World Aid Agencies Faulted in Food Crisis
Monday, May 19, 2008
UNITED NATIONS -- Buffeted by food riots at home, Senegal's president, Abdoulaye Wade, this month lashed out at a distant culprit: The U.N. Food and Agriculture Organization, which he slammed as a wasteful "bottomless pit of money" that should be abolished for failing to help increase global food production.
Wade's broadside is part of a backlash against multilateral organizations that were created after World War II -- including the FAO, the World Bank and the World Food Program -- tasked with weaving together a safety net for the world's poorest. The recent spike in food prices has ripped a massive tear in that net, triggering riots around the world and threatening to plunge more than 100 million people into extreme poverty.
Analysts say decades of neglect of agriculture by those agencies have left many countries with less food to feed their people. "There has been a very deep institutional failure over how we deal with food problems," said C. Peter Timmer, a Stanford University scholar who studies food security. "Everybody understands that 80 percent of the world's poor are in rural areas. But the World Bank for 30 years has basically said market signals don't support agriculture, so we can't support agriculture."
U.N. Secretary General Ban Ki-moon last week convened a task force of multilateral agencies to try to stitch the safety net back together. It intends to present a plan of action aimed at lowering trade barriers, boosting agricultural production and extending a lifeline to the poorest at a summit of world leaders June 3-5 at FAO headquarters in Rome.
"I can understand and sympathize with the frustrations of many African leaders," Ban told reporters this month. But he said: "This crisis did not come out of the blue. It grew out of more than a decade of neglect and ineffective development policies. If not properly handled, this crisis could cascade into multiple crises affecting trade, development and even social and political security around the world."
The FAO has become the target of increasing criticism. An independent review of its policies last summer said the agency had lost the confidence of donors, who have steadily reduced funding to the organization over the past decade. "FAO is today adrift," according to the July 2007 report by a team of outside experts.
FAO's director general, Jacques Diouf, defended the agency's record in a statement Thursday, blaming a host of external factors for the crisis: neglect of agriculture by policymakers, population growth, rising food consumption in China and India, subsidies for food and biofuels, and climate change, drought, hurricanes and cyclones. "Does FAO bring 78.5 million babies into the world every year?" Diouf said.
Last year, the World Bank commissioned an internal review of its agricultural programs in Africa, concluding that "over time, the importance of agriculture in the Bank's rural strategy has declined." The bank's Independent Evaluation Group noted that total international agricultural aid fell from $1.9 billion in 1981 to less than $1 billion by 2001, and that the bank cut its number of agricultural specialists for Africa from 40 to 17 over the past decade.
World Bank President Robert B. Zoellick has vowed to reverse the slide, proposing to boost annual lending for African agriculture from $450 million to $800 million. He has also pressed the United States, Japan and European governments to end agricultural subsidies that make it difficult for poor farmers to compete in global markets. "The world's agricultural trading system is stuck in the past," he said. "If ever there is a time to cut distorting agricultural subsidies and open markets for food imports, it must be now."
Zoellick has also called for reducing the sort of food donations favored by the United States. The World Food Program, which was established in the 1950s to distribute surplus U.S. and European food stocks, concedes that shipping too much food aid into poor countries can hurt local farmers, said Nancy Roman, the food program's director of policy planning. But the U.S. farmers and shipping companies that supply the WFP have resisted the change.
The WFP has already reduced its share of food donations -- known as "in-kind" aid -- to 50 percent of its overall giving, Roman said. In addition, the program has increased the portion of food it purchases in the developing world and is pressing states to give more cash than food.
There is no question that the spike in food prices is "exposing weaknesses of the system," Roman said. "Do we want to look anew at cash? Absolutely," she said. But cash is "not a silver bullet. We cannot function without in-kind donations."
Scholars say responsibility for the current crisis is widely shared and that many poor countries, primarily in Africa, have failed to invest enough in agriculture and squandered what little aid has come from international agencies.
At the same time, rich governments have undercut African farmers through costly agricultural subsidies at home. This past week, Congress mustered a veto-proof majority to pass a farm bill that includes billions of dollars in farm subsidies, including for the production of ethanol.
European governments, meanwhile, have clung to an import ban on high-yielding, genetically modified crops -- thus dissuading African nations from using a technology that could increase production. "The two biggest follies are biofuels in America and the ban on genetically modified crops in Europe," said Paul Collier, a professor of economics at Oxford University. "There is a phone call to be made between Washington and Europe that says we'll back off our idiocies and you back off of yours."
Collier says international policymakers have focused too much on the plight of small-scale farmers and not enough on production. He proposed large-scale farming in countries such as Mozambique, Zambia and Angola. But other experts have argued that a massive increase in farming could exhaust limited water resources and hasten global warming by destroying forests.
Columbia University economist Jeffrey D. Sachs, a special adviser to Ban, said it is "ridiculous" to suggest that there has been too much attention paid to small farmers. He said they will need financing to pay for seeds, fertilizers and technology to prevent crop failures.
Both Sachs and Collier agree that the multilateral organizations, despite their failings, will have to play a key role in fixing the problem. "These are the organizations we've got," Collier said. "It took the Second World War to produce them, and we better try to make them work."