House of Commons - International Development

Select Committee on International Development Written Evidence

Memorandum submitted by the Department for International Development

EXECUTIVE SUMMARY

The world is experiencing a period of rapid food and energy price rises. Current projections indicate that staple food prices are likely to remain above levels at the start of the decade for the foreseeable future. There will be gainers and losers but those most vulnerable are the 162 million very poor people who live on 50 US cents a day or less.

The UN's World Food Programme is the world's largest humanitarian agency. It is entirely voluntarily funded and operations fluctuate with the scale of humanitarian need. It has a work programme of US$ 5.4 billion over 2008 and 2009 covering 162 operations in 78 countries. This year it expects to feed 73 million people including victims of war and natural disasters, orphans and families affected by HIV/AIDS, and schoolchildren in poor communities. Owing to commodity and transport price rises since mid 2007, WFP estimate they will need an additional US$ 500 million in 2008 to maintain the same level of operations.

WFP is in the process of reshaping itself to meet new global challenges. These include a post food-surplus world, climate change, and reforms in aid (reducing food aid donations, increasing cash donations, "Paris" harmonisation principles, humanitarian aid reforms, and UN Delivering as One). The first draft of the new Strategic Plan responds to these trends.

DfID recognises the vital role that WFP plays in responding to emergencies around the world, saving millions of lives. As part of the global response to achieving food security, we would like WFP to focus on acute hunger, notably in emergencies. We see an important role for the organisation in emergency logistics, emergency preparedness and disaster risk management. In situations where the emergency is more long term and chronic, WFP is often uniquely placed to help deliver effective transitions to stability.

We see economic growth and job creation as the principal means of tackling chronic hunger. Agriculture is vitally important. For those facing chronic hunger, including malnourished children and AIDS sufferers, there is growing evidence that predictable social protection including food, cash and other transfers, can be effective. With its extensive experience of nutrition, WFP can play an important capacity building role in these areas.

This memorandum is arranged in four sections. The first looks at the implications of rising world food and energy prices (covering ToR item 1); the second at how DfID is responding (ToR item 8). In the third section we cover various aspects of the the WFP's work, including DfID's support to it (ToR items 2, 3 and 5). In the last section we look at WFP's—and the UN system's—broader response to humanitarian emergencies (ToR items 4, 6 and 7).

I. IMPLICATIONS OF THE RISE IN WORLD FOOD AND ENERGY COSTS

The effects on food prices and availability of increasing demand and changes in energy and agricultural policies.

Rising food prices

1. Food prices have been rising steadily showing an overall increase of 75 between 2000 and 2008. The prices of key staples such as maize, wheat and rice have increased from around US$ 88, 114 and 203 per metric tonne in 2000 to US$ 215, 420 and 397 per metric tonne this year, representing increases of 143, 107 and 249% respectively.

2. This is in marked contrast to the trends throughout most of the 20th century, though prices are still relatively low from an historical perspective. Even over the last couple of decades average commodity prices in 2008 (adjusted for inflation) are only now similar to 1996 levels.

What is causing food price increases?

3. The underlying causes are a combination of short term shocks and longer term structural factors. While global agricultural productivity has kept pace with population growth, several recent supply side shocks have put upward pressure on food prices. These include the successive poor harvests in major grain producing regions (Australia, Canada, the EU and the Ukraine), high input and transportation costs resulting from surging oil prices, and record low stock levels of food grains.

4. There have also been longer term structural shifts in world grain markets. With rapidly increasing incomes, diets in a number of developing countries have been shifting to meat and dairy products. Some 700 million metric tonnes of grain are now used for animal feed, about 37% of total grain use.[1] Demand for livestock products in China and India is a key factor. According to the International Food Policy Research Institute (IFPRI), animal feed consumption will rise by nearly 300 million metric tonnes per year by 2020.

5. Biofuels are playing a role in driving up prices. Production has doubled in the last five years and the US, the EU and Brazil all plan further expansion. In the US the use of maize for biofuel increased from 54 to 81 million tonnes in 2007. Globally, however, the use of grains for biofuel is still low in relation to food and feed use, accounting for only 6 and 0.5% of grain in developed and developing countries respectively, compared with 15 and 60% respectively for food use.

6. It is not yet possible to establish a link between global food price rises and climate change. A recent DEFRA study concluded that even with the combined challenges of population growth and climate change, global capacity to produce staple food commodities is unlikely to be compromised. Over the long-term, yields may be severely reduced by water shortages in northern India and in southern and western Africa. These regions may become increasingly dependent on imports from other countries. At the global level, higher productivity in North America, Europe, Russia and China is likely to more than compensate for these losses.[2]

Food price projections

7. It is not clear how long current price trends will persist. High demand will continue, but there are signs that the market is already responding, with bumper maize crops in the US and Brazil this year and global wheat production 5% up on 2006. Prices may already have peaked.[3] Maize prices have eased over the last few months. Chicago wheat futures prices for March 2008 delivery are $401 per metric tonne; $363 for December 2008; and $334 for July 2009. This reflects an expectation of higher winter plantings and good growing conditions in major producer countries.

8. Different projections for cereal prices up to 2016 from OECD/FAO, the US Department of Agriculture (USDA) and the International Food Policy Research Institute (IFPRI) all show similar trends: that prices in real terms will remain 20-40% higher than the levels of the early 2000s.

The impact on low-income developing countries (LIDCs)

9. Higher food prices will benefit net exporters of agricultural commodities but hurt net importers. A number of African countries could be adversely affected: Ghana, Ethiopia, Malawi, Rwanda, Tanzania and Uganda are particularly vulnerable because of their large food import to export earnings ratios, ranging from 54% for Ethiopia to 30% for Tanzania. These countries will be exposed to the risk of large trade deficits that could lead to balance of payments problems and economic instability. Countries such as Afghanistan and Eritrea that depend on large scale food imports for domestic food consumption will also be particularly vulnerable if food prices remain high.

10. At the household level, net producers of food staples will benefit while net buyers will lose out. Poor people, both urban and rural, are particularly vulnerable to higher food prices because they spend proportionately more (typically more than 60%) of their income on food. IFPRI suggest that higher food and energy prices will lead to reduced diet quality, increased micronutrient malnutrition and a fall in real wages.

11. However, the impact of rising international food prices on households depends critically on the linkages between international and domestic food prices, which vary between countries. Some countries, typically landlocked ones, are poorly linked to global markets and thus insulated from global market fluctuations. In others, government economic policies affect the extent to which world prices are transmitted into local prices, at least temporarily. There is currently no comprehensive analysis of these linkages and the extent of the impact of rising food prices on food security and poverty. WFP are carrying out their own analysis.

12. Reports from our country offices suggest varied impact. Uganda, for example, appears to be insulated from the global price changes because of geography, whilst Zambia and Malawi appear to be buffered through government policy. In some countries, price rises are connected to aggravating factors such as natural disasters (Bangladesh and Mozambique) or local political circumstances (Kenya, Sierra Leone and Zimbabwe). In other countries, such as Afghanistan, there is clear evidence of the impact of rising world food prices.

II. DFID'S RESPONSE

Short term response

13. We are closely monitoring food price movements and have commissioned research to strengthen our analysis of the impact of rising prices. Our aim is to support countries heavily dependent on food imports, and to protect poor and vulnerable people from the price shocks. Our policy responses are at three levels: protecting poor and vulnerable people in countries susceptible to food shocks; increasing incomes of the poor; and supporting agricultural growth.

14. To increase access by poor people to food, we are supporting the development of social protection programmes which aim to reduce poor people's vulnerability to shocks and stresses. Taking people out of chronic dependency on food aid into longer term social protection programmes provides them greater opportunities to graduate from poverty. Examples include Ethiopia, where DfID has given £70 million over three years for the Productive Safety Net Programme which helps support 7.2 million people who had previously depended on emergency relief. This will rise to £30 million per annum. The programme delivers a mix of food and cash transfers. And in Zimbabwe, where DfID is providing £80 million over eight years (2005-13) for a protracted relief programme to improve the food security of more than 1.6 million of the poorest who would normally receive food aid.

15. Where these options are insufficient, we are providing humanitarian assistance. In Sudan, the UK has spent £275 million since 2003 covering a range of emergency interventions in food, water, health and shelter. In 2007, the UK committed £65 million for humanitarian work (including £6.5 million in neighbouring Chad). In cash terms, since 2005, the UK has spent £67 million on the southern Africa crisis and £35 million in Kenya for food aid through the World Food Programme to treat child malnutrition and to provide health and water provision.

16. When responding to new humanitarian appeals we will take the increase in food and transport costs into account. WFP is the largest recipient of funding from the Central Emergency Response Fund[4] (CERF), accounting for about 38 of the fund's total allocations since inception. We are working with the CERF Secretariat to ensure that food price inflation is taken into account in making CERF funding allocations, whilst also ensuring that food aid assistance is appropriate and targeted.

How Bangladesh is responding

The Bangladesh government is applying to borrow around US$ 216 million from the IMF under the Emergency Natural Disaster Assistance (ENDA) facility. The UK and other donors support the Government's action as a response to the damage incurred from severe floods and a cyclone in 2007. These natural disasters reduced agricultural production and increased support needs, including food, of the affected population.

At the same time, increases in international commodity prices—most notably rice—have increased the costs of imports required to fill the gap between food production and requirements. This has put pressure on Bangladesh's fiscal deficit and on the trade balance. Support from the IMF will provide essential financing to fill this gap and relieve stress on the balance of payments.

The Bangladesh government also plans to start phasing out subsidies, notably on foods, agricultural inputs and fuel. The fiscal burden of these subsidies is increasing as world commodity prices rise. It is important to protect the incomes of poor people but general subsidies are inefficient and poorly targeted. The Bangladesh government say they intend to start phasing out additional subsidies after the next rice harvest in May. This will need to be accompanied by measures such as improved and expanded safety.

Longer-term contribution to achieving the MDG 1 hunger targets

17. Driven by growth in China and India, Asia is making good progress towards halving poverty by 2015. In sub-Saharan Africa, however, despite recent rising per capita growth, the absolute number of poor people is still rising (by 34 million people between 1992-2002) and is projected to stand at 345 million by 2015. By then, over 90% of poor people are expected to be in South Asia and Africa.

18. Global levels of hunger in developing countries have reduced slightly since 1990, from 823 million to 820 million. This has been due, primarily, to falls in countries in Eastern and South Eastern Asia. On current trends, these regions, along with Latin America and the Caribbean, are expected to meet the 2015 MDG hunger target. In sub-Saharan Africa, Southern Asia and Western Asia the absolute number of undernourished people has increased.[5]

19. In 2002 DfID published Eliminating Hunger which outlined a strategy for achieving the hunger MDG.[6] Building on this we have set out policies on growth, agriculture, social transfers and humanitarian response. These have been translated into strategies and country programmes that support supply side responses ie jobs and employment, growth in agriculture, market development and local and regional trade; and access responses (to adequate food) eg social protection mechanisms such as social transfers, livelihood support programmes and where appropriate agricultural input subsidies.

20. The main obstacle to reducing hunger is poverty. Poor people cannot get enough food either by growing it or buying it. Introducing measures to reduce poverty helps reduce hunger. Developing countries' poverty reduction strategies have, however, often focused too much on treating the symptoms of hunger, eg through providing food aid, rather than dealing with the underlying causes. Country strategies and donor responses are getting better at broadening the focus especially highlighting economic growth as a powerful way of pulling people out of poverty. Economic growth creates higher incomes, which help people save, invest, send children to school and protect themselves. And as economies grow, governments can raise the money they need for public services.

21. Agriculture plays a direct role in reducing hunger through producing, storing, processing, marketing and distributing food. This is increasingly about quality—even in markets serving very poor people. Increasing agricultural productivity is particularly important. Rising prices provide an incentive for increasing agricultural productivity and accelerating growth in rural areas where the majority of the poor live. Maximising the supply response from agriculture in turn will help to ease the upward pressure on prices.

22. Some 70% of poor people in developing countries live in rural areas and depend on agriculture for their livelihoods, directly and indirectly. But agriculture also provides income and jobs and contributes to broader economic development. There is a mass of evidence that increasing agricultural productivity has benefited millions through higher incomes, more plentiful and cheaper food and by generating patterns of development that are employment-intensive and benefit both urban and rural areas.[7] Growth in agriculture has provided the spur to economic development outside agriculture where growth and job creation are faster and wages are higher. This point is well made in the 2008 World Development Report: Agriculture for Development, to which DfID contributed.[8]

23. We are providing a wide variety of support for agriculture. Examples include our £150 million of rural livelihoods programmes in India; and our support to NEPAD's Comprehensive Africa Agricultural Development Programme and the Alliance for a Green Revolution in Africa (AGRA). These programmes support the priority African leaders themselves are now giving to agriculture. We are also investing £40 million annually in international agricultural research aimed at higher crop yields, better pest control and better forest management.

24. We are also working to break the cycle of emergency food aid in Africa. With governments, the World Bank, the European Commission and the US Agency for International Development we are supporting provision of long term and predictable assistance. This involves small payments in cash and/or food, fertilizer or seed to chronically hungry people before a crisis develops.

25. The 2006 White Paper recognised social security as a human right, and social protection as one of four essential public services complementing health, education and water and sanitation. It committed us to significantly increasing spending on social protection in at least 10 countries in Africa and Asia by 2009. We have achieved this and in Africa are supporting social protection programmes and pilots in Ethiopia, Ghana, Kenya, Malawi, Mozambique, Uganda, Zambia and Zimbabwe. This amounts to spending commitments of £200 million over the next three years covering 2.5 million vulnerable households.

26. A review of evidence generated by DfID-supported social transfer schemes found that most contribute to enhanced household food security in the short term and to reduction in the severity of poverty.[9] It found that social transfers have a significant effect on reducing income poverty and hunger, mainly at household level. Social transfers provide poor and vulnerable households with a predictable and regular income, reducing the need to sell assets in response to shocks. One of the most consistent findings on impacts of social transfer programmes is their positive impacts on nutrition and food security.

27. A detailed assessment of Ethiopia's Productive Safety Net Programme (DfID supported) that covers eight million people found that three-quarters of participants consumed a higher quantity and quality of food compared to the previous year, and were less likely to sell assets in order to buy food.[10] In some cases, social transfers also generate a positive impact on the supply of food by strengthening demand in local markets.

28. Through Help Age International, we are helping build capacity of the African Union to lead and deliver the "Livingstone II" process on social protection. The AU will use this process to embed social protection policies in governments' poverty reduction and growth plans. It will also help make explicit the links between the AU's social policy framework and social protection. This framework will be debated at a Conference of Ministers for Social Development, the first of its kind, scheduled for late May 2008.

III. WORLD FOOD PROGRAMME

The UK's contribution to WFP

29. The UK contributes to WFP as a donor and as a member of the Executive Board. We maintain close contacts at country, regional and headquarters level.

Funding

30. UK funding of WFP's programmes is shown below: it shows a shift out of emergency (red) and development (green) funding towards protracted relief and recovery (yellow) funding.

UK direct contributions to WFP

31. All direct UK contributions are earmarked against specific countries or programmes. Whilst continuing to provide multilateral funding direct to UN agencies, in order to provide incentives for a more efficient and effective response at country level we are increasingly channelling funding for humanitarian operations through pooled funds—the Central Emergency Response Fund and the country common humanitarian funds (CHFs).[11] These funds allow the UN Emergency Relief Coordinator (ERC) and UN Resident/Humanitarian Coordinators on the ground to allocate funding to agencies best placed to respond to humanitarian need. CHFs are being piloted in Sudan and DRC and will be introduced in Central African Republic and Ethiopia during 2008. The UK is the largest donor to the CERF, contributing US$ 69.9 million and US$ 83.7 million in 2006 and 2007 respectively, equivalent to about 23 of CERF total funds. In 2007, we contributed US$ 79 million and US$ 60 million to CHFs in Sudan and DRC respectively, and we have since approved another US$ 79 million for the Sudan common fund. While DfID's direct funding to WFP has decreased, the pooled funds have risen over the last two years to become WFP's fourth largest "donor".

Contributions to WFP from UK and UN fund contributions

US$ million	2003	2004	2005	2006	2007
UK	135.7	115.9	114.3	100.4	66.8
UN funds	0.0	0.6	7.2	161.2(1)	143.0(2)

Source: WFP.

(1) of which CERF US$ 108 million; (2) of which CERF US$ 113 million.

WFP/DfID Institutional Strategy

32. DfID funding includes £5 million per year over 2006, 2007 and 2008 in support of our Institutional Strategy (IS) with WFP.[12] The IS aims to enhance WFP's: preparedness to respond to humanitarian crises; organisational learning and knowledge management; role in developing national and regional capacities to prevent and respond to food emergencies. The IS was reviewed in April 2007 and assessed to be broadly on track with a high success rate and commitment shown by WFP at all levels (see box overleaf). It will be subject to a full evaluation later this year, including a field assessment in Nepal in May.

Executive Board

33. The UK is a full member of the Executive Board and from February this year we have been Bureau Member and Convenor for "List D" (the economically developed countries). The Board meets formally three times a year. It also meets informally, as needed; this has especially been the case since mid 2007 when WFP embarked on revising its Strategic and Management Plans. Other informal consultations have included induction for new members, governance and oversight, private sector strategy, and the implications of world food price increases. We are working closely with other Members, notably through the likeminded donors' group, and the Secretariat on the new Strategic Plan.

Achievements from IS funded activities:

— improved knowledge management in WFP;

— capacity for Emergency Preparedness and Response reinforced;

— corporate Monitoring and Evaluation better integrated in corporate information systems;

— stronger and better harmonised analysis and monitoring of vulnerability;

— a greater focus on outcomes as well as inputs is leading to better performance; and

— improved budgetary formats are leading to better management of IS resources and activities. The standard formats and Log Frame developed for the IS are now being used for other donor trust funds.

Source: IS Annual Report for 2006, WFP.

34. Since taking office in April 2007, WPP's Executive Director Josette Sheeran has had several meetings with UK Ministers (DfID and FCO). John Powell, Deputy Executive Director, visited London in November last year for discussions with PUSS Shahid Malik and senior officials. Our office in Rome is in regular contact with the ED and her senior staff.

35. Our Rome office also ensures good communication between WFP and DfID country programmes, for example on appeals and food pipelines. DfID country teams working on protracted emergency or humanitarian situations, for example in Bangladesh, Sudan, Uganda and Zimbabwe, maintain close links with local WFP offices. Information from DfID country programmes is used to inform WFP Board discussions of programmes. DfID headquarters staff working on humanitarian or policy issues periodically visit WFP headquarters for technical discussions.

Audit

38. WFP's external auditor is the UK National Audit Office. Terms of appointment for external auditors are currently under discussion by the WFP Executive Board. Since mid 2004 WFP has had a fully functioning Audit Committee, established by the Executive Director, although this committee does not currently have a direct relationship with the Executive Board.

How WFP engages with local communities to identify needs, and to assist in programme design

39. Since 2004, WFP has been implementing its Strengthening Emergency Needs Assessment Implementation Plan (SENAIP) which aims to increase the quality, credibility and transparency of emergency needs assessments. A recent progress report lists achievements in transparency and accountability, methodology and staff and partner capacity.[13] Some 95% of WFP's programmes in 2007 were supported by needs assessment compared to 45% in 2004.

40. Our field level contacts also suggest that WFP's performance is improving. However, in many cases the quality and depth of community consultation is dependent on the capacity of WFP's implementing NGO partners. WFP's role is frequently one of training in best practices, ensuring consistency of application and providing technical oversight.

41. Programme design (eg how much food is required) is normally approached first at national level using a cereal balance sheet approach, such as that facilitated by the FAO/WFP Crop Food Supply Assessment Mission (CFSAMs). This is translated to regional/district level taking into account of population and estimated local food production levels. Community engagement is then used for targeting, where communities identify beneficiaries against pre-determined criteria to receive a pre-established set of interventions. However, it would often be beneficial to have stronger community involvement earlier in the process in order to bring in a stronger focus on access to food.

42. There is often an assumption that food transfers are the required intervention (they often are) and community engagement focuses on who will benefit. Design of food for work programmes includes an element of consultation on what work the community would value and what level of community inputs would be appropriate.

43. The most common output of community engagement is to establish vulnerability criteria by which households or individuals can be classified as vulnerable. These often include access to assets and exacerbating health and demographic criteria such as prevalence of HIV/AIDS, orphan-headed households etc. Community members are ranked or grouped according to vulnerability. Inclusion errors are often high, particularly in the case of long term food aid, as individuals and communities learn to respond to questions in a way that qualifies them to receive food. This is difficult to correct for, requiring extensive local knowledge.

44. WFP is making efforts to improve the inclusion of marginalised groups, but there is still room for improvement. For example, community-based targeting is highly sensitive to the objectivity of those community members charged with its implementation and over-reliance on community leaders has the potential for politicisation in some contexts. WFP's policy of ensuring over 50% women on allocation committees goes some way to mitigate this.

How WFP monitors and evaluates its operations

45. WFP's evaluation function was independently reviewed in 2007.[14] The reviewers found that evaluation was generally sufficiently independent, though WFP staff did not always appreciate the importance of independence; that the credibility of products was uneven, due to mixed quality and a failure to take into account the cost implications of recommendations; and that utility was compromised by insufficient corporate attention to how evaluation should be used. At the February Board meeting, donors, including the UK, emphasised the importance of strengthening the evaluation function.[15]

46. Monitoring in the field still tends to be delivery focused, eg number of tonnes of food delivered to number of beneficiaries. We would like to see more impact based monitoring that draws on wider information, eg changes in nutritional status or school attendance rates.

47. The cost of monitoring and evaluation is included in programme operational costs, although WFP sometimes claim these are insufficient. We have sometimes provided additional funding, in Zimbabwe for example, where it was important for the UK to establish that WFP was taking steps to avoid politicisation of its programme. In general, we have found some reluctance at country level to have independent evaluation.

The effectiveness of WFP's development food aid activities

48. WFP groups its non-emergency food transfer programmes under the rubric of "enabling development". The last major independent evaluation was published in 2005.[16] This found positive impact from school feeding programmes, in particular, and from livelihoods protection and asset building. Evidence of health-related outcomes was less convincing. Assessment was hampered by a lack of baselines and impact-related indicators. Sustainability was often an issue, in part because of the complex contexts in which WFP operates. The review concluded that WFP's inputs made a positive contribution at project level and ensured a high degree of ownership by local partners, but stronger capacity in WFP country offices could improve performance.

49. The recent evaluation of WFP's Kenya programme suggests that these issues are still current.[17] For example, whilst the impact from school feeding was positive "it is difficult to attribute [improvements] to SFP [school feeding] alone..."; and "The impact of WFP food [in AIDS treatment] is tremendous . . ." but "one serious criticism of the current HIV/AIDS programme is the lack of coordination with other UN agencies and government partners".

50. The UK does not support WFP's non-emergency food aid activities. This is partly because of concern over the appropriateness and effectiveness of these interventions, and partly because we deliver our support to health and education through budget support, sector programmes or global funds such as the Global Fund for Aids, TB and Malaria (GFATM). The funding of WFP's developmental activities has been on a declining trend. This has led the organisation to include these activities in bids for PRROs (protracted relief and recovery operations), which has become an issue for several donors.

51. Our view on school feeding is that it needs to be carefully considered in relation to other policy interventions. For instance, cash transfers have been shown to increase enrolment and attendance—as well as tackle hunger and nutrition—while providing benefits to the rest of the family. Removing school fees and investing in improving the quality of education can also increase enrolment and improve attainment levels. School-feeding programmes may not be the most cost effective policy alternative for achieving education and nutrition objectives. According to the International Food Policy Research Institute (IFPRI), "a reasonable consensus exists among those experienced in managing and studying [food for education] programs that in-school meals increase primary school participation. Where calorie intakes are low, providing meals at school has a unique ability to attract children. However, careful estimates of the size of the causal impact of in-school meals on school enrolment and attendance rates for all children living in the service area of a school are still not available, making it difficult to assess the cost-effectiveness of these programs, even for this primary objective".[18]

Main reasons why some donors are moving away from the use of food aid in development

— Concerns about the potential negative impact of food aid on local markets and production.

— The increased number of emergencies and the related resource requirements.

— Lack of strong evidence on the positive impact of the use of food aid in development.

— For several donor countries, food aid is considered an expensive form of aid transfer, the additional cost of which should be justified on the basis of clear comparative advantage.

Source: Joint evaluation of the effectiveness and impact of the enabling development policy of the World Food Programme. Synthesis Report. February 2005. page 5.

52. The situation with regard to food transfers to augment AIDS treatment is similarly complex. Our assessment of the available evidence suggests that providing food rations does not inhibit disease progression or increase the effectiveness of anti-retroviral treatment in the long term, except to stabilise excessive weight loss. The costs of providing food rations or nutritional supplements alongside anti-retroviral treatment are high and their use except to stabilise weight is not based on evidence. Furthermore we do not believe food rations are the most appropriate incentive to encourage take up of AIDS services.

53. We have not made any recent assessments of food-for-work which WFP has used for many years for livelihoods protection and asset building, as in Ethiopia's MERET programme of land reclamation and environmental protection, and tree planting in Mali and Syria. The success of these programmes hinges on the cost effectiveness of food-for-work, which needs to be re-evaluated in times of rising food costs and increasing knowledge of alternatives such as cash-for-work. Under Ethiopia's Productive Safety Net Programme, families who are able to work get cash or food in exchange for participating in public works. Those who cannot work get direct support. Providing cash instead of food is intended to allow poor people more control and flexibility over what they consume, and stimulate the development of rural markets.

54. We are encouraging WFP to work closely with governments to develop the most appropriate and cost-effective policy choices, which in many cases may be less about food transfers and more about longer-term, sustainable social protection. We are also encouraging WFP to pay much more attention to monitoring, evaluation and lesson learning to inform future programmes.

IV. WFP'S STRATEGY TO MEET INCREASED NEEDS IN THE CONTEXT OF HIGHER FOOD PRICES

55. WFP has issued a general appeal for extra funding, but it has not yet discussed with its Members in detail how it will respond to higher food prices. There are two distinct aspects: how to respond in the current Management Plan (2008-09); and secondly, how to address the likelihood of higher prices persisting into the medium term.

Immediate response

56. The Management Plan for 2008-09 anticipated a programme of work for the organisation of US$ 5.4 billion. This figure includes approved programmes and anticipated extensions but does not include any new emergencies. At the Executive Board meeting in February this year, WFP announced that the cost of delivering this same programme of work had already increased by US$ 520 million for food commodities, US$ 133 million for transport and US$ 82 million owing to currency exchange movements.

57. Updated figures were released to the Board at the end of February suggesting that for 2008 the increased requirement would be in the region of US$ 500 million against an original programme of work of US$ 2.9 million—equivalent to 17%.

58. WFP is working on a range of more detailed analyses:

— A modelling exercise to identify the 30 or so countries most at risk;

— A more complex modelling exercise to identify the numbers of most vulnerable people in these countries:

— A programme-by-programme estimation of the effects of cost increases (not all programmes are equally affected).

59. Donor members of the Board are waiting for the output of these analyses. In the meantime they have asked WFP to investigate the potential for further efficiency and cost savings through eg maximising use of local purchasing, the use of cash/vouchers in place of commodity aid, seeking the earliest possible handover to livelihood recovery operations, and prioritising greatest humanitarian need. Another implication is that governments, where they have the capacity, need to start making greater efforts to help their affected populations, including through contributions to WFP programmes in their own countries. WFP's response has been that they have already exhausted most of these avenues but will return to the Members with detailed estimates and proposals.

The longer term

60. WFP is drafting a new Strategic Plan for the period 2008-11 to better position the organisation to respond to global trends. The first draft of the Plan was submitted to the Executive Board in February 2008 and the final version will go to the Executive Board for approval in June.[19] The current draft responds to anticipated longer term trends such as declining availability of food aid, increases in the numbers of natural disasters and increasing food prices.

61. Our view is that WFP is successful at addressing hunger and nutrition needs in humanitarian emergencies, and is highly regarded across the UN system and beyond in that role. It also successful at providing the logistical support for itself and other UN agencies involved in emergency responses. These are its comparative advantages.

62. However, in its response to longer term hunger needs, WFP needs to take account of changing circumstances. We therefore believe that the starting point for the new Strategic Plan should be the premise that:

Food is now expensive. This increases the vulnerability of poor people, especially the 162 million very poor people who live on 50 US cents per day or less. Tackling this involves policies and investments that promote growth in incomes, protect access by the poorest, reduce vulnerability and incorporate prevention. Food aid and food transfers should be used only when they are really needed and demonstrably the most appropriate and cost effective intervention.

63. This means that as a general rule WFP should focus on the acute end of MDG 1: tackling hunger in emergency and difficult. It implies careful reconsideration of the organisation's role in the more general provision of food transfers such as school feeding or food-for-work. In some cases these will remain appropriate, but in others there may be cheaper and more effective approaches to achieving the same ends. It implies more and better partnerships with those working on related aspects of hunger, such as disaster risk management and post emergency/conflict transition, with clear handover strategies. And it implies becoming more than ever a learning and evidence based organisation.

How the Rome based agencies are working together

64. The FAO Programme Committee, chaired by the UK, suggested in September 2006 that FAO, WFP, and International Fund for Agricultural Development (IFAD) should use the advantage of being based in Rome to work together on improving efficiency and report back to the governing bodies of each organisation. The report on Collaboration on Administrative and Processing Work between the three agencies was submitted to FAO in May 2007 and the WFP Executive Annual Board Session in June 2007.[20] It maps out areas of collaboration in procurement, human resources, finance, information systems and knowledge exchange.

65. An Inter-Institution Coordination Committee (IICC) was established, composed of the Heads of Administration and Finance Departments and Heads of Units responsible for inter-agency affairs. The Committee meets every quarter to review, approve and prioritise the overall programme of inter-organisation activities.

66. A further paper was submitted to the October 2007 WFP Executive Board.[21] This maps existing cooperation at global, regional and country levels. It identifies four "pillars" around which collaboration can be grouped:

— Pillar 1: increased investments in agriculture and rural development;

— Pillar 2: policy formulation, capacity building, knowledge management and advocacy;

— Pillar 3: emergency and rehabilitation, including disaster risk management; and

— Pillar 4: administration.

67. This collaboration is part of a broader partnership strategy being developed for the new WFP strategic plan. The first draft of the Plan sets out WFP's commitment to working with the United Nations system and other international agencies:

"A timely and effective response during a humanitarian emergency requires close and effective WFP partnerships with, among others, OCHA, the International Red Cross and Red Crescent Movement, UNHCR, UNICEF, FAO and WHO. Essential WFP partnership to break the chronic intergenerational cycle of hunger are, for example, those with the International Financial Institutions, UNAIDS, FAO, IFAD, UNESCO, UNDP and UNFPA." (p 8)

68. With respect to the UN "Delivering as One":

"WFP will work with governments, NGOs and United Nations partners in the Chief Executive Board, United Nations Development Group (UNDG), Executive Committee on Humanitarian Affairs (ECHA), Inter-Agency Standing Committee (IASC) and other relevant fora to promote the United Nations' "Delivering as One" at capital and country level. These efforts must be designed to ensure a more effective and efficient United Nations. WFP will ensure that its activities support overall United Nations aims and multilateral efforts at conflict prevention, peace-building, development, humanitarian assistance, human rights, and the United Nations Charter." (p 9)

69. Board members, including the UK, have consistently stressed the importance of collaboration and partnership on the basis of comparative advantage.

The prospects for a "one UN" approach in meeting food security needs

70. UN humanitarian agencies are implementing a package of reforms to make humanitarian assistance more predictable, timely, accountable and needs-based. This involves more efficient humanitarian financing and strengthened leadership and coordination on the ground. The Office for the Coordination of Humanitarian Affairs (OCHA) through its Humanitarian Coordinator Strengthening Unit (HCSU) is improving the capacity, leadership and field co-ordination skills of RC/HCs. Pooled humanitarian funds—the CERF and the in country Common Humanitarian Funds (CHFs)—are supporting a more coordinated and strategic response between UN agencies and between the UN and the wider humanitarian community. In part this is achieved by enabling the UN Emergency Relief Coordinators (ERC) and RC/HCs to direct funding to priority needs.

71. CERF is a success—to date it has provided nearly US$ 700 million to meet humanitarian needs in 60 countries. Donors and the UN have recently agreed to replicate the country humanitarian funds, currently operating in Sudan and DRC, in Ethiopia and Central African Republic in 2008. The humanitarian Cluster Approach has also been introduced. One UN agency is nominated for each sector to ensure that global capacity is increased and that coordination, coverage and accountability in humanitarian response are improved on the ground. This covers 11 sectors including nutrition, early recovery and agriculture, which were previously under-serviced.

72. Different parts of the UN play important roles in achieving food security. As part of the inter-agency cluster approach to humanitarian emergencies, UNICEF is responsible for ensuring that emergency nutrition needs are met, while FAO as lead agency for the agriculture cluster and UNDP as lead agency for the early recovery cluster also play important parts. While not the cluster lead, WFP has a vital role in tackling acute hunger arising from short or prolonged shocks and crises. WFP provides effective leadership of the Logistics Cluster. It manages the UN Humanitarian Response Depot (UN-HRD) network (including the depot in Accra) and in many countries provides essential logistics support such as the UN Humanitarian Air Service in Sudan. The UN has yet to identify a lead on social protection; in the meantime several agencies, including FAO, UNICEF and WFP are considering their potential role.

73. The UN development programme also contributes to food security. For example, FAO help tackle crop and livestock disease; UNICEF can help improve the health and nutrition of vulnerable children; and IFAD provide loans to increase rural incomes and food production.

74. By taking an integrated approach to food security, UN country programmes can ensure that different agencies reinforce each other's work. UN Resident/Humanitarian Coordinators (RC/HCs) in country have a central role to play in overseeing consolidated, prioritised, strategic responses. A more integrated approach to running country programmes, Delivering as One, is being piloted whereby UN country teams have one leader, one programme, one office with integrated systems and one consolidated budget. The objective is to improve effectiveness and delivery by aligning the UN's programmes with partner countries' priorities and managing them as an integrated programme rather than as an uncoordinated set of separate activities.

75. Eight countries are piloting this approach: Albania, Cape Verde, Mozambique, Pakistan, Rwanda, Tanzania, Uruguay and Vietnam. In most of these countries, WFP is working alongside other UN agencies. For example in Mozambique, it is part of the team working on the national policy and strategy on safety nets. It is also contributing to education goals through school feeding programmes at primary schools.

76. Good progress is being made in these country pilots. In particular, governments have welcomed the new and more transparent approach to UN programming. In Rwanda, for example, 85 of UN resources were being spent on standalone projects, managed by 400 staff through 30 separate implementation units. The UN programme has now been much more closely aligned with the Government's own policies and programmes. A single budgetary framework has been established. There is one leader and common services for all UN agencies are being established. WFP is playing its part, contributing around one third of UN spending in Rwanda.