The Hunger Report

In the early and mid-1960s, many experts were predicting that millions of people around the world would die of starvation.

At the end of the 1950s, the future looked particularly grim for India and China, both of which had experienced horrific famines in earlier decades. The two countries were mired in poverty, overall economic growth was barely keeping pace with population growth, and agricultural production was stagnant. But beginning in the 1960s, and continuing through the 1970s, new technologies developed by international agricultural research centers in partnership with the Rockefeller Foundation, and supported by the U.S. Agency for International Development (USAID) and other donors, were introduced in Asia and Latin America. These technologies basically involved using improved varieties of wheat, rice, and hybrid maize in combination with irrigation and chemical fertilizers. While arguments persist over the long-term environmental and social costs of the technologies used in the Green Revolution, it is hard to dispute that the impact on food security was astounding, especially in Asia. Since the start of the Green Revolution, neither India nor China has experienced a famine.

The “greenness” of this revolution refers to a dramatic growth in agricultural productivity. At the beginning of the Green Revolution, experts were skeptical that the countries involved would ever emerge from chronic food insecurity. The focus on improving crop yields turned things around. Today, India is a net rice exporter and the wheat it imports is an insignificant share of the country’s food consumption. And despite what were seen as nearly insurmountable obstacles, India has been able to reduce poverty from 55 percent of the population in 1970 to 35 percent in 2000, largely because of policies complementary to the Green Revolution that supported growth in agriculture and the rural economy.

In China, “astounding” may be too mild a description of the changes that have occurred. China has experienced the most rapid reduction in poverty in modern history. In little more than two decades, the country’s poverty rate fell more than six-fold: from 66 percent of the population in 1981 to 10 percent by 2004. To put this in terms of people: during this period, 500 million Chinese people were lifted out of extreme poverty.¹ Economists often point to China as a textbook case of export-led growth in the manufacturing sector. In reality, it was rural economic growth, and agricultural growth in particular, that had far more to do with China’s dramatic reduction in poverty between 1981 and 2004.²

India and China together make up nearly one-third of the world’s population. It is impossible to know what the world would be like if these two economies were as weak today as they were before the Green Revolution—but it’s an unsettling thought. We cannot exaggerate the role of the Green Revolution by saying that it had everything to do with the progress these countries have made—yet we shouldn’t underestimate it either. And well-focused, effective development assistance played a vital role in making the Green Revolution happen.

---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

¹ Martin Ravallion (2008), Lessons for Africa, World Bank Development Research Group.

² Ibid.

Lessons Lost from the Green Revolution

“No country has been able to achieve a rapid transition out of poverty without raising productivity in its agricultural sector,” writes Peter Timmer, a scholar at the Center for Global Development, and one could say the same of hunger.³ In spite of the evidence that agriculture plays a crucial role in reducing hunger and poverty, it has received very little attention and resources from donors in recent decades. Indeed, it is as if donors had learned nothing from the Green Revolution.

• Reductions in rural poverty generally correspond to overall reductions in poverty in developing countries. The poorest countries have largely rural economies. Of the people in the world who are chronically hungry, 75 percent live in rural areas and depend on agriculture for their earnings, either directly, as farmers or hired workers, or indirectly in sectors that derive from farming.⁴
• Agriculture fuels economic growith in developing countries. “Cross-country estimates show that economic growth originating in agriculture is at least twice as effective in reducing poverty as economic growth originating outside of agriculture,” explains the World Bank’s 2007 World Development Report.⁵ In Chile, for example, each 1 percent of expansion in agricultural and agro-processing output is estimated to have reduced national poverty between 0.6 and 1.2 percent.⁶
• The agricultural sector provides jobs to people with few skills. Jobs available to people with few skills contribute directly to reducing poverty. This is especially important because there will continue to be many new jobseekers. In 2005, 30 percent of the population in the developing world (41 percent in Africa) was younger than 15.⁷ Agriculture and agricultural support industries have the potential to absorb large numbers of workers compared to other sectors of the economy.
• Increasing agricultural productivity also stimulates job growth in the manufacturing and service sectors. In Asia, most rural households earn half or more of their incomes from non-farm sources, but it is often the agricultural sector that provides the “ladder,” explains Peter Timmer, “from underemployment at farm tasks to regular wage employment in the local economy.”⁸
• Agricultural growth results in increasing numbers of women in the economy, whether their jobs are on or off the farm. The opening up of employment opportunities to women carries with it a range of benefits. For example, research shows that when women control a larger share of family income, household spending on food increases.

Realizing agriculture’s potential to create economic opportunities in rural communities is clearly important to reducing hunger and poverty—yet most donors have been partners in a steady decline of support for agriculture and rural development.⁹ Between 1985 and 2005, agriculture’s share of U.S. Official Development Assistance declined from more than 12 percent to just 3.1 percent.¹⁰ In absolute terms, support for agriculture went from a high of almost $8 billion in 1984 to $3.4 billion in 2004.¹¹

To make matters worse, domestic policies in rich countries have exacerbated the effect of this disinvestment in agriculture and rural development. U.S. and European Union farm policies shower subsidies on domestic producers and encourage production. Until recently, this had the effect of driving down the prices of world commodities and discouraging poor countries from investing in their own agricultural sectors. A 2003 report by the International Food Policy Research Institute estimated that agricultural protectionism and subsidies in industrialized nations cost developing countries about $23 billion in lost annual income.¹²

As long as commodity prices remained low, rich countries argued that it was not a problem for developing countries to neglect their agricultural sector and buy the food they needed on international markets. Reinforcing this view, when the International Monetary Fund and the World Bank set policies on how developing countries could use financial supports, investments in agriculture were not favored. These institutions have since reoriented their focus and now provide more support for agriculture, but it has taken decades for them to begin to make these changes. In the meantime, as the recent hunger crisis has shown, developing countries were left vulnerable.

---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

³ Peter Timmer (2005), Agriculture and Pro-poor Growth: An Asian Perspective, Center for Global Development.

⁴ Reducing Poverty and Hunger: The Critical Role of Financing Food (2002), United Nations Food and Agriculture Organization.

⁵ World Development Report: Agriculture for Development (2007), World Bank.

⁶ Ibid.

⁷ World Economic and Social Survey (2007), United Nations.

⁸ Timmer, op. cit.

⁹ United Nations Food and Agriculture Organization, op. cit.

¹⁰ Statistical Annex of the 2007 Development Co-operation Report (2007), OECD/DAC.

¹¹ World Bank, op. cit (pp. 41-42). While decline was common to bilateral as well as multilateral assistance, the decline in the latter was more pronounced.

¹² How Much Does It Hurt? The Impact of Agricultural Trade Policies on Developing Countries (2003), International Food Policy Research Institute.

Food Security and U.S. Development Assistance

The world is facing a hunger crisis unlike anything it has seen in more than 50 years. An additional 100 million people in 70 developing countries have fallen into poverty because of a spike in food prices, pushing the total number of people in extreme poverty in the world to more than 1.4 billion.¹³  Hunger is also on the rise as 75 million people in the developing world suffered a devastating setback in 2007, bringing the total number of undernourished people to 923 million.¹⁴

Higher food prices have placed a crushing burden on the most vulnerable and poorly nourished people, especially mothers and babies. Long-term food security depends on increasing the supply of food and raising the earning potential of poor people, so growth in the agricultural sector and rural economy is crucial. Increases in agricultural productivity comparable to those of the Green Revolution over the past two decades could have helped to avert the current crisis. Effective development assistance could have facilitated this, just as it did in the case of the original Green Revolution. Promoting food security remains an important component of U.S. foreign assistance, but now food security resources are tilted heavily towards providing support for hungry people in humanitarian crises. Instead of concentrating efforts on increasing agricultural productivity in poor and chronically food insecure countries, the United States has found it easier to respond to hunger and malnutrition by providing food aid. However, the recent increases in food prices have pushed more new people into hunger and malnutrition than the total number who are served annually by emergency food aid.¹⁵ Higher food prices also mean that food aid dollars don’t have the same purchasing power as they did just a year or two ago.

Food security requires a number of components, including immediate assistance in the case of humanitarian emergencies. Global food aid, roughly half of which is provided by the United States, can and does go a long way toward meeting the immediate needs of hungry people, but the net effect of emphasizing food aid has been to divert resources from long-term food security—the very resources that could end hunger for good.

Components of Effective Development Assistance

The development community has learned a great deal over the years about how to deliver effective assistance, especially when it comes to reducing hunger. Unfortunately, not all of these lessons are consistently applied to U.S. food security programming. In fact, the U.S. approach to global food security regularly ignores these learnings. The decline in funding for agriculture in the U.S. budget is emblematic of how U.S. priorities do not correspond to recommendations that are based on decades of experience.

Clear Objectives—What are we trying to achieve?

Both food aid and investment in agricultural productivity are intended to help bolster food security. But instead of looking at emergency food aid and agricultural development as immediate and longer-term responses to the same problem, the U.S. government separates them in terms of objectives, funding, management, and congressional oversight. On top of this, the effectiveness of U.S. food aid programs is compromised by inherent conflicts of interest. In addition to feeding hungry people, U.S. food aid programs also have the objective of supporting U.S. farmers, shippers, and agribusiness.

Flexibility—Applying the right resources in the right way

Food security resources are subject to earmarks and directives that often prevent their most effective use. Legislation governing food aid, for example, requires that it be delivered in-kind rather than in cash, procured in the United States, and shipped on U.S.-flagged vessels. This means that during emergencies, when a speedy response is critical, needs can and do go unmet. In-kind food aid also can distort local markets, making it harder for farmers in developing countries to sell their crops and thus undermining the goal of long-term food security. “Buy America” requirements also mean that development funding ends up being spent disproportionately on U.S. technical assistance.

Accountability—Holding implementers responsible for results

At one level, U.S. foreign assistance programs are very accountable: they are rigorously audited and there is little chance of taxpayer dollars going to unauthorized ends. But at another level, there is a total absence of clear, meaningful indicators of success. A simple, widely accepted set of objectives and measures of effectiveness for development assistance would engender this sort of accountability. The Millennium Development Goals (MDGs) serve as a way to measure results and evaluate the effectiveness of U.S. foreign assistance.16 The MDGs are a widely accepted framework for human development, and the United States has already agreed to support them in principle. See the MDG Annex for more information on the MDGs.

Host-Country Ownership—Ensuring that recipient countries and communities are committed to a shared vision

For too long, decisions about how to allocate resources for development have been made unilaterally by donors, ignoring or rejecting input from the recipient country and its civil society. There is an increasing awareness that this simply does not work. The U.S. Millennium Challenge Corporation (MCC) is a refreshing exception to the general rule of telling recipient governments what is best for them. The MCC funds development assistance “compacts” in poor countries that are well governed and invest in their people. These compacts are based largely on the country’s own assessment of its development priorities. To date, more than half of the funds committed by the MCC are for agriculture and related rural infrastructure.

Long-Term Commitment: Development requires adequate and reliable resources

A country’s food security is determined in large measure by its institutional and infrastructural capacity—the ability of educational institutions and research farms to train agricultural scientists, develop appropriate technologies, and transfer them to farmers; the availability of irrigation and transportation systems; and the ability of governments to establish and implement supportive policies. All of these tasks require patience and a significant investment over the long term. Establishing a capable national research system can take decades. Yet donor priorities are constantly changing, with new administrations and development fads, and funding levels for particular countries or programs fluctuating significantly from one year to the next.

An Integrated Approach—Ensuring that programs don’t undercut or contradict each other

The programs or actions of numerous agencies and cabinet departments can affect development. Does the U.S. Trade Representative know what the Secretaries of Agriculture and Treasury or the head of USAID are doing and vice versa? The argument that global development is not a clear goal of U.S. foreign policy is bolstered by the fact that there is no one tracking the impact of U.S. domestic policies on poor countries. For example, the North American Free Trade Agreement (NAFTA) has been an overall net economic boon to both Mexico and the United States. However, it has also resulted in the impoverishment of thousands of small farmers, many of whom now seek to enter the United States illegally in search of jobs. Bringing a development perspective to trade negotiations could help anticipate and mitigate such “unintended consequences.”

Program Management Capacity

The question of sufficient resources extends beyond program funds to include the human resources needed to plan and oversee development efforts. Even if adequate funding were guaranteed, the absence of trained and experienced agricultural staff in the field—there are fewer than half as many agricultural experts at USAID as there were 10 years ago—seriously constrains the ability to analyze issues and opportunities and collaboratively design effective programs.

---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Agriculture and the Challenges to Development

When development assistance is focused on a country’s needs and priorities, it can reduce hunger and poverty and improve food security. Chapter 1 discussed some of the most difficult challenges poor countries face in their efforts to achieve the MDGs. These include poor starting conditions, weak governance and institutions, conflict and instability, and environmental degradation. Here we revisit them with a focus on the crucial role of agriculture in meeting these challenges.

The Challenge of Poor Starting Conditions

One of the major barriers to development in sub-Saharan Africa has been the poor performance of its agricultural sector. For a variety of reasons, the Green Revolution that transformed much of Asia never occurred in Africa. What has this meant for development? Figure 1 shows the relationship between agricultural productivity (measured in terms of crop yields) and poverty levels for South Asia and sub-Saharan Africa between 1984 and 2002.¹⁷

In spite of some formidable obstacles, it is possible to achieve sustained agricultural growth in Africa. Twelve sub-Saharan countries have had agricultural growth rates higher than 3 percent (some higher than 5 percent) sustained over the past 15 years.¹⁸ Organizations like the National Smallholder Farmers Association of Malawi (NASFAM),¹⁹ which provides production and marketing support for more than 100,000 farmers, demonstrate what can be achieved through a combination of local partnerships and financial and technical support. Another encouraging sign is that a number of African leaders have pledged to commit 10 percent of their national budgets to agricultural investments.²⁰

A Green Revolution in Africa, however generally defined, will require national governments and the international community to act in concert, putting in place the policies, institutions, and resources that will encourage and support smallholder agriculture and rural development. This must include applying the lessons from the first Green Revolution as well as significantly increasing investment in rural infrastructure, including irrigation, roads, electricity, and communications, all of which are woefully underdeveloped in sub-Saharan Africa. The emerging Alliance for a Green Revolution in Africa (AGRA), which brings the Gates and Rockefeller Foundations together in partnership with national leaders and African scientists, holds real promise for stimulating the kind of research and policy reform that leads to sustainable economic growth benefiting poor people. U.S. development assistance could obviously play a role here as well.

Dr. Norman Borlaug, the Nobel Peace Prize winner now in his 90s, who is often called the father of the Green Revolution, dismisses the notion that a Green Revolution in Africa is a lost cause. “This is the same argument used by a number of famous U.S. academicians in the early 1960s in describing the hopelessness of food production in India and China,” Borlaug said in Bread for the World Institute’s 2005 Hunger Report, Strengthening Rural Communities. “And look what happened. Technology is now available to double, triple, and in some cases quadruple maize production. This potential is not being realized because of lack of infrastructure, especially roads; lack of courageous African political leadership; and lack of financial assistance from affluent nations.”

The Challenge of Weak Governance and Institutions

The accomplishments of the Green Revolution would not have been possible without substantial political and financial support from the countries involved. Underinvestment by developing-country governments explains a lot of their underperformance in the agricultural sector.

Ghana in the 1960s and 1970s is an example of how government policies in the agricultural sector can nearly lead a country to ruin. Ghana was the world’s leading producer of cocoa in the 1960s, which accounted for more than 50 percent of government revenues.²¹ As the price of cocoa dropped in world markets, the government sought to recoup some of the lost revenue by imposing steep new export taxes on the smallholder producers, who accounted for almost all of the country’s production capacity. The Ghana Cocoa Board, the only authorized exporter of cocoa, paid farmers less than the real value of what it was worth. This led to a rash of smuggling cocoa out of the country, or farmers switching to other crops. Cocoa production plummeted and, by the early 1980s, was less than a third of peak production in the 60s.22 As a result, government revenues vanished and the country was driven deeper into poverty.

In the 1980s, things began to turn around as the government sought to correct its past missteps. Economic reforms implemented in the 1980s and 1990s allowed Ghana to recover from the worst of the damage, but not without a great deal of suffering. Ghana’s development prospects now look promising. Currently, it is one of the few sub-Saharan countries on track to reduce hunger by half (MDG 1) by 2015. But the experience of mismanaging the cocoa industry demonstrates the damage that flawed agricultural policies can cause poor countries.

Good governance has allowed the Ghanaian government to build better relations with donors. Ghana’s development partners have been involved in the country’s resurgence, for example, by providing debt relief. The government has used the freed-up resources to improve the health, education, and agriculture sectors. As recently as 1998, more than 50 percent of the country was living on $1 per day. In 2005, it was down to 29 percent.²³

Alliance for a Green Revolution in Africa (AGRA)

The Alliance for a Green Revolution in Africa (AGRA) seeks to empower small-scale farmers with the technology and information to improve farming practices. Led by the Rockefeller and Gates Foundations, AGRA provides resources and leadership to tackle some of the toughest problems confronting African farmers:

• Improving seeds for locally grown food crops;
• Managing water resources;
• Strengthening agricultural markets;
• Scaling up agricultural education, research, and extension services;
• Creating a better policy environment for farmers.

Some have criticized AGRA for taking a “one-size-fits-all” approach to the variety of agro-ecological climates across African countries. But AGRA is ensuring that strategies are ecologically sound, technologically appropriate, and geared to meet the needs of small-scale farmers who need simple and sustainable solutions. AGRA is not pursuing or funding the development of new seed varieties through the use of genetic engineering. As many agricultural experts in Africa readily understand, a lot can be done through better seed breeding and better soil and water management.

The Challenge of Conflict

Food insecurity, like poverty, can be a cause as well as an effect of conflict. U.N. agencies estimate that armed conflict cost Africa over $120 billion in agricultural output during just the last third of the 20th century.²⁴

Real or perceived inequities in access to land and water resources underlie many of the world’s conflicts. One of the darkest episodes in recent human history is the Rwandan genocide of 1994. A leading cause was the government’s exploitation of scarce land and water resources, which exacerbated the ethnic divisions within the country. The Hutu government, led by President Juvenal Habyarimana, exploited a drought to provoke public fears that scarce resources would lead to further increases in hunger. The World Bank’s 2008 World Development Report argues that to ignore the agricultural sector in fragile states increases the risk of further instability. Rwanda again serves as a good example of how the agricultural sector can play a key role in helping a country to rebuild. Rwanda is world renowned for its specialty coffees. Between 2001 and 2006, export revenues for Rwandan coffees increased from zero to $8 million; much of this can be credited to the technical and financial assistance of USAID.²⁵

The productive agriculture sector has fueled Rwanda’s economic growth and successes in poverty reduction. A recent study found that agricultural growth in Rwanda contributed 50 percent more to poverty reduction than growth in other sectors, and that a 1 percent annual growth rate in staple food production translated into a 3 percent reduction in poverty.²⁶

In many conflict countries, a large share of the population lives in rural areas and derives its income in whole or in part from agriculture. In such countries, agriculture and the wider rural economy provide the best means of giving people a renewed stake in their societies. When a society emerges from conflict, it is vital to engage as much of the population as possible, as rapidly as possible, in positive, income-generating pursuits. Development assistance should be in place to help countries through post-conflict reconstruction, when peace is fragile, but donors have a tendency to pull out soon after the fighting stops.

The Environmental Challenge of Global Warming

Climate change is the great environmental challenge facing the global community in the 21st century. According to the Stern Review on the Economics of Climate Change, a major report on the effects of climate change and global warming commissioned by the British government, “The poorest developing countries will be hit earliest and hardest by climate change, even though they have contributed little to causing the problem.”²⁷

So far most of the debate about responding to global climate change has focused on mitigation, or how to get the largest carbon-emitting nations to curb their output of greenhouse gases. While this is an important piece of any solution, we must also focus on the more immediate concern of adaptation. For the poorest people, who rely on agriculture for their livelihoods, adapting to climate change is an unavoidable issue now and for the foreseeable future.

Substantial resources are needed to help poor countries adapt to the impacts of climate change. Agricultural research is needed to identify and promote the most appropriate crops and soil management and cultivation techniques. For example, research should focus on drought tolerance and the suitability of alternative crops and on identifying more salt-tolerant varieties of paddy rice, vegetables, and other cash crops in areas facing increased salinization of their water resources.

Oxfam International estimates that adaptation will cost $50 billion annually, more if global emissions are not cut rapidly. The cost of inaction also has to be considered. According to World Bank estimates, if climate change results in a decrease in economic growth of 0.5 percent per year in developing countries, the annual cost in terms of lost income will be roughly $70 billion.²⁸ Current development assistance budgets would replace nowhere near this amount. It’s important to consider all possible sources of funds to help poor countries adapt to climate change—for example, a tax on carbon emissions at the national level. Under the principle that the “polluter pays” for the damage caused, these additional resources are not development assistance. Rather, the funds are compensation from high-emissions countries to those most impacted.

---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

¹⁶ See Chapter 1 for a fuller discussion of the Millennium Development Goals.

¹⁷ World Bank, op. cit.

¹⁸ Ibid. Countries include Benin, Burkina Faso, Cameroon, Central African Republic, Ghana, Guinea, Guinea-Bissau, Mozambique, Niger, Nigeria, Tanzania, Uganda.

¹⁹ Data available from the National Smallholder Farmers Association of Malawi website: www.nasfam.org/.

²⁰ The commitment has been made under the Comprehensive Africa Agriculture Development Program (CAADP), an initiative of the New Partnership for African Development (NEPAD).

²¹ Ales Bulir (1998), The Price Incentive to Smuggle and the Cocoa Supply in Ghana, 1950-1996, International Monetary Fund: http://www.imf.org/external/pubs/ft/wp/wp9888.pdf.

²² Ibid.

²³ Data available from the Alliance to End Hunger website: http://www.alliancetoendhunger.org/.

²⁴ Marc Cohen and Ellen Messer (2005), “Ending Food Wars in the 21st Century,” in Strengthening Rural Communities, Bread for the World Institute.

²⁵ David Kampf (2008), “Coffee Production Jolts Women to Success in Post-Genocide Rwanda,” in Frontlines, USAID.

²⁶ Accelerating CAADP Implementation in Rwanda (2007), NEPAD: http://www.nepad.gov.rw/docs/CAADP/Day%20Two.%2030th%20March%202007/5.%20Knowledge,%20Review%20and%20Dialogue%20Mechanisms.pdf.

²⁷ Nicholas Stern (2006), Stern Review on the Economics of Climate Change, Government Economic Service: http://www.hm-treasury.gov.uk/6520.htm.

²⁸ Ian Noble (2008), “From Rhetoric to Action on Adaptation,” World Bank and Adaptation Tools and Practices: http://powerpoints.wri.org/vulnerability_noble.ppt#256,1.

²⁹ Alexandra Spieldoch (2007), A Row to Hoe: The Gender Impact of Trade Liberalization on Our Food System, Agricultural Markets, and Women’s Human Rights, International Gender and Trade Network.

³⁰ Timmer, op. cit.

³¹ Joachim von Braun, M.S. Swaminathan and Mark W. Rosegrant (2004), Agriculture, Food Security, Nutrition and the Millennium Development Goals, International Food Policy Research Institute.

Looking Forward

For bilateral and multilateral donors, the essential question about development assistance is: What do you want the world to look like in 10 years, 20 years, or even 100 years—and what role are you ready to play to help make this happen?

Developed countries have said publicly that they support the MDGs, which are surely a concrete vision of a better world. But to achieve the MDGs, it’s a given that developed countries will have to provide more and better development assistance. This must include elevating support for agriculture in poor countries to its rightful position.

Effective development assistance must be complemented by policies that do not undermine what the assistance is designed to achieve. For example, developed countries must reduce trade barriers and subsidies that disadvantage farmers in poor countries. Developing countries themselves must provide supportive policies and the bulk of the extra investment. Donor governments and financial institutions should step back and encourage developing-country governments to determine their own policies, rather than requiring them to adhere to agendas determined in Washington or other foreign capitals. Governments and civil society in developing countries can develop their own options based on what will work for them.

The ultimate test of development assistance is how much it contributes to the goal of ending global hunger and poverty. In the case of the Green Revolution and agricultural development more broadly, the results are in: development assistance, combined with political backing and supportive policies in recipient countries, have saved the lives of millions of people and launched many countries on the path to sustained poverty reduction and economic growth. Certainly, we know enough about the benefits of investing in agriculture to make a powerful case for increased donor support.

* * *