Memorandum submitted by Simon Maxwell,
Director, Overseas Development Institute
WFP AND GLOBAL
FOOD SECURITY
1. The Committee's enquiry touches on the
role of WFP, but also on wider questions of UN system-wide coherence,
as well as the ability of the international system as a whole
to cope with food crises.
2. WFP has changed over 40 years from an
agency using surplus food for development projects to something
that looks more like a logistics agency, supplying food and some
other materials for emergency relief. Its rhetoric still emphasises
a broad-based attack on hunger. It could live up to the rhetoric
but would need to shift its attention back to development and
also break its traditional link with the supply of food. If it
did this, WFP could take on a really exciting role as the UN's
leading anti-hunger agency, providing advice, money and sometimes
food, to tackle the scourge of hunger and malnutrition in the
world. The shift is represented graphically in the Figure below.
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| Emergency | Development
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| Food | 1980-2000s | 1960s-1970s
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| Non-food supplies | (2000s)
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| Money | Being talked about |
This is the new vision! |
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3. WFP was founded in the early 1960s as an agency to
carry out long term development work using food aid. Its only
resource was surplus food donated by donors. Its main activities
were food for work programmes and supplementary feeding for mothers
and children. There was very little provision for emergency relief.
4. From the early 1980s onwards, emergencies began to
play a bigger role—driven by obvious need, but also by increasing
doubts about the value of using food aid for development projects.
Today, WFP is a $3 billion agency, 80% of whose efforts are in
emergencies and only 20% in development. Food remains by far the
most dominant resource, although more food is now procured by
local or regional purchase in developing countries.
5. The most recent shift, associated with the growing
share of emergency relief, is for a growing role in general logistics
management in emergencies, including the delivery of tents, health
supplies and the like. This reinforces WFP's role as mainly a
logistics agency.
6. In the pipeline is a possible expansion of cash-based
programmes, in which victims of emergency are provided with cash
rather than physical commodities—for example, so that they
can buy food on local markets. The research literature makes it
clear that cash is often a better option than food. Many agencies
are experimenting.
7. The big challenge is for WFP to extend this argument,
This would mean WFP recognising—and persuading its donors—that
although hunger and malnutrition are serious problems, the physical
supply of food may or may not be necessary. Sometimes, food from
outside a country or its immediate region may need to be supplied.
Sometimes, rarely, food may need to be shipped from a developed
country. Very often, however, that will not be the case. Food
and nutrition problems may best be tackled by targeted subsidies
on particular commodities, by food stamps, by nutrition education
programmes, by employment projects, or in other ways. In the modern
world, an agency which sets out to tackle hunger should never
be constrained by only having one main solution: food aid.
8. A new vision for WFP as the lead UN agency on all
aspects of hunger would be inspiring. It would also be consistent
with current efforts to strengthen the UN and make it more coherent.
WFP would need new competencies, to complement those already there;
and it would need new resources, especially cash.
9. WFP itself, and especially its Executive Director,
Josette Sheeran, sees this opportunity. It has greatly expanded
food purchase programmes, and is, of course, publicly concerned
about the impact of rising food prices.
10. Rising food prices are very much in the news. Farmers
may gain, but poor consumers are hard hit—and let the politicians
know. Governments and aid agencies are under pressure to provide
more robust safety nets, while simultaneously facing higher costs.
11. This has played out in various ways. On 25 February,
The Financial Times led on an interview with Josette Sheeran,
the Executive Director of the World Food Programme, under the
headline "High food prices may force aid rationing".[120]
The Guardian followed up the following day.[121]
Many other news outlets have carried stories of rising prices,
hardship and food riots. Meanwhile, wheat prices were reported
as having risen by 25% in one day, amid alarming reports of record
low food stocks and trade restrictions by potential exporters
like Kazakhstan.[122]
12. Rising food prices were a theme at the World Economic
Forum in Davos in January this year, as I discussed in my blog
on "hunger and malnutrition—the forgotten MDG".[123]
13. The International Food Policy Research Institute
has prepared two briefs[124]:
they track the rapid rise and also explain the causes, estimate
the impact and predict trends. The website of the US Department
of Agriculture also has new 10-year forecasts.[125]
A few key points:
a. IFPRI remind us that wheat is up 240% in dollar terms
since 2000 and 170% in euro terms. There has been a 40% rise in
prices since last June.
b. Forecasts do not show prices rising much more over
the next decade (with the possible exception of rice), but do
not show them falling either. This is from both IFPRI and USDA
models. Continued high prices are because slow growth in yields
interacts with sharply rising demand associated with Chinese growth,
biofuel demand etc... ODI has useful material on biofuels.[126]
c. The Director of IFPRI, Joachim Von Braun, has said
that to understand future food markets it is necessary to look
at the interactions between and within four separate markets:
staples; high value crops; biofuels; and carbon sequestration.
The energy market will be a major driver of food prices.
d. The impact on the poor is likely to be significant,
because most are net food buyers and are unlikely to be compensated
fully by additional employment as agriculture grows or by higher
wages. Joachim Von Braun again: the key indicator to watch is
not food price alone, but the ratio of food price to wages. In
Bangaldesh, for example, food prices have doubled, and wages have
risen, but only by 30%.
e. The biggest impact will be felt by the very poorest,
those living on 50 cents a day or less, estimated as 170 million
in total, falling much more slowly than dollar a day numbers,
and actually rising in Africa. The analysis is in the second of
the IFPRI briefs, "Taking Action for the World's Poor and
Hungry People".[127]
f. WFP is tracking the impact of rising food prices in
30 key countries, using a combination of macro data and vulnerability
models. Key countries include the obvious, but also Bangladesh,
Senegal, Yemen, many others. WFP is very engaged in Egypt, for
example.
14. All this represents a big policy challenge for governments,
but also for international agencies. US food aid has effectively
shrunk by $120 million since October, because of rises in procurement
prices. WFP is facing about $1 billion higher costs over two years,
half of this for food, on a budget for food and transport of $4.5
billion—this despite holding cost increases to about 20%,
by virtue of more efficient purchasing, greater use of local purchase
and a shift to cheaper commodities. This will either mean reducing
by 20% the number receiving support (currently eight million)
or reducing rations by 20%—in both cases cuts to already
agreed programmes, not taking account of new needs. Hard decisions
are already being taken, with the possibility of major "pipeline
breaks" for places like Darfur and Afghanistan.
15. The responses needed of course go beyond protecting
food aid, or aid for food. Joachim Von Braun has identified three
major lines of attack: (a) a technology offensive, (b) a major
push to make markets work better, and (c) a big investment in
social protection. Within (b) he includes rethinking the Food
Aid Convention and also the need for a big investment in commodity
exchanges.
16. On these diagnostic points, I would add:
a. It is good to have the projections, but they are necessarily
uncertain and it would be good to work with scenarios, using well-known
techniques to identify a range of drivers and outcomes, with probabilities
attached (cf eg the Stern Report).
b. We need better modelling of the impact on poor people,
in order to understand the interaction between short term price
effects and medium or longer term effects through agricultural
growth and consumption linkages. General equilibrium analysis
is needed.
c. It is important to superimpose the impact of changes
in food prices on rapid change taking place in developing countries
anyway, including urbanisation and changes to supply chains (cf
our work on Food Policy Old and New).[128]
d. The private sector will be key in how higher prices
play out, esp the role of supermarkets.
17. On food aid specifically, it is important to understand
how much WFP has changed, from an agency supplying foreign food
to one working with and through food markets. In Africa, 80% of
food distributed is locally purchased, 80% of all transport is
local, and 80% of staff are local. WFP are spending $800 million
p.a. in Africa.
18. The "perfect storm" of higher food prices
underpins the discussion about WFP's new strategy, due by June.
There are five strategic objectives, viz (a) meeting emergency
needs, (b) assessing and preventing emergencies and famine, (c)
post-conflict recovery, (d) advising governments on food policy,
and (e) market development. Note that the emergency work includes
logistics supply on behalf of other agencies—eg transporting
drugs for WHO.
19. There are some important points to make about the
current situation:
a. The current "crisis" provides an impetus
to change and an opportunity. Others are active—FAO, of
course, Robert Zoellick for the World Bank, NGOs like SCF (who
launched a big child hunger and survival initiative this week).
The window would be time-limited.
b. The case-load includes both failed and fragile states,
but also many other countries with some capacity to respond. It
is a bit surprising that there is not more talk about what countries
themselves are doing or could do.
c. The aid context is generally favourable, with qualifications
(see DAC report on aid flows),[129]
with two key features—(a) an emphasis on harmonisation and
alignment, under the umbrella of the Paris agenda, and (b) an
interest in architecture and UN system reform. Aid agencies, including
food aid agencies, need to recognise these priorities.
d. There are some key opportunities in 2008, incl the
Call to Action events in May and September, Accra on Aid Effectiveness
in September, and Doha at the end of November on Financing for
Development.
e. What donors would really, really like to see is two
things: (a) a one-UN initiative on this topic, and (b) a strong
pitch from developing countries that they had plans of their own
and would like aid agencies to help implement them.
f. The real challenge is not "Why?" or "What?"
but, as usual, "How?"—a collective action problem.
It is especially important to have strong allies among the G-77.
20. In sum, the current food crisis challenges the international
community to understand and respond to global food security problems
in new ways. In particular, it presents an important opportunity
to tackle outstanding issues of aid architecture and UN reform.
A coherent action plan would include the following:
a. Acknowledge the importance of this issue.
b. Put someone in charge, presumably the Secretary of
State or someone reporting to him.
c. Make some immediate moves to support WFP.
d. Insist that the main international aid agencies produce
a single analysis and immediate action plan—to include WB,
WFP, FAO, UNICEF, IMF. A one-UN plan should be demanded in time
for the series of meetings kicking off in the summer (EU Council,
MDG Summit etc...).
e. The agencies should be told to make sure that the plan
starts with country needs and that the one-UN plan should clearly
be coherent with the Paris agenda of harmonization and alignment.
No branding by UN agencies, no "WFP vouchers". Note
that the UN agencies will have to move very fast to work with
countries to produce outline plans and that this will probably
be a staged process—ie first stage 2008 needs, second stage
2009-10 needs, third stage longer term plans, or something like
that.
f. Once there is a plan, then money should be channeled
to countries through UN agencies, but in the same spirit as the
IHP, and supporting core budgets rather than setting up special
purpose vehicles. In other words, use this as a vehicle for UN
system strengthening and reform.
Simon Maxwell
3 April 2008
Taking Action for the World's Poor and Hungry People: Synopsis
of an International Consultation, Joachim von Braun and Rajul
Pandya-Lorch, December 2007—http://www.ifpri.org/pubs/books/oc57.asp
120
http://www.ft.com/cms/s/0/451604c4-e30b-11dc-803f-0000779fd2ac.html?nclick<au0,1>
<xucheck=1 Back
121
http://www.guardian.co.uk/environment/2008/feb/26/food.unitednations Back
122
http://www.ft.com/cms/s/0/efe9a452-e3db-11dc-8799-0000779fd2ac.html Back
123
http://blogs.odi.org.uk/blogs/main/archive/2008/02/01/5493.aspx Back
124
The World Food Situation: New Driving Forces and Required Actions,
Joachim von Braun, December 2007-http://www.ifpri.org/pubs/fpr/pr18.asp Back
125
http://www.usda.gov/wps/portal/usdahome Back
126
http://www.odi.org.uk/Publications/nrp/NRP107.pdf Back
127
http://www.ifpri.org/2020chinaconference/pdf/wayforward.pdf Back
128
http://www.odi.org.uk/Publications/briefing/bp<au0,1> <xunov03.pdf Back
129
http://www.oecd.org/document/32/0,3343,en<au0,1> <xu2649<au0,1>
<xu37413<au0,1> <xu40056608<au0,1> <xu1<au0,1>
<xu1<au0,1> <xu1<au0,1> <xu37413,00.html Back
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