Obama Announces Private-Public Food Aid Partnership, Critics Question Plan
(MintPress)– “Three quarters of the world’s population makes a living from agriculture, so this is why when we mention the fight against global poverty, agriculture matters so much,” said Oxfam spokeswoman Porter McConnell in an interview with MintPress.
As President Obama meets with leaders from the eight largest global economies at the G8 summit this weekend, food aid for developing nations is on the list of topics to discuss. But not everyone agrees on what is the best way to solve the problem of hunger on a global scale.
G8 public-private plan
Obama and G8 heads at Camp David in Maryland, facing pressure from activists wanting them to make a concrete financial commitment to save starving people across the globe, unveiled a new ten-year food security initiative for the African continent called the New Alliance.
The novel aspect of the plan is that it introduces a model of aid focused on private-sector development.
The New Alliance is being supported by a host of NGOs as well, including the World Bank and African Development Bank, the United Nations’ World Food Program, International Fund for Agricultural Development and Food and Agriculture Organization for the New Alliance.
The G8 members, including the U.S., Canada, France, Germany, Italy, Japan, Russia and the United Kingdom, have cited shrinking budgets as the new plan slashes a previous commitment of over $7 billion in aid each year for three years to $300 million a year, with much of the funding coming from 45 companies in the private sector.
Not everyone is happy about the funding amount or the fact its coming from the private sector. “They say they’re broke, but they’re the eight richest countries, so if they can’t help, who can?” asked McConnell, who is the Oxfam policy lead for the G8 Camp David summit.
When leaders met in L’Aquila, Italy three years ago, $22 billion was pledged towards food security in developing nations. But by last year less only a quarter of the promised amount made its way to more than 1 billion people in nations across the globe facing starvation. On Saturday, G8 will release an accountability report on the L’Aquila Initiative.
At Camp David the President will be joined by Yayi Boni, Chairperson of the African Union and President of Benin; Prime Minister Meles Zenawi of Ethiopia; President Jakaya Kikwete of Tanzania; and President John Atta Mills of Ghana.
Representatives from the private sector who are investing in agriculture will also be at Camp David for “a robust discussion” about the New Alliance and “what the G8 can do to support increased agricultural activity and growth in Africa,” according to Deputy National Security Advisor for International Economic Affairs Michael Froman in an interview posted on the blog of record on White House food initiatives, Obama Foodorama, the public portion of the digital archive of record about Obama Administration food and nutrition initiatives.
About half of the private sector partners are African companies and entrepreneurs, and the remainder are from around the world, including PepsiCo, Monsanto and Diageo.
“Right now, the public sector has invested a lot, but the private sector just isn’t showing up,” said McConnell of previous pledges of aid from private sector companies. She highlights that public sector donor money has done a great deal more in alleviating issues of hunger than private sector pledges in recent years.
Critics call for more public sector support
“Its kind of a funny time to be experimenting,” she said. “If you have tight fiscal constraints, you go with something that’s proven to work,” she said. Critics of this new aid model would prefer to see more assistance from the public sector.
“They’re backing away at the worst possible time,” she said of the G8 countries. Oxfam recently published a report on poverty in Africa noting, “Parts of East Africa are the driest they have been in 60 years. But punishing weather is not the only challenge families here face: deep poverty and decades of marginalization have left them with few resources on which to fall back as the price of food soars and water shortages persist. In Somalia, the crisis has escalated into famine.”
Rajiv Shah, administrator of the U.S. Agency for International Development confirmed, “Nearly 45 private sector companies will make clear and concrete commitments to invest more than $3 billion in agricultural projects and programs,” and also said that the private sector can “bring the kind of talent, cutting-edge technology, and innovation to agricultural projects that governments alone simply can’t achieve.”
The Malawi connection
Director of the Earth Institute at Columbia University, Jeffrey D. Sachs is a world-renowned professor of economics, leader in sustainable development, senior UN advisor. Sachs is considered to be the world’s leading expert on economic development and the fight against poverty. His work focuses on ending poverty, promoting economic growth, fighting hunger and disease, and promoting sustainable environmental practices, has taken him to more than 125 countries with more than 90 percent of the world’s population.
In an April column he authored for the New York Times, he tells the story of President Bingu wa Mutharika of Malawi, a nation he described as “an impoverished, landlocked, tropical country in southern Africa, one of the poorest in the world.”
Sachs uses the case of Malawi to illustrate what a donor program would look like in its best form, and advocate for sustainability programs. He says, “Mutharika had actually engineered an agriculture-led boom in Malawi, one that pointed a way for Africa to overcome its chronic hunger, food insecurity, and periodic extreme famines. To accomplish this, Mutharika had to stand bravely against the arrogance of an ill-informed foreign aid community back in 2005.”
He says that in 2004, when Mutharika took office, the country was experiencing a rain and nitrogen drought, which left it unable to produce food. Farmers were too poor to buy fertilizer, and farming over the years had depleted nitrogen from the soil.
“Mutharika then did a brilliant thing,” Sachs says. “He said that the government of Malawi would subsidize the smallholders to buy a small amount of fertilizer and seed so that they could replenish the soil nutrients, take advantage of improved seed varieties, and at least achieve a livable crop from their tiny farms. Over time, they could save part of their increased earnings to become creditworthy on their own, thereby ‘graduating’ from the subsidy program. This was to be a ‘smart subsidy.’ Rather than simply lowering fertilizer prices for all, which would disproportionately benefit the rich, the government gave a voucher ticket for a small fixed amount of fertilizer and seed per household, thereby disproportionately benefiting the poor.”
Despite donor resistance to the idea, who had prohibited subsidies, the plan worked in Malawi.
“Malawi used its own paltry budget revenues to introduce a tiny subsidy program for the world’s poorest people, and lo and behold, production doubled within one harvest season. Malawi began to produce enough grain for itself year after year, and even became a food donor when famine struck the region. Life expectancy began to rise, and is estimated to be around 55 years for the period 2010-15,” Sachs reports.
McConnell says that the best way to creating lasting change and alleviate poverty is a model where “the hero is the poor farmer”, one in which the Malawi model was successful and “pointed the way to a new Green Revolution for Africa” Sachs says.
A model where smallholder farmers hatch plans, partner with donors and gain access to the vital inputs they need to raise their productivity, diversify their production and escape from poverty is what he recommends.
Oxfam reports that there are today 30 countries who were pledged support by the 2009 G8 Summitt who have similar plans in place and are awaiting aid from donors.
“As much as private sector commitments are welcome, they are usually in the millions of dollars, rather than billions. There’s no substitute for public investment. If the G8 wants to stay on the trail, the new G8 food security initiative needs to scale up the G8’s public sector investments from $7 billion a year to $10 billion to show forward momentum. At a minimum, the modest funding commitments of L’Aquila should not be eroded,” MConnell says.
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