So very many of us

The current world population of 7.3 billion is expected to reach 8.5 billion by 2030, 9.7 billion in 2050 and 11.2 billion in 2100, according to ‘World Population Prospects: The 2015 Revision”, which is compiled and issued by the Department of Economic and Social Affairs of the United Nations.

Of particular interest to us is the prediction (based on very sound estimates and the careful curation of data) that some time in 2022 the population of India will exceed the population of China. Currently, the population of China is approximately 1.38 billion compared with 1.31 billion (the UN-DESA estimate as of now) in India.

Population growth till here and the fan-tail of predictive projections for the next 85 years. Differing trajectories start becoming visible only from the mid-2020s. Image: UN-DESA

By 2022, both countries are expected to have approximately 1.4 billion people. Thereafter, India’s population is projected to continue growing for several decades to 1.5 billion in 2030 and 1.7 billion in 2050, while the population of China is expected to remain fairly constant until the 2030s, after which it is expected to slightly decrease.

China is now a ‘low fertility country’, that is, one in which women have fewer than 2.1 children, on average, over their life-times. Low-fertility countries now include all of Europe and Northern America, plus 20 countries of Asia. India is an ‘intermediate fertility’ country, that is, where women have on average between 2.1 and 5 children. Intermediate-fertility countries are found in many regions, with the largest being India, Indonesia, Pakistan, Bangladesh, Mexico, and the Philippines.

More urbanisation is expected which will concentrate larger numbers of people into town and city wards. Few will be as ideal as this graphic suggests.

Most of the projected increase in the world’s population can be attributed to a short list of high-fertility countries, mainly in Africa, or countries with already large populations. During 2015-2050, half of the world’s population growth is expected to be concentrated in nine countries: India, Nigeria, Pakistan,  D R Congo, Ethiopia, Tanzania, USA, Indonesia and Uganda (listed according to the size of their contribution to the total growth).

Currently, among the ten largest countries in the world, one is in Africa (Nigeria), five are in Asia (Bangladesh, China, India, Indonesia, and Pakistan), two are in Latin America (Brazil and Mexico), one is in Northern America (USA), and one is in Europe (Russia). Of these, Nigeria’s population, currently the seventh largest in the world, is growing the most rapidly. Consequently, the population of Nigeria is projected to surpass that of the USA by about 2050, at which point it would become the third largest country by population in the world.

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Food crisis in the Sahel

UN-OCHA map of vulnerability to food insecurity in the Sahel.

ReliefWeb has a series of backgrounders, assessment reports and maps to explain the malnutrition and food crisis in the Sahel. The UN Office for the Coordination of Humanitarian Affairs has said that the Sahel is characterised by long standing chronic food insecurity and malnutrition, poverty and extreme vulnerability to drought. “The localised deficit recorded for the agropastoral season 2011-12 and increasing cereals prices in Mali and Niger could bring millions of people at risk of food insecurity,” said the UN-OCHA briefing.

Throughout the Sahel, acute malnutrition in children reaches its annual peak during the hunger season. Children under two years of age have the highest risk of becoming sick or dying during this period. Malnutrition is caused by inadequate food quality and quantity, inadequate care, as well as unhealthy household environment and lack of health services.

The prevalence of global acute malnutrition met or exceeded the critical threshold of 10% in all of the surveys conducted in the hunger season of 2011 (from May to August). If food security significantly deteriorates in 2012, the nutrition conditions for children could surpass emergency levels throughout the Sahel region.

Affected countries are: Burkina Faso, Cameroon, Chad, Gambia (the), Mali, Mauritania, Niger (the), Nigeria and Senegal.

Food insecurity and malnutrition chronically affect a significant part of the Sahel population. However, several events came in 2011 which exacerbate this vulnerability:

1. In 2011 many parts of the region received late and poorly distributed rains, resulting in average harvests and serious severe shortfall in some areas. Consequently, the Government of Niger as an example has estimated that the 2011 agro pastoral season will record a deficit of 519,600 tons of cereals and of over ten million tons of fodder for livestock.
2. In Mauritania, authorities expect a decrease of more than 75% of the agriculture production and a strong fodder deficit.
3. In areas where harvests are weak, households will run out of food stocks faster than usual and will be forced to rely on markets for supplies, contributing to maintaining the already high prices at the same level.

UN-OCHA map of expected cases of severe acute malnutrition in the Sahel.

Furthermore, the purchasing power of the most vulnerable populations is likely to deteriorate. In addition the lean season is estimated to begin earlier than usual, probably as early as January 2012 in Chad, two months in advance. As the situation gets worse by spring 2012, there will be an increase of infant acute malnutrition, already beyond emergency thresholds in four wilayas in southwestern Mauritania.

Several countries in the Sahel have already announced measures taken to curb the negative effects of the food insecurity and malnutrition on vulnerable populations; who have not had enough time to recover from the 2009-10 crisis, despite the good harvest registered last year. Three countries (Burkina Faso, Mauritania and Mali) have also requested for assistance from the humanitarian community. In late November, the United Nations Central Emergency Response Fund (CERF), administered by OCHA, allocated US$ 6 million to three organisations in Niger – the World Food Program, UNICEF and the Food and Agriculture Organization – for emergency operations to fight food insecurity and malnutrition.

According to a ‘Humanitarian Dashboard – Sahel’ dated 12 January 2012 released by UN-OCHA, early indicators point to a likely food crisis in localised areas of the Sahel in 2012, with people at particularly high risk in Mauritania, Niger, Burkina Faso, Mali, Chad, and localized areas of Senegal. These are:

1. Acute food insecurity already noted in southeastern Mauritania.
2. Deficits in 2011, in agro-pastoral production led to higher market prices, resulting in an earlier than usual need for food aid.
3. Resilience to food insecurity is low in most vulnerable groups.
4. High poverty level in Sahel (51%) impacting on food accessibility due to high prices.

FAO 2011 October Food Index down, food prices still up, what’s going on?

FAO has released its Food Price Index for October 2011, saying the index has dropped dropped to an 11-month low, declining 4 percent, or nine points, to 216 points from September. Indeed the index has dropped, declined and has certainly not risen. But does this mean food prices for the poor in many countries, for labour, for informal workers, for cultivators too – has the cost of food dropped for any of them?

The answer is a flat and unequivocal ‘No’. FAO has said so too: “Nonetheless prices still remain generally higher than last year and very volatile.” At the same time, the Rome-based food agency has said that the “drop was triggered by sharp declines in international prices of cereals, oils, sugar and dairy products”.

The FAO has said that an “improved supply outlook for a number of commodities and uncertainty about global economic prospects is putting downward pressure on international prices, although to some extent this has been offset by strong underlying demand in emerging countries where economic growth remains robust”.

Once again, the FAO is speaking in two or more voices. It should stop doing so. A very small drop in its food price index does not – repeat, does not – indicate that prices for food staples in the world’s towns and cities has dropped and people can afford to buy and cook a square meal a day for themselves and their children. Not so at all.

I am going to contrast what FAO has said about its October food price index with very recent reportage about food and food price conditions in various parts of the world.

FAO: “In the case of cereals, where a record harvest is expected in 2011, the general picture points to prices staying relatively firm, although at reduced levels, well into 2012. International cereal prices have declined in recent months, with the FAO Cereal Price Index registering an eleven month-low of 232 points in October. But nonetheless cereal prices, on average, remain 5 percent higher than last year’s already high level.”

Business Week reported that rising food prices in Djibouti have left 88 percent of the nation’s rural population dependent on food aid, the Famine Early Warning Systems Network said. A ban on charcoal and firewood production, which provides about half of the income of poor people in the country’s southeast region, may further increase hunger, the Washington- based agency, known as Fewsnet, said in an e-mailed statement today. Average monthly food costs for a poor urban family are about 33,907 Djibouti francs ($191), about 12,550 francs more than the average household income, Fewsnet said. Urban residents in the Horn of Africa nation don’t receive food aid, it said.

FAO: “According to [FAO’s November 2011] Food Outlook prices generally remain ‘extremely volatile’, moving in tandem with unstable financial and equity markets. ‘Fluctuations in exchange rates and uncertainties in energy markets are also contributing to sharp price swings in agricultural markets,’ FAO Grains Analyst Abdolreza Abbassian noted.”

A Reuters AlertNet report quoted Brendan Cox, Save the Children’s policy and advocacy director, having said that rising food prices are making it impossible for some families to put a decent meal on the table, and that the G20 meeting [currently under way in Cannes, France] must use this summit to agree an action plan to address the food crisis. Malnutrition contributes to nearly a third of child deaths. One in three children in the developing world are stunted, leaving them weak and less likely to do well at school or find a job. Prices of staples like rice and wheat have increased by a quarter globally and maize by three quarters, Save the Children says. Some countries have been particularly hard hit. In Bangladesh the price of wheat increased by 45 percent in the second half of 2010. In new research, Save the Children analysed the relationship between rising food prices and child deaths. It concluded that a rise in cereal prices – up 40 percent between 2009 and 2011 – could put 400,000 children’s lives at risk.

FAO: “Most agricultural commodity prices could thus remain below their recent highs in the months ahead, according to FAO’s biannual Food Outlook report also published today.  The publication reports on and analyzes developments in global food and feed markets. In the case of cereals, where a record harvest is expected in 2011, the general picture points to prices staying relatively firm, although at reduced levels, well into 2012.”

IRIN News reported that food production is expected to be lower than usual in parts of western Niger, Chad’s Sahelian zone, southern Mauritania, western Mali, eastern Burkina Faso, northern Senegal and Nigeria, according to a report by the World Food Programme (WFP) and the Food and Agriculture Organization (FAO), and a separate assessment by USAID’s food security monitor Fews Net. “We are worried because these irregular rainfalls have occurred in very vulnerable areas where people’s resilience is already very weakened,” said livelihoods specialist at WFP Jean-Martin Bauer. Many Sahelian households live in a state of chronic food insecurity, he said. “They are the ones with no access to land, lost livestock, without able-bodied men who can find work in cities – they are particularly affected by a decrease in production.” A government-NGO April 2011 study in 14 agro-pastoral departments of Niger noted that pastoralists with small herds lost on average 90 percent of their livestock in the 2009-2010 drought, while those with large herds lost one quarter. Those who had lost the bulk of their assets have already reduced the quality and quantity of food they are consuming.

FAO: “Food Outlook forecast 2011 cereal production at a record 2 325 million tonnes,  3.7 percent above the previous year. The overall increase comprises a 6.0 percent rise in wheat production, and increases of 2.6 percent for coarse grains and 3.4 percent for rice. Globally, annual cereal food consumption is expected to keep pace with population growth, remaining steady at about 153 kg per person.”

The Business Line reported that in India, food inflation inched up to 11.43 per cent in mid-October, sharply higher than the previous week’s annual rise of 10.6 per cent, mainly on account of the statistical base effect of the previous year. Inflation in the case of non-food items and the fuels group, however, eased during the latest reported week. According to data released by the Government on Thursday, an increase in the year-on-year price levels of vegetables and pulses contributed to the surge in the annual WPI-based food inflation for the week ended October 15, apart from the base effect. Sequentially food inflation was up 0.25 per cent.

FAO: “The continuing decline in the monthly value of the FAO Cereal Price Index reflects this year’s prospect for a strong production recovery and slow economic growth in many developed countries weighing on overall demand, particularly from the feed and biofuels sectors.”

Al Ahram reported that Egyptian household budgets had mixed news in September with prices for some basic foods tumbling month-on-month and others showing small climbs, according to state statistics agency CAPMAS. Figures released this week show the price of local unpacked rice fell 15.6 per cent to LE4.96 per kilo between August and September 2011. It was the commodity’s first decline in nearly a year, although the per kilo price remains 68 per cent higher than the LE2.95 that rice cost in October 2010. Chicken also fell 5.8 per cent to LE16.26 per kilo between August and September. Other staples, however, continued to rise; the price of potatoes climbed 14 per cent to LE4.89 per kilo, while a kilo of tomatoes gained a monthly 14.8 per cent to cost LE4.65.

Joining the dots between economics, income, health and poverty

The concerns about recession and its impacts on poverty are seen commonly as a question mark over household incomes, over food security and often involve debates about social protection. An aspect that all too often gets ignored in this equation – no doubt because of its complexity – is health and in particular the health of women and children.

Changes in neonatal mortality rates between 1990 and 2009. The map illustrates the change in NMR between the years 1990 and 2009 for each of the 193 countries estimated. PLoS Medicine 8(8): e1001080

This is linked very closely to poverty, however we measure it, and the conditions that either cause poverty to persist (leading to chronic poverty) or cause households at risk to lapse into poverty every now and then (shock). The human development index methodolgy, which is from this year using multi-dimensional indices for poverty for the first time, helps us link health, poverty, income and economic growth (or its opposite).

The question is: is this new understanding, which is more in tune with the way households actually carry on with their lives and are actually affected by wider trends concerning economy, helping integrate the connections? If there is one good reason to ask this question, it is the new study on ‘Neonatal Mortality Levels for 193 Countries in 2009 with Trends since 1990: A Systematic Analysis of Progress, Projections, and Priorities’.

[The World Health Organization (WHO) has a report and summary of the study on this page – ‘Newborn deaths decrease but account for higher share of global child deaths’]
[The full study is available on PLoS Medicine, 1 August 2011 (Volume 8, Issue 8)]

This has shown that every year, more than 8 million children die before their fifth birthday. Most of these deaths occur in developing countries and most are caused by preventable or treatable diseases. In 2000, world leaders set a target of reducing child mortality to one-third of its 1990 level by 2015 as Millennium Development Goal 4 (MDG4). This goal, together with seven others, is designed to help improve the social, economic, and health conditions in the world’s poorest countries. In recent years, progress towards reducing child mortality has accelerated but remains insufficient to achieve MDG4.

“In particular, progress towards reducing neonatal deaths – deaths during the first 28 days of life – has been slow and neonatal deaths now account for a greater proportion of global child deaths than in 1990. Currently, nearly 41% of all deaths among children under the age of 5 years occur during the neonatal period. The major causes of neonatal deaths are complications of preterm delivery, breathing problems during or after delivery (birth asphyxia), and infections of the blood (sepsis) and lungs (pneumonia). Simple interventions such as improved hygiene at birth and advice on breastfeeding can substantially reduce neonatal deaths.”

Neonatal mortality rates in 2009. The map illustrates the NMR in year 2009 for each of the 193 countries estimated. PLoS Medicine 8(8): e1001080

The researchers used civil registration systems, household surveys, and other sources to compile a database of deaths among neonates and children under 5 years old for 193 countries between 1990 and 2009. They estimated NMRs for 38 countries from reliable vital registration data and developed a statistical model to estimate NMRs for the remaining 155 countries (in which 92% of global live births occurred).

They found that in 2009, 3.3 million babies died during their first month of life compared to 4.6 million in 1990. More than half the neonatal deaths in 2009 occurred in five countries – India, Nigeria, Pakistan, China, and the Democratic Republic of Congo. India had the largest number of neonatal deaths throughout the study. Between 1990 and 2009, although the global NMR decreased from 33.2 to 23.9 deaths per 1,000 live births (a decrease of 28%), NMRs increased in eight countries, five of which were in Africa. Moreover, in Africa as a whole, the NMR only decreased by 17.6%, from 43.6 per 1,000 live births in 1990 to 35.9 per 1,000 live births in 2009.

To return to my question concerning the understanding of economics, income, health and poverty, does most current analysis see to integrate these elements, or is it still GDP-income driven? A new (2011 May) paper released by the Brookings Institution indicates that the GDP-income route is still favoured. The paper, ‘Two Trends in Global Poverty’, Geoffrey Gertz and Laurence Chandy, has said that while the overall prevalence of poverty is in retreat, the global poverty landscape is changing. “This transformation is captured by two distinct trends: poor people are increasingly found in middle-income countries and in fragile states. Both trends – and their intersection – present important new questions for how the international community tackles global poverty reduction.”

The two charts show the trajectory of 20 developing countries along three dimensions: number of poor people, degree of fragility and real income per capita. These 20 countries collectively account for 90 percent of the world’s poor in 2005, and thus largely define the evolving state of global poverty. Graphic: Brookings Institution

“The increased prevalence of poverty in middle-income countries is in many ways a trend of success. Over the past decade, the number of countries classified as low-income has fallen by two fifths, from 66 to 40, while the number of middle-income countries has ballooned to over 100. This means 26 poor countries have grown sufficiently rich to surpass the middle-income threshold. Among those countries that have recently made the leap into middle-income status are a group of countries  –  India, Nigeria and Pakistan  – containing large populations of poor people. It  is their “graduation” which has brought about the apparent shift in poverty from the low-income to middle-income country category.”

This categorisation of middle, low and high income was to an extent useful in the 1970s, when the idea of a human development index was being discussed, but we’ve come a long way since. We know that even in smaller countries (rather, countries with populations that are relatively small compared to those whic bear the sort of burdens studied in the PLoS Medicine research) there is a great deal of income disparity. ‘Income’ itself is a condition with a bewildering number of inputs – social science is quite inadequate to the task of being able to recognise all of these, let alone quantify them and rationalise them across countries and regions – which is exactly what studies like this try to do unfortunately.

“In 2005, when more than half the world’s poor lived in such countries, it made some sense to think about fighting poverty in terms of a single developing country paradigm, based on what worked in countries such as Ghana, Tanzania, Mozambique or Vietnam,” Gertz and Chandy have said. “This logic was evident in two of the major events of that year which continue to shape today’s development agenda: the G8 meeting at Gleneagles and the High Level Forum on Aid Effectiveness in Paris. It was also apparent in Jeffrey Sachs’ influential 2005 best-seller, ‘The End of Poverty’. The legacy of these ideas is scattered throughout the work of the international development community in the design of traditional aid instruments and the standard methods of country engagement.”

The authors of the Brookings paper have said that this approach remains relevant for some countries, but with 90 percent of the world’s poor living in different settings today, its broader application can no longer be justified. Yet they have found that such an admission poses a dilemma. The dilemma exists because one of the reasons the stable low-income paradigm has persisted is because it characterizes an environment in which the international development community feels most comfortable and has the most experience. “The role of external actors in supporting poverty reduction in stable low-income countries is well understood and the standard tools of external assistance – financial and technical assistance – are well suited to them.”

Maplecroft's 2011 food security risk index

What does this mean? Does it give us a hitherto obscured insight into the inner world of aid agencies and international development departments and how they see ‘poor’ countries’ populations? Does it mean that we are burdened with three decades worth of simplistic labelling of populations at risk simply because labelling them any other way makes it difficult to help them? That’s what it looks like to me and I’d like to thank Gertz and Chandy for revealing this. But it’s way past high time this sort of categorisation was ditched, once and for all. It would do us and the battalions of development professionals a huge amount of good to simply be able to say, every so often, “we don’t know enough”.

It is worth being honest about the state of our knowledge concerning the lives of the the majority of households in ‘developing’ countries. Some of the reasons why such honesty will help in the long term are contained in a thoughtful new publication from the World Bank (whose army of development professionals will benefit from its reading). This collection is entitled ‘No Small Matter: The Impact of Poverty, Shocks, and Human Capital Investments in Early Childhood Development’ (The World Bank, 2011) and it has said that, as the 2008 global financial crisis has again demonstrated, economic crises are an unfortunate recurring event in the world and can have severe consequences for household livelihoods.

Progress in key health indicators, UN Human Development Report 2010

‘No Small Matter’ defines economic crises as sharp, negative fluctuations in aggregate income, these being especially common in developing countries, and the frequency with which they occur has been increasing in recent history. We know that declines in household and community resources are not the only risks that arise from an economic crisis because of its aggregate nature. We also know – from fieldwork and by hearing those whom we would wish to help – that at the same time as households cope with the possibility of reduced income from aggregate economic contractions, vital public services may also experience a decline in quality or availability, which in turn may have an additional impact on skill development among children. This is happening now, in more countries than ever before. The economic crisis that hit Latin America in 1982 led to a decrease in public health spending and had a disproportionate effect on the poorest groups. In 2011, the decrease in public health spending exists in many more countries.

A chapter in ‘No Small Matter’, ‘The Influence of Economic Crisis on Early Childhood Development: A Review of Pathways and Measured Impact’, by Jed Friedman and Jennifer Sturdy, is particularly useful.

This has said that “conservative estimates suggest that over 200 million children under five years of age living in developing countries fail to reach their cognitive development potential because of a range of factors, including poverty, poor health and nutrition, and lack of stimulation in home environments”. It is possible, the chapter’s authors have said, that this burden increases during times of crisis as poverty increases and food security is threatened. However, to investigate this claim more carefully it is necessary to understand the pathways through which poverty influences skill acquisition in children.

“The most severe condition affecting ECD (Early Childhood Development) is infant and early child mortality. Sharp economic downturns were associated with increases in infant mortality in Mexico, Peru and India. The mortality of children born to rural and less educated women is more sensitive to economic shocks, which suggests that the poor are disproportionately affected during most economic crises, and perhaps the poor face important credit constraints that bind in tragic ways during large contractions.

Weak relationship between economic growth and changes in health and education, UN Human Development Report 2010

The mortality of girls is also significantly more sensitive to aggregate economic shocks than that of boys. This gender differential exists even in regions such as Sub-Saharan Africa that are not particularly known for son preference and indicates a behavioral dimension where households conserve resources to better protect young sons at the expense of daughters.”

Finally, a further note about the extremely valuable PLoS Medicine study ‘Neonatal Mortality Levels for 193 Countries in 2009 with Trends since 1990: A Systematic Analysis of Progress, Projections, and Priorities’. The authors are: Mikkel Zahle Oestergaard1, Mie Inoue1, Sachiyo Yoshida, Wahyu Retno Mahanani, Fiona M. Gore1, Simon Cousens, Joy E. Lawn and Colin Douglas Mathers (on behalf of the United Nations Inter-agency Group for Child Mortality Estimation and the Child Health Epidemiology Reference Group – World Health Organization, Department of Health Statistics and Informatics; World Health Organization, Department of Child and Adolescent Health and Development; London School of Hygiene & Tropical Medicine; Saving Newborn Lives/Save the Children).

Children of poor households are more likely to die, UN Human Development Report 2010

The study found that of the 40 countries with the highest NMRs in 2009, only six are from outside the African continent (Afghanistan, Pakistan, India, Bhutan, Myanmar, and Cambodia). Among the 15 countries with the highest NMRs (all above 39), 12 were from the African region (Democratic Republic of the Congo, Mali, Sierra Leone, Guinea-Bissau, Chad, Central African Republic, Burundi, Angola, Mauritania, Mozambique, Guinea, and Equatorial Guinea), and three were from the Eastern Mediterranean (Afghanistan, Somalia, and Pakistan). Throughout the period 1990–2009, India has been the country with largest number of neonatal deaths. In 2009, the five countries with most deaths accounted for more than half of all neonatal deaths (1.7 million deaths = 52%), and 44% of global livebirths: India (27.8% of deaths, 19.6% of global livebirths), Nigeria (7.2%, 4.5%), Pakistan (6.9%, 4.0%), China (6.4%, 13.4%), and Democratic Republic of the Congo (4.6%, 2.1%). The top five contributors to the 4.6 million neonatal deaths in 1990 were: India (29.5% of deaths, 19.8% of global livebirths), China (12.3%, 18.0%), Pakistan (5.4%, 3.4%), Bangladesh (5.0%, 2.9%), and Nigeria (4.8%, 3.3%).

As the risk of children dying before the age of five has fallen, the proportion of child deaths that occur in the neonatal period has increased. This increase is primarily a consequence of decreasing non-neonatal mortality in children under five from infectious diseases such as measles, pneumonia, diarrhea, malaria, and AIDS. Globally, 41% of under-five deaths now occur in the neonatal period. Over the 20 y between 1990 and 2009, the proportion of global neonatal deaths that occurred in Africa increased. Although Africa is now the region with the highest NMR, the proportion of under-five child deaths that are neonatal remains relatively low in Africa—the fraction increased from 26% to 29% between 1990 and 2009. This apparent anomaly reflects the fact that Africa accounts for approximately 90% of child deaths due to malaria (0.7 million under-five deaths) and HIV/AIDS (0.2 million under-five deaths), resulting in relatively higher post-neonatal child mortality than other regions.

Who’s poor and who isn’t – the flawed $1.25 formula

The $1.25 a day poverty line is neither realistic nor is it any use to governments of less industrialised countries. It is time this ‘global poverty line’ is rejected.

An early stage shanty settlement of rural labourers, in Maharashtra, western India

Once again a major international thinktank has released a ‘big picture’ prognosis about global poverty. Once again the $1.25 a day line has been used to confirm that in developing countries, poverty is on the retreat and that the current model of economics is working for the poor by yanking them over that troublesome dollar line.

This time, the thinktank is the Brookings Institution, USA. Here’s their bottomline. Most of the poverty reduction we have seen in the last decade has happened because of the economic growth in China and India, where, until the end of the 20th century, a large number of the world’s poor lived. That growth in Asia not being matched by similar growth in Africa is the reason, Brookings has explained, for Nigeria heading towards being home to the largest population of poor by 2015, more so even than India. Poverty will be an African problem, according to Brookings.

As many other high-profile thinktanks have done over the years, Brookings has proferred its poverty prognostications [pdf] based on a few givens in the world of macroeconomics. One is that $1.25 a day, the World Bank’s revision of its own dollar-a-day definition which is now of some vintage, is the most reliable way to set a global poverty line. Two is that economic growth has brought many people in developing countries out of poverty and will continue to do so. Three is that the kind of growth that we have witnessed (and participated in) in China is the best anti-poverty solution to be found.

A vegetable vendor pushes his cart over a bridge across the river Ganga, near Kanpur, Uttar Pradesh, India

Based on these ‘givens’, which I shall turn to in a moment, the world’s development specialists and macroeconomists who measure poverty have lately been waxing enthusiastic about the prospect of providing all poor people in the world cash supplements, which they are sure will bring them out of poverty. The cost, they say, is relatively quite small, at about $66 billion. This cash transfer, to each and every poor person, will cost less now than it would have done only five years ago, they have said.

Well, yes and no. All programmes, even ones that distribute cash to people, cost money to run. If you have to distribute on a regular basis enough money to enough poor people at the rate of more than $1.25 a day, that distribution itself is going to be huge and enormously complicated, and of course quie expensive too. Faced with this question, they do have a ready answer, which goes something like this: recent advances in biometric identification technologies—such as fingerprint and iris scanning—have greatly expanded the promise of implementing large-scale welfare programs in poor countries. No doubt, the technology is there and it has been proven to work. However we who work in the field know well that a gizmo in the hand is not exactly worth a meal on the table, so to speak.

That’s the nuts-and-bolts part of the proposal to buy our way out of poverty. A far more troublesome set of questions concerns the ‘givens’ this whole idea is based on. Let’s look again at $1.25 a day to start with. In most developing countries, this is in mid-2011 equivalent to about a litre of petrol. It will buy about three kilos of rice in some countries, pay for two autorickshaw commutes in others, or buy 10-15 litres of water in some cities (this year on World Water Day the UN said that “Someone living in an informal settlement in Nairobi pays 5 to 7 times more for a litre of water than an average North American citizen”).

Built-up shanties along a Mumbai highway, leading to suburbs bristling with expensive new high-rise residential blocks.

That daily line also works out to $37.50 (EUR 26.25) a month. What can an individual buy with that much for a month? Can she buy shelter which does not leak when it rains, can she buy baby food for her children and medicines for her aging parents? Can she pay for schoolfees? Can she afford even a kilowatt hour of electric power a day with that money? Can she stock her kitchen with the cereal, fresh vegetable and lentils her family needs? Never mind $1.25 a day – can she do this on $2 a day in Cairo, Mumbai, Rio de Janeiro or Nairobi?

I can’t see a ‘yes’ answer to any of those questions, anywhere. Next, on what basis do the thinktanks and multilateral lending banks (World Bank, IMF) continue to say that economic growth removes poverty? They use variations of the GDP-divided-by-population formula, and ask th macroeconomists to make the appropriate adjustments for income categories and rural-urban distribution. The trouble is, the real world of poverty doesn’t function the way these models and formulae do. Economic growth has meant the continuing and deepening inequality of income. The ‘richer’ a country gets based on GDP, the more unequal the distribution of the money amongst its people. That’s the very reason the ‘advanced’ economies of Western Europe and North America put in place social safety nets (whose very much poorer cousins are the cash transfer programmes in vogue nowadays).

The truth is plainer and far more visible. There is no let-up in poverty, not in the numbers of poor, and not in how far under the poverty line they are. Any other view may be well-intentioned but misguided. [Thanks to From Poverty To Power, the blog by Duncan Green of Oxfam, for mentioning the Brookings report.]

Grain markets and trade for the last third of 2010

Continuing a trend that began earlier in the year, La Niña conditions strengthened through the summer of 2010, evidenced by a streak of cool water across the equatorial Pacific Ocean. This map reveals a broad swath of cool water stretching from South America to New Guinea. The ocean is not, however, uniformly cool. Pockets of warm water are mixed with the cool, particularly in the western Pacific. Warmer waters in this region can lead to increased rainfall, and La Niña conditions may have played a role in the devastating floods in Pakistan during the Northern Hemisphere summer of 2010. Over the eastern Pacific Ocean, cooler waters lead to less moisture along the coasts of North and South America. So as more rain pounds some parts of the globe, La Niña conditions can deepen drought in others. NASA Earth Observatory

The International Grains Council released its monthly Grain Market Report on 2010 September 23. In this report the IGC said that global grain prices advanced again in September, those for wheat having returned to the peaks reached in early August. While the initial trigger for the steep upturn in wheat and barley values in recent months was the fast deteriorating outlook for these crops in the Black Sea region, much of the more recent bullishness is attributed to concerns about smaller than anticipated US maize (corn) yields, as well as substantial new grain buying activity by importers.

The market commentary of the report said: “Another feature is the difficult harvest weather in some countries, affecting milling wheat and malting barley quality. US soyabean prices partly mirrored the upturn in maize, but were also supported by concerns about South American crop prospects and continued heavy buying by China. Asian rice prices moved higher, largely because of the impact of the flood emergency in Pakistan. The recent surge in world grain prices, while not on the same scale as in 2007-08, again prompted concerns about its impact on global food prices as well as the increased volatility in the major commodity exchanges. One measure of such volatility is the day-to-day change in futures values which, even allowing for the events of three years ago, is significantly greater than earlier in the decade. Given the generally adequate supply situation for wheat and other grains, despite recent crop concerns, many have expressed surprise at the ferocity of recent market responses.”

Grains outlook for 2010-11 – This year’s sharply reduced crops in the CIS and Europe will contribute to a fall of 1.2% in global grain supplies, reversing three successive years of stock building. World production in 2010-11 is forecast at 1,741m. tons, (1,787m.), 4m. below the previous month’s projection. This follows downward revisions, for maize in the US and wheat in the CIS region, more than offsetting improved prospects in Australia. Significant reductions in wheat and barley output will outweigh another rise in maize, although prospects for the latter crop are downgraded slightly. The difficult growing and harvesting conditions in parts of North America, Europe and the CIS have affected supplies of high-quality milling wheat and malting barley.

Grain consumption in 2010-11 is projected to increase by 0.6%, to 1,780m. tons, but this represents a marked slowing compared with previous years as the overall rate of expansion in industrial use, especially for ethanol in the US, is scaled back. In the animal feed sector, maize use is expected to be boosted, while that of wheat will likely hold steady, but this will be more than offset by reductions in barley and other grains. With global grains consumption expected to exceed output after three surplus years, global carryover stocks in 2010-11 are projected to fall by 39m. tons, to 353m., mostly because of declines in the world’s exporters, notably Russia and the US. However, the total carryover will remain significantly above the lows seen earlier in the past decade.

International Grains Council wheat and maize export prices

Global trade in grains is expected to fall in 2010-11, mainly because of reduced wheat shipments. At 237m. tons (239m.), the total is 5m. above the August forecast, following upward revisions for the EU, Russia and sub-Saharan Africa. Export forecasts for several countries, including Australia, Canada and the US, have been lifted, with total availabilities still seen as ample in a year which will see a huge shift in trade away from the drought-afflicted Black Sea region. In all, wheat and coarse grains shipments from Kazakhstan, Russia and Ukraine will fall by 27m. tons compared with 2009-10, with around half of this shortfall likely to be sourced in the United States.

The US Department of Agriculture’s ‘Grain: World Markets and Trade’ September 2010 report is also out. It noted wheat trade changes in 2010-11 in this way:

Selected Exporters: Australia is down 500,000 tons to 15.5 million based on logistical constraints. Canada is boosted 2.0 million tons to 17.5 million due to larger exportable supplies. EU is lowered 3.0 million tons to 21.0 million on reduced exportable supplies and quality concerns, particularly for German wheat. Iran is raised 450,000 tons to 500,000 due to greater exportable supplies and opportunities opened by reduced supplies in Russia. Kazakhstan is up 500,000 tons to 6.5 million on higher Russian import demand. Russia is raised 500,000 tons to 3.5 million based on exports shipped before the ban. United States is boosted 1.0 million tons to 34.0 million on strong demand, particularly for higher quality wheat.

International Grains Council rice and soyabean export prices

Selected Importers: Nigeria is up 400,000 tons to 4.0 million due to expected consumption growth. Russia is raised 1.4 million tons to 2.0 million due to increased demand for milling wheat caused by drought-reduced production.

The USDA report recorded trade changes in 2009-10 as “large late-season adjustments reflect reported shipments”. These are – Selected Exporters: Canada is up 500,000 tons to 19.0 million. The United Arab Emirates is raised 450,000 tons to 950,000. Selected Importers: Indonesia is down 450,000 tons to 5.4 million. Iran is up 600,000 tons to 3.6 million. Turkey is lowered 300,000 tons to 3.2 million.

Rice world markets and trade – Despite weather problems in China and Pakistan, global crop prospects remain excellent said the USDA report. Record world production is expected to not only meet rising demand but also maintain global stocks at the highest level since 2004.

International Grains Council world grain estimates

Prices – though quotes from all origins are up somewhat from last month, Vietnam’s increase is the most dramatic. With 2010 contracts already at a record 6.2 million tons, Vietnam raised the minimum export price of 5% broken to $450 per ton FOB, essentially halting new sales and, for the first time, pushing above higher-quality U.S. #2/4 quotes ($445 per ton FOB). Vietnamese quotes are now only $30 below Thai 100B quotes, a stark departure from the $120 spread just 2 months ago. As sales stall in Vietnam, Thai sales are expected to increase as the government finally releases intervention stocks. U.S. long-grain sales are also expected to pick up on newfound competitiveness and a record crop. By contrast, the medium-grain trade is somewhat on hold as the California crop has yet to be harvested. In addition, many tenders in major markets have yet to be announced.

The USDA report forecast trade changes for 2011. These are – Pakistan’s exports are slashed 750,000 tons to 2.9 million as floods have reduced the crop and damaged infrastructure. Afghanistan’s imports are reduced 100,000 tons to 200,000, as Pakistan is by far the largest supplier due to proximity and relative prices. Iran’s imports are cut 300,000 tons to 1.2 million on the expectation that imports from Pakistan will fall. Thailand’s exports are down 500,000 tons to 9.0 million because the government stock release is happening much later in the year than originally anticipated. Vietnam’s exports are raised 450,000 tons to a record 6.2 million on contracts to date. By contrast, imports are dropped 100,000 tons to 400,000 on a slowdown of border trade with Cambodia. Indonesia’s imports are doubled to 500,000 tons as relatively high domestic prices have caused a surge in trade with neighboring countries. Iran’s imports are dropped 150,000 tons to 1.2 million on the pace of shipments. Nigeria’s imports are lowered 100,000 tons to 1.7 million on slower-than-expected imports from Thailand.

World agri supply and demand estimates, Sep 2010

The US Department of Agriculture’s World Agricultural Supply and Demand Estimates (Wasde) report is out, dated 10 September 2010. Here are the highlights of its analysis on global wheat and rice.

Wheat

Global wheat supplies for 2010-11 are projected down 0.7 million tons as higher carry-in mostly offsets a 2.7-million-ton reduction in world output. Much of the offset is explained by Canada, where beginning stocks are increased 1.5 million tons, as reported by Statistics Canada, and production is increased by 2.0 million tons. These changes mostly offset lower production in Russia and the European Union (EU) 27. Production for Russia is lowered 2.5 million tons based on the latest harvest results for the drought-affected central growing areas in the Volga and Urals Federal Districts. EU-27 production is lowered 2.4 million tons with the largest reductions for Hungary and Romania where heavy summer rains reduced yields. Smaller reductions in a number of other member countries also reduce EU-27 production. Although the reduction for Germany is small, persistent and heavy August rains have reduced supplies of high quality milling wheat. Other production changes include a 0.3-million-ton reduction for Belarus and a 0.4-million-ton increase for Morocco.

World wheat trade for 2010-11 is raised with global exports projected 1.4 million tons higher. Export shifts among countries largely reflect availability of supplies and increased competition from North America. Exports are raised 2.0 million tons for Canada and 1.4 million tons for the United States. Exports are also raised 0.5 million tons each for Iran and Kazakhstan. A 0.5-million-ton increase in Russia exports reflects larger-than-expected shipments during early August, before implementation of the export ban on August 15. These increases more than offset a 3.0-million-ton reduction for EU-27 and a 0.5-million-ton reduction for Australia. EU-27 exports are lowered with reduced supplies and increased competition from Canada. Logistical constraints are expected to limit exports from Australia.

World wheat imports for 2010-11 are raised with increases for Russia and Nigeria. Imports for Russia are raised 1.4 million tons as imports from regional suppliers support domestic usage, particularly for feeding. World wheat consumption is lowered 3.8 million tons with lower consumption in EU-27, Russia, and Kazakhstan outweighing increases for Pakistan, Canada, and Nigeria. Wheat feeding is lowered 2.0 million tons for EU-27 with imported coarse grains expected to partly replace wheat in livestock and poultry rations. Global ending stocks are projected 3.0 million tons higher with increases for EU-27, Canada, and Australia. Ending stocks are lowered for Pakistan and Russia.

Rice

Projected global 2010-11 rice supplies and use are both lowered from last month. Global rice production is projected at a record 454.6 million tons, down 4.6 million tons from last month’s estimate, mainly due to large declines for several countries including China, Indonesia, and Pakistan.

China’s 2010-11 rice crop is reduced 1.5 million tons to 136.0 million, due mainly to a decrease in the early rice crop. Both area and yield are reduced by early season drought in some areas combined with late-season flooding in other areas. Indonesia’s 2010-11 rice crop is reduced 2.0 million tons to 38.0 million, based in part on a report from the U.S. Agricultural Counselor in Jakarta. Indonesia’s 2009-10 rice crop is also reduced – a reduction of 1.7 million tons to 37.1 million. Indonesia’s yield growth has stagnated due to weather, pests, and disease problems. Pakistan’s 2010-11 rice crop is reduced by 1.2 million tons or 18 percent to 5.3 million as severe flooding lowered both area and average yield.

Global 2010-11 exports are reduced by 0.6 million tons to 31.0 million, mainly due to a reduction for Pakistan. Global consumption is lowered by nearly 2.3 million tons, mainly due to decreases for China (-0.5 million) and Indonesia (-1.35 million). Global ending stocks for 2010-11 are projected at 94.6 million tons, down 3.0 million from last month, but up slightly from 2009-10. Stocks are lowered for China, Indonesia, Vietnam, and Iran, and raised for the United States.

Global farmland grab and the shadow of the Soviet kolkhozes

Peasant girl with rake, 1930s, Simon Fridland

The World Bank has just released an interesting document called ‘Rising Global Interest in Farmland: Can it Yield Sustainable and Equitable Benefits?’. It is presented as a response to the global farmland grab, reviews global trends of land expansion as well as empirical evidence on land acquisitions in 14 countries between 2004 and 2009: Brazil, Cambodia, Democratic Republic of Congo, Ethiopia, Indonesia, Liberia, Lao PDR, Mexico, Mozambique, Nigeria, Peru, Sudan, Ukraine, and Zambia. (I’ll post more on the study as soon as I can read it fully.)

The inclusion of Ukraine is interesting, primarily because of the country’s long history (as a Soviet republic) of collective farming, and also because of the horrific famine that engulfed Ukraine, the northern Caucasus, and the lower Volga River area almost 80 years ago, in 1932-1933, was the result of Joseph Stalin’s policy of collectivisation. This is also part of the region which suffered in the July 2010 fires that traumatised Russia.

The Bank’s study contains a few paras about the Soviet farming system which are worth reading closely, for they help explain the current wheat shortage in Russia and the responses of both Russia and Ukraine to the continuing wheat crisis.

Woman Collective Farmer, 1932, Simon Fridland

Eastern European countries have undergone major transitions from the former Soviet system of collective and state farms to new agrarian structures (says the Bank’s section on Russia). These transitions have unfolded in many ways depending on countries’ factor endowment, the share of agriculture in the overall labour force, infrastructure, and the way the reforms were implemented. In areas of low population density, where collectives were divided into small plots allocated to members, the plots were quickly rented back by companies with access to finance and machinery.

These companies were often created from former collective farms whose managers could more easily consolidate land parcels and shares. Services, institutions, and logistics were geared to large-scale production, so smallholder grain production was never viable option. Where farms were land- and capital-intensive, corporate farming was the dominant organisational structure. On the other hand, many countries where land was split up into smallholder farms also performed well. The diversity is illustrated by the share of area under corporate farms 10 years after the transition, ranging from 90 percent in Slovakia, 60 percent in Kazakhstan, 45 percent in Russia, to less than 10 percent in Albania, Latvia. and Slovenia.

In Russia, Ukraine, and Kazakhstan, the transition was associated with a 30 M ha decline in area sown, with most of that area returning to pastures or fallow. Large farms were better able to deal with the prevailing financing, infrastructure and technology constraints. Aided by the phasing out of an inefficient meat industry and the associated demand for grain as feed, the region turned from a grain deficit of 34 mt in the late 1980s to exports of more than 50 mt of grain and 7 mt of oilseeds and derivatives. In light of the scope for transfer of available technology, Russia, Ukraine and Kazakhstan, the region’s three land-abundant countries, have an opportunity to establish themselves as major players in global grain markets, especially if ways to effectively deal with volatility are found.

Farmer's first Spring. The Soviet region of Nizhnegorodsk's District, 1929, Arkadi Shishkin

Given the slow development of markets, mergers to integrate vertically to help acquire inputs and market outputs led to the emergence of some very large companies. For example, in Russia, the 30 largest holdings farm 6.7 million ha, and in Ukraine, the largest 40 control 4 to 4.5 million ha. Many of the agricultural companies are home grown, though often with significant investment from abroad. Several have issued IPOs.

Some Western European companies have also invested directly in large-scale farming in the region. For example, Black Earth, a Swedish company, farms more than 300,000 ha in Russia. With greater demand and better logistics, there remains substantial potential for intensification and in some cases for area expansion. Cereal yields increased 38 percent from 1998-2000 to 2006-2008 but are still far below potential. For example, Ukraine’s cereal yields are 2.7 t/ha, some 40 percent of the Western European average. The potential to transfer technology and relatively cheap land has been one of the major motivations for foreign direct investment in the region.

In Russia land is either leased or owned, and in Ukraine. where private land sales are not allowed, all land is leased. usually for 5-25 years. But throughout the region, land rents are still very low relative to land of comparable quality in other parts of Europe. Competitive markets for land shares have yet to emerge. and in many situations imperfections in financial and output markets preclude own-cultivation as a viable option. So the bargaining power of landowners is often weak, suggesting that rental rates are low and that owners receive few of the benefits from large-scale cultivation.

Why drought and hunger in Africa spells opportunity for global agri-tech

Climate change is leading to more intense drought conditions in Africa. Small and marginal farmers, pastoralists and nomadic communities are the most vulnerable and the hardest hit. Already. aid agencies have warned that 10 million people are already facing severe food shortages, particularly in the landlocked countries of Chad and Niger, after a drought led to the failure of last year’s crops. As many as 400,000 children are at risk of dying from starvation in Niger alone, according to Save the Children.

The Independent of Britain has reported that unusually heavy rains have washed away this year’s crops and killed cattle in a region dependent on subsistence agriculture. Organisations including Oxfam and Save the Children say that the slow international response to the emergency means that only 40 per cent of those affected are receiving food aid. As many as four out of five children require treatment for malnutrition in clinics.

Against this grim new news, the global agri-technology networks are readying plans to use possible food shortages to push new structures of seed, funding and conditions onto countries looking for quick fix solutions. One such programme ia the Comprehensive Africa Agriculture Development Programme (CAADP) which has announced that it received a major boost as several countries have begun drawing on funds from a US$22 billion pledge made by the G8.

Under CAADP, African governments are committed to increase their national budget expenditure on agriculture to at least 10 percent. The Programme, agreed by heads of state at the 2003 summit of the African Union, expects a six percent growth rate in agriculture every year. What part of this growth will meet the needs of the drought-hit people in Chad and Niger is not discussed.

Close behind is the International Maize and Wheat Improvement Center (known by its Spanish acronym CIMMYT, one of the CGIAR centres) which has used the alarming food situation news as a prop on which to announce a study which it says “finds widespread adoption of recently developed drought-tolerant varieties of maize could boost harvests in 13 African countries by 10 to 34 percent and generate up to US$1.5 billion in benefits for producers and consumers“. Who will these producers and consumers be?

The study was conducted as part of the Drought Tolerant Maize for Africa Initiative (DTMA) implemented by CIMMYT and IITA with funding from the Bill & Melinda Gates Foundation and the Howard G. Buffett Foundation. CIMMYT and IITA have said they “worked with national agriculture research centers in Africa to develop over 50 new maize varieties that in drought conditions can produce yields that are 20 to 50 percent higher than existing varieties”. There is no mention of Africa’s immense wealth of traditional cereals or the communities that have guarded and used old growing knowledge in difficult times.

Finally, from August 30 to September 4, Namibia hosted the annual Food, Agriculture and Natural Resources Policy Analysis Network (FANRPAN) Regional Food Security Policy Dialogue, where over 200 policymakers, farmers, agricultural product dealers, scientists and non-governmental organisations from across Africa and the world gathered “to address African priorities on climate change and its impacts on food security, agricultural development and natural resource management”.

The tone and tenor is astonishingly upbeat, especially considering the dreadful food situation and climate change news that’s now coming out daily from central, eastern and north Africa: “Increasing the collaboration between public and private sector organisations can also help build infrastructure, secure better access to natural resources, improve the distribution of agricultural inputs and services, and share best practices. The Farming First coalition is a successful example of farmers, scientists, engineers, industry and agricultural development organisations coming together to push for improved agricultural policies which benefit farmers while safeguarding natural resources over the long term.”

FANRPAN has cited two reports by consulting firm McKinsey and Company which have (1) estimated that Africa produced only 10 percent of the world’s crops despite representing a quarter of land under cultivation and (2) noted that 60 percent of the world’s uncultivated arable land lies in Africa with the potential for African yields to grow in value more than three-fold by the year 2030, from US$280 billion today to US$880 billion.

Those extraordinarily large sums may explain why FANRPAN is currently working in partnership with the Rockefeller Foundation “to improve food security throughout sub-Saharan Africa by promoting the understanding of climate change science and its integration into policy development and research agendas”. FANRPAN said it is also working with the International Food Policy Research Institute (IFPRI) – a study cell based in Washington, USA, whose research objectives have tended towards international agricultural trade in recent years. A recent collaboration is called ‘Strategies for Adapting to Climate Change in Rural sub-Saharan Africa: Targeting the Most Vulnerable’ which says it recognises the interrelated impact of climate change on household poverty, hunger and food security.

No doubt, but these high-minded statements of objectives come bundled with some decidedly commercial conditions. As IPS news reports, there are conditions attached to how countries will be accessing CAADP funds. Countries will need to have gone through the CAADP process, which includes designing a “national investment plan” which contains detailed and fully-costed programmes and signing a “CAADP compact”. This is nothing but an agreement between the government, regional representatives and “development partners” for “a focused implementation of the programme”. Moreover, the investment plans will have to undergo “an independent technical review” and the plan should also “have been tabled before a high-level CAADP business meeting” before funds are allocated. Which simply means that there are only so many ways the money can move.

For all these noble programmes, the countries in their sights are: Angola, Benin, Ethiopia, Ghana, Kenya, Malawi, Mali, Mozambique, Nigeria, Tanzania, Uganda, Zambia and Zimbabwe. The aid agencies on the ground are warning again what they have said last year, the year before, five years ago, a decade ago. “After six months without proper nutrition, these children have little resistance to disease,” said Severine Courtiol, Save the Children’s Niger manager. “There is little children can do to avoid coming into contact with this contaminated, disease-ridden floodwater. That’s why it’s critical we make sure they get enough food so they are strong enough to fight off and recover from sickness.”

Robert Bailey, Oxfam’s west Africa campaigns manager, said that some food was available in marketplaces in Niger, but was too expensive for ordinary households to afford. As a result, many were reduced to eating leaves and berries. Chad and parts of Mali were also affected, he added. “The international donor response has been too little too late. We estimate that 7.9 million people are affected by food shortages in Niger, with only 40 per cent receiving international aid. The other 60 per cent are dependent on the government and NGOs [non-governmental organisations]. But the government has no food.”