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60. It cannot be emphasized strongly enough that the investments proposed under the Anti-Hunger Programme will only have the intended impact on hunger and poverty if appropriate policies are in place. Such policies will ensure the maximum impact of public resource mobilization on hunger and poverty reduction as well as sustainable use of the resource base. In particular, an enabling policy environment is a prerequisite for the success of the Anti-Hunger Programme as it is required for attracting flows of private investment to complement public investment flows and enables the poor and hungry to realize their full development potential. The following section presents the emerging consensus among the international development community on key policies related to the twin-track approach. It must be stressed that the formulation of policy plans and frameworks at the country level is indispensable for country ownership of those policies and as a basis for donor support.

61. The emerging consensus supports a reliance on markets and market signals and macroeconomic discipline and stability as necessary conditions for economic growth. It is also widely accepted that: i) a reliance on markets and macroeconomic stability is not a sufficient condition for economic growth; and ii) economic growth by itself may not lead to substantial and strong reductions in poverty and hunger, though such reductions will not be brought about without swift economic growth either. For sustainable pro-poor growth, policies and institutions are needed to improve human capital and expand human potential, broaden access to productive resources, promote the generation and adaptation of knowledge and technology to the benefit of the poor and enhance their access to markets. The quality and transparency of governance and public administration, a participatory approach to policy design and implementation at all levels, and commitment to gender equality are essential elements of a pro-poor policy framework. Appropriate social safety nets for especially vulnerable segments of the population should be devised and integrated in the policy framework.

62. This section begins by outlining elements of an appropriate international and domestic policy environment and subsequently focuses on key principles that should guide actions on the five priority areas for investment under the Anti-Hunger Programme.

Making the international trade environment conducive to poverty and hunger reduction

63. For developing countries to derive the full benefits of increased integration into the global economy, action is required at both the international and national levels. Institutions of global governance can create a better environment for developing country agriculture by promoting peace and stability, providing global public goods, such as reduction of monetary and financial volatility, promoting a rules-based multilateral trading system and implementing international environmental agreements that promote sustainable development.

64. Freer trade in agriculture can make a powerful contribution to rural development and hunger reduction. But the benefits from freer trade do not come automatically. Many developing countries need companion policies and programmes that help increase agricultural productivity and product quality and the functioning of market institutions in order to raise competitiveness in domestic and international markets. The measures proposed in the Anti-Hunger Programme can contribute substantially to this end.

65. The Agreement on Agriculture of the Uruguay Round of multilateral trade negotiations held out the promise of a rules-based, transparent, trading system for agricultural commodities and was generally welcomed by developing countries. However, the practical application of the Agreement has raised concerns among developing countries that it is imbalanced in its effects. These countries contend that its rules hinder them in pursuing food security and supporting their own agriculture while doing too little to constrain developed countries from subsidizing and protecting theirs.

66. The focus of the Agreement is on restraining support for domestic agriculture, rather than the promotion of food security as such. Yet, it does have an impact on food security. For example, lower tariffs on imported food, while providing lower incomes for net sellers of food (such as landowners), also lead to lower food prices for net buyers of food (such as the rural landless or the urban poor) and may thus promote food security.

67. The Agreement does not rule out support for domestic agriculture, but rather seeks to restrain trade-distorting support such as tariffs and certain kinds of subsidy. This is permitted up to 10 percent of the value of agricultural production in most cases for developing countries. However, developing countries generally lack the resources to take full advantage of this provision and cannot raise tariffs on food without serious consequences for their poor. By contrast, the developed countries have more flexibility in practice as they possess the resources to provide subsidies and can also raise tariffs on food without serious consequences.

68. The investments proposed under the Anti-Hunger Programme do not entail trade-distorting support to agriculture. Investments in rural infrastructure, research or feeding programmes for the hungry simply lower production costs in general or equip a country’s population to participate productively in work and trade and are not, for all practical purposes, contrary to WTO provisions on domestic support. Indeed, input and investment subsidies given to low-income resource-poor farmers in developing countries are specifically exempted from discipline.

69. It is important for developing countries to note that the better developed their infrastructure, institutions, and research and development capacity, the greater their gains from trade. To take the example of infrastructure, transport and insurance costs account for more than 25 percent of the total value of exports for a third of all African countries. Investments in Priority Area 3 proposed in this paper should improve transport and marketing infrastructure in developing countries while also promoting food safety, thus improving overall competitiveness.

70. However, it is natural to ask whether the domestic production increases generated through this investment programme and the associated policy reforms are sustainable in the face of competition from agricultural producers and exporters in other, particularly developed, countries that benefit from subsidies and protection. These support measures have two negative impacts on farmers in developing countries. First, they make import competition itself difficult. Second, they cut into exports. Thus it becomes difficult for farmers in developing countries to earn a living in agriculture.

71. It is argued here that the proposed investments will strengthen the ability of developing country farmers to compete with their developed country counterparts. At the same time, a reduction in trade-distorting support to agriculture should promote the expansion of agriculture in developing countries, although there would, of course, be short-run adjustment costs that need to be taken into account. This agenda is currently being pursued through multilateral negotiations under the Doha Round. The following are some of the important issues in the negotiations that are of concern for the developing countries:

72. The current provisions on subsidies and protection need to be judged against the recognition of development needs. Within the context of international trade negotiations, developing countries should also take steps to reduce their own barriers to imports from other countries, especially developing countries. This kind of support not only hurts consumers (particularly where food products are concerned), but also reduces a country’s export competitiveness and should therefore be used after careful consideration.

73. The launching of the Doha Round of multilateral trade negotiations in 2001 had raised hopes that the development and food security concerns of developing countries would be taken into account. Unfortunately, at the time of writing, the future of the Doha Round is uncertain in light of the failure of the Cancun Ministerial Conference.

74. In their efforts to build competitiveness in international as well as domestic markets and improve the livelihoods of the poor and hungry, developing countries - in particular the poorest - will require external assistance. In this context, the pledges by major donors during the International Conference on Financing for Development to increase official development assistance (ODA) are encouraging. It is particularly urgent to reverse the sharp decline in ODA to agricultural and rural development.

Making the domestic policy environment conducive to poverty and hunger reduction

75. The importance of sound macroeconomic policies in promoting agricultural and rural development and poverty reduction cannot be overstated. Although there seems to be a movement away from the dogmatic adherence to rigid macroeconomic targets that characterized the 1980s and most of 1990s, it is nevertheless widely accepted that unless governments are committed to long-term macroeconomic stability, reforms in agriculture are unlikely to be effective. Stable and predictable macroeconomic policies encourage savings and investment, discourage capital flight and focus private sector efforts on promoting efficiency instead of anticipating and reacting to macroeconomic shocks.

76. Although many developing countries have moved towards macroeconomic stability, budget allocations for agricultural and rural development remain painfully low. Substantial increases in budget allocations are particularly critical where hunger and poverty are prevalent and where the performance of agriculture, as the backbone of the economy, is well below potential.

77. Policy formulation and implementation should be based on a process that encourages participation by the poor and involves civil society organizations and the private sector so as to broaden ownership of goals and strengthen consensus on action. This will also facilitate the mobilization of private capital towards the objectives of sustainable alleviation of hunger and poverty. Administrative and fiscal decentralization makes it more likely that the poor will have a say in the decisions that affect them. Another critical area for public action lies in enhancing the functioning of markets through appropriate laws and regulations that ensure fair competition, safeguard market access by the poor and enforce adherence to sanitary, phytosanitary and environmental standards.

78. Since agriculture is subject to a high degree of risk, it is also necessary to promote and improve instruments that address the need for risk management, especially that of the most vulnerable. This includes measures to ensure that markets for financial services allow rural populations to save, lend and borrow more efficiently.

79. Finally, policies geared towards the rural economy must take account of the growing evidence that agriculture alone is not enough to sustain livelihoods for poor rural families - hence the importance of non-farm rural activities, particularly in view of the fact that they offer the poor an escape route from poverty and constitute an integral part of their risk management and coping strategies. Policies and institutions are needed to develop rural infrastructure, build entrepreneurial capacity and ensure competitive and fair markets for small-scale rural enterprises.

Policies for priority areas of the anti-hunger programme

80. The following sections raise key policy issues that are more directly associated with the five proposed priority areas for investment.

81. Improve agricultural productivity in poor rural communities. The key policy issue in this priority area is strengthening the ability of rural communities, especially those that are poor and vulnerable, to organize themselves and play an active role in matters that affect their livelihoods. This should lead to the improved availability and adoption of technologies that are appropriate for the needs of the rural poor.

82. Associations of smallholders and rural community organizations, in coalition with civil society organizations, can play an important role in redressing some of the most serious handicaps faced by their members and non-members. These include insufficient access to natural, financial and human capital, lack of access to appropriate technologies and income-earning opportunities, high transaction costs and insufficient access to markets, lack of access to information, communications services and other public goods such as health and sanitation services.

83. Collective and coordinated action assures greater responsiveness of the political process to the specific needs of communities and their members, prevents abuse of pricing power for agricultural products and inputs by large buyers and sellers, allows producers to capture the considerable economies of scale existing in the procurement of inputs and marketing of outputs and facilitates the exchange of information and access to credit. The role of such partnerships and coalitions is particularly important in the face of government withdrawal from the provision of marketing services and credit.

84. Develop and conserve natural resources. With few exceptions, the scope of bringing additional natural resources into agricultural production (notably land and water resources) is limited. The only viable option is sustainable intensification, i.e. increasing the productivity of land, water and genetic resources in ways that do not compromise unacceptably the quality and future productive capacity of those resources. The policy environment must ensure that intensification is indeed sustainable and beneficial to the populations involved.

85. The development of baseline information on renewable natural resources is necessary for monitoring changes over time. Practical decision-support tools for local farmers need to be developed as an important component in capacity building for a participatory approach to developing and conserving natural resources.

86. With regard to water, the key policy issue is the growing competition between water requirements for agriculture and other water uses (domestic, industrial and ecosystem). As agriculture is by far the largest water user, the efficient use of water for agriculture should be the starting-point for expanding water availability for other uses. A challenge for countries is to find the appropriate balance between improved rainfed agriculture and intensive irrigation so as to improve agricultural potential while promoting food security and poverty reduction. Policies affecting agricultural water use must provide incentives for efficiency gains and ensure that water scarcity is appropriately signalled to water users. Transparent, stable and transferable rights to water use for individual users or groups of users are powerful instruments for promoting efficiency and distribution equity.

87. Concerning land for agricultural use, the most important policy issues concern access and tenure (individual or community ownership, rental or longer-term user rights), improved land management practices and investments in soil fertility with a long-time horizon. Ensuring access to land will significantly contribute to its sustainable use. In this context, strengthening women’s rights to own and inherit land is particularly important. Policies should recognize the complexity of existing land tenure systems and of formal and informal arrangements regarding land use rights. They should take into account the impact of increased mortality of the productive generation in rural areas as a result of HIV/AIDS and its potential impact on land use patterns and inheritance arrangements.

88. Ensuring present and future access to sufficient diversity of genetic resources for food and agriculture requires policy action at both the international and national levels. Regarding the conservation and sustainable use of plant genetic resources, the policy framework is set out in the International Treaty on Plant Genetic Resources for Food and Agriculture and the Leipzig Global Plan of Action. However, the measures contained in the treaty need to be integrated into national agricultural and rural development programmes. An appropriate regulatory framework for variety release and seed distribution that facilitates synergies between the public, private and informal seed systems needs to be established. For animal genetic resources, international and national regulatory frameworks still need to be developed to guide actions at the national level.

89. For fisheries, the critical policy issue is to limit access to natural fish stocks where the capture, particularly marine, has reached or surpassed sustainable limits. Respecting limits on access to fish stocks requires that governments and fishing communities share authority and responsibility for making decisions about the use of fisheries resources. During the 1990s, several global agreements were reached on how to manage marine capture fisheries in a manner that would ensure conservation and long-term sustainable use of marine ecosystems. Among these are the Code of Conduct for Responsible Fisheries, adopted by the FAO Conference in 1995, and the 1995 United Nations Fish Stocks Agreement, which came into force at the end of 2001.

90. In forestry, policies and institutions are needed to ensure full accounting of the value of the resource and benefits that accrue to the various members of society. These need to be incorporated into decision-making on utilization and conservation. Policies should encourage and promote the participation of key stakeholders in forest planning and management. In many cases there is a need for greater transparency and accountability in policies affecting forest access and management. Institutional strengthening and coordination at the national and international levels is needed to ensure the inclusion of non-market values associated with forests, such as biodiversity, carbon sequestration and watershed protection. It is also important for policies affecting the management of forest resources to give recognition to the food security buffer role they play for the poorest members of society.

91. Expand rural infrastructure and broaden market access. A critical policy problem in the provision of infrastructure is addressing the relative neglect of poor rural communities. While involvement of the private sector in infrastructure construction and servicing may increase efficiency and respond better to overall needs, it may also mean that poor farming regions continue to be underserved. The public sector should maintain an active role in infrastructure provision that benefits the poor, for example the provision of secondary or rural roads. The policy approach should encourage decentralization and community participation in infrastructure investment planning, implementation, maintenance and financing to ensure demand-driven, sustainable service delivery and consider various forms of public-private partnerships.

92. Enhancing market access implies that coordinated policy, legislative and regulatory frameworks consistent with international obligations for food safety and plant and animal health are in place. Policies must be enacted and enforced, especially in countries where food contamination and plant and livestock diseases are endemic. Private-public partnership ventures, from supply through certification facilities and services, and flexible approaches to the progressive compliance with standards are effective means in strengthening access to trade.

93. Strengthen capacity for knowledge generation and dissemination. Policy action should aim at ensuring that the poor share the benefits of technological progress (agricultural, information, energy and communications). This is particularly so for areas with poor agro-ecological potential, which are usually sidestepped by private commercial research. Public funding is required for the development and/or adaptation of technological options for those areas.

94. Policies should promote technological options that address the twin goals of agricultural productivity and environmental sustainability. In the short term, research policy should focus on identifying and removing constraints to the adoption of practices that promote an optimal use of existing technologies, including organic agriculture, conservation agriculture and integrated pest management. New technologies are needed for areas with shortages of land, water or labour, or with particular problems of soil or climate. The promotion of labour-saving technologies is needed to respond to labour shortages of female-headed and HIV/AIDS-affected households, where a shortage of labour constitutes the principal constraint to diversified and sustainable cultivation. The emerging consensus is for a participatory approach to technology design and generation. Farmers’ organizations, women’s associations and groups and other civil society organizations can promote the necessary partnerships between farmers and scientists so that technological options are demand-driven and relevant. National policies should facilitate the establishment of functional linkages among research, extension education and communications.

95. Ensure access to food by the most needy through safety nets and other direct assistance programmes. Policies conducive to the achievement of this priority area should, inter alia, be derived from a human rights-based approach. A key policy prerequisite is the existence of information that identifies accurately who the hungry are and where they are located. FAO and the World Food Programme (WFP) can assist governments in effective targeting, through the Food Insecurity and Vulnerability Information and Mapping Systems (FIVIMS) and the Vulnerability and Mapping (VAM) system.

96. Programmes to provide direct assistance to the hungry can only succeed when national governments establish effective capacity for the delivery of such assistance. This requires a supportive national policy environment for the development of social safety nets, which can be provided in cooperation with civil society organizations. Social safety net policies specifically targeted at hunger reduction should give recognition to the special vulnerability that women and children have to malnutrition at critical times in their lives and should support the creation and implementation of programmes such as mother-child feeding, related health and nutrition education and school feeding.

97. A national commitment and relevant policies towards gender equality and women’s rights is essential to enhancing access to food. At the household level, an improved status of women has been shown to be the most important single variable in reducing malnutrition.

98. Finally, a policy commitment by government and non-state actors is essential for international humanitarian assistance to ensure access to food in times of conflict and crisis.

Urban hunger

99. The majority of the poor and hungry in the developing world live in rural areas and will continue to do so till 2015 and possibly beyond. As the primary focus of the Anti-Hunger Programme is on actions to be taken in the years up to 2015, an emphasis on rural hunger is warranted. However, a discussion of the problem of urban hunger is necessary in view of the rapid growth in urban populations: the UN Population Division estimates that urban populations will equal and then exceed rural populations from 2020 onwards. Of the increase of 2.2 billion in the world’s population projected between 2000 and 2030, 2 billion will take place in the cities of the developing world. Survey data on poverty and child undernutrition show that in many countries the absolute number of poor and undernourished individuals living in urban areas has increased, as has the urban share of overall poverty and undernourishment.

100. The urban poor depend disproportionately on the informal sector for their employment and income and rely principally on market purchases for their food supplies. In a few cases, urban agriculture can be a source of livelihoods and household food supplies, especially in formerly rural areas incorporated into cities.

101. The reliance of urban households on pre-prepared and street foods results in diets that are usually richer in sugars and fats than those of rural households, thus contributing to a higher incidence of obesity and non-communicable diseases in urban areas, especially as urban lifestyles are often associated with lower levels of physical activity. At the same time, a more crowded, unhealthy environment (air pollution, insufficient sanitation facilities, low drinking-water quality), may lead to higher levels of communicable diseases despite the fact that medical facilities tend to be better in towns.

102. Policy responses to urban food insecurity. Devising policies and programmes targeted at urban food security is made easier by the fact that these policies a) have to reach a much more spatially concentrated population, b) can rely on a network of public services (education, health) that is usually more developed and far-reaching than the rural one, and c) can rely on more effective civil society and NGO networks that can bridge the gap between public and private sector actions. At the same time, the large number of activities in which the poor are involved limits the scope of focused sector-specific policies to improve their livelihoods. In general, policies regarding urban food security fall into two broad categories: i) those that enhance and protect the livelihoods of the poor and ii) those that work directly to improve food and nutrition security.

  1. Policies to enhance and protect urban livelihoods. Providing opportunities to the urban hungry to improve the basis of their livelihoods implies supporting the productive activities in which they are involved, especially those that are intensive in unskilled labour (public works, construction, petty trades and services). Enhancing the functioning of urban markets through improved infrastructure and strengthening of market institutions will reduce transactions costs and facilitate participation by the urban poor in markets.

    Improving governance and stamping out corruption is particularly important in view of the dependence of the urban poor on the informal sector. Interviews with the poor conducted by the World Bank identified corruption and harassment by the police as two of their main complaints.

    Reducing obstacles to setting up and expanding small businesses in a legal manner is especially helpful. Transforming informal rights to assets into formal rights, perhaps by finding ways to give title to land held informally, holds out the promise of unlocking large amounts of capital that already exist but cannot be put to productive use, for example, as collateral for raising loans for productive purposes. This policy can also be a source of revenue to city governments if they charge small fees for issuing ownership certificates.

    Effective social safety-net programmes, such as food and health care subsidies, cash transfers and unemployment assistance, can be vital in protecting the livelihoods of the urban poor given their heavy reliance on the informal economy. It is therefore important to ensure that these benefits are not confined to participants in the formal economy.

    Urban and peri-urban agriculture is estimated to involve 800 million urban residents worldwide, and accounts for about 15 percent of all the food consumed in urban areas. Vegetable cultivation can make an important contribution to urban livelihoods as vegetables can be grown on small plots of land using wastewater and their sale can finance purchases of other food by the poor. Vegetables are also a valuable source of vitamins and micronutrients. Similarly, peri-urban agriculture is a significant source of meat, milk and eggs. Any expansion of urban agriculture will be faced with increasing competition for land for urban dwellings, infrastructure and other urban amenities. Policies for urban agriculture will also have to reconcile its potential benefits with the environmental and health costs it implies.

  2. Direct support for urban food and nutrition security. Policies and programmes to reduce urban food insecurity should take into consideration its nature and major causes. An important aspect is the quality and healthiness of diets. Urban households, and poor urban households in particular, rely heavily on street and pre-prepared foods, often spending up to a third of their income on them. This is partly because the poor have limited access to cooking fuel and partly because buying pre-prepared food saves time, which has a high opportunity cost in urban areas. The high fat and sugar content of such foods may promote obesity and facilitate the spread of non-communicable diseases.

    Policy should address the causes of unhealthy diets rather than try to discourage them directly (through regulation or taxation). For example, to the extent that the urban poor rely on street foods because of shortages of cooking fuel, policies to improve access to cooking fuel by the poor would be more efficient. Similarly, to the extent that street foods are prepared and served under less hygienic conditions than home-prepared foods, policy should focus on improving the safety and quality of purchased foods. This can be achieved through education and training in hygienic food-handling, by raising public awareness and through food fortification and supplementation programmes. To the extent that pre-prepared foods are unhealthy, it is necessary to promote dialogue with the food industries, stressing the importance of less saturated fat, more fruits and vegetables, and effective food labelling. Incentives for the marketing and production of healthier products are also necessary. In working with advertising, media and entertainment partners, there is a need to stress the importance of clear and unambiguous messages to children and young people.

    Improved access to safe drinking water is critical for lowering the incidence of waterborne diseases. In many developing countries, the poorer parts of cities receive piped water for a very limited time during the course of a day, forcing the poor to buy water from private sellers or do without. A common reason is inappropriate pricing of water, which leaves municipalities starved of resources. One possible solution to the problem of poor access to water is to have two-tier pricing, with low or even no charges for a reasonable minimum quantity of water and then sharply rising prices for quantities above that level. Improved access to water needs to be combined with practical ways to improve hygiene (e.g. washing hands before handling food, which has been shown to be surprisingly effective). Vaccination and immunization programmes for children are a vital part of public health and are essential for improving food utilization. Unfortunately, they are often neglected in developing country cities.

    Finally, measures are needed to reduce the burden of expenses related to transport and communications borne by the poor. Of these the most significant is the cost of transport. Many of the urban poor live on the outskirts of towns and travel long distances to work and to shop. The importance of providing well-functioning public transport to the poor and promoting local retail market facilities in areas where they live cannot be overstated. Neither can the importance of providing cheap telecommunications services as these tend to reduce the need to use public transport.

103. Conclusion. Urban food insecurity is a fast-growing problem in the developing world. Policies aimed at addressing this problem have to take into account the precarious nature of urban livelihoods on the one hand and, on the other hand, the drain on the purses of the poor caused by transport and communication costs, the burden of communicable and non-communicable diseases, and their reliance on pre-prepared foods. A lack of properly devised policies is likely to impose heavy costs in terms of the loss of economically productive life years, continued reduction in economic growth and national productivity, and increases in the health burden and its consequent costs. There are also important interactions between rural and urban food insecurity. A more effective fight against hunger and poverty in rural areas is likely to reduce the pressure for rural-urban migration and thus the prevalence of urban hunger.

[2] This section has benefited greatly from contributions by the World Food Programme (WFP) and the International Food Policy Research Institute (IFPRI). It also reflects a common policy framework for the twin-track strategy for poverty and hunger reduction as first presented by FAO, IFAD and WFP at the Monterrey International Conference on Financing for Development in March 2002. The final responsibility for its content rests with the FAO secretariat.
[3] The figures for total transfers to agriculture and direct support to agricultural producers in 2002 are provisional.

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