At the summit meeting that opens in Italy on Wednesday, the leaders of the G8 are expected to announce a food security initiative—an effort to reverse “the tendency of decreasing official development aid to agriculture” and, instead, to increase investment in food production in the developing world.
According to the Chicago Council on Global Affairs, Washington spends 20 times more on short-term food aid in Africa than it does on long-term agricultural programs to develop local food production. A similar bias exists in the policies of the European Union, which uses the guise of food aid to dump production surpluses in developing nations.
Nothing may come of the new promises, as nothing came of the big hoo-ha at the G8 summit four years ago when a massive increase in aid, especially to Africa, was agreed upon. But long-term investment in food production is just what poorer countries need.
Most of the world’s poor live in the rural backwaters of Africa, Asia, and Latin America; most are small farmers or landless farm workers. Despite the cries in 2007-08 when world food prices suddenly shot up to historic highs, there was actual benefit, albeit long term, for the global poor.
Last summer’s price spike was a long-overdue correction in the terms of trade. For too long, the world’s urban minority (whether they be shanty-town dwellers in Lagos or the inhabitants of middle-class suburb in Mumbai) has been subsidized by the cheap food produced by the poorest of the poor—those left behind in the remote reaches of the countryside. For the majority of the world’s rural poor, there exist far too few schools, agricultural advisers, or health clinics; a lack of investment has not even fixed the rutted roads and battered trucks that bring their produce to market.
I was in the Nigerian countryside in 2007, as prices were beginning to skyrocket. The peasants I talked to, who were largely growing the local staple crop, cassava, were happy about the turn in events. It meant they could sell their produce at a substantially higher price than before. They planned to expand their seeding the following year, and have done so, though prices have now fallen. Fortunately for the farmers, the prices have not yet hit bottom.
One UN agency should be credited for seeing the 2007-08 price hike clearly, standing out from the cacophony of voices of despair. The International Fund for Agricultural Development’s remit has always been the small farmer. I’ve seen with my own eyes the good they have done—from supporting the nascent efforts of Muhammad Yunus’s Grameen Bank in Bangladesh some 30 years ago and buttressing El Salvador’s farmers’ programs. A senior official, Shantanu Mathur, told me, in the middle of the food price hike, his organization feels much happier [when food prices rise] than when food prices are going down.” But while short-term price increases may help producers, they also hurt consumers, as we saw in last summer’s food riots across the developing world.
Indeed, price fluctuations are part of the problem. The G8 must do more than merely dump cheap (or free) food surpluses, as they do little to promote sustainable domestic agriculture and play havoc with prices. Long-term support is essential.
Mathur singled out two opportunities, in particular, where more aid and agricultural expertise could help. The first is the niche market of organic produce. An increasing number of developing world farmers are already being trained to take advantage of this growing market. The second is the much criticized biofuel market. “Biofuels don’t have to be a trade-off between food and fuel,” says Mathur. “It is the stalks that make the fuel. The grain on the plant can be used for food.”
As always, history repeats itself. The last time there was a massive jump in food prices was 1974. Then, U.S. Secretary of State Henry Kissinger called for a world food conference. If nothing else, the goals were grandiose: “within a decade no child will go to bed hungry, no family will fear for its next day’s bread and no human being’s future and capacities will be stunted by malnutrition.” This didn’t come to pass, of course, but significant gains were made. Robert McNamara, President John F. Kennedy’s former secretary of defense, was then head of the World Bank and decided to focus on rural development. For a while, much good was done.
But now, some 35 years later, the World Bank has confessed that its financing for agricultural development has fallen from 30 percent of its total lending to only 10 percent. Moreover, the proportion of Western aid targeted at the agricultural sector has fallen from 17 percent to less than 4 percent.
What happened in 1974? The combination of market forces and Western developmental assistance reaped great rewards. Farmers all over the world planted more crops, and as rural incomes grew, the numbers of hungry people fell dramatically in countries such as China, India, and many parts of Africa.
With a renewed emphasis on rural development—promised by the G8—such progress could once again be achieved. But food aid alone won’t do the trick.
Jonathan Power is a syndicated columnist and a contributing editor of Prospect magazine, London. His most recent book is Conundrums of Humanity (Martinus Nijhoff, 2007).