Institute Notes: A Dialogue on Overcoming Hunger and Poverty

Grim News We Already Knew: Hunger is Increasing

The FAO released new data today about the increase in hunger around the world. In 2009, 1.02 billion people will go hungry.

Number of Hungry People in the World

While Asia and sub-Saharan Africa continue to have the largest number of hungry people, it is surprising that three areas that have had low or stable hunger numbers over the last decade or more saw sharp increases: the Near East/North Africa region, Latin America and the Caribbean and developed countries as a whole

Estimated Regional Distribution of Hunger in 2009 (mil.)
and Increase from 2008 Levels (%)

More on the Madrid Conference

The text of Secretary of State Clinton's video-taped remarks to Summit attendees can be found here.

Also, this article provides some interesting details from the conference. There has been a good deal of talk about the need to coordinate the US response to international hunger - this GAO Report being but the most recent example. The question batted around at the Madrid Conference is how such a coordinating mechanism would operate at the international level.One proposal is to create a new global partnership - less a new structure and more a loose but coordinated alliance - consisting of civil society, business, donor and recipient governments and multilateral institutions.

No decision was reached at the conference on a way forward.

Little Outcome from the Madrid High Level Conference

The good news, for what its worth, is that 62 ministers from 126 countries including a delegation from the United States, attended the Madrid Conference held on Monday and Tuesday of this week. Attendees were even greeted by a message from Secretary of State Hilary Clinton.

But that's about the extent of the good news - at least on first blush. A note from the chair reports that all present recognized the need "to mobilize adequate, predictable, and flexible funding that have already been committed," and to "identify financing gaps and the additional resources needed for existing anti-famine mechanisms." This is a good start, but given that during 2008 well over $20 billion was pledged, the world's poor and hungry people struggling doubly as a result of food price volatility and the recent economic turmoil, deserve more than the recognition that existing pledges should be met. Prior to the Conference, MSF called for "a concrete funding and action plan" to address the plight of the world's 55 million severly malnourished children. This is a good place to start, though long-term food and nutrition security demands more.

The Impact of the Hunger Crisis: What the new numbers tell us

The release of FAOs State of Food Insecurity 2008 provides an update of the impact rising food prices have had on global hunger. The news is sobering and depressing: globally 115 million more people have been pushed into hunger since 2007 as a result of the food price spike (an estimated 75 million in 2007and an addition 40 million in 2008). The report provides data up to 2007 (depicted in the graph below) while the accompanying press statement provides a global estimate for 2008.  Just seven countries - India,Bangladesh, Pakistan, China, Indonesia, the Democratic Republic of Congo, and Ethiopia – account for 65 percent of the world’s hungry people.

It's United Nations Day

If there is one thing that has changed this fall, it's the awakening to the fact that the nations of the world are interconnected in fundamental ways--the global meltdown as a result of the US housing market and the financial instruments that depended on it has underscored what experts and advocates have been saying about climate change and the hunger crisis caused by poor policy choices that led to food prices doubling in the span of a few weeks earlier this year. We live in a world now where our choices and actions have global consequences, intended or unintended.

The founders of the United Nations and other multilateral institutions could not have imagined the world we live in today but they took steps to provide venues for having those conversations. Unfortunately, the nations of the world have not been very good at using these venues to have an honest dialogue about the challenges facing humanity. Instead these institutions have been used to pursue national agendas and protect national interests even if they were at the expense of the global good, leading many to be cynical about the usefulness of these institutions and multilateralism more generally. 

I don't think we have a choice anymore...we need to get real about the world we live and create systems that will help the international community understand the nature of global problems and come up with global solutions. We cannot afford to live in a world where half of world's people, the poor half, the ones who are most vulnerable are "collateral damage," to quote a NY Times article from today, when the financial system implodes or as a result of climate change or our biofuels policy.

With those thoughts, happy United Nations Day!

FAO: Hunger Increased by 75 million in 2007

Late yesterday the FAO released new estimates of the number of hungry people around the world. Given the rise in food prices experienced over the last several years (and most dramatically since the beginning of 2008), the news is not surprising, but it is troubling. In 2007, the number of hungry people increased by 75 million. FAO estimates that 923 million people suffer from hunger.

The report makes the sobering observation that "with the number of chronically hungry people in the world now higher than during the baseline period [1990-1992], the World Food Summit target of reducing that number by half by the year 2015 may be unreachable."

Food Prices – the On-Going Story

According to the latest FAO Crop Prospects and Food Situation, international prices for wheat and rice have retreated somewhat from the highs set in March and May respectively. Wheat prices have fallen by roughly one-fourth, and rice is down by 11 percent. Still, though, prices of these two commodities are well above their levels of just one year ago – by 150 percent in the case of rice. The only major internationally traded cereal that shows no price abatement yet is corn (maize), continuing a steady upward trend (already more than double one year ago) that reflects the strong continuing demand for livestock feed and corn-based ethanol.

World cereal production is forecast to increase 2.8 percent over 2007, alleviating some of the pressure, but global markets can be expect to remain tight going into 2009. This means that a weather-induced production shortfall could lead to another price run-up comparable to what we’ve seen this year. Further, production in the lower income countries will grow by a lesser amount, meaning continuing food insecurity, high import bills and potential political turmoil.

A quick news round up

There are a few articles that I think are worth calling attention to:

There are signs that farmers in India, China, Australia and other parts of the world are beginning to respond to higher food prices by planting more food crops. This will certainly ease pressures on the record high prices that we have seen in the last 18 month--but particularly in the last six months. This is good news for consumers. The story suggests that rice and grain prices have not come down as much as wheat and soybean. A WSJ article and reports from the World Bank and USDA suggest that while prices have and will continue to decline in coming months as a result of a supply response, it is unlikely that they will go down to pre 2004 levels, when they were quite low. Grain prices in particular will remain high because of the ethanol mandates and subsidies in the US that are diverting corn and land away from food and feed production. For people living in extreme poverty and hunger, an easing of food prices may be of some comfort but they are still very vulnerable to even the slightest fluctuations and will continue to face enormous challenges feeding their families. They need the skills, tools and physical strength to lift themselves out of poverty once and for all and that is where development assistance, trading opportunities, and good governance come in.

This morning's New York Times has a piece by Roger Cohen about Ghana--the kind of story you don't see much in our media about Africa or anywhere in the developing world quite frankly. But many developing countries are making progress, leap frogging technologies, facing up to challenges and there is an energy and intensity about the changes that is quite enticing. Of course there are a great many challenges, far too many people (862 million) go to bed hungry but as Cohen acknowledges, very few of these type of stories make the papers.

Promising Approaches as Developing Countries Grapple with Higher Food Prices

I saw this story yesterday about how in the face of rising food and fuel prices, developing countries are shifting away from using subsidies to keep prices down, particularly for fuel, to providing cash assistance directly to poor people. Because this approach is more targeted, it is more effective at reaching the people who need help the most. Subsidies tend to benefit all consumers--even those who can afford to pay higher prices--and they are very costly. For resource-strapped poor countries, this shift would free up resources to invest in social safety nets and long-term development priorities. But it is not without its challenges--including creating systems to make sure that the cash reaches the intended beneficiaries. It is also politically risky as governments may face opposition from those who stand to lose out.

I like this idea from a climate change perspective too. It is high time the international community stopped subsidizing fossil fuels. Indeed we should be pricing fossil fuels in a way that takes into account their devastating impact on the world's climate--but that's for another blog post!

Debating Biofuels

On June 12, “Six major U.S. farm groups called for a congressional investigation of the factors behind higher food prices. ‘Food companies are trying to pass the blame onto farmers while many are enjoying record prices.’" Record prices are being enjoyed by investors such as Vinod Khosla, founder of venture capital firm Khosla Ventures, who wrote opinion article, “All Biofuels Are Not The Same” in the Washington Post June 16. Mr. Khosla is one of the larger investors in cellulosic biofuels research; he states, “Rising food prices are of course a concern, but principally blaming ethanol production is illogical.” His reasoning is based on the facts reported by US Agriculture Secretary Ed Shafer who has repeatedly attributed rising food costs as only 3% of the 40% increase in world food prices. Furthermore, Khosla cites, “If biofuels were taken off the market, Merrill Lynch estimates, oil prices would climb 15 percent, putting further upward pressure on food prices.”

Peter Brabeck-Letmathe, chairman of Nestle, wrote in the Wall Street Journal June 13, that “Biofuels are economical nonsense, ecologically useless, and ethically indefensible. This year, the U.S. will use around 130 million tons of corn for biofuels. This corn was not available as human food, nor as fodder to animals.”

It is clear that corporate interests are cemented to the ethanol debate. What I believe is worth noting is that corporations, driven by for profit agendas, should be in support of getting goods produced cheaper and at higher quality whenever possible. And yet, this option is being ignored. In all of the campaigning and talk, viable solutions are ignored. Will anyone read more closely Roger Cohen’s piece “Bring on the Right Biofuels”, in the New York Times, in which he says that “most of the supposed crimes of biofuels is . . . to borrow a farm image, is hogwash and bilge.” Cohen concluded that biofuels are part of the solution, “It just depends which biofuels.”