Institute Notes: A Dialogue on Overcoming Hunger and Poverty

More on GMOs

In response to concerns voiced by many in the NGO and religious communities about government promotion of GMOs – Genetically Modified Organisms – in the draft Global Food Security (“Lugar-Casey”) legislation, Senator Lugar has issued a “dear colleague” clarifying letter. The letter notes that the legislation is supported by Bread for the World, among other organizations, and goes on to state, “Let me be clear.  The bill does not require the use of GM technology by any farmers, implementing partners, or government agencies.  It does not condition the receipt of food aid on a recipient country’s adoption of GM.  The use of any technology must ultimately be left to individual farmers based on their particular circumstances.”

He goes on to note that only one provision in the bill (Sec. 202) even mentions GM technology, and that provision would only highlight research on biotechnology, including GM, as eligible for U.S. assistance.  The research would include work on the appropriate uses of GM technologies in different environments. He also notes that, as pointed out in our Institute Notes of April 28, while much research has already been done on GM seeds for the U.S., there is a dearth of research on its potential and applicability in developing countries. 

Bread for the World is not a proponent of GMOs per se, but we also believe that no potentially productivity-enhancing technologies should be preemptively ruled out. Most importantly, developing countries should have the capacity to make their own informed decisions on the matter. While Senator Lugar’s letter will not alleviate all concerns or objections, it does constitute a welcome contribution to the discussion.

An Objective Look at GMOs in Developing Countries?

The use of crops that are modified by the transfer of genes across species (GMOs, or “transgenics”) has provoked concerns that reverberate in the media and the academic press and have reached into the fields and lives of farmers in both rich and poor countries. The language in the Lugar-Casey “Global Food Security” draft legislation, which explicitly extends the research authorized under the Foreign Assistance Act to include work on GMOs, has touched off another round of debate. An issue that remains generally unaddressed amidst all the polemic is that what consumers and producers in rich countries may prefer is not necessarily what producers and consumers in poor countries may need (and want); there is a risk that the preferences of rich countries—transformed into science and development policies—may hinder the poor’s access to needed technologies.

While the charges and counter-charges have been flying, there has been a paucity of objective analysis of the subject, with advocates for one side or the other seizing upon individual case studies in support of their arguments. Now, IFPRI – the International Food Policy Research Institute -- has stepped into the fray with the first attempt at an objective look at the pros and cons of whether GMOs do, in fact, benefit farmers in developing countries. The  IFPRI study – Measuring the Economic Impacts of Transgenic Crops in Developing Agriculture during the First Decade – limits itself exclusively to peer-reviewed studies of the impacts of transgenic crops in nonindustrialized agriculture. The questions addressed focused on the advantages (if any) of transgenic crops to farmers, the importance of GMOs (or lack thereof) to consumers, the magnitude and distribution of economic benefits of transgenic crops across an industry, and the international distribution of economic benefits from adoption and trade of transgenic crops.

On balance, the authors conclude that the balance sheet is promising for the few biotech crops (Bt cotton and maize, herbicide resistant soybeans) that have been introduced thus far in developing economies. However, they caution that the number of studies reviewed is small (only 137 met the criteria), and that the overall findings mask fairly wide variations in the individual studies. It’s noteworthy that the most promising experiences with GMOs were in those emerging economies with vibrant research institutions and strong markets. I.e., institutional capacity is an important determinant of whether GMOs do, in fact, begin to manifest the benefits that are claimed for them. This, in turn, points up the importance of long-term institutional development and helping to assure that developing countries have the capacity to make informed decisions about whether and how to employ these new and controversial technologies.

It’s normal for academic studies to conclude with a call for further research, thus guaranteeing further work for researchers. In this case, though, the admonition is appropriate. If ever a subject warranted dispassionate, objective analysis, this is one.

Progress on the Food Security Front

A major element of Bread for the World’s push for foreign assistance reform is increasing the emphasis on and resources for agricultural development – the diminution over the past several decades of agriculture in the U.S. development agenda is illustrative of the flaws in the current system. But, this element of the Bread program received a major boost this week with the unanimous passage out of committee of the Lugar-Casey Global Food Security Act, followed by the call by President Obama in London for Congress to double the financial resources available to support international agricultural development. 

The Lugar-Casey legislation would create the position of a Special Coordinator for Global Good Security, would authorize significant additional resources ($750 million for FY 2010, increasing to $2.5 billion for FY 2014), and improves the U.S. emergency response to food crises by creating a separate Emergency Food Assistance Fund that could make local and regional purchases of food – something that Bread has been advocating for years. The legislation would create a new program that would strengthen institutions of higher education in agricultural sciences (themselves among the most important legacies of the Green Revolution, which have enabled continued agricultural progress in many poor countries), and provide additional resources for research, technology transfer and rural development.

The President’s announcement of a doubling of support for agricultural development, to “more than $1 billion in 2010” would seem to up the ante in the Lugar-Casey Bill, and reflects the view that “a permanent solution to food insecurity requires restoration of rapid and sustained economic growth that directly engages the world’s poorest populations, many of whom depend on agricultural labor for most or all of their household incomes and food consumption.” It emphasizes three main areas:
• Increasing agricultural productivity and rural incomes;
• Reducing dependency on international food aid; and  
• Building multilateral partnerships and leveraging the strengths of the private sector, NGOs and universities.

Surprising Success at the G20

The conclusion of the G20 seems, at first blush, to provide a great deal of positive news for developing countries. The official Communique begins with the recognition that

prosperity is indivisible; that growth, to be sustained, has to be shared; and that our global plan for recovery must have at its heart the needs and jobs of hard-working families, not just in developed countries but in emerging markets and the poorest countries of the world too; and must reflect the interests, not just of today’s population, but of future generations too.

To achieve financial stability and promote a return to trade and economic growth, G20 leaders had to act boldly, and it appears they have.

Agricultural Development Week in Washington

The week of Feb. 23 was marked by three (at least) substantive events, all focused on the common objective of increasing the visibility and funding for agriculture and rural development in the U.S. Government’s global development assistance portfolio: Monday and Tuesday was the Partnership to Cut Hunger and Poverty in Africa (PCHPA) forum “Transforming Food Security and Agricultural Development in sub-Saharan Africa” that brought together researchers, analysts and advocates from Africa and the U.S. to consider how we take advantage of the current heightened interest in food and agriculture, in the aftermath of the 2008/09 food price spike, to advance the African agricultural development agenda; Thursday and Friday was a USAID-sponsored conference on chronic poverty and the role of agriculture and rural development in addressing that issue. And Wednesday marked the launch of the Chicago Council for Global Affairs study, Renewing American Leadership in the Fight Against Global Hunger and Poverty.  Bread for the World president David Beckmann spoke at both the PCHPA and Chicago Council events.

The Chicago Council report promotes the clearest advocacy agenda, with the basic premise that the U.S. needs to resume a leadership role in global agricultural development – a role that we abrogated over the past two or so decades. The recommendations are based on several key principles, among them that reducing large-scale hunger and poverty abroad is consistent with America’s interests and values, and that priority should be given to restoring U.S. leadership in agricultural development based on reciprocal partnerships.

Development at Work

After half an hour of hard driving down a rutted dirt-track road, we arrived at the Arrata Churfa Small Scale Irrigation program in the Ethiopian countryside.  More than 300 farming families are finding improved agricultural productivity as a result of improved irrigation supported through the combined support of the Governments of Ethiopia and Japan and the International Fund for Agricultural Development.

The program channels the flow from a small stream to irrigate 100 hectares of land. A simple engineering project, the irrigation scheme is a major feat for the small farmers who live in this area and have seen the productivity of their land increase substantially since the program’s inception in 1993.

Barreling down the dirt road to Arrata Churfa I was struck by two things.

The GAO Gets It Right (almost)

The recent GAO report -- INTERNATIONAL FOOD SECURITY: Insufficient Efforts by Host governments and Donors Threaten Progress to Halve Hunger in Sub-Saharan Africa by 2015 – confirms, in its own carefully-worded way, what Bread for the World and others in the global development community have been saying for years – that despite their commitment to halve hunger in sub-Saharan Africa by 2015, “efforts of host governments and donors, including the United States, to accelerate progress toward that goal have been insufficient.” To put this in context, the report cites the commitments made by the United States and more than 180 world leaders at 1996 World Food Summit to halve the total number of undernourished people worldwide from the 1990 level by 2015. More than a decade later, the report notes, the number of undernourished has not decreased significantly, and about 850 million people, including 170 million children, remain undernourished.

Rachael Nugent, in a blog post at the Center for Global Development website, observes that, “The GAO is far too kind. U.S. and other donor hunger policies have been disastrous, as demonstrated by the current food price crisis. The sub-title of the GAO's Report says progress to cut hunger is threatened by these donor mistakes. In fact, as the GAO itself points out, there is NO progress in reducing world hunger!”

Updated numbers on global hunger

The Food and Agriculture Organization of the United Nations has updated its estimate of food insecurity around the world. The most recent data is from 2004. It is estimated that in 2004, 862 million people were suffering from hunger, up from 854 million in 2003. Although this does not represent a increase in the proportion of people (relative to population) who experience hunger, it is the largest increase in recent years and suggests that the progress we had witnessed in the previous decade is slowing and that a much greater effort and a substantial increase in resources are needed. The rise in global food prices in the last two years is pushing people on the edge of poverty into poverty and is devastating those who are already poor (to learn more see here). We are likely to see further increases in hunger if the international community does not take action.

There are promising signs. This week world leaders and heads of all the UN agencies, including the World Bank and IMF, meet in Rome to discuss the food crisis and develop a plan of action. Jacques Diouf, the head of FAO is calling for an additional $30 billion in development assistance for improving agricultural productivity in poor countries. The food crisis will also be on the agenda at the G8 Summit in Japan and the UN General Assembly session in September.

The FT has just begun an excellent series on the food crisis, see here and here and has in depth analysis of the crisis on its website.

Food Prices, Energy and Fertilizer Efficiency

There’s been a great deal of publicity of late on the increasing conjunction of agriculture and energy – the use of corn for ethanol production has knock-on effects for food costs, with the actual impact of the ethanol mandate accounting for some 20 percent of the recent runup in food costs according to IFPRI, the International Food Policy Research Institute. However, there is another point of commonality between food and fuel, and that is fertilizer. Food prices will only be stabilized and eventually reduced through increased production, and that is heavily dependent on fertilizer use. But while corn has gone from $3.05/bu. to $4.28/bu. between January ’07 and January ’08, fertilizer prices have been increasing even faster: For example, the Arab Gulf price of urea – the most commonly used form of nitrogen fertilizer – went from $272 to $415 per ton over the same period – a 50 percent increase. (The main input for producing urea is natural gas – hence the Arab Gulf base price.) So the increase in energy costs directly affects the costs of producing the food needed the mediate the price increases.

Rising in Food Prices: Ethiopia’s Response

It is unfortunate that an already food insecure country like Ethiopia now has to cope with the sudden hike in food prices. As I indicated in a previous post, Ethiopians were feeling the price increase for a long time. As long as I can remember, it has been a common household conversation. If my middle class family complains about this price increase, how can those living on urban slums - whose income to feed themselves and their family depends on selling tissues or other commodities for a few cents - survive the current price increase. This concern is also shared by WFP Executive Director Josette Sheeran. She indicated that “the price hike witnessed in Ethiopia has also been challenging urban dwellers all over the world”.

In a recent report, the World Bank noted that governments may pursue any different strategies to address higher food prices. The following chart survey’s some of the policy choices governments have made in response to the crisis. It shows that many countries taken in this sample have reduced taxes, instituted price controls and provided consumer subsidies. Some of these approaches address prices directly, but a more appropriate response may be to increase the purchasing power of the poor through, for example, targeted safety nets or cash transfer programs like those currently used in Brazil, China, Ethiopia, Egypt, Indonesia, Mexico, Mozambique, South Africa, Sri Lanka, and Tunisia.