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Why agricultural investment ‘principles’ must be buried

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FAO_IYFF_1This year the Food and Agriculture Organisation (FAO) will through its Committee on World Food Security, advocate principles concerning what are called ‘responsible agricultural investments’. The adoption of principles such as these are expected to promote investments in agriculture that contribute to food security and nutrition, and which support the realisation of the right to food, particularly within national contexts of how food security is defined.

While the principles are intended to provide practical guidance to governments, private and public investors, intergovernmental and regional organisations, civil society groups, research units and universities, donors and philanthropic foundations, they will be voluntary and will not be binding upon their signatories.

FAO_IYFF_2The problem with such a conceptualisation of international or globally applicable principles is that the negative consequences that accompany investment are left undefined and therefore weak as a countervailing argument. Investment made to acquire land, to pursue industrial agricultural techniques (in contrast to policies and programmes that support smallholder cultivation), and which – experiences of the last three decades have shown – have deepened income inequalities while making those vulnerable to food scarcity and food price volatility even more so.

These investments are determined by a dominant political economy found in a country, or a sub-national region – important variations that cannot be recognised or dealt with in any meaningful way by a set of voluntary principles (nor even with the aid of a ‘knowledge platform’ on the subject set up by the World Bank, FAO, UNCTAD and IFAD.

In this article published by Pambazuka News – the pan-African community of some 2,600 citizens and organisations that make it one of the largest and most innovative and influential web forums for social justice in Africa – I have examined the rationale and background to the principles pertaining to ‘responsible agricultural investment’ (which is now referred to commonly by the ‘RAI’ short form); and also concepts about agricultural investment (or public and private spending on agricultural activities) especially what are assumed and what are implied; and a conclusion criticises the RAI and the effort to promote a multi-lateral common ground for problems that are essentially local.

FAO_IYFF_3“The adoption of RAI will aid, in any host country, the tailoring of all policies and strategies to fit investors (foreign and domestic, for the technological advantages are now common, as much as the conduits of capital flow for food and agriculture investment are many) so that they can be ‘competitive’ in the market. Instead of prioritising a model of agricultural production where women, farmers/peasants, pastoralists and all small-scale food producers are at its core, in which agro-ecological forms of farming and raising livestock are supported, and through which local markets and economies are strengthened, the draft RAI principles will if accepted legitimise policies that put the government and country at the service of such investors (both foreign and domestic, it must be noted).”

Moreover, from the point of view of human rights terms this is discriminatory; and will turn a parlous situation into a destabilising one – already countries are falling short of their obligations related to realising the right to adequate food (a foretaste of which was seen most recently during the World Trade Organisation ninth ministerial conference in 2013 December which brought to the fore disagreements about governments’ own procurement of food for public programmes as distorting world trade).

[Read the full article on Pambazuka News.]

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A tiring tale from the FAO that again ignores the global food industry

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Cheap processed food advertised in Chengdu, P R China.

Cheap processed food advertised in Chengdu, P R China.

Why has the Food and Agriculture Organisation (FAO) not stated what has become painfully obvious to households the world over – that the macro-economics which determines everything from what farmers grow and what city workers pay for food is utterly out of control?

This silence is why FAO’s ‘State of Food Insecurity in the World 2013’ – with its updated estimates of undernourishment and its diplomatic paragraphs about progress towards the Millennium Development Goals (MDG) and World Food Summit (WFS) hunger targets – remains conceptually crippled.

The roles of the food industry, its financiers, its commodities satraps, the marketers and their fixers in government, the networks that link legislators and food business investors in countries with growing processed foods businesses, all these shape food security at the community and household level. Yet none of these are considered critically by an FAO report that ought to be thoroughly non-partisan on the matter.

The FAO ‘State of Food Insecurity in the World 2013’ (condensed to SOFI 2013) has said that “further progress has been made towards the 2015 MDG target, which remains within reach for the developing regions as a whole, although marked differences across regions persist and considerable and immediate additional efforts will be needed”.

How many more food insecurity indicators are needed to tell governments what their working class households already know? The table of SOFI 2013 indicators.

How many more food insecurity indicators are needed to tell governments what their working class households already know? The table of SOFI 2013 indicators.

In the first place, let’s consider the 2015 Millennium Development Goals (MDG) target concerning hunger. This is to halve the proportion of hungry people in the total population. There is also the World Food Summit (WFS) target, which is to halve the number of hungry people. Both have 2015 as the target year. However, any hunger has no place in a world that today produces more than enough food to adequately feed every elder, child, woman and man.

But there is another aspect, and this is: who does the FAO think is paying attention to ‘global’ targets and placing these targets above any local needs or ambitions? Just as the MDGs are scarcely known and recognised outside the enormous development industry which perpetuates a growing mountain of studies and reports on the MDGs, nor are ‘global’ hunger reduction targets. When alleged leaders of the world gather together in the United Nations General Assemblies and other grand international fora and ask (in a tiresome and repetitive way) how we are going to feed 9 billion people, no individual smallholder farmer listens, because growing and feeding is done locally, and therefore ‘targets’ are also local, just as food insecurity or security is local.

This is why the SOFI 2013 approach – which is to say that “the estimated number of undernourished people has continued to decrease [but] the rate of progress appears insufficient to reach international goals for hunger reduction” – is utterly out of place and does not in any way reflect the numerous variety of problems concerning the provision of food, nor does it reflect the equally numerous variety of local approaches to fulfilling food provisioning.

Next, it is way past high time that FAO and the UN system in general jettison the “developing regions” label. It has no meaning and is an unacceptable legacy of the colonial view. Besides, as I point out a little later, food inadequacy (including insecurity and outright poverty) is becoming more and not less prevalent in the so-called developed regions. And moreover, I object to “considerable and immediate additional efforts will be needed” to reverse food insecurity, as the SOFI recommends, because this is the green signal to the global industrial agri-food industry to ram through its destructive prescriptions in the name of additional efforts.

SOFI 2013 also “presents a broader suite of indicators that aim to capture the multi-dimensional nature of food insecurity, its determinants and outcomes”. Once again, it is way past high time that the FAO ceased encouraging a proliferation of indicators of every description (and then some) that do next to nothing to ensure low external input and organic agriculture supported by communities and local in scale and scope, and in which the saving of seed and the preservation of crop and plant diversity is enshrined. There is not one – not a single indicator from FAO (and not one from any of its major partners, the World Food Programme (WFP) and the International Fund for Agricultural Development (IFAD) – for this need that is at the core of the myriad wonderful expressions of human civilisation.

Oxfam has made graphic the growing poverty in the European Union.

Oxfam has made graphic the growing poverty in the European Union.

SOFI 2013 also said that “recent global and national food consumer price indices suggest that changes in consumer prices were generally much more muted than those recorded by international price indices, often influenced by greatly increased speculation in spot, futures and options markets”. This unfortunately is completely untrue, for even FAO’s own database on national consumer price indexes (supplied by FAO member countries themselves) suggests that the CPI follows international price indices (this blog has pointed out the correlation a number of times in the last two years). And it is the same macro-economics that rewards speculators in “in spot, futures and options markets” which also deepens food insecurity every year.

Now, to return to the question of who is “developing” and who is not. The European Union (28 countries) has a population of 503 million (the early 2012 estimate). The USA has a population of 313 million (mid-2012 estimate). How large a group in both the European Union and the USA are hovering around the poverty lines, or who are plain poor, and who cannot afford to buy enough food for themselves?

In a report released in September 2013, the Oxfam aid agency warned that the poverty trap in Europe, which already encompasses more than 120 million people, could swell by an additional 25 million with austerity policies continuing. The report, ‘A cautionary tale: Europe’s bitter crisis of austerity and inequality’, said that one in two working families has been directly affected by the loss of jobs or reduction of working hours.

The food insecurity problem has been growing in the non-“developing” world just as fast as it has been growing in sub-Saharan Africa, south Asia, south-east Asia and other “developing” regions that the FAO’s flagship reports habitually places in the foreground. In early 2012 news reports in European Union countries were mentioning regularly how “ever more people are threatened with poverty”. The European Commission’s office for Employment, Social Affairs and Inclusion said so too: “Household incomes have declined and the risk of poverty or exclusion is constantly growing.”

Across the Atlantic, a US Census Bureau report released in September 2013 titled ‘Income, Poverty and Health Insurance Coverage in the United States: 2012’, poverty was found to be “at a near-generation high of 15 percent, close to the high point since the 1965 War on Poverty, the 15.2 percent rate reached in 1983”. This report found that 46.5 million USA ctitzens (about 9.5 million families) live in poverty and that some 20.4 million people live on an income less than half of the official poverty line of the USA.

FAO’s ‘State of Food Insecurity in the World 2013’ will with its present methods, outlook and biases be useful neither to cultivating communities growing the food we eat, nor to administrators in districts and provinces who must plan and budget to encourage local action that brings about food security, nor to the member countries of the United Nations if it continues to ignore the very large and growing numbers of the poor in the European Union and USA – 170 million poor people, and therefore food insecure, is a population that is considerably larger than that of any country in sub-Saharan Africa which inevitably figures in these reports.

Here are the materials for FAO’s ‘State of Food Insecurity in the World 2013’: The FAO news story. A frequently asked questions document. The FAO page on State of Food Insecurity 2013. The executive summary. The full pdf file and chapters. The e-book. The food security indicators data.

For whom do the FAO and its director-general work?

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A farmer accompanies his cattle through the fields of Uttara Kannada district, in the state of Karnataka, south India.

A farmer accompanies his cattle through the fields of Uttara Kannada district, in the state of Karnataka, south India.

For farmers small and large?  For the tens of millions of food-consuming households, poor or just getting by?  For the governments and bureaucracies of small countries who want to import less and grow more?  For the organic cultivators on their small densely bio-diverse plots?  Or for the world’s large food production, trading, and retail corporations, whose influence is wide and whose power is vast? [This is an extract from the full article at Monthly Review’s MRZine.]

FAO director-general Jose Graziano da Silva

There is the continuing if travel-stained hope — held by so many of us, those who work at humble stations in the food and agriculture sector — that, of all those whom the director-general of the Food and Agriculture Organization (FAO of the United Nations) does work for, it is not that last.  But, since 2011 June, when José Graziano da Silva became the head of the FAO, the signs have been otherwise, and they are growing stronger with each passing month.

What effect does this have on the way the 190-odd member states of the UN deal with agriculture and food, with nutrition and food security, with making food affordable?  A great deal.  These are questions the member states of the FAO (and of the UN) have faced since 1945, with the end of World War Two.  If you read this passage, it helps illustrate how little has changed from one point of view, and how much has, from another, far more insidious and destabilizing point of view:

. . . [S]ome of the basic problems that have afflicted humanity since the beginning of society remain unsolved.  Large parts of the world still suffer from hunger, and the threat of famine is ever present.  Today we are confronted by a new challenge in human history which, if not faced, could sweep away the little progress we have so far achieved — this is the upward surge of world population at a rate never experienced before.

That was the fourth director-general of the FAO, B. R. Sen of India, and he said these words during his inaugural address at the First African Regional Conference held in Lagos, Nigeria, on 3 November 1960.

Sen appealed “… to our Member Governments not only to discuss their problems, but also to avail themselves of the knowledge and skills FAO has acquired over many years in the fields of agricultural development and food production and distribution.”  He said: “While the increase of agricultural productivity must remain the sine qua non of economic development of the less developed regions, the importance of education, public health and institutional factors must be recognised in any plan of balanced economic development.”

The FAO 'real' food price index. What will a private sector 'political commitment' do to these trends?

The FAO ‘real’ food price index. What will a private sector ‘political commitment’ do to these trends?

As you see, it has been over 50 years and few of the deficits recorded then have been banished.  How could they have been?  In the years — the decades — since 1960, many a development theory has been advanced only to be discarded . . . but not before the worst of them were thrust upon poor folk and choiceless urban dwellers, as they are now.

Only the armory of the food giants today is far more potent than it ever has been.  And still more powerful will they become, if championed by the FAO as they currently are.  Graziano da Silva at the end of 2012 November said that the private sector can make an important contribution to the fight against poverty and hunger and promote sustainable food production and consumption.  Where did he say this?  At the FAO Headquarters, to participants whose associations represent more than five thousand companies, during the first in a series of planned dialogues on what the FAO is calling “private sector involvement in poverty- and hunger-reduction initiatives.”

This is deeply worrying.  Food companies, global grain traders, commodities exchanges, multi-national food retail chains, and large processed-food corporations have been using all the means they could muster to influence the FAO during the 2001-10 decade.  Now, under Graziano da Silva, the gates have opened wide in a manner that was still resisted during the tenure of his immediate predecessor, Jacques Diouf (1994-2011), and could hardly be countenanced during the tenure of Edouard Saouma (1976-1993).  What would those who came before — A. H. Boerma (1968-1975), B. R. Sen (1956-1967), P. V. Cardon (1954-1956), N. E. Dodd (1948-21), and J. B. Orr (1945-1948) — have thought of such a swerve marketward?

Indigenous and organic cereals displayed in Bangalore, Karnataka

Indigenous and organic cereals displayed in Bangalore, Karnataka

The signs came early.  In 2011 October, for the World Food Day of that year, Graziano da Silva in an article wrote of “boosting investments in agriculture and food security” but didn’t say whether he meant public investment or private.  What he did do was extol what he believes are the benefits of “boosting cash flows into economically stagnant rural communities,” as the FAO release of that day explained.  The director-general’s words were: “Cash transfers and cash-for-work programmes work in the same way as rain on dry soil, allowing these communities to bloom once again.”

It was a turn of metaphor that, when similarly used by him in an article about eleven months later, infuriated 109 farmers’ and peasants’ movements and associations.  Graziano da Silva and Suma Chakrabarti, the president of the European Bank for Reconstruction and Development (EBRD), wrote an article published in the Wall Street Journal on 6 September 2012.  In the article, they called on governments and social organizations to embrace the private sector as the main engine for global food production.

mrzine_logo“The language used by Graziano da Silva and Chakrabarti is offensive,” said the signatories to the common statement issued by the 109 organizations.  “Phrases like ‘fertilize this land with money’ or ‘make life easier for the world’s hungry’ call into question the FAO’s ability to do its job with the necessary rigor and independence from large agribusiness companies and fulfill the UN mandate to eradicate hunger and improve the living conditions of rural people.”[You can read the rest on MRZine.]

Written by makanaka

December 5, 2012 at 16:35

Right-sizing the 2050 calculus on food and population

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A man walks away with a bag of rice at a food distribution centre in Tarenguel, Gorgol region, in Mauritania in May 2012. A full third of the country’s population, amounting to around a million people, are at risk of severe malnutrition if rain doesn’t fall by July. Photo: AlertNet / Reuters / Susana Vera

Ever since October 2011 when the world’s seventh billion person was born, there has been a new flurry of articles and prognoses about the need to increase ‘global’ food production to feed a ‘global’ population. While this may be all very well for earth systems scientists and researchers who are accustomed to dealing with planetary scale, those in charge of planning for agriculture at national and sub-national levels find it difficult enough relating to their own numbers (in India, the population of the smallest states are between 1 and 2 million, while that of the largest, Uttar Pradesh, is close to 200 million (!) which if it were a country would be placed between the fourth and fifth most populous countries – Indonesia and Brazil).

Through this year, numerous inter-governmental agencies and large organisations – including the FAO, WFP and IFAD – have discussed the need to be able to feed a population of nine billion, which we are expected to be in 2050 or thereabouts. And so says, recently, the ‘Sustainable Agricultural Productivity Growth And Bridging The Gap For Small-Family Farms’, which is the ‘Interagency Report to the Mexican G20 Presidency’ (12 June 2012).

Explaining that “the growing global demand for food, feed and biofuel is well established”, this inter-agency report has said that income growth will increase the quantity and change the composition of agricultural commodity demand. I find this approach a troublesome one because on the one hand there is growing recognition (even if corrective action is small and mostly symbolic) that consumption is to sustainable the way energy efficiency is to total energy use. Why are large agency and inter-agency reports continuing to skirt a matter which should be dealt with head-on – that consumption of food by the populations of ‘developing’ countries, on the lines of that practiced by the populations of OECD countries – cannot be encouraged by the food MNCs and the global food retail consortia?

A man gestures at a compound belonging to the World Food Programme as it is being looted in Abyei, in this United Nations Mission in Sudan (UNMIS) handout photo taken in May 2011. Photo: AlertNet / Reuters / Stuart Price / UNMIS

It is because of this consistent refusal to see – and name – the elephant in the room that this report, to the Mexican G20 Presidency, has said: “Significant increases in production of all major crops, livestock and fisheries will thus be required”.

What are the estimates provided? “Estimates indicate that by 2050, agricultural production would need to grow globally by 70% over the same period, and more specifically by almost 100% in developing countries, to feed the growing population alone… ” I am puzzled by the easy acceptance of this simple equation by the following agencies and institutions, all of whom have contributed to this report: Bioversity, CGIAR Consortium, FAO, IFAD, IFPRI, IICA, OECD, UNCTAD, Coordination team of UN High Level Task Force on the Food Security Crisis, WFP, World Bank, and WTO.

There is a mathematics here that is eluding me. The estimate is that from now until 2050, world population will grow around 30% – from the current 7 billion to an estimated 9.1 billion. However, if population grows at 30%, why must the available food (excluding biofuels demand) grow at 70% over the same period? It is extremely difficult for most people (earth system scientists excluded) to make sense of such large numbers. In order to break up large numbers into more familiar terms, I have (from UN’s World Population Prospects 2010) extracted the following data. These are the populations of France, DR Congo, Thailand, Turkey and Iran, these are the world’s 21st to 17th most populous countries (in that order).

People buy food at a vegetable market in Tripoli in August 2011. Photo: AlertNet / Reuters / Youssef Boudlal

In 2012 their populations are: France 63.5 million, DR Congo 69.6 m, Thailand 69.9 m, Turkey 74.5 m, and Iran 75.6 m. Let’s not try to strain to look ahead as far as 2050 (by which time some of us will have returned to our ecosystems as dust or as ashes) but look to 2027, or 15 years ahead. Then, the populations will look like this: France 67.7 million, DR Congo 99.6 m, Thailand 73.1 m, Turkey 85.1 m and Iran 83.7 m.

Thus we see that, as the ‘Interagency Report to the Mexican G20 Presidency’ has explained, it is indeed some ‘developing’ countries which will need to provide for considerably more food being grown and made available – DR Congo will have, in this short span of years, 30 million more people! Turkey will have more than 10 million more! The growth – again for the 2012 to 2027 period alone – is France 7%, DR Congo 43%, Thailand 5%, Turkey 14% and Iran 11%.

Does it then still make sense to speak of 2050 horizons and 2.1 billion more people when we are at best talking to national planners, sectoral administrators and thematically-oriented agencies accustomed more to district boundaries than continental spreads? I say it doesn’t – and the less time and money and conferencing we expend on these beyond-humanscale numbers the more sense we will make to those in need of guidance. The question then resolves itself as being more prickly, and more in need of hard answers – if the 30 million additional people in DR Congo are to choose a diet that has 50% less meat and 50% more indigenous vegetables and tubers and roots in it, will DR Congo still – over this period alone – need to plan for growing 43% more food (grain) to keep pace with population growth? Will Turkey need to do the same (time to encourage more çorbasi and less schwarma perhaps!)?

Rural institutions and food security, useful case studies

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A useful addition from FAO and IFAD, this publication describes an array of organisations and institutional for access to and help managing natural resources for small farmers. These include mediation committees for conflict resolution over land or securing land-use rights, women’s groups for reclaiming land, and forest-community based enterprises for generating income activities. The publication, ‘Good Practices in Building Innovative Rural Institutions to Increase Food Security’, outlines how a vast array of producer-organization initiatives have enabled small producers to increase their access to markets and productive assets.

From 'Good Practices in Building Innovative Rural Institutions to Increase Food Security', by Food and Agriculture Organization of the United Nations (FAO) and International Fund for Agricultural Development (IFAD).

The case studies describe some of the services and resources that these institutional arrangements and new models of public-private engagement can offer to small-scale producers. They include accessing and managing natural resources; providing inputs like seeds and equipment; enabling access to markets; improving information and communication, and helping small producers to have a voice in decision-making processes.

* Farmer Field Schools developed by FAO in Asia, and subsequently in Africa, have enabled millions of small farmers to analyze their production systems; identify their risks and opportunities and test solutions, and adopt new practices that lead to improvements in their livelihoods and food security.
* West African and Indian farmer groups have helped members to obtain short-term credit through a “warehouse receipt system”. In collaboration with micro-finance institutions, they have provided storage facilities for agricultural products. The receipts are then used as guarantees to obtain short-term credit.
* In India, where a disastrous harvest can lead poor people to mortgage their lands, a women’s association has provided loans to release mortgaged land and free borrowers from dealing with money lenders.
* In Cameroon, farmers’ groups, collectors, buyers, resellers and researchers collaborated to select a new plantain variety that fetches a higher price than traditional plaintains. The new variety is also used to make specialty dishes and chips. This has led to the emergence of small groups, including dozens of women’s groups, concerned not only with the production and sale of bunches, but also with processing the plantain into chips.
* In the Gambia, the National Fisheries Post Harvest Operator Platform is a mechanism for dialogue where governments can learn about small producers’ needs while producers express their concerns and preferences.
* In Honduras, greater control over natural resources was transferred to local communities as part of the decentralization process, resulting in better land management and cropping practices. These Community Development Councils, representing rural families, participated in the Municipal Council and managed to ban slash-and-burn agriculture.

World food insecurity report 2011 – expect more of the same

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The UN Food and Agriculture Organization (FAO), the International Fund for Agricultural Development (IFAD) and the World Food Programme (WFP) have released ‘The State of Food Insecurity in the World 2011’ (SOFI).

This year’s report focuses on high and volatile food prices, identified as major contributing factors in food insecurity at global level and a source of grave concern to the international community. “Demand from consumers in rapidly growing economies will increase, the population continues to grow, and further growth in biofuels will place additional demands on the food system,” the report said.

Moreover, food price volatility may increase over the next decade due to stronger linkages between agricultural and energy markets and more frequent extreme weather events.

Price volatility makes both smallholder farmers and poor consumers increasingly vulnerable to poverty while short-term price changes can have long-term impacts on development, the report found. Changes in income due to price swings that lead to decreased food consumption can reduce children’s intake of key nutrients during the first 1000 days of life from conception, leading to a permanent reduction of their future earning capacity and an increased likelihood of future poverty, with negative impacts on entire economies.

Key Messages

Small import-dependent countries, especially in Africa, were deeply affected by the food and economic crises. Some large countries were able to insulate themselves from the crisis through restrictive trade policies and functioning safety nets, but trade restrictions increased prices and volatility on international markets.

High and volatile food prices are likely to continue. Demand from consumers in rapidly growing economies will increase, population will continue to grow, and further growth in biofuels will place additional demands on the food system. On the supply side, there are challenges due to increasingly scarce natural resources in some regions, as well as declining rates of yield growth for some commodities. Food price volatility may increase due to stronger linkages between agricultural and energy markets, as well as an increased frequency of weather shocks.

Price volatility makes both smallholder farmers and poor consumers increasingly vulnerable to poverty. Because food represents a large share of farmer income and the budget of poor consumers, large price changes have large effects on real incomes. Thus, even short episodes of high prices for consumers or low prices for farmers can cause productive assets – land and livestock, for example – to be sold at low prices, leading to potential poverty traps. In addition, smallholder farmers are less likely to invest in measures to raise productivity when price changes are unpredictable.

Large short-term price changes can have long-term impacts on development. Changes in income due to price swings can reduce children’s consumption of key nutrients during the first 1,000 days of life from conception, leading to a permanent reduction of their future earning capacity, increasing the likelihood of future poverty and thus slowing the economic development process.

High food prices worsen food insecurity in the short term. The benefits go primarily to farmers with access to sufficient land and other resources, while the poorest of the poor buy more food than they produce. In addition to harming the urban poor, high food prices also hurt many of the rural poor, who are typically net food buyers. The diversity of impacts within countries also points to a need for improved data and policy analysis.

High food prices present incentives for increased long-term investment in the agriculture sector, which can contribute to improved food security in the longer term. Domestic food prices increased substantially in most countries during the 2006–08 world food crisis at both retail and farmgate levels. Despite higher fertilizer prices, this led to a strong supply response in many countries. It is essential to build upon this short-term supply response with increased investment in agriculture, including initiatives that target smallholder farmers and help them to access markets, such as Purchase for Progress (P4P).

Safety nets are crucial for alleviating food insecurity in the short term, as well as for providing a foundation for long-term development. In order to be effective at reducing the negative consequences of price volatility, targeted safety-net mechanisms must be designed in advance and in consultation with the most vulnerable people.

A food-security strategy that relies on a combination of increased productivity in agriculture, greater policy predictability and general openness to trade will be more effective than other strategies. Restrictive trade policies can protect domestic prices from world market volatility, but these policies can also result in increased domestic price volatility as a result of domestic supply shocks, especially if government policies are unpredictable and erratic. Government policies that are more predictable and that promote participation by the private sector in trade will generally decrease price volatility.

Investment in agriculture remains critical to sustainable long-term food security. For example, cost-effective irrigation and improved practices and seeds developed through agricultural research can reduce the production risks facing farmers, especially smallholders, and reduce price volatility. Private investment will form the bulk of the needed investment, but public investment has a catalytic role to play in supplying public goods that the private sector will not provide. These investments should consider the rights of existing users of land and related natural resources.

Agriculture, nutrition, health: the new global focus begins

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I am attending the “Leveraging Agriculture for Improving Nutrition and Health” conference under way in New Delhi. Organised by the International Food Policy Research Institute (IFPRI), this is a sprawling conference with over 900 international participants from all three sectors.

What’s it all about? “Agriculture is much more than just producing food and other products. It is linked to people’s well-being in many ways, and it has the potential to do much more to improve their nutrition and reduce their health risks. But to accomplish this, we need to re-imagine agriculture,” said Shenggen Fan, director general of IFPRI.

The gathering is meant to examine ways in which agriculture can enhance the health and nutritional status of poor people in developing countries. To work toward this goal, said IFPRI, they have brought experts together (I’m civil society, and there are very few NGOs/CBOs here) from all three sectors “to take stock of current knowledge, share information and best practices, and build consensus on the actions most needed to move forward”.

Here’s the IFPRI rationale. Agricultural scientists have traditionally focused on developing more productive crops and livestock and on reducing their susceptibility to disease. IFPRI and the conference sponsors (list below) say that by incorporating nutrition as a goal, researchers and breeders could provide farmers with a wide range of healthier products. For example, breeding crops with higher levels of micronutrients like vitamin A and iron can potentially reduce death and disease, especially among women and children.

“Increasing crop productivity overall is not enough. A new paradigm for agricultural development is needed, so that agricultural growth leads also to improved nutrition and health,” said Fan. The CGIAR (the Consultative Group on International Agricultural Research) and the conference sponsors say that improvements in other factors such as land distribution, women’s status, rural infrastructure, and health status, can have a positive effect on nutrition, the paper contends. “Complementary investments in rural roads, nutrition programs, and other targeted interventions can make a huge impact.”

IFPRI's agriculture, nutrition and health logo

The development community needs to be conscious of the entire “value chain” – which is a central concept running through the discussions and presentations here. This is defined as including production, storage, transportation, marketing, and consumption, “as all of these have implications for health and nutrition”. Moreover, “after harvest, there are opportunities for improving health and nutrition, from better storage and transport to stronger nutritional marketing from retailers”.

The conference features heavyweights in the international agricultural research sector and representatives from the major UN agencies involved in these sectors. The proceedings were inaugurated by India’s Prime Minister Manmohan Singh. M S Swaminathan was there; John Kufuor (former president, Ghana), David Nabarro, UN Special Representative on Food Security and Nutrition, and Montek Singh Ahluwalia, head of India’s Planning Commission were all there.

The conference concludes on 12 February and it will take me a few days to put my thoughts together on the themes and what they represent – the implications beyond the powerpoint world and what is driving this new focus.

The sponsors: Asian Development Bank; Bill & Melinda Gates Foundation; Canadian International Development Agency; Technical Centre for Agricultural and Rural Cooperation (CTA) (ACP-EU Cotonou Agreement); Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ); International Fund for Agricultural Development (IFAD); Indian Economic Association; International Development Research Center, Canada / Le Centre de recherches pour le développement international (IDRC-CRDI); Irish Aid; PepsiCo; UK Department for International Development (DFID); United States Agency for International Development (USAID); Feed the Future Initiative; The World Bank.

What use is the Committee on World Food Security?

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The Committee on World Food Security (CFS) opened its 36th session yesterday (11 October 2010). It’s described as “a five-day high-level intergovernmental meeting” which “takes place against a background of recent increases in international food prices which pose additional  challenges to food security”.

The FAO (Food and Agriculture Organization of the United Nations) said the Committee aims to be “the most inclusive international and intergovernmental platform for all relevant stakeholders to work together to ensure food security and nutrition for all. In its role as the cornerstone of the global governance of agriculture and food security, the CFS will be more effective in facing challenges to food security”.

I expected that now at least, when the price of food staples is rising the way it did in 2007, the FAO and its constellation of agencies and committees and task forces would quit moralising and get down to naming names and naming reasons for the rise in prices. After all, the FAO food price index is relied on by national governments, traders and commodity markets – all for different reasons of course. It’s absurd to imagine that FAO analysts cannot see the reason why those indices move.

But if you read FAO statements and press releases, it sounds as though the problems they are struggling to describe in real terms have nothing whatsoever to do with things like trade, speculative trading, hoarding, price gounging, dumping, trade rules, tariffs, embargoes and other instruments designed to beggar national neighbours and reinforce trading blocs.

The FAO still refuses to say that market forces – call it what you will, free market forces or speculative trade or consumerist economics – is very largely responsible for food shortages and food price spikes all over the world. If this 36th session of the Committee on World Food Security cannot, will not or dare not speak the truth, it may as well pack up and go home and save some money by disbanding.

As for the statements, sorry but we’ve heard it all before in varying shades of myopic optimism:

1) FAO Director-General Jacques Diouf said “Global problems demand global as well as local solutions. The renewed CFS constitutes the required platform for debating global complex problems and reaching consensus on solutions.”

2) “This week marks the launch of a strategically coordinated global effort to draw on the combined strengths of all stakeholders engaged in the fight against global hunger,” said World Food Programme  (WFP) Executive Director Josette Sheeran.

3) International Fund for Agricultural Development (IFAD) vice-resident Yukiko Omura said: “Investing in small farmers — improving their access to land, to appropriate technology, to financial services and markets, and responding to their other requirements — is the most effective way to generate a broad-based movement out of poverty and hunger.”

Messers Diouf, Sheeran and Omura, set aside your prepared statements and summon up the courage to tell the countries which support the FAO the truth about global food prices. Tell them about the World Trade Organisation (WTO) and free trade agreements and the conditions attached to development aid. Help your agencies do their work by being honest about the problem.

The race to own India’s water

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Image courtesy 'UN-Water Global Annual Assessment of Sanitation and Drinking Water (GLAAS) 2010', World Health Organization (WHO) and UN-WaterWater privatisation in India today comes in a wide range of what are called “solutions” by the votaries of public-private partnerships. There is water-related engineering and construction (such as earth-moving activities, alteration of river courses, artificial linking of rivers, building of dams and pipelines, etc), water and wastewater services, and water treatment, which affect both nature and communities. What remains outside the ambit of “solutions” – only until the victims can be persuaded to pay – are the impacts of the micro-scale geoengineering. Every impact damages people and the environment. Impacts can be categorised as: ecological (effects on natural ecosystems), social (related to rights of human beings and communities, health, cultural norms, attitudes, belief systems), economic (affecting livelihoods, well-being, and access to basic services) and even legal and institutional.

We are now seeing increasing pressure for private sector development in India – and the rest of Asia-Pacific. Manthan Adhyayan Kendra, an independent research unit concerned with water in India (they are based in Madhya Pradesh) says that this pressure is being mounted mainly by two influential international financial institutions: the World Bank and its regional partner, the Asian Development Bank. The World Bank gives funds, advice, training and technical assistance to governments and the private sector to implement privatisation.

Courtesy, The Economist, special report on water, 22 May 2010Four entities allow the World Bank to undertake various functions. The International Finance Corporation (IFC) lends directly to the private sector and can even purchase equity in private companies. The Public Private Infrastructure Advisory Facility (PPIAF) seeks to improve the quality of infrastructure through private participation. The Multilateral Investment Guarantee Agency (MIGA) insures the private sector against commercial and political risk. The International Court for Settlement of Investment Disputes (ICSID) takes charge of disputes between investors and states. The Bank also has some other mechanisms that promote its activities in India including Water and Sanitation Program (WSP), Water and Sanitation for Urban Poor (WSUP), Water for Asian Cities (WAC) and others. The World Bank’s funding partners include the JBIC, AusAid, GTZ, USAID, DFID, UN-Habitat and the ADB.

More growth in large cities and towns, and urbanisation becoming a dominant land use pattern in more districts of India mean that the industrial, residential and municipal demands for water are rising quickly. India’s Central Pollution Control Board (an agency of the Ministry of Environment and Forests, Government of India) has released its ‘Observation on trend of Water Supply, Wastewater Generation in Cities and Towns’. Here are its main comments and highlights. I’ve left the language as it is – the import is what counts.

Courtesy, The Economist, special report on water, 22 May 2010

From The Economist's special report on water, 22 May 2010: Global water sources

“In decade of 90’s the growth of cities is observed is 33% while the growth of the decade in beginning of millennium is slowed down. Metropolitan cities is increased from 3 to 6 Nos. from 80’s to 2008. Class-I cities increase from 37 to 53 Nos. Class-II towns increase from 22 to 35. This trend indicates that all type of cities has grown in the decade of 90’s.”

Findings and Recommendations

  • Since the cities are growing, the population is enhanced from 30 million to 48 million.
  • Consequently water supply has been increased approximately twice in magnitude from 4,970 MLD (million litres per day) to 8,782 MLD.
  • Sewage generation has risen 38%.
  • Comparing the data of decades of 90’s to 2008, it is indicated that coastal cities and towns are not growing significantly.
  • Treatment capacity of sewage in comparison to decade of 80’s to until now has increased almost double (93%).
  • There are 498 Class-I Cities having population of 257 million and 410 Class-II Towns having population in India.
  • Total water supply including all class-I cities and class-II town in India is 48,093.88 MLD.

The CPCB says that wastewater generation from all class I cities and class II towns is 38,254 MLD whereas the installed treatment capacity is 11,787 MLD, which means that no more than a maximum of 31% of total sewage generated can be treated. (If the question is ‘where does the rest go?’, the CPCB answers that too in its report.) “This evidently indicates ominous position of sewage treatment, which is the main source of pollution of rivers and lakes,” warns the CPCB report. “To improve the water quality of rivers and lakes, there is an urgent need to increase sewage treatment capacity and its optimum utilisation.”

Image courtesy 'UN-Water Global Annual Assessment of Sanitation and Drinking Water (GLAAS) 2010', World Health Organization (WHO) and UN-WaterThe CPCB, which thankfully still has a reputation for straight talking, has advised India’s municipalities and town administrations to “set up a very thoughtful action plan to fill this gap in a minimum time frame”. The CPCB has suggested that large cities in which and from which the pollution problem is more severe, cities/towns whose effluents and sewage are polluting rivers and water bodies “will be required to be taken up on priority basis in first phase”. Why is the CPCB so insistent? Quite simply, it says there is an “urgency of preventing pollution of our water bodies and preserving our precious water resources”.

But even in the India of non-city and non-town landscapes, there are plans being hatched by the would-be water merchants. An indication of the mischief afoot comes from a report righteously entitled ‘Pro-Poor Financial Services for Rural Water: Linking the Water Sector to Rural Finance’. (If so many good deeds are ‘pro-poor’ nowadays how come the ranks of the do-gooders is only increasing?) Here is what it says: “Previous studies suggest that a considerable demand for pro-poor financial services for water in rural areas remains unmet. The number of potential microfinance clients in rural areas for investments in water supply is estimated to be 5.0 million in East/Southeast Asia, 10.3 million in South Asia, and 3.1 million in sub-Saharan Africa.” Those three numbers get to the heart of the matter.

The report continues: “Concerning microloans for rural sanitation, there are 17 million potential clients in East/ Southeast Asia, 30.8 million in South Asia, and 4.4 million in sub-Saharan Africa. In total, the potential demand for micro-loans in these three regions is estimated at US $ 1.5 billion in the case of rural water supply, and US $ 5 billion in the case of rural sanitation. The challenge is how to unlock this latent demand and turn it into an effective process.” The authors make no bones about it, the riches at the bottom of the water table is what they’re after. And who are the authors? The German Federal Ministry for Economic Cooperation and Development (BMZ), the Deutsche Gesellschaft für Technische Zusammenarbeit (well-known as GTZ in Asia, and which I was surprised to learn is a GmbH), the International Fund for Agricultural Development (IFAD) and of course the World Bank.

Courtesy, The Economist, special report on water, 22 May 2010

Cover of The Economist's special report on water, 22 May 2010

The water merchants have their cheerleading squad in place in the form of a pliant media, and The Economist has obliged by bringing out one of its typically characterless ‘surveys’, as it likes to call them. It is a special report on water (the 22 May 2010 issue) and the subject is dealt with in the sycophantic manner that the weekly reserves for the captains of industry. “Yet even if it takes two litres of groundwater to produce a litre of bottled water, companies like CocaCola and PepsiCo are hardly significant users compared with farmers and even many industrial producers.” (Hear, hear, who needs those pesky farmers anyway?) “PepsiCo has nevertheless become the first big company to declare its support for the human right to water. For its part, CocaCola is one of a consortium of companies that in 2008 formed the 2030 Water Resources Group, which strives to deal with the issue of water scarcity. Last year it commissioned a consultancy, McKinsey, to produce a report on the economics of a range of solutions.” This transatlantic weekly, once upon a time British, puts in a word for big dams too: “Dams and reservoirs certainly need constant repairs and careful maintenance and do not always get them, usually because the necessary institutions are not in place.”

Who are operating as water merchants and what do they want? There are several North American / West European companies now in India: Ondeo-Degrement, Veolia Environnement, Saur of France, RWE/Thames Water of Germany and the UK Bechtel, Enron (US), Compagnie Generale des Eaux (CGE). Indian companies are going to either compete with them, or join them – Tata subsidiary Jamshedpur Utilities and Services Company (JUSCO), IVRCL Infrastructures and Projects, Mahindra Infrastructure Ltd., IL&FS.

Surat, Gujarat, near the mouth of the Tapi river

Surat, Gujarat: Fishing boats near the mouth of the Tapi river

The foreign multinationals are involved in several projects across the country. Compagnie Generale des Eaux (CGE) is operating urban water supply project in Hubli-Dharwad in Karnataka. Veolia is operating water and wastewater plant in Nagpur in Maharashtra and it has also formed a joint venture with JUSCO. Ondeo-Degremont has won contracts to construct water treatment plants in Mumbai and Chennai and it is also operating a wastewater treatment plant in Delhi. Thames Water was involved in a leak reduction project in Bangalore while United Utilities and Bechtel are partners in the Tiruppur project. JUSCO has projects in Jamshedpur, Bhopal, Kolkata and Adityapur. IVRCL is working on a wastewater treatment project in Alandur, desalination in Chennai and solid waste management in Tiruppur. IL&FS is involved in various projects in Haldia, Tiruppur, Vishakhapatnam and municipal waste processing facilities in Delhi and Ajmer, Rajasthan.

The CPCB has outlined the water, sewage and pollution tasks for cities, but its worries are going to be transformed into “a challenge to unlock latent demand” by the multilateral lending organisations on the one hand and the global water merchants (together with their Indian partners). Already deficit in terms of civic infrastructure and struggling with yawning gaps in the provision of healthcare and education, India’s towns and small cities will pass the burden of water profiteering on to those who can’t afford it. They leave the rural districts to earn a living in the cities, when their water rupee gets squeezed down to the last drop, where will they go then?