage to health, lowers life expectancy, spreads its damaging effects from affected individuals to others through inter-generational transfers and contributes to social and political instability. The afflicted person, the family, the community and the country, in consequence, suffer losses from unrealized potential. A growing body of evidence shows quantified relationships between the prevalence of hunger and macro-economic performance and between poverty and food insecurity and frequency of conflicts.

What kind of resources are needed to ensure a RTF?

The RTF steers the process through which hunger is reduced and does not make demands on resources per se, although the resultant policies and strategies do. Anti-hunger strategies and policies, are likely to vary greatly by country. Before claiming additional resources, a reallocation of existing resources can already make a large impact. Reallocation of resources towards poverty and hunger reduction detracts from other uses causing trade-offs. Concerns about the efficiency of such a redirection are usually unfounded. It is widely accepted that equitable allocation of resources, including for hunger and poverty reduction, has a stronger impact on national welfare and economic growth than inequitable allocation of resources.

Development practitioners recommend a simultaneous, two-track approach towards hunger reduction, via general economic growth and via specific targeting. A humanitarian approach by itself can be ineffective. Without supportive policies or, possibly, against political or military obstacles, the cost can be too high for donor constituencies to support or the numbers of hungry affected with given resources too low. Economic growth alone may not be inclusive enough of all food insecure persons.

Economic growth in rural areas is the appropriate path to sustainable hunger reduction in the long term. Assistance requirements and policy interventions on this track include the provision of public goods and services and policy advice that create an environment for farmers to produce, agri-businesses to buy, process and sell and the landless to find employment on farms or in the non-farm economy. The other track, aiming at poverty and hunger directly involves food supply for school feeding and food-for-work programs and the expenditure often is, and is meant to be, temporary to overcome an emergency situation.

The two track concept is one of convenience, but in practice, there are large areas of overlap. A distinction between productive, income-generating, and non-productive, welfare programs is superseded once the implicit cost and foregone social and economic benefits of hunger and destitution are understood. Land reform programs that provide productive assets to the landless poor can be both, long-term growth enhancing and short- and medium term hunger reducing.

Resources for RTF - how much and how to secure them?

As argued above, the RTF is an absolute and omnipresent human right with no inherent funding implications and resources to implement it depend essentially on the food strategies pursued. The international community has agreed on a broad global strategy for the implementation of the RTF in terms over the coming 13 years in the WFS Goal and Action Plan. It is possible therefore to equate the cost of pursuing the global RTF with the cost estimates for reaching the WFS Goal.

Cost estimates for the reduction of hunger are inherently uncertain. Methodological problems caused by the intersection of RTF with other human rights make it difficult to attach a cost figure to the removal of one deprivation, hunger, in isolation. There is a wide range of possible outcomes of hunger reduction programs at given resource levels, depending on the policies assumed by concerned states. Important constraints other than financial resources need to be overcome such as those related to the internal organization and operation of funding institutions and to priorities in the borrowing countries themselves.

Cost estimates for reaching the WFS and the MD goals have been attempted by different sources3. They are in the broad order of US$ 10-20 billion extra annual total cost of which about one half additional ODA, chiefly for investments in the rural sector under the two-track approach. By comparison, some US$ 40-60 billion extra ODA are estimated by the World Bank to be needed annually for investment in all social sectors in rural and urban areas to attain the full range of MD Goals. Raising resources of this order will not strain the international financial markets and government budgets and they will remain below the 0.7% of GDP target that OECD countries have set for themselves decades ago.

Additional financial resources are not the decisive element for advancing the RTF. The realization of the RTF requires above all a broad international consensus and agreement that hunger is the most important problem in the development arena today. Experience shows that public resources are available to causes with high political support. To muster the necessary political will for raising resources for the RTF the advocacy must be strengthened. The justification must be based on first, the ethical argument that the persistence of chronic hunger is an intolerable disgrace in today's world and, second, on the realization that it makes good sense to eradicate hunger also on economic grounds. The strategy must be based on, first, the understanding that permanent, sustainable, reduction of poverty and hunger is impossible without economic growth and, second, on the recognition that growth alone is not acting fast and inclusive enough and needs to be supplemented by targeted measures.

How can the international community help?

The international community has directly assisted in hunger reduction mainly through food and rehabilitation assistance to communities suffering form natural or man-made disasters. Development efforts, despite fostering general economic progress have often failed to reduce hunger in the short and medium run. Where the cause of poverty is hunger and where extreme poverty is due to market and institutional failures or man-made or natural disasters, direct food assistance and safety nets are appropriate to supplement general growth promotion.

The international community can assist states to implement the RTF through financial, technical, political and humanitarian and emergency assistance. Respect for the RTF can be enhances through international monitoring and diplomacy and assistance with the preparation and completion of a legal framework for RTF. Infringements of the RTF are more typical from private or corporate violators or from individual officials than part of a deliberate central government policy. The international community has in recent years developed an elaborate system of monitoring mechanisms and safeguards against graft, corruption and violation of minority and gender rights and environmental abuses that alert governments and assist them to act against violations.

Protection of the RTF can be assisted through the provision of technical and financial support to the executive and judiciary branches of government. This may include the institution of an ombudsman, assistance with legislation in food safety and inspection, poverty mapping and monitoring of hunger, early warning systems and supporting NGO observers to raise awareness for cases of violation of the RTF and other human rights.

International assistance is and will continue to be most active at the fulfillment stage of the RTF supplying development, technical, financial and humanitarian assistance in cooperation with governments. At the facilitation stage it includes assisting the state to ensure the smooth working of markets, undertake trade negotiations, secure ownership and land tenure rights, give policy advice and finance programs and projects in poverty and hunger reduction and general development as well as providing an array of global public goods that help increase agricultural productivity and sustain the environment worldwide. At the provision stage the international community can assist with the design of safety nets, provision of food aid, seed and fertilizer supply after emergencies like drought, flood and conflict and implement school feeding schemes. It can also help with capacity building, beneficiary group formation and support and with drafting and response coordination of international appeals for food and input aid.

How to move the RTF forward?

The RTF is by now well established in international law but it needs practical approaches towards its implementation. Some key issues that emerge from the above discussion could benefit from further reflection by the international community are summarized below.

The Right to Food and Economic Efficiency

As a universal human right the RTF is in potential conflict with international concerns over aid efficiency. There are views that human rights are absolute and cannot be discussed at all on the same plane as economic efficiency. Others argue that the international support for mobilizing resources will erode if assistance is not used efficiently. The compromise between the claim of universality of the RTF and practical progress in its realization needs further reflection and discussion. In particular, the issue of how to guarantee a RTF to the hungry in countries that are termed "poor reformers" or those afflicted by conflict needs to be addressed with urgency.

Overcoming institutional constraints

By all accounts, the additional financial resources needed for reaching the WFS and MD goals are not excessive in terms of their share of GDP in OECD countries. The greatest bottlenecks, after the political ones, are institutional. The international community must find ways to double aid flows within a short period and focus them on poverty and hunger in narrower geographical regions and fewer sectors without sacrificing accountability, transparency and quality. New delivery channels and innovative financing mechanisms are urgently needed to meet the 2015 deadline. In recipient countries policy reforms, smoothed by safety nets, need to be speeded up.

Globalizing the Support for RTF

Central to the concept of human rights is their universality. For the RTF as for other human rights, this means ensuring their acceptance and support by all countries. Implementation details need to be formulated in ways to ensure the largest possible consensus on the practical implementation of the RTF. The proposed International Code of Conduct on the Human RTF could become an important step forward provided it is formulated in a way to allow countries at all levels of development to subscribe to it. Only about 20 developing countries out of 142 signatories of the ICESCR have so far given explicit recognition of the RTF in their national legislation. The process of drafting framework legislation or equivalent changes to existing national laws and formulating corresponding policy and administrative implementation measures in poor countries needs to be accelerated. The international community should reflect on incentives to the concerned countries to do so and increase its assistance to drafting the legislative and policy agendas. International assistance agencies - multilateral, bilateral and NGO should further explore the policy and operational implications of a rights-based orientation of their own activities. The global level benefits of the RTF in terms of geopolitical stability need to be further researched, in addition to what has already been done at household, community and national levels, for use in the advocacy campaign.

Integrating RTF into PRS

Poverty reduction is replacing general economic development as the main focus of international assistance in poor countries. Poverty Reduction Strategy Papers (PRSP) will in future be needed not only under the HPIC initiative, as originally started, but for all non-commercial finance. The RTF will have to be included into national poverty reduction strategies by specifically addressing rural development, hunger reduction and nutrition. Countries need policy advice and technical assistance to formulate hunger-focused PRSP as part of a grant package to increase pre-investment activities and the provision of global public goods and in this manner to improve the environment for a focused attack on hunger. .

The "Cost" of RTF

The following section describes recent attempts to estimate financial resources requirement for food security and rural development to achieve WFS and MD goals. The political will, another essential ingredient that must be mobilized for the RTF, is being discussed in another context4.

FAO

In preparation of the 1996 WFS FAO has estimated investment in agriculture needed to keep pace with population and economic growth as projected in its Agriculture Towards 2010 study. The exercise identified total investment needs in primary agriculture and downstream storage and processing based on simplified, linear agricultural input/output relationships and unit cost of agricultural investment. The initial investment estimate was based only on effective demand, that is, demand backed by purchasing power, and did not cover food security for people unable to participate in food production and food markets. Subsequent refinements5 expanded the coverage of food security and considered resources to reach WFS goals. Accordingly, additional public investment required for halving the number of hungry by 2015 were US$ 20 billion per year. Of this increment, one half would be required as ODA, the rest assured from extra resources or reallocations within national budgets6.

World Bank

At the Development Finance Summit in Monterrey in March 2002 the World Bank has made a plea for a doubling over five years of ODA from US$ 50 billion to US$ 100 billion annually to 2015 in order to reach the Millennium Declaration Goals. Supporting the plea is a background document entitled: "Goals for Development, History, Prospects and Cost"7 in which the authors estimate additional total resource cost and extra ODA needed to reach the MDG. The approach is from two angles: one, through the economic growth needed to halve the number of people in extreme poverty (anticipating that such growth will create the effective demand for social and environmental services pursued under the MDG in education, health and environmental sustainability) and two, by adding the cost of reaching six specific social and environmental MDG (table 1) through direct investment. Both, the indirect and the direct approach yield similar orders of magnitude for total additional resource needs: US$ 54-62 billion annually to reach the growth and poverty reduction target and, alternatively, US$ 35-75 billion to reach the social and environmental targets.

To estimate the extra ODA the countries were divided into two groups. The first, mainly middle income, countries were already on track and could achieve the MDG under current efforts, without additional ODA. The second, mainly low income countries with a combined population of about 1 billion, were unable to achieve MDG without extra ODA. For these countries nearly all additional funding must be met from international sources. Concerned with aid efficiency the countries were further divided into good reformers and poor reformers (using savings rate and incremental capital output ratio as indicators). Depending on a (politically chosen) share of resources going to efficient aid users or good reformers, additional ODA required to reach the MDG could range from US$ 39 to 54 billion p.a.

According to these estimates, ODA needs to raise from 0.25% to about 0.4 of GNP in OECD countries, still far below the recommended rate of 0.7%. Below is a summary of the World Bank estimates.

Alternative additional average resource needs for reaching MDG

estimation
method
resource
type

stimulating growth to halve poverty

sum of investments in social and environmental
goals

annual total

US$ 58 billion

US$ 50 billion

annual ODA

US$ 46 billion

US$ 55 billion

IFPRI

As part of its 2020 Global Food Outlook IFPRI has estimated the cost of food security, defined as gross public sector investment in agriculture and human welfare. Using its International Model for Policy Analysis of Agricultural Commodities and Trade (IMPACT) IFPRI assumes three scenarios, baseline, optimistic and pessimistic. The baseline scenario extrapolates current trends to 2020 with investments of, cumulatively, US$ 578 billion for irrigation, rural roads, education, clean water and national agricultural research. Little progress is expected under the baseline scenario and the majority of indicators continue to point downward. Under an optimistic scenario food security and human well-being will be `dramatically' improved (not quantified) with US$ 802 billion of investment. The additional cost over baseline, US$ 223 billion, are about US$ 10 billion extra per year. A pessimistic scenario at investment of 45% below baseline would result in a serious deterioration of human development indicators.

USAID

The explicit aim of USAID8 was to estimate the resources needed to meet WFS goals. It distinguished between global, national, sector and household level interventions. Global and national level interventions involved barely any additional expenses as they typically concerned international agreements, conflict prevention, trade and legal reform and civil participation and advocacy, challenging the political will more than the budget. Sector and household level investments, in contrast, included rural roads, technology generation and transfer, targeted food aid, women's education and safe water and sanitation. Four scenarios were evaluated: (i) equitable per caput allocation of aid, (ii) efficient allocation favoring countries that were more efficient aid users, (iii) a compromise between equitable with efficient resource allocation and (iv) a situation where no policy support would be given by governments and the MDG had to be reached by humanitarian action alone. Alternative investment cost are given as follows.

Scenario

resources to reach WFS Goals

1. equitable distribution of aid

US$ 125 billion

2. efficient (least cost)allocation

US$ 72 billion

3. efficiency with equity

US$ 80 billion

4. no supportive policy reforms

US$ 126 billion

Under the most likely scenario 3. extra investment amount to just under US$ 5 billion per year.

Comparison of estimates of additional annual investments to reach WFS and/or MDG

Source of estimate

Additional annual expenditure to 2015/20
US$ billion

Type of resources

Coverage

FAO

25

10

5

all public resources

of which ODA

for direct feeding and safety nets

Agriculture- and rural development- related public resources, all developing countries, WFS goals

World Bank

50
55

ODA
all resources

all low income countries,
urban and rural, all sectors, seven MD goals

IFPRI

10

all resources

agricultural and rural sectors, all developing countries,
WFS and some MD goals

USAID

5

ODA, public resources

agriculture and rural sectors, all regions excluding Latin America, WFS goals

The ease with which the WFS goal can be achieved, if resources are available, will vary by region, depending on how radically prevailing trends have to be changed. During the 1990s the share of undernourished people decreased in most regions, though at rates less than necessary to reach the 2015 goals. In the countries of the ex-Soviet Union the numbers of undernourished increased sharply though only poverty, no hunger figures are available. Only the East Asia region appears ready to reach the goals without major difficulty. In South Asia and Latin America, the rate of hunger reduction would need to accelerate by half (from -2 to -3%). In Sub-Sahara Africa an uphill battle will have to be fought to accelerate the rate of hunger reduction by nearly ten times over that of the last decade. In the Middle East a sharp reversal from an annual increase of hunger by 3% in the 1990s to an annual decrease of -5% between 2002 and 2015 is needed, although absolute numbers are small in this region.

How to mobilize resources for the implementation of the RTF?

ODA and domestic resources for agriculture and rural development have been falling in the 1990s. Although the decline seems to have bottomed out the committed amounts remain far below of what international agencies believe is needed. Perhaps more ominously, the unanimous view of a High Level Panel of Experts that met in Rome on 25-26 June 2001 to discuss the subject of resources mobilization for food security and rural development was that declining commitments to agriculture and the rural sector were not caused by a lack of loanable funds, even of the concessional kind, but by bottlenecks connected with the internal organization and operations of international financing institutions and with priority setting by the borrowing countries. Resource gaps existed on the other hand for grants to carry out economic and sector work, pre-investment studies and pilot operations and to finance global public goods that underpinned and created the environment for sound rural and agricultural investment programmes and projects.

International loans

The view that financial resources for lending are not a limiting factor may need to be qualified if rather large increases are at stake over short periods, as for reaching the MDG. This does not obviate, rather reinforces, the need to act on the other constraints. Concessional lending by the major IFIs is likely to remain the backbone of ODA for fighting poverty and hunger. The extra resources have to be requested from contributing governments during periodic replenishment negotiations. A hypothetical example may illustrate the implications of doubling ODA9. During the replenishment period of 1999-2002 the World Bank had IDA resources of approximately US$ 15 billion at disposal for all purposes, about half of which were new injections and the remainder reflux from loan repayments. To double concessional lending, the Bank would need, for future replenishment periods, new resources at nearly three times the previous level since reimbursements from prior lending would not immediately rise and be available for re-lending. At the same time the Bank would have to double the speed at which it commits new financing. As staff resources cannot be built up quickly, much greater use would need to be made of programmatic lending that needs less preparation time and resources than project lending but requires stronger institutions in recipient countries. Another constraint could follow from the increased poverty focus. Poverty is concentrated mainly in rural areas of two regions, Sub-Sahara Africa and South Asia. Not only must disbursement of concessional resources be doubled, it must also be concentrated geographically and by sectors with the risk of encountering more bottlenecks.

The phasing of the build-up is critical. Imaginative ways of speeding up loan preparations and disbursements are urgently needed. Larger use could possibly be made of sub-regional financing institutions and, selectively, national development banks as sub-contractors or on-lenders for the major international financing institutions. Such institutions would however need to have their mandate extended that usually restricts them to financially profitable investment.

Grants

The debate, started by the US government, of extending a much higher proportion of development assistance as grants rather than loans does not fundamentally change the issue of institutional bottlenecks on donor or recipient side for handling greatly increased aid flows. Justification, accountability and transparency remain necessary for all types of financing. In pre-investment work, grant funding will have to grow in line with extra lending for poverty and hunger reduction10. In addition, more global public goods are needed. They are provided at the moment to the tune of US$ 3 billion11 annually and are believed to require doubling or tripling.

Grant funds from bi-lateral donors, the UN system and the financing institutions themselves are notoriously short. To increase their impact they need to be more strongly focused on pipeline building, upstream economic and sector work and pre-investment activities which have prospects for up-scaling. Larger efforts are needed for identifying the poor and hungry (by age and sex, given that food needs vary with these two variables as well as over the life cycle), developing poverty, hunger and nutrition indicators and measurement tools, targeting interventions to undernourished and monitoring outcomes of assistance programmes. FAO and other agencies have developed an array of instruments for such activities, including FIVIMS, remote sensing, GIEWS and others that need to be greatly expanded.

Trade

Trade liberalization, internal and external, has the potential to generate substantial welfare gains. Open markets and unimpeded trade that multiply opportunities and reduce cost, including of food, can benefit the poor more than targeted assistance. It is estimated that reducing worldwide protection by one half could lead to welfare gains of US$ 200 billion p.a. by 2015 in developing countries. Among the regions with the highest numbers of poor people, South Asia could benefit much from a reduction of protectionism. Sub-Sahara Africa would benefit much less since the region already enjoys preferential access to OECD countries in several important commodities and is handicapped by poor infrastructure, institutions and management capacity that hinder its trade potential to unfold.

Debt Relief

In the actual round of HPIC some US$ 60 billion are to be unlocked through debt relief in about 35 countries, mostly in Africa. The freed resources are to be used for poverty reduction and could make a major contribution to attain WFS and MD goals in many of the poorest countries12. The PRSP required by the HIPC debt relief process are rarely of the necessary quality. In many cases the rural, agricultural or nutritional dimensions of poverty reduction are ignored. Substantial assistance is required for countries re-focusing their policies and strategies on poverty and hunger reduction in order to allow them to take full advantage of the debt relief initiative.

Food Aid

Food aid has been constant in the last decade but its importance for development purposes has much declined. Available food surpluses in OECD countries were mainly used for a growing number of emergencies. In emergency situations food aid is a critical first line of defense while the local economy recovers and will have to continue. In development situations, food aid enables marginalize, food insecure groups to escape consumption driven constraints. Food aid is viewed as an enabling pre-investment that can free people to take up development opportunities that increase human capital and acquisition of assets. It has been argued that food aid is limited in terms of development impact. Critics have viewed food aid as competing with local production, being insensitive to local consumer preferences and, in food-for-work programmes, diminishing nutritional benefits by requesting heavy physical work. However, food aid is rarely a stand-alone food security tool. It is most appropriate in combination with other assistance types and has its greatest impact if targeted to the most food insecure where additionality is greatest and the adverse impact on food production lowest.

There are important niches for food aid in the context of resources mobilization for RTF. Hungry rural (and urban) poor are net food consumers and naturally benefit from cheap food. If markets are segmented, geographically or seasonally, well targeted food aid ought not to depress farm prices. School feeding programmes are generally found suitable to help food insecure children, especially girls, to get access to both, food and an education. Targeted food aid coupled with labour-saving, simple technologies can be vital for ensuring the RTF in communities and households suffering from acute shortages of labour for food production as a result of HIV/AIDS. Making more cash available to food aid donor agencies for the financing of collateral cost and buying some of the food on local or neighboring countries markets would fend off much of the criticism and contribute to an urgently needed diversification of resources and agencies for RTF implementation.

International Taxation and FDI

Speculations have been rife in some quarters whether a carbon tax or a Tobin tax could be tapped as extra sources of finance for poverty and hunger reduction. These reflections have not yet led very far since vested interests and the need for universal consensus appear insurmountable at the moment. FDI has made substantial inroads in the last decade, interrupted by the Asian crisis, but touches few countries and sectors and avoids those that need it most under a poverty perspective.



1 Food production is understood to include reduction of post-harvest losses that can be as high as 40-50%

2 See Attachment 1

3 see Attachment 2

4 see report of the High-Level Panel on Mobilizing the Political Will to Fight Hunger, Rome, August 2001

5 Committee on Food Security, 25th Session, Rome, 31 May to 3 June 1999 and Anti-hunger programme submitted to the WFS;fyl

6 The extra requirements may appear small in relation to the perceived magnitude of the problem. However, due to Engel's Law, the additional demand, production capacity, and hence net investment, for food is relatively limited as incomes rise. Most investment is needed for keeping the existing capital stock intact, that is, keep existing irrigation infrastructure from crumbling, reclaim or replace cultivated land suffering from salinization and overexploitation, replace aging plantations, raise young stock to maintain the herd and so forth. The required investment would fall further if technology improvements in production and distribution were factored in. Also, a thought experiment shows that the cost of extra kcal to supply an adequate intake for the 800 million undernourished would be limited. At current international cereal prices the supply of additional 300 Kcal per day for each of the 800 million would cost some US$ 3 billion per year, or under 1% of farm support in OECD countries. This, evidently, says nothing about the far more important aspects of targeting and sustainability of the effort.

7 by Shantayanan Devarajan, Margret J. Miller and Eric V. SwansonCillier. The paper draws heavily on Paul Collier and David Dollar. 2000. Can the World Cut Poverty in half? How Policy Reform and Effective Aid can Meet International Development Goals. World Development 29 (11):1767-1802

8 Costs and Benefits of Meeting the Food Summit Target, by Styker, Plunkett, Nash, USAID, Sept. 2001

9 This section might need to be drafted omitting reference to the World Bank.

10 For example, experience shows that preparation cost of investment projects average from 1-2% of the loan amount suggesting extra preparation cost of the order of US$ 100 million annually for poverty-targeted rural projects and programmes unless a strong move away from project lending proves feasible.

11 not all of them hunger or agriculture-related

12 The amounts of debt relief must, of course, be collectible in order to form an additional resource for poverty reduction


 

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FAO, 2002