Conference participants further encouraged FAO to promote the conference recommendations to the next sessions of the Committee on World Food Security and the Committee on Forestry, as well as to the Second International Conference on Nutrition (ICN2) to be held at FAO headquarters in Rome on 19-21 November 2014.

Santos López, on behalf of the Central American Integration System (CAIS) and the Republic of Nicaragua, expressed full support for the transformational process being undertaken by FAO and for the Director-General's Programme of Work and Budget for 2014-15. The Minister also highlighted the importance of providing sufficient financial resources for FAO's programmes.

• A budget increase of  $ 10 million  for strengthening priority areas of work such as the Technical Cooperation Programme (FAO's technical work at the field level) including the capacity for social protection; 
• The development and implementation of regional programmatic initiatives as part of the Strategic Objective Action Plans; and
• The further strengthening of decentralization.

• establishment and training of a Locust Watch Unit inside the Plant Protection Directorate, for monitoring and analysis of the locust situation over the whole invasion area;
• aerial and ground survey operations;
• monitoring and mitigation of locust control operations to preserve human health and protect the environment;
• training in pesticide and spraying operations management.

According to the FAO Director-General, Malawi has made important progress against hunger: “It is on track to meet the first Millennium Development Goal and can realistically set even higher targets.”

However, he recalled that the country still faces many challenges and that many of them are immediate.
 
“As President Banda pointed out, late rains in the current agricultural season put additional pressure on food security especially in the southern region,” he said.

Banda, Graziano da Silva and Piebalgs also discussed how Malawi could benefit from the experiences of and lessons learned from other countries in tackling hunger and malnutrition, such as the Brazilian Zero Hunger Strategy. President Banda welcomed the proposal and also gave her support to the partnership between FAO, the African Union and Instituto Lula to intensify efforts to end hunger in Africa.

Graziano da Silva and the EU Commissioner are also visiting several EU and FAO projects during their stay in Malawi. In Chingonthi, for example, FAO supports a community grain storage project that aims to reduce post-harvest losses of maize by improving storage facilities and marketing.

The communities will receive further support and training to ultimately become cooperatives, so that they can scale up their farming activities with better market integration.  

In the coming year FAO will be focusing on supporting the country in the implementation of its Agriculture Sector Wide Approach (ASWAp) which reflects the priorities of the Malawi Growth and Development Strategy II and the Comprehensive African Agricultural Development Programme (CAADP) of the African Union.

FAO will also, in partnership with the African Union Commission, the EU Commisssion and partners such as Brazil's Instituto Lula call on Member States, Civil Society, the private sector, Regional Economic Communities and Development Partners to join in the proposed partnership for "Intensifying efforts to End Hunger in Africa."

FAO's engagement in this partnership stems from the Organization's recent efforts to strengthen the identification and delivery of a focused set of products and services requested by member states in order to achieve a tangible impact at country level. Towards this aim, FAO is working with all member states to prepare Country Programming Frameworks that identify priority areas of intervention.

FAO's new decentralization strategy and this partnership provide an opportunity to achieve concrete results and maximum impact.

Also high on their list of concerns were global efforts to strengthen systems for agricultural statistics, especially for major globally traded commodities, to avoid price shocks and ensure transparency on global markets.

"Latin America and the Caribbean have understood this and this was the first region to take on the challenge of fully eradicating hunger and not only diminishing it, by launching the Hunger Free Latin America and the Caribbean Initiative in 2005", he added.

Graziano da Silva highlighted the many initiatives that have emerged in the region, such as Hunger Zero in Brazil and the Crusade Against Hunger in Mexico - launched this week - which will help more than 7.4 million Mexicans living in extreme poverty and food insecurity.

"When a country decides to say 'no more hunger', the improvements that can be achieved are surprising," said the FAO Director General.

Graziano also highlighted the fact that Antigua and Barbuda has joined the UN Zero Hunger Challenge: Zero Hunger in Antigua and Barbuda has the full support of the FAO, and other agencies such as the World Food Programme (WFP), the World Bank, the Inter-American Institute for Cooperation on Agriculture (IICA),  the Economic Commission for Latin America and the Caribbean (ECLAC), the Pan American Health Organization/World Health Organization (PAHO/WHO), and the United Nations Children's Fund (UNICEF), as well as the Caribbean Community and Common Market (CARICOM).

Latin America on the front line  against hunger

Latin America and the Caribbean has become a benchmark in the global fight against hunger. In the last 20 years, 16 million people have ceased to suffer hunger in the region.

 In 1990-1992 hunger affected 14.6 percent of the population, or 65 million people, while in 2010-2012, it affected only 8.3 percent, or 49 million people. Add to this significant legislative advances: currently seven countries in the region already have food security laws, while another ten are developing legislation on the matter.

Hunger in the region is fundamentally a problem of access to food and not of food availability, Graziano said: "Latin America and the Caribbean, with a population of 600 million people, produces enough food to feed 750 million people. However, 49 million of the current population still suffer hunger," he said.

The Hunger Free Latin America and the Caribbean 2025 Initiative has provided strong support to this process by promoting the fight against hunger and the realization of the right to food, with action such as the creation of Parliamentary Fronts Against Hunger, which already exist in 14 countries

Tackling food waste

"A sustainable world requires not only that production be sustainable, but also consumption," said the Director General of the FAO.

Graziano da Silva said that globally, a third of all food produced is wasted, and he stressed that if one could avoid this waste "it would be possible to feed all the hungry people and have food to spare."

In Latin America and the Caribbean, losses and waste of food for retail during the production phase reach 200 kg per capita per year. At the consumer level, 25 kilos per capita per year are wasted. In cereal production, losses reach 30 percent of the grains produced, 40 percent of roots and tubers, 55 percent of fruits and vegetables, 20 percent of meat, almost 30 percent of fish and seafood, and more than 20 percent of dairy products.

The Think.Eat.Save. Reduce Your Foodprint campaign is in support of the SAVE FOOD Initiative to reduce food loss and waste along the entire chain of food production and consumption - run by the FAO and trade fair organizer Messe Düsseldorf - and the UN Secretary General's Zero Hunger Initiatives. The new campaign specifically targets food wasted by consumers, retailers and the hospitality industry.

The campaign harnesses the expertise of organizations such as WRAP (Waste and Resources Action Programme), Feeding the 5,000 and other partners, including national governments, who have considerable experience targeting and changing wasteful practices.

Think.Eat.Save. aims to accelerate action and provide a global vision and information-sharing portal for the many and diverse initiatives currently underway around the world.

Worldwide, about one-third of all food produced, worth around $1 trillion, gets lost or wasted in food production and consumption systems, according to data released by FAO. Food loss occurs mostly at the production stages - harvesting, processing and distribution - while food waste typically takes place at the retailer and consumer end of the food-supply chain.

"In a world of seven billion people, set to grow to nine billion by 2050, wasting food makes no sense - economically, environmentally and ethically," said UN Under-Secretary-General and UNEP Executive Director Achim Steiner.

"Aside from the cost implications, all the land, water, fertilizers and labour needed to grow that food is wasted - not to mention the generation of greenhouse gas emissions produced by food decomposing on landfill and the transport of food that is ultimately thrown away," he added. "To bring about the vision of a truly sustainable world, we need a transformation in the way we produce and consume our natural resources."

"Together, we can reverse this unacceptable trend and improve lives. In industrialized regions, almost half of the total food squandered, around 300 million tonnes annually, occurs because producers, retailers and consumers discard food that is still fit for consumption," said José Graziano da Silva, FAO Director-General. "This is more than the total net food production of Sub-Saharan Africa, and would be sufficient to feed the estimated 870 million people hungry in the world."

"If we can help food producers to reduce losses through better harvesting, processing, storage, transport and marketing methods, and combine this with profound and lasting changes in the way people consume food, then we can have a healthier and hunger-free world," Graziano da Silva added.

The global food system has profound implications for the environment, and producing more food than is consumed only exacerbates the pressures, some of which follow:

• More than 20 per cent of all cultivated land, 30 per cent of forests and 10 per cent of grasslands are undergoing degradation;
• Globally 9 per cent of the freshwater resources are withdrawn, 70 per cent of this by irrigated agriculture;
• Agriculture and land use changes like deforestation contribute to more than 30 per cent of total global greenhouse gas emissions;
• Globally, the agri-food system accounts for nearly 30 per cent of end-user available energy;
• Overfishing and poor management contribute to declining numbers of fish, some 30 per cent of marine fish stocks are now considered overexploited.

Part of the trigger for the campaign was the outcome of the Rio+20 Summit in June 2012, in which Heads of State and governments gave the go-ahead for a 10-Year Framework of Programmes for Sustainable Consumption and Production (SCP) Patterns. Developing an SCP programme for the food sector must be a vital element of this framework, given the need to sustain the world's food production base, reduce associated environmental impacts, and feed a growing human population.

"There can be no other area that is perhaps so emblematic of the opportunities for a far more resource-efficient and sustainable world - and there is no other issue that can unite North and South and consumers and producers everywhere in common cause," said Mr. Steiner.

According to FAO, roughly 95 per cent of food loss and waste in developing countries are unintentional losses at early stages of the food supply chain due to financial, managerial and technical limitations in harvesting techniques; storage and cooling facilities in difficult climatic conditions; infrastructure; packaging and marketing systems.

However, in the developed world, the end of the chain is far more significant. At the food manufacturing and retail levels, large quantities of food are wasted due to inefficient practices, quality standards that over-emphasize appearance, confusion over date labels, and consumers being quick to throw away edible food due to over-buying, inappropriate storage and preparing meals that are too large.

Per-capita waste by consumers is between 95 and 115 kg a year in Europe and North America/Oceania, while consumers in sub-Saharan Africa, south and south-eastern Asia each throw away only 6 to 11 kg a year.

According to WRAP, the average UK family could save £680 per year ($1,090) and the UK hospitality sector could save £724 million ($1.2 billion) per year by tackling food waste.

"In the UK, we have shown how tackling food waste through engaging with consumers and establishing collective agreement with retailers and brands, reduces environmental pressures and aids economic growth," said Dr. Liz Goodwin, CEO of WRAP. "With a rising population, even more pressure is going to be put on resources, and we are excited to be a partner in UNEP and FAO's Think. Eat. Save. campaign, which is a great start to tackling food waste on a global scale."

In a similar vein for other parts of the world, the European Union is looking into the issue of food waste, and the European Commission has lent its weight to the new initiative.

"In the EU we have set ourselves a target to halve edible food waste by 2020 and to virtually eliminate landfilling by 2020; the Commission is planning to present ideas next year on the sustainability of the food system which will have a strong focus on food waste," said Janez Potočnik, European Commissioner for the Environment.

"Less food waste would lead to more-efficient land use, better water resource management, more sustainable use of phosphorus, and it would have positive repercussions on climate change. Our work fits perfectly with the launch of this initiative," he added.

For the campaign to reach its huge potential, everyone has to be involved - families, supermarkets, hotel chains, schools, sports and social clubs, company CEOs, city Mayors, national and world leaders.

The campaign website provides simple tips to consumers and retailers, will allow users to make food waste pledges, and provides a platform for those running campaigns to exchange ideas and create a truly global culture of sustainable consumption of food.

• Improve information on drylands to support sustainable management of land and water resources.
• Scale up the sustainable intensification of agriculture and adapt production to climate change.
• Build resilience in rural communities and increase responsible investments in agriculture and rural development.
• Strengthen global food security governance, building on the Committee on World Food Security (CFS), the intergovernmental food policy body.

Since 2009, the EU has been supporting a wide-ranging initiative of the government and FAO to raise nutrition levels of the rural population and stimulate their economic growth potential, known as the Swaziland Agricultural Development Project (SADP), a 5-years programme funded with over €14 million of EU and almost €350 000 by FAO.

Although it was challenging to get such a complex project off the ground, Amadou Traoré, the EU's chargé d'affaires a.i. in Swaziland feels that things are moving in the right direction. "European taxpayers are willing to show their generosity," he says, "but especially now, when Europe itself experiences financial and economic difficulties, they want to see results." 

Louise McDonald, country program manager for the International Fund for Agricultural Development (IFAD) for Swaziland, says that SADP's achievements have strengthened collaboration between IFAD and FAO in assisting the government and smallholder farmers. "Together, we will work on bridging SADP's activities with a US$ 47 million program to be co-financed by IFAD", she says.

Smallholders

Fundamentally, SADP is all about smallholders, says Nehru Essomba, the project's Chief Technical Advisor: "You cannot tackle rural poverty, if you don't put the smallholder farmers first."

Connecting farmers to the market is a major challenge, Essomba says. So close to South Africa with its big scale producers, the environment is extremely competitive. SADP is setting up a €1 million Marketing Investing Fund, particularly to promote niche crops that offer small farmers a comparative advantage on the market place.

Equally important is to improve the environment in which the agricultural sector operates, both institutionally and physically. While major infrastructural rehabilitation works are being prepared, policies relating to research and extension are being updated and large scale capacity building of farmers, organisations and extension workers is underway.

At the same time, SADP helps spreading good agricultural practices, important for farmers to increase their productivity, while preserving the environment and lessen the pressure on Swaziland's limited natural resources. So far, more than 2 000 farmers have been trained in a wide range of practices, including conservation agriculture and agro-forestry.

Holding on

"Food security will come in two ways: by growing your own food and by growing to sell at the market," says Dr. Robert Thwala, Principal Secretary of Swaziland's Ministry of Agriculture, explaining SADP's focus on improving crop and livestock production and on agro-business development.

In Swaziland, where HIV prevalence is the highest in the world, the most vulnerable among the rural poor are the elderly and the youth, who have lost either parents or children, as the generation in between was decimated by the aids pandemic.

A total of 340 vegetable gardens have been established for vulnerable families to grow vegetables and herbs for household consumption, or in case of excess production, for sales to community members. Over 2000 people have directly benefited from the gardens, while also receiving nutritional education, through demonstrations in food preparation and processing. 

To support the younger generation, SADP is helping youth groups set up small agricultural businesses. Sixty groups, comprising around 2 500 youngsters, are engaged in poultry farming, pig production or vegetable and field crop production. They get the equipment, tools, inputs, medicines and training to make their business run.

The Mhawu Youth Club from the Ngudzine area in southern Swaziland is raising chickens. Sixteen year old member Nomcebo Simelane finds a lot of encouragement at her club: "Your peers tell you that when you want to make your dreams come true, you should just hold on."

Moreover, the poultry business offers her a way to do just that. She hopes that she will make enough money out of it to go to university and become a nurse.

“There can be no freedom from hunger – there can be no food security - without the active participation of all sectors of society, including the private sector,” said FAO’s Director-General José Graziano da Silva at the conference.

He added that apart from important investments, financial and in-kind contributions, the private sector can make another important valuable contribution, which “is not easy to quantify, but that is crucial: the political support that the private sector can give to food security. We need to build consensus and mobilize all stakeholders towards this goal. With the private sector on board, national and international efforts to fight hunger have added legitimacy."

Integration

The conference explored ways to improve the trade conditions between transition countries and the Southern and Eastern rim of the Mediterranean. 

Furthermore, with a view to develop farming and maximize the efficiency of food chains, different models of vertical integration were discussed. Agricultural cooperatives were singled out as one of the models to support more inclusive food systems.

And as the involvement of the private sector strongly depends on agricultural policies, much attention was given to ways of fostering private-public dialogue, to ensure that key partners can make their voices heard in policy-making processes and, eventually, enrich the policies themselves, bearing in mind the special interest of millions of small farmers.

Food chain

Earlier this year, the EBRD and FAO stepped up their efforts to promote private sector investment in agribusiness in EBRD's Southern and Eastern Mediterranean region (SEMED), reflecting the two organizations' push for strengthened links with the private sector and civil society to fight hunger and promote sustainable development.

The EBRD and FAO are providing and mobilizing investment in infrastructure and equipment and improving farmers' access to finance thanks to the secured-transactions reform that will allow them to pledge crops and equipment as collateral.

The EBRD and FAO also encourage efficient use of resources, which means "more food per drop" of water and fertilizer.

Since the start of their partnership in 1994, FAO and the EBRD have implemented over 90 technical assistance projects for a total value of about USD 12 million. These projects have helped to address institutional and regulatory bottlenecks, as well as improve transparency and efficiency along the whole food value-chain in EBRD's countries of operation. 

10 September 2012, Rome - A new FAO publication says carefully tailored policy and institutional changes can help to unlock the livestock sector's poverty reduction potential.

"Although an estimated 750 million poor have a major stake in the livestock sector, only a small minority of them have so far been able to take advantage of the opportunities provided by livestock sector growth" the authors write.

"In most instances, governments do not deliberately formulate policies that are anti-poor; rather they fail to realize that economic growth, although necessary, is not always sufficient for poverty reduction," they explain.

The book, Livestock sector development for poverty reduction: an economic and policy perspective, collates evidence from a broad array of sources and perspectives showing that investing in livestock can sustain livelihoods and spur economic growth. It illustrates that good policies and institutions are essential to the support of equitable livestock sector development.

But it equally warns that the specific context of each country means that a blueprint approach to policy and institutional change does not work: Identifying the most appropriate institutional and policy reform requires making space for experimentation and learning from the associated successes and failures.

The authors also argue it is important for governments, donors and others to make a distinction between livestock sector-related policies that lead to economic growth, and policies and institutional change which help the very poorest families to survive or improve their livelihoods.

This is especially critical in areas where the depth of poverty among livestock keepers is particularly high. For example, in sub-Saharan Africa it is estimated that more than 85 percent of poor livestock keepers live in extreme poverty.

For people living in extreme poverty, the authors note, "livestock may not provide many growth opportunities, but are more likely to act as safety nets - tools for survival, rather than tools for development."

The book, subtitled Livestock's many virtues, is the last in a series of publications written under FAO's decade-long Pro-poor Livestock Policy Initiative (PPLPI), a global endeavour funded primarily by the United Kingdom's Department for International Development (DFID) to improve livestock sector policy in ways that increase the benefits to poor people.

Tackling the root causes of high food prices and hunger

by José Graziano da Silva, Kanayo F. Nwanze and Ertharin Cousin*

Two interconnected problems must be tackled: the immediate issue of some high food  prices, which can impact heavily on food import-dependent countries and on the poorest people; and the long-term issue of how we produce, trade and consume food in an age of increasing population, demand and climate change.

In responding to those challenges, we are better placed today than five years ago. We have developed new policies and new instruments, like the United Nations High-Level Task Force on Global Food Security and AMIS, the G20's Agricultural Markets Information System, which improves transparency in global markets. We also have the AMIS-related Rapid Response Forum, set up to facilitate coordinated policy responses by the major world producers and traders of key cereals and soybeans in the event of market upheavals.

We have learned that not all are affected in the same way - the urban and rural poor and people in food import-dependent countries are most vulnerable to international commodity price increases, when these are transmitted to local markets, because they spend the largest proportions of their incomes on food.

We have also learned that smallholder farmers, many of whom are also poor and food insecure, can be enabled to benefit from higher food prices and become part of the solution by reducing price spikes and improving overall food security.

We have thus adopted a twin-track approach which supports long-term investments in agriculture, notably smallholder agriculture, while ensuring that safety-nets are in place to help poor food consumers and producers avoid hunger, asset losses and poverty traps in the short run.

Many countries have social protection systems including safety nets - such as assistance for smallholder farmers, nutritional support to mothers and children, and school meals - to ensure that their poorest citizens have enough to eat; yet, these need to be expanded significantly in poorer countries. Safety nets that are affordable, predictable and transparent are an absolute must if we are to safeguard against recurring price shocks and crises.  

Small-scale food producers also need to be better equipped to raise their productivity, increase their access to markets and reduce their exposure to risk. And, of course, people need decent jobs and incomes so that they can afford the food they need and escape from poverty.

In responding to high food prices, the things we must avoid doing are just as important as the things we should do. In particular, countries must avoid panic buying and refrain from imposing export restrictions which, while temporarily helping some consumers at home, are generally inefficient and make life difficult for everyone else.

Above all, however, we must understand that high food prices are a symptom, and not the disease. So while the international community must take early action to prevent excessive price increases, it should also move to act on the root causes behind such surges.

There have been three international food price spikes in the last five years. Weather has been among the drivers of each. Droughts in some part of the world have impaired global grain production virtually every other year since 2007. Elsewhere, major floods have also caused severe damage to crops. Increased diversion of food stock for non-food purposes and increased financial speculation are among the various drivers of increased  price levels and volatility.

Until we find the way to shock-proof and climate-proof our food system, the danger will remain. In the short term, this has costs, not only for those directly impacted, but also for the international community at large. For instance, the World Food Programme (WFP) estimates that every 10 per cent increase in the price of its food basket means it has to find an extra $200 million a year for food assistance.

We are vulnerable because even in a good year, global grain production is barely sufficient to meet growing demands for food, feed and fuel - this, in a world where there are 80 million extra mouths to be fed every year. We are at risk because only a handful of nations are large producers of staple food commodities, and when they are affected, so is everyone else.

The challenge - and the opportunity - is both to reduce and to spread that risk. And the most obvious way is to promote sustainable food production in poor, food-importing countries, where there is often huge potential to improve production. That would make more food available in local markets and provide jobs and income, especially in rural areas where 70 per cent of the world's poor live. We should also address the fact that, globally, one third of food produced is wasted or lost to spoilage, damage and other causes.

The Food and Agriculture Organization of the UN (FAO), the International Fund for Agricultural Development (IFAD) and the World Food Programme are helping poor people to eat today while building their resilience and capacity to feed themselves tomorrow. But more needs to be done.

We need to invest much more in agriculture and social protection, including programmes that help poor people to access food that has become unaffordable in their local markets.

Lastly, we also need to review and adjust where applicable policies currently in place that encourage alternative uses of grains. For example, adjusting biofuel mandates when global markets come under pressure and food supplies are endangered has been recommended by a group of international organizations including FAO, IFAD, the International Monetary Fund, the Organisation for Economic Co-operation and Development, the UN Conference on Trade and Development, WFP, the World Bank and the World Trade Organization. That recommendation, made to the 2011 G20 summit in Paris, still stands today.
 
In moving to prevent a possible deterioration of the situation, we need to remain vigilant and prepare for the worst in the short run, while working on sustainable solutions for the long haul. Not to do so would inevitably mean that the world's poorest and most vulnerable pay the highest price. Getting this right will help us respond to the "Zero Hunger" challenge set by UN Secretary-General Ban Ki-moon of eradicating hunger from the globe.

*The authors are respectively the Director-General of the Food and Agriculture Organization of the United Nations, the President of the International Fund for Agricultural Development and the Executive Director of the UN World Food Programme.

More than half of all urban Africans live in slums, up to 200 million survive on less than $2 a day, and poor urban children are as likely to be chronically malnourished as poor rural children.

"The challenge of achieving a "zero hunger" world - in which everyone is adequately nourished and all food systems are resilient - is as urgent in African cities as it is in rural areas," reads the foreword by Modibo Traoré, FAO Assistant Director-General for Agriculture and Consumer Protection.

"African policymakers need to act now to steer urbanization from its current, unsustainable path towards healthy, ‘greener' cities that ensure food and nutrition security, decent work and income, and a clean environment for all their citizens," the foreword continues.

The book was released in advance of the sixth session of the World Urban Forum in Naples, Italy (1-7 September). The Forum was established by the United Nations to examine one of the most pressing problems facing the world today: rapid urbanization and its impact on communities, cities, economies, climate change and policies. 

By the end of the current decade, 24 of the world's 30 fastest growing cities will be African. The publication cites surveys showing that between 2010 and 2030, the urban population of sub-Saharan Africa is projected to double, from about 300 to 600 million.

Sustainable market gardens

Growing greener cities in Africa voices particular concern about the future of market gardening - the irrigated, commercial production of fruit and vegetables in designated or other urban areas.

Market gardening is the single most important source of locally grown, fresh produce in 10 out of 27 countries surveyed, and the number-two source in six other countries. But market gardening has grown with little official recognition, regulation or support. In some cities, it is becoming unsustainable: to maximize returns, market gardeners have increased the use of pesticides and polluted water.

The publication urges national governments and city administrations to work together with growers, processors, suppliers, vendors and others to give market gardens and urban and peri-urban agriculture the political, logistical and educational support necessary for sustainable development.

Among the specific recommendations, policymakers are advised to zone and protect land and water for market gardens, and encourage growers to adopt FAO's "Save and Grow" farming model. Save and Grow seeks to boost yields while conserving and enhancing natural resources. It includes applying the right amount of appropriate, external inputs at the right time - such as pesticides, fertilizers and seeds.

FAO and urban gardening

FAO's Programme for Urban and Peri-urban Horticulture helps cities to ensure a year-round supply of affordable, fresh produce that meets the nutrition needs of their populations. It does that, first, by promoting market gardening, usually within 30 kilometres of city centres.

FAO also supports action to help low-income urban households to "grow their own", as a way of improving the quality of their diet, saving cash to spend on other needs, and earning income from the sale of surpluses.