Dear Moderator and friends
I like to draw attention to, why investment from the private sector will only go some of the way to ending undernutrition. It covers two broad arguments. Firstly, when considering how the private sector could contribute to improved nutrition outcomes, it dispels two common misconceptions: the first is that all that is needed is a production-based model with a minor tweak towards nutritionally enhanced harvests. The second is that all countries and regions in the midst of the global nutrition crisis are equally attractive for private sector contributions. The reality is that by eliminating food availability through increased yields we will only take a minor step towards eradicating undernutrition (Smith and Haddad; 2000). Secondly it emphasizes that new investments have so far been very biased towards agriculture and have not been mirrored by investments in other sectors such as nutrition, health, education or rural infrastructure. The G8’s ‘New Alliance’, which has food security and nutrition as its headline goals, is regarded as the flagship programme to catalyze investments from the private sector. Examining the six country frameworks that so far have been published, it appears that few private sector investments are planned for nutritious crops and foods. More than half of the 111 planned private investment projects focus on non-food crops and only four mention specific, nutrient-dense food products to be sold locally (Robinson and Humphrey, IDS Blog 2013).
The first misconception is that increased production of nutritionally rich crops will be a major step in combatting the global nutrition crisis. While evidence exists suggesting that improved agricultural can lead to improved food security and nutrition outcomes, evidence also exists proving that this will not happen automatically and that regulated, multi-sector interventions are needed to ensure that the increased food resources are distributed evenly at household level and that food of the right quality is accessible by all. To maximise availability at the household level, production models need to be adjusted with three key policy measures in mind:
The second misconception is that private sector interest in development is equal to the interest shown in public private partnerships (PPP). The encouraging theme of the World Economic Forum in 2010 (Realizing a New Vision for Agriculture and Nutrition: A Roadmap for Private Sector Stakeholders) did result in some support towards the resolution of problems related to water quality, hygiene, disease prevention, livelihoods and commodity supply chains. However it is probably reasonable to state that private sector food companies have yet to become pro-active towards the needs of the very poor and malnourished who may be perceived to be outside their future customer base. The above analysis of the New Alliance confirms this trend.
The groundbreaking work which led to the development of Ready To Use Therapeutic Foods (RUTF) to treat Severe Acute Malnutrition (SAM) through the CMAM approach has given frontline medical professionals a product which can be used under clinical or community supervision in controlled dosages to save the lives of many. Considering the caseload of 19 million children in need of these products globally, this is surely an interesting investment proposition. However there are apparently some major blockages to engaging business actors to invest in it.
To attract new actors to contribute to efforts to improve nutrition, it is of paramount importance to narrow the current funding gap and the unpredictability of the current market place. Funding for RUTF is more forthcoming in response to emergencies: 60% of current investments involving the treatment of SAM with RUFTs are in short-term, emergency settings, rather than in protracted crises. Increasing the funding for nutrition in chronic crises where there are on-going baseline needs would be more conducive to private sector investments (ACF’s Aid for Nutrition Series 2012-13) and would potentially attract new actors.
Not only does funding need to be increased and delivered more consistently, but the supply chain also needs to be reformed. One of the key challenges is that the sustainable provision of RUTF by external actors is only possible if UNICEF plays a pivotal role. Governments, donors and civil society organisations should explore and trial innovative financing to provide long-term, sustainable and predictable funding for the full package of direct nutrition interventions which is aligned with complementary initiatives in health, food security and agriculture. The vacuum of private sector interest in undernutrition can only hope to be closed when a credible costing to improve nutrition by an external actor is integrated with national nutrition plans.
Equally, donors within the SUN Movement are taking very different approaches to tackling undernutrition. While the EC is the primary funder of the Secretariat, DFID’s support appears to focus on advocacy and the stimulation of partner government involvement rather than the supply of digestible nutrients. In contrast, USAID’s approach through the Feed the Future initiative is to improve food security by boosting harvests, nurturing agricultural development and expanding business opportunities. In some respects this is a return to development through market economics and livelihood improvement rather than a direct move to addressing malnutrition on the ground or through its health and social drivers. Despite the positive messages printed in their policies, such inconsistency between major donors is sending mixed messages to potential private investors.
An additional barrier to private sector investment in nutrition is the limited potential for additional stocks of RUTF. It is unlikely that a new PPP for RUTF would be successful as the current producers of the product are operating well below their available capacity. An alternative would be to direct the capacity of the private sector to the manufacture of Ready To Use Supplementary Products (RUSF) which could be used address Moderate Acute Malnutrition (MAM). MAM is much more widespread and there is a much greater potential to develop new, innovative types of RUSF. Therefore the private sector could play a very positive role here by working with the public sector to ensure the institutional supply of products to address MAM and by potentially providing the consumer with the product free of charge.
The development of products and services for the treatment and prevention of MAM probably offers the greatest potential for the private sector in nutrition programmes. Private sector investments would to reduce the need for treatment and free up the resources of governments to target the underlying causes of undernutrition within the health, food security and education sectors. This will also require a rethink of how civil society operates and the role of NGO’s play in addressing MAM.
Finally we should consider whether there is a preference for local or multinational companies to invest, bearing in mind that multinational companies are likely to contribute the most financially. While global or regional private partnership initiatives would contribute significant value to the distribution of products around the world, they would also undermine the desired objective of integrating the manufacture of RUTF within national governments where it is needed. Also there must be a transparent agreement between the private sector, civil society and government at national level which defines the extent to which external engagement is in the interest of all parties. This is especially the case when foreign exchange is needed for the purchase of milk powders, micronutrients and packaging.
The lack of funding, stability and strategy to tackle acute malnutrition and to produce RUTF therefore requires initiatives to be started at government level and progressed by engaging in discussions with affected civil society. These challenges are unlikely to be fixed by the private sector.
If the private sector is to play a new and positive role in addressing undernutrition, governments and civil society must be clear on where and how to encourage the development of future markets. Discussions must outline where the gaps in funding are and how new investment could free resources in other areas where private sector investments have not been forthcoming. Furthermore, given that there is unequal progress in different sectors and regions, donors must be able demonstrate that there is a real need to tackle undernutrition beyond emergencies. This would create long-term markets which interested companies could enter. In 2008, the first Lancet series concluded that the approach to tackling nutrition crises was fractured. Since then much energy has been expended to improve coordination and increase the evidence-base. If future efforts to address hunger are dictated by disjointed and biased private investment, we are in danger of losing much of this progress.
Links and resources:
Earlier FSN Forum ICN2 discussions:
El Foro FSN es apoyado por el proyecto Respuestas coherentes de seguridad alimentaria: la incorporación del Derecho a la Alimentación en las iniciativas globales y regionales de seguridad alimentaria.