Institute Notes: A Dialogue on Overcoming Hunger and Poverty

Green Revolution for Africa?

Last week the Bill and Melinda Gates Foundation announced that they plan to invest $900 million this year in programs related to agricultural development. A large part of this grant will go to improve seeds and soil in Africa; funding that can have a positive impact African agriculture.  So far Africa did not have its own Green Revolution; a region that needs such revolution more than any other continent in the world. In the 60’s and 70’s green revolution countries in Asia, Latin America and the Middle East were able to increase their food productivity which allowed them lift millions out of hunger and poverty with new technology in seed, fertilizers and irrigation system. But Africa missed out on the Green Revolution. "Africa is the only region in the world in which per capita food production has fallen steadily over the past 40 years explains Eric Solheim, Norway’s minister of international development. Better agricultural methods and increased production will be crucial”.

Why did Africa miss out on the Green Revolution of the 1960s and 70s? The answer is debatable but I think it is because of the diverse nature of African countries, unfavorable climate and poor productivity and technology. The agricultural sector suffers from lack of disease resistance crops, poor seeds and farming practices.

After the Stimulus Package

To reduce hunger in the United States, we primarily focus our attention on the federal nutrition programs. It may sound counterintuitive, but I’m not sure currently this is the best way to get the results we want. The jettisoning of the food stamp benefits from the stimulus package agreed on by Congress and the Bush Administration argues for a more nuanced approach to reducing food insecurity. I’m not suggesting we should take our eye off nutrition programs, but I believe better opportunities to increase food security can be achieved in other ways.

Let’s talk about one of those ways, the Earned Income Tax Credit (EITC). Last week, I blogged about the EITC in relation to predatory lending practices. This time I want to speak about increasing the benefit size of the EITC. Now is the ideal time to be focused on this program. It’s a tax program and tax season is upon us or approaching rapidly. When you think about the stimulus package, it was all about tax relief. There was even some tax relief for poor families. I hate to put it this way but if you want to talk in terms of keeping score, tax relief got something, food assistance got nothing. We at least know that tax breaks are something that is always in play.

Once again, I’m going to refer you to the 2008 Hunger Report, Working Harder for Working Families, the chapter on work supports, for a longer explanation of the EITC than I have room for here. Knowing one-click away is still one click away, I will grab some text from the chapter and set it down right here to briefly explain the program.

The EITC is a refundable tax credit that families receive through their federal income tax return, reducing their tax liability and returning a portion of federal taxes. … In 2006, a family with one child received a maximum of $2,747 and a family with two or more children $4,536, while the maximum a single person received was $412.

The EITC was mainly designed to boost the income of working families with children. Those that needed the biggest boost were families headed by single parents. The EITC is widely celebrated for having gotten many single parents (mostly single mothers) off welfare and into the workforce. This issue deserves a lot more discussion than I’m planning to give here, but the point I want to make is while the EITC did do a lot to help single parents, it did far less for two-parent families. A recent study by Gordon Berlin, President of MDRC, puts the problem in perspective, and the rest of my discussion is heavily indebted to Berlin’s ideas.

Initial Reactions...

Okay, so perhaps I was a little too skeptical in my earlier post. Tonight's SOTU was not a dramatic call to action to reduce poverty in the United States and around the world but President Bush did identify some important poverty-focused initiatives, some new and some reflecting his legacy.

President Bush called for increased funding for education for poor children in the United States--$300 million in Pell grants for young children--and around the world. He called on Congress to fully fund the Millennium Challenge Account, his flagship initiative to increase development funding for countries that are well governed and investing in their people that has been underfunded by Congress since its inception in 2004. My colleague reminds me that he did not talk at any length about why this program is so important, but at least he did highlight it.  He also called for the reauthorization and a doubling of funding for PEPFAR, the global AIDS initiative.

The president talked about the importance of reaching an agreement in the Doha Round of trade negotiations while calling for the reauthorization of Trade Adjustment Assistance--to help families in the United States cope with globalization and the changes that come with it (see chapter 1 of our latest Hunger Report). He reiterated his support for allowing for the local purchase of food aid.

The State of the Union

Tonight President Bush will deliver his last State of the Union (SOTU for short) address. As is usual at this time each year, rumors abound as to what will be in the speech. Will this particular SOTU focus on his legacy? How ambitious will be the agenda he lays out for the coming 12 months?

As anyone who reads this blog could guess, my colleagues and I will be listening for what President Bush says about making progress against poverty here in the United States and around the world. If previous SOTUs are anything to go by, this is not going to feature very prominently. While President Bush used his 2003 State of the Union to launch the United States most ambitious global aids program, PEPFAR (President's Emergency Plan for AIDS Relief), and has lifted up the need to do more on AIDS in the United States, neither he nor his recent predecessors have used this particular platform to make the case to the Congress and the American public that the fight against poverty should be a national priority--that it is the right thing to do and it is in the country's best interest. Will tonight be different? Unlikely, but a fun way to find out is to play the Center for Global Development's State of the Union Bingo, part of their terrific Global Development Matters Campaign.

Local Purchases Create win-win Situations to Hunger

Recently, food insecurity has become a burning topic in my home country. This is reflected in my phone calls home. I call Ethiopia very often and my usual question of “what’s new?” seems to have the same answer in the past months: everything, including food, has become very expensive. As the price of food increases, many people in developing countries will find a greater reliance on food aid. In 2008 WFP identified what is referred as “hunger global hotspots” - Afghanistan, Chad, DRC, Ethiopia, Iraq, Kenya, Somalia and Zimbabwe. Part of the problem in these countries may be local availability of food, but a much bigger problem, and the one that is faced in Ethiopia is that food is simply becoming more expensive.

Last year my professor attending a conference at Western Michigan University challenged a group of economic experts on the issue of rising food prices: why does the Ethiopian government continue to claim that the economy is going strong while millions of their own citizens can’t afford to buy enough food because of high prices? The response he received was as unconvincing to him as it was to me, and in any case what I hear on the ground is different from their response.

New Lancet Series on Maternal and Child Undernutrition

A new Lancet series provides a critical update on maternal and child undernutrition. The four studies in the series describe global and regional trends in undernutrition, discuss impacts on health and human capital, provide evidence of nutrition interventions that work, and focuses special attention on the 20 countries with the greatest concentration of undernourished children. A fifth paper discusses the ever illusive lack of political will that hampers efforts to solve the problem of child and maternal undernutrition.

I must admit that I have not made it through all of the articles, but in the material I have read I have already been surprised with some new information. Specifically, the series reports that, along with Vitamin A, zinc is the micronutrient with the greatest contribution to disease burden. In Bread for the World Institute's 2006 Hunger report, Frontline Issues in Nutrition Assistance, we focused on Vitamin A, Iron and Iodine. But zinc is responsible for 500,000 childhood deaths each year. And like Vitamin A, it appears that zinc supplements are cheap and effective in reducing childhood morbidity and mortality.

The report was launched over at the Woodrow Wilson International Center for Scholars. The full presentation can be viewed here.

Climate Change, Governance, Growth and the Imperative of U.S. Leadership – the Case of Bangladesh

I find Robert Kaplan to be one of the more astute and readable commentators on the developing world and the U.S. role in it. His work has taken him from the Balkans and Balkan Ghosts, his first book to gain wide acclaim, to, literally, The Ends of the Earth – his provocative and gloomy prognosis for those economically marginalized and miserably governed spawning grounds for so much of the world’s troubles. Along the way he has become a cheerleader for the increasing role of the U.S. military in such troubled areas (Imperial Grunts)  – something that gives me, and apparently Defense Secretary Gates as well, pause. However, in his latest Atlantic article, Waterworld, he clearly hits the nail on the head in summarizing what’s at stake in Bangladesh.

“Bangladesh,” he states, “demonstrates how developing-world misery has acquired – in the form of climate change – a powerful new argument, tied to the more fundamental outcry for justice and dignity.” Bangladesh, with its 150 million inhabitants living basically at sea level at the head of the Bay of Bengal, is vulnerable to the slightest climatic variation, and is “the most likely spot on the planet for one of the greatest humanitarian catastrophes in history,” where a one foot rise in the level of the Bay could displace well over 10 million people in the coming years.

Usury, Plain and Simple

The Bible makes many references to “usury," that is, the lending of money at exorbitant interest rates. “You shall not lend him your money for usury, nor lend him your food at a profit.” (Leviticus 25:35-37); “If he has exacted usury or taken increase—Shall he then live? He shall not live! If he has done any of these abominations, He shall surely die; His blood shall be upon him.” (Ezekiel 18:13)

While working on the 2008 hunger report, Working Harder for Working Families, I grew especially fond of the latter verse from Ezekiel, especially as I learned more about the usurious practices of payday lenders. The verses above are both from the Old Testament. That’s Yahweh’s book; the New Testament is Jesus’, whose otherwise kinder, gentler discursions on the law (Matthew 5) contrast sharply with his treatment of greedy moneylenders (John 2: 12-22).

In Working Harder for Working Families, we wanted to show that usury is happening every day in low-income communities around the country. Payday lending is one form of it. I will talk more about payday lending at another time. For now, I want to focus on another modern form of usury, the refund anticipation loan (RAL). It's tax season and the word refund in this term refers to an income-tax refund.   

Round-the-Clock Asset

A poor family gets a housing voucher and uses it to move out of their high-crime neighborhood into another where the streets are safer and the schools better. The children in the family begin to excel at school. Research shows that school performance is crucial to a kid’s chances of achieving upward mobility as an adult.

Which one is more of an asset to the family, the new home or the schools? Both mean a lot—but the home is the key. It’s having the home that makes it possible to take advantage of the schools.

Consumption Factor Versus Living Standard

A couple of recent stories on consumption and development are worth noting. Michael Gerson writes in The Washington Post,

It is often recounted, in fits of prosperous self-hatred, that America has only 5 percent of the world population while consuming 30 percent of global resources. But this comparison is misunderstood. The rest of the world has been underconsuming, because too many have lived in poverty.

This observation gave me serious pause over my morning cup of coffee.

I couldn’t quite pin down what about this made me so squeamish until I went back and re-read this piece by Jared Diamond in the New York Times. Diamond begins with the same broad observation made by Gerson, namely that a massive gulf exists between the world’s top consumers – people in developed countries – and those who consume the least – people in developing countries. But Diamond goes on to observe,