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State of Food Insecurity 2010 – FAO says too little, too timidly

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Food and Agriculture Organization (FAO), State of Food Insecurity (SOFI) 2010The 2010 edition of the State of Food Insecurity says much too little and what it does say is unconvincing. There is a theme for this years edition of one of the Food and Agriculture Organization’s (FAO) ‘flagship’ reports. The theme is “countries in protracted crisis” by which FAO means conflict and war, internal and external.

FAO doesn’t say so explicitly in the introduction to SOFI 2010 on its website. There’s no excuses for FAO not to when the World Food Programme, Oxfam, ActionAid and a number of international agencies and aid groups have done so, not just this year but for at least a decade.

As the world’s pre-eminent compiler of food and agriculture-related research, data and analysis, FAO ought to see itself as duty-bound to be clear and fair in its reportage but it is not.

SOFI 2010 says that the majority of the world’s undernourished people live in developing countries. Two-thirds live in just seven countries (Bangladesh, China, the Democratic Republic of the Congo, Ethiopia, India, Indonesia and Pakistan) and over 40% live in China and India alone.

The report says that “FAO’s projections for 2010 indicate that the number of undernourished people will decline in all developing regions, although with a different pace. The region with most undernourished people continues to be Asia and the Pacific, but with a 12% decline from 658 million in 2009 to 578 million, this region also accounts for most of the global improvement expected in 2010″. Where does FAO think this improvement is going to come from, given the fact that its own food price index shows how cereals have risen at a clip this year to match the rise in 2007?

Food and Agriculture Organization (FAO), State of Food Insecurity (SOFI) 2010Just as it did a month ago, the FAO is sounding like it is in two minds about what to report. SOFI 2010 says that “developing countries as a group have seen an overall setback in terms of the World Food Summit goal (from 827 million in 1990–92 to 906 million in 2010), while some progress has been made towards MDG 1 (with the prevalence of hunger declining from 20% undernourished in 1990–92 to 16% in 2010)”.

Which are the 22 countries covered by the ‘protracted crisis’ theme? Here they are, the numbers in total population in millions followed by number of undernourished in millions, both for 2005-07. (Why couldn’t these have been for 2009 in a report dated 2010?): Afghanistan (na / na), Angola (17.1 / 7.1), Burundi (7.6 / 4.7), Central African Republic (4.2 / 1.7), Chad (10.3 / 3.8), Congo (3.5 / 0.5), Côte d’Ivoire (19.7 / 2.8), Democratic People’s Republic of Korea (23.6 / 7.8), Democratic Republic of the Congo (60.8 / 41.9), Eritrea (4.6 / 3.0), Ethiopia (76.6 / 31.6), Guinea (9.4 / 1.6), Haiti (9.6 / 5.5), Iraq (na / na), Kenya (36.8 / 11.2), Liberia (3.5 / 1.2), Sierra Leone (5.3 / 1.8), Somalia (na / na), Sudan (39.6 / 8.8), Tajikistan (6.6 / 2.0), Uganda (29.7 / 6.1), Zimbabwe (12.5 / 3.7).

SOFI 2010 says: “On average, the proportion of people who are undernourished is almost three times as high in countries in protracted crisis as in other developing countries (if countries in protracted crisis and China and India are excluded). Nonetheless, not all countries in protracted crisis present very high levels of undernourishment as in some of these countries crises are localized to certain areas or regions. There are approximately 166 million undernourished people in countries in protracted crisis – roughly 20% of the world’s undernourished people, or more than a third of the global total if China and India are excluded from the calculation.”

Food and Agriculture Organization (FAO), State of Food Insecurity (SOFI) 2010The question, what happens when China and India are excluded from calculations? With the exclusions 130.4 million (China) and 237.7 million (India) fall out of the equations? Moreover, SOFI isn’t following it’s own data. The para above says 166 million (approx) undernourished in countries in ‘protracted crisis’ but the table annex shows that the 22 countries together have 146.8 million undernourished. If the larger number for the 22 countries is the 2009 estimate, then FAO could have used the same method to provide estimates for all countries for 2009.

When FAO recalculates its food price index monthly (the current index is up-to-date for September 2010) why are these estimates three years old? Why should China and India be excluded when they account for over a third of the global undernourished population? Last month FAO said that 925 million people in the world live in chronic hunger and explained that “the decline (from 1,020 million in 2009) was primarily attributable to better economic prospects in 2010 and the fall in food prices since mid-2008″. What fall in food prices? What better economic prospects?

The State of Food Insecurity 2010 is a disappointing and pedestrian effort. FAO ought to retract this version and revise it thoroughly without dwelling on themes like ‘protracted crisis’ and instead get to grips with the market- and economics-related reasons for food price spikes and the hunger they bring.

Spring fiction by the Bank-Fund troll

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Vendor at Mapusa market, Goa

"Bank? Fund? Do they have a clue about livelihood?"

Pay no attention to the announcements coming from the World Bank and the International Monetary Fund during what the troublesome twins call their ‘spring meetings’ of 2010 (an annual, very expensive, exercise in financial fiction, but an exercise which has disastrous consequences for many in developing countries). The global big media were inertly supportive, as usual, and had this to say:

Business Week: “The World Bank, created after World War II to eradicate poverty, received shareholder backing for two separate capital increases that will provide a combined $5.1 billion. The 186 member countries agreed to pay $3.5 billion for the bank’s unit that lends to governments, the first general increase in 22 years, the International Monetary Fund’s development committee said in a statement today.”

The New York Times provided a clue about the machinations behind the scenes to maintain US control over the World Bank: “Under the changes, China will become the bank’s third-largest shareholder, ahead of Germany, after the United States and Japan. Countries like Brazil, India, Indonesia and Vietnam will also have greater representation. Mr. Zoellick carefully devised the capital increase and voting changes to be adopted together. The $5.1 billion in so-called paid-in capital, which the bank can use for day-to-day operations, will bring the bank’s cash on hand to about $40 billion. Of the $5.1 billion, developing countries will contribute $1.6 billion in connection with a shift in representation that will give them 47.19 percent of voting power, up from 44.06 percent. The actions fulfill a pledge the bank’s members made in Istanbul in October.”

The Financial Times: “A package put to ministers at the World Bank’s meetings in Washington yesterday increased the bank’s $11bn (€8.2bn, £7.1bn) paid-in capital by $5.1bn in return for reforms to voting rights, which would mainly see a transfer of votes from smaller European countries to emerging markets such as China, India and Brazil. Robert Zoellick, the bank’s president, last year began campaigning to increase its capital in response to the global financial crisis. The bank increased lending by $100bn to combat the effects of the crisis on poor countries, helping to overcome the scepticism of countries such as France and the US. “This is a once-in-a-generation request to address the impact of a once-in-a-generation crisis,” Mr Zoellick said.”

Bahrain's Finance Minister and Chairman of the Development Committe Ahmed Al Khalifa (L) gives his opening remarks to the Development Committee at the World Bank April 25, 2010 in Washington, DC. Finance Ministers and Bank Governors around the world are attending the IMF/World Bank Spring Meetings this weekend in Washington, DC. IMF Staff Photo/Stephen Jaffe

Rhubarb, rhubarb

As predicted just before the ‘spring meetings’ by the Bretton Woods Project, the capital increase and voting rights hogged most of the headlines. “The G20 group of the world’s biggest economies promised a 3 per cent shift in voting share towards ‘developing and transition countries’,” the Project had commented. “The Bank will proclaim success in achieving this, despite the fact that it fudged the definition of what is a ‘developing country’ so that the category included many countries that have achieved high-income status. With further reform being delayed until 2015, rich countries seem to have stemmed the surge of demands from the large emerging markets for deeper reform.”

The World Bank has asked its members to put up more money, as it had stretched itself to its limits to lend more during the financial and economic crisis in 2009. After a big debate over the size of the capital increase, the Bank has secured a US$60 billion nominal boost to its capital, which means it will receive about US$5 billion in actual cash (the rest is ‘callable capital’ that members would provide if ever asked by the Bank). Said the Bretton Woods Project: “This is a relatively small boost that will only allow the Bank to return to lending the same amount it did before the crisis. It also means that rich countries again rebuffed the large emerging markets who wanted a much larger capital boost and offered to pay for it entirely out of their own coffers.”

The point is that all these reforms and discussions have been kept completely out of the public eye until now. There have been no consultations with stakeholders and little discussion with most of the Bank’s members. That the rich countries won’t budge on governance issues was highlighted in a March report by a US Senate committee. The US is the largest shareholder, with an effective veto over any changes to the Bank’s governance. The committee called on the Obama administration to maintain “United States voting shares and veto rights at the international financial institutions” and questioned existing reforms to the selection of the World Bank president by demanding preservation of “United States leadership of the World Bank and senior level positions at the other IFIs.”

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