Friends –
Thanks to Géraldine Tardivel for her excellent summary of our conversation on innovative financing mechanisms.
The “Preliminary List of Innovative Financing Mechanism for Agriculture, Food Security and Nutrition” that Géraldine provided describes four broad categories of funding sources. Perhaps a fifth, Community-based Funding, could be added? Imagine an area in which there are many small farms, and a local population that obtains much of its food from those farms. A local credit union could be created, based on deposits from those farms and that population. Its rules could limit it to lending only to local small farms.
In my previous contribution I spoke about the need for discussion of how the proceeds from any innovative funding mechanism would be managed. Géraldine said, “a mechanism could be identified where resources collected by national taxes on currency transactions would be matched with a number of uses and needs in various sectors like health, education, food security.” This could be done, but it is really not easy. In far too many cases, nice sounding efforts have been hijacked by managers who steer the new resources to serve their own interests. Very often programs intended to meet the needs of the poor end up serving the wants of those who are relatively well off.
The idea of a transaction tax has been around for a long time. Perhaps it has not been implemented because, under many of the proposals, the powerful would not control the revenues. Another example is the global negotiations on the law of the sea. Many analysts think there is great economic potential in mining the seabed, but countries such as the U.S. do not want to have those resources managed as our common heritage. The powerful want those resources to belong to whoever has the power to take them.
The top of p. 3 of the Preliminary List says, “Preserving and enhancing food security requires agriculture production systems to change in the direction of higher productivity . . . “It is important to make a clear distinction between addressing the issue of overall food supply for the general population over the long run, and the hunger problem, which is the distinctive food security problem faced by people with little income. They require different sorts of policy responses. I carry on about this point at http://www.huffingtonpost.com/george-kent/achieve-sustainability-or_b_66...
Near the bottom of its third page, the Preliminary List says, “Malnutrition remains widespread, with market failures due to lack of competition and poor information . . .” This implies that malnutrition results from markets not functioning the way they are supposed to function. I don’t agree. I think that in any normally functioning market there is a steady flow of value from the bottom toward the top. This helps to explain the steadily widening gaps between rich and poor, both within countries and among countries. New investments can help the needy, but that is only likely where there is a strong element of caring about the needy. That caring is outside the market mechanism. These views are explained in my recent book, Ending Hunger Worldwide.
To summarize: while market-oriented programs, including strengthened investment programs, may be effective in increasing food production, one needs to look to other motivations and other mechanisms to ensure the food security of the poor.
Aloha, George
Проф. George Kent