32. Table 1 sets out the incremental average annual public expenditure required for a multicomponent programme intended to lead to the achievement of the WFS goal by 2015. It should be noted that these cost estimates are far from being an exhaustive list of all the required expenditures. Rather they should be seen as a priority list. While much more is required, it is critical to mobilize at least the amounts mentioned below.
33. The spending proposals contained in this document do not preclude the possibility of countries or regions devising more ambitious rural development programmes. An example is the Comprehensive Africa Agriculture Development Programme (CAADP) described in Box 1, which aims to revitalize the struggle against poverty and hunger in the African continent through rapid agriculture-based economic development.
34. It would be misguided to conclude from Table 1 that an incremental public investment of about US$24 billion per year will produce an annual "return" of US$120 billion. The interventions described are aimed at halving the number of the undernourished between 1990-92 and 2015. The figure for the benefits describes what would happen if the number of the undernourished were halved, through whatever means, i.e. not necessarily through these particular interventions. In particular, the investment costs are predicated on the crucial assumption that the necessary enabling political, social and economic environment exists and that sufficient private investment will accompany public investment spending. It should also be noted that, in addition to the benefits deriving from the reduction in the number of the undernourished from the programme, there are expected to be other benefits associated with rural development, such as overall poverty reduction. Nevertheless, it would seem reasonable to conclude from Table 1 that spending on hunger reduction is very worthwhile.
Table 1
Incremental annual public investment needed to
meet the WFS goal
|
Priority area for investment |
Estimated annual cost* |
|
1. Improve agricultural productivity in poor rural communities |
2.3 |
|
2. Develop and conserve natural resources |
7.4 |
|
3. Expand rural infrastructure and market access |
7.8 |
|
4. Strengthen capacity for knowledge generation and dissemination |
1.1 |
|
5. Ensure access to food for the most needy |
5.2 |
|
Total investment costs |
23.8 |
|
Estimated annual benefits of meeting WFS goal |
120.0 |
* All costs are in 2002 prices.
Source: FAO calculations.
|
Box 1 The African continent faces special challenges. The latest figures (for 1999 - 2001) show that about 205 million people - 27 percent of Africa’s population - are chronically hungry, compared with 171 million in 1990 - 92. While the proportion of the population living in hunger is dropping slightly, the absolute numbers are rising. Most of the economic opportunities accessible with Africa’s limited financial and human capital, at both the household and the national level, will have to come from agriculture, since agriculture directly affects the lives of between 70 and 80 percent of Africa’s people. Agricultural development must be at the centre of sustainable development in Africa in order to bring down the incidence of hunger and poverty by a substantial amount. Unfortunately, agriculture is being devastated by the spread of the HIV/AIDS epidemic. In Sub-Saharan Africa, AIDS has already killed around 7 million agricultural workers since 1985 and 16 million more may die before 2020. Over 20 percent of the agricultural labour force has been lost in Botswana, Namibia, Mozambique, South Africa and Zimbabwe. Losses of this magnitude can cause the collapse of the entire social fabric of rural communities. The resource requirements for the Anti-Hunger Programme given below are the minimum amounts required to promote hunger reduction through agricultural development in Africa. These figures therefore exclude the cost of programmes to promote direct access to food. Given the special needs of Africa, especially sub-Saharan Africa, a minimum amount of US$4.6 billion per year will be required. It is proposed that these additional resources be allocated to sub-Saharan Africa as follows: US$2.4 billion in concessional assistance to agricultural and rural development, and another US$1.6 billion from public domestic sources. It is expected that an additional in flow of US$0.6 billion per year in non-concessional loans will be available. A more ambitious programme has been launched by Africa’s leaders, the New Partnership for Africa’s Development (NEPAD). NEPAD’s cross-cutting priorities are: peace, security, democracy and political, economic and corporate governance. These are complemented by the following sectoral priorities: infrastructure, human resources development, agriculture, environment and culture. NEPAD’s framework, which applies to all of Africa, provides a potentially important avenue to attain and even exceed the WFS goals in the entire region. The Comprehensive Africa Agriculture Development Programme (CAADP) was launched in June 2002 under the auspices of NEPAD. The African Union Summit Declaration on Agriculture and Food Security in Africa, issued at Maputo in July 2003, resolved to implement in earnest the CAADP and to adopt fair policies for agricultural development and commit increased budgetary resources for their implementation. Governments have committed themselves to allocate a minimum of 10 percent of their budgets to agricultural and rural development and food security within five years. In the medium term, action to promote comprehensive and balanced agricultural development will require a focus on three priority areas: increasing food supply and reducing hunger; extending the area under sustainable land management and reliable water control systems; and improving rural infrastructure and market access. Resource requirements for these three priority areas are estimated to be approximately US$13 billion per year between 2003 and 2015. |
35. As for the timing of these investments, there are good reasons to give priority to direct food assistance programmes, building these up rapidly from the outset. When such programmes procure food from local sources, they provide income for local producers and, by feeding the hungry during the period before the fruits of agricultural investment become available, improve their productivity and income-earning opportunities. Clearly, local procurement is not always possible in emergencies and in cases of severe national food deficit. In these situations food aid is essential.
Cost estimate: US$2.3 billion per year
36. Improving the performance of small farms in poor rural and peri-urban communities offers one of the best and most sustainable avenues for reducing hunger by increasing the quantity and improving the quality of locally available food. It also provides a foundation for equitable economic growth. At the very least, better performance improves food availability and nutrition within the immediate farm families, thereby increasing their capacity to enjoy a full life, learn and work effectively and contribute to the general good of society. But it also increases and diversifies food supplies in local markets, creates a base for expanding and diversifying farm output into tradable products, opens employment opportunities and slows rural-urban migration.
37. Starting up such a process requires an initial injection of capital, either through loans or matching grants, to enable small farmers to build up productive assets on their farms. The average cost of investments required to kick-start a sustainable process of on-farm innovation may be estimated at about US$500 per family. Typically, this start-up capital would finance the uptake of new technologies, such as seed of improved varieties, plants, manure or fertilizers; small-scale on-farm works and equipment (e.g. land levelling, treadle pumps); breeding stock (e.g. poultry, goats); or contributions towards community-led measures to improve food security (e.g. school gardens, paralegal services to broaden land access). To ensure sustainability, farmers who take part in such programmes would repay the initial capital into savings and loans associations or community-run revolving funds, thereby allowing reinvestment of the benefits accruing from higher production.
38. Success in on-farm development depends on the creation of a policy environment conducive to agricultural growth, supported by research and extension institutions that are responsive to locally articulated needs. In many cases success also depends on developments beyond the farm boundary, such as improvements in roads or in the supply of irrigation water. The investment needs for these improvements are addressed under other programme components.
39. Sustaining and upscaling this process requires the emergence of self-reliant community institutions that can take the lead in ensuring the food security of all their members, plough gains back into new investments and develop linkages with other communities through sharing knowledge and experience. This enables groups of communities with a common goal to place increasingly effective demand on the broadening range of services and types of infrastructure required to allow them to develop greater resilience to economic, social and natural shocks as well as to earn more and emerge from hunger and extreme poverty.
40. The scale of the programme must be massive if it is to have a meaningful impact on reducing hunger and poverty. A plausible target is to benefit 60 million households in developing countries between now and 2015, equivalent to approximately half the number of people who are now hungry. The total cost would be about US$2.3 billion per year over 13 years.
Cost estimate: US$7.4 billion per year
41. Land, water and plant and animal genetic resources enable agriculture, fisheries and forestry to contribute to food production and rural development. Combining them with appropriate technologies, financial capital, labour, infrastructure and institutions enhances their productivity. This combination of resources and human ingenuity has enabled global food production to outpace growing demand, despite the declining availability of per capita land and water resources and the tendency towards depletion of genetic resources. If food demand is to be met in the future, increased outputs will have to come mainly from intensified and more efficient use of these limited means of production. At the same time, action must be taken to arrest the destruction and degradation of the natural resource base. Achieving these apparently conflicting tasks requires investments to manage the resource base, improve technical production efficiency (yields) and develop practices that foster sustainable and intensified food production. International agreements, such as the International Treaty on Plant Genetic Resources for Food and Agriculture adopted at the 2001 FAO Conference, can provide agreed frameworks for the conservation and sustainable utilization of key agricultural resources, and the fair and equitable sharing of the benefits. An estimated annual incremental public sector investment of US$7.4 billion is required in natural resources (i.e. land and water, plant and animal genetic resources, fisheries and forestry) to meet the WFS target in 2015. This figure is broken down as follows:
US$2.5 billion per year is needed for the extension and improvement of irrigation systems beyond the farm boundary (e.g. dams, canals) and the implementation of programmes that foster farmers’ adoption of soil and water conservation practices.
US$500 million per year is needed to conserve and use plant genetic resources. The rapid ratification and entry into force of the International Treaty on Plant Genetic Resources for Food and Agriculture will allow funds for the implementation of priority activities, plans and programmes, in line with the Leipzig Global Plan of Action, to be mobilized through its Funding Strategy. This will help cover the incremental cost of funding international activities and will contribute to national activities necessary to conserve, evaluate, make available and enhance the use of plant genetic resources, providing the basis for yield increases through crop breeding and better on-farm management of genetic resources.
The conservation of farm animal genetic resources, together with genetic improvement schemes for increased animal productivity through higher reproductive rates and better production per animal, would require investments of an additional US$385 million per year.
Ensuring the sustainable use of the world’s fisheries, while increasing production, will require investments of an additional US$2 billion per year in fisheries monitoring and protection, in the creation of alternative livelihood sources for fishermen and in aquaculture. As most wild fish stocks are fully exploited, about 70 percent of these investments will be used to conserve aquatic ecosystems and manage associated capture fisheries. Additional fish demand will be met mainly from aquaculture, in which relatively modest public investment will trigger large private investment commitments.
Incremental public sector investment needed to use forests in a sustainable manner to meet the WFS goal is estimated conservatively at US$2 billion per year. This would be used to protect forests from unauthorized or unplanned conversion, manage wild food sources in forests, develop alternative livelihood opportunities for food-insecure forest-dependent populations, and minimize and offset the negative consequences of converting forest to agricultural land.
Cost estimate: US$7.8 billion per year
42. Throughout the 1990s, many developing countries invested substantially in infrastructure. While such investments have done much to improve living standards and increase productivity, the rural areas of most developing countries still face inadequate levels of services and often a deteriorating stock of rural infrastructure. This infrastructural handicap has resulted in, inter alia, reduced competitiveness of the agriculture of developing countries in domestic and international markets, and it has increased the costs of supplying growing urban markets from national farm production. Reversing the decline in the share of developing countries in world agricultural exports, which is an essential ingredient in improving rural incomes, will require increased efforts by many developing countries to alleviate their domestic supply-side constraints. There is a danger that, unless infrastructure-related constraints are addressed, developing countries will miss the opportunities arising from multilateral negotiations on agriculture, which aim to achieve substantial improvements in market access through reductions in export subsidies and trade-distorting domestic support. The highest priority must go to the upgrading and development of rural roads and to ensuring their maintenance, and to basic infrastructure to stimulate private sector investment in food marketing, storage and processing.
43. The assurance of food safety and quality is an important factor in food security, as contaminated food is a major cause of illness and mortality. It is also important for broadening access to export markets. All developing countries are faced with an urgent need to invest in creating a stronger institutional capacity to ensure higher standards of food safety and quality and compliance with international standards throughout the food chain. In an increasingly globalized market, it is also essential to take measures to prevent the spread of livestock and crop pests and diseases beyond national boundaries, since this can have devastating effects on food security and safety in both developing and developed countries. This requires substantial investments in monitoring and surveillance systems and in building the capacity of institutions responsible for plant and animal health.
44. Post-production operations account for more than 55 percent of the economic value of the agricultural sector in developing countries and up to 80 percent in developed countries. However, relatively little public sector and developmental support is targeted at this sector in developing countries. Action is urgently needed to develop food handling, processing, distribution and marketing enterprises by promoting the emergence of small-scale farmers’ input supply, processing and marketing cooperatives and associations. It is also important to encourage entrepreneurship and to develop the requisite infrastructure and standards.
45. Investments in rural infrastructure to enhance market access will not only complement and underpin the projected increased levels of agricultural production, but will also provide wider and more general socio-economic benefits.
46. The additional public investments required to meet the WFS target amount to an annual US$7.8 billion at 2002 prices. This amount includes new construction of rural roads (US$5.2 billion) and of market infrastructure (US$850 million) as well as the maintenance and rehabilitation of both (US$1.3 billion and US$31 million, respectively). Another US$200 million would cover the cost of capacity building, support for policy assistance, institution strengthening and measures to improve plant and animal health. An additional US$150 million is required for measures to strengthen food safety. While it is assumed that the bulk of spending on rural roads will be financed by the public sector, only a small part of market and food safety infrastructure needs will be funded by public resources.
Cost estimate: US$1.1 billion per year
47. As already noted, success in promoting rapid improvements in livelihoods and food security through on-farm investments depends on small-scale farmers having good access to relevant knowledge. This requires the provision of effective knowledge-generation and dissemination systems, aiming to strengthen links among farmers, agricultural educators, researchers, extension workers and communicators. Agricultural research and technology development are likely to be dominated by the private sector, especially suppliers of inputs and companies purchasing farm products. There remain, however, many areas of basic research and, especially, extension where those who have not paid for the research cannot be prevented from enjoying its benefits. Private companies would be unwilling to conduct research in these areas, yet they may be vital for agricultural development and the sustainable management of natural resources. These include, in the case of research, most forms of pro-poor technology development and most approaches to farm development that do not depend on the increased use of purchased inputs - such as integrated pest management, measures to raise the organic matter content of soils or to improve fertilizer use efficiency (e.g. through biological nitrogen fixation), or to conserve genetic resources. Because the likely users of this research are poor and widely dispersed and because it can easily be copied, it does not pay private companies to do it. The responsibility for conducting research in these areas must, therefore, rest with the public sector.
48. The experience of the Consultative Group on International Agricultural Research (CGIAR), which runs an international network of research centres, has been very positive, and there is every reason to reverse the decline in funding from which the CGIAR system has been suffering. Incremental funding of US$350 million per year would greatly strengthen the effectiveness of the system, enabling it to continue to play a vital role in supporting the process of technology development in developing countries.
49. National agricultural research and extension systems, many of which have deteriorated in their effectiveness, also need to increase their capacity to respond to the technology needs of small-scale farmers, in particular, taking account of the acute labour shortage resulting from the HIV/AIDS epidemic in many African rural communities. Upgrading national research systems requires additional investments in building staff capacities and in improving facilities and equipment, estimated to cost about US$350 million annually.
50. Improving the effectiveness of agricultural extension usually involves supporting the decentralization of services and making them more responsive to farmers’ needs. It requires creating conditions for the emergence of multiple-service providers, including not only public sector services, but also services provided by NGOs and the private sector. It also requires the incorporation of sustainability themes such as environment and population into ongoing extension programmes, and a broader role beyond passive technology transfer to cover areas like HIV/AIDS, food security and rural poverty. The main investments will be in introducing institutional reforms and associated activities, such as training of extension staff and, particularly, farmers, who can assume much of the responsibility for facilitating group learning processes in the medium term. Investments are also needed in the preparation of extension and training materials and in means of transport. Total incremental public funding needs are estimated to be US$290 million per year.
51. Rural people are especially threatened by the "digital divide" because of the lack of communication infrastructure in rural areas. To prevent a widening of the gap in access to knowledge and information between urban and rural populations, public funding will be required to match private investments in bringing better radio, television and information technology connectivity into rural areas. An estimated US$100 million per year would be required for this.
52. Strengthening capacity in education in relation to the Anti-Hunger Programme requires an emphasis on the basic educational needs of rural people, covering all technical disciplines related to sustainable agricultural and rural development. Unfortunately, reasonably well grounded cost estimates for this element are currently unavailable and will be provided at the earliest possible opportunity.
53. Particular attention needs to be paid to education about food and nutrition, as the attainment of the food security and nutrition goals of the WFS depends on the ability of people to make an array of informed choices about food, including its production, processing and storage, and particularly its purchasing, preparation and consumption. Improving family care and feeding practices and developing lifelong good eating practices are essential for improving and maintaining good health and nutrition and represent very cost-effective interventions. Well-targeted food and nutrition communication and education campaigns can have a profound effect on public opinion about issues concerning poverty, hunger and malnutrition, and they can be a powerful tool for generating the popular and political will necessary to alleviate hunger. Such education should stress the importance of a diversified, nutritionally balanced diet for reducing micronutrient malnutrition. Because indigenous foods are often key elements of such a diet, the importance of preserving these foods should also be stressed. The cost of supporting basic food and nutrition information, communication and education is estimated to be US$15 million a year, including the expansion of the "Feeding Minds, Fighting Hunger" initiative - led by FAO and the United States World Food Day Committee.
54. To improve the chances of success, a strategy for agricultural and rural development should follow an approach in which research, extension, education and communication components are integrated. Coordination between national-level and community-level interventions is crucial.
Cost estimate: US$5.2 billion per year
55. The need to ensure direct access to food by the poor arises not only from humanitarian considerations and from the right to food, but also from the fact that it is a productive investment that can contribute greatly to fighting poverty. The need for such assistance does not disappear with economic development, but changes its focus towards temporary assistance during crises.
56. All governments committed to achieving the WFS goal need to put programmes in place to ensure that, where the goal is not being met, their citizens have access to adequate food through traditional extended family and community coping arrangements, market mechanisms and the process of economic growth. Options include:
Targeted direct feeding programmes. These include school meals; feeding of expectant and nursing mothers as well as children under five through primary health centres; soup kitchens; and special canteens. Such schemes contribute to human resource development by encouraging children to attend school and improving the health and nutritional status of mothers and infants. They minimize nutrition-related illnesses and mortality among children, raise life expectancy and contribute to a fall in birth rates. Recent WHO estimates show that approximately 30 percent of children under five (approximately 200 million children) are more vulnerable to sickness and more likely to die early because of undernourishment.
Food-for-work programmes. In many developing countries, a significant number of rural people are subsistence or below-subsistence farmers, producing only enough food to feed their families for part of the year. Food-for-work programmes provide support to such households while developing useful infrastructure such as small-scale irrigation, rural roads, buildings for rural health centres and schools.
Income-transfer programmes. These can be in cash or in kind, including food stamps, subsidized rations and other targeted measures for poor households, and are also good means of increasing food-purchasing power and improving dietary intake.
57. Programmes aimed at ensuring adequate access to food by 214 million of the most nutritionally deprived people in the world would cost an annual amount of US$5.2 billion. Of this, about US$1.2 billion is needed for a school feeding programme targeting the most needy schoolchildren. The estimate assumes that a nutritionally adequate "basket" of foods is provided. As a result of better feeding, it is expected that school attendance will increase. However, since universal primary education is already included in the Millennium Development Goals, the additional cost of educating these children is not taken into account here.
58. The first victims of large-scale emergencies, whether caused by humans or natural, are the poor and chronically hungry because they generally lack savings and stocks of food. Early intervention, as and when emergencies occur, helps to avoid further destitution and suffering of poor households. Current programmes, however, often fail to reach several million people affected by emergencies. They also tend to suffer from delays (which limit their effectiveness in reducing suffering and mortality) because of the current system of raising funds through international appeals after the event (in spite of the fact that it is often possible to predict with a fair degree of certainty whether and even when an emergency will occur). Additional international funding (or food supplies) is needed to extend the reach of emergency feeding programmes and to build up reserve funds (such as the World Food Programme’s Immediate Response Account) aimed at speeding up response time.
59. An essential part of such interventions, beyond meeting immediate food needs, is to ensure the timely availability of seeds, tools and other inputs for small-scale farmers so that they can resume food production rapidly. The costs, including administrative costs, of input packages for restoring subsistence production are estimated to be an average of US$50 per family. To address the needs of about 10 million rural families, not currently benefiting from emergency assistance, would cost US$500 million annually. The costs of emergency assistance interventions have not been counted as part of the total cost of programmes aimed at chronic hunger.
