Nothing may come of the new promises, as nothing came of the big hoo-ha at the G8 summit four years ago when a massive increase in aid, especially to Africa, was agreed. But if these promises were to be honoured, this will be just what the poorer countries need.
Most of the world’s poor live in the rural backwaters of Africa, Asia and Latin America. Most of them are small farmers or landless farm workers. Despite the cries in 2007 when the world food price suddenly shot up to historical highs it actually benefited these people. It was a long overdue correction in the terms of trade, whereby the urban minority of the world, whether they be shanty town dwellers in Nigeria’s Lagos or the inhabitants of middle class suburb in Mumbai, have long been subsidised by the cheap food produced by the poorest of the poor- those left behind in the remote reaches of the countryside. Moreover, little investment reaches them—there are too few schools, agricultural advisers or health clinics and only rutted roads and battered trucks to link their produce to the market place. (Although the amazing penetration of the mobile phone in recent years has done much to link some of them to the market place.)
I was in the countryside in Nigeria at the time when prices were going up. The peasants I talked to, growing the local staple, cassava, were happy about this. It meant they could sell their produce at a substantially higher price than before. They planned to expand their planting the next year. Indeed, that was done all over and prices have now fallen, as one would suspect. Fortunately for them, they have not yet returned to the low levels they had been before.
One UN agency should be credited for seeing the 2007-08 price hike clearly, standing out from the cacophony of voices of despair. The International Fund for Agricultural Development‘s remit has always been the small farmer. I’ve seen with my own eyes the good they have done—from helping the Grameen bank of Bangladesh get going thirty years ago or El Salvador’s farmers’ programmes. A senior official, Shantanu Mathur, told me, in the middle of the food price hike, his organisation “feels much happier than when food prices are going down.”
Mathur singled out two opportunities in particular, where more aid and agricultural expertise could help a lot. The first is the niche market of organic produce. An increasing number of third world farmers are already being trained to take advantage of this. “It is very responsive to prices”, he says. The second is the much critisised bio fuels. Mathur punctures another myth. Bio fuels don’t have to be a trade off between food and fuel. It is the stalks that make the fuel. The grain on the plant can be used for food.”
History repeats itself. The last time there was a massive jump in food prices was 1974. The US Secretary of State, Henry Kissinger, called for a World Food Conference. The conference with Kissinger in attendance was held in Rome and declared that “within a decade no child will go to bed hungry, no family will fear for its next day’s bread and no human being’s future and capacities will be stunted by malnutrition.”
Robert McNamara, President John F Kennedy’s former secretary of defence, was then head of the World Bank and decided that the bank’s main focus would be on rural development. For a while much was done. But now 30 years later the Bank has confessed that its financing for agricultural development has fallen from 30 per cemt of its total lending to 10 per cent today. The proportion of western aid targeted at the agricultural sector has fallen from 17 per cemt to less than 4 per cent.
What happened in 1974? The market responded to the high prices- farmers all over the world planted more. But something else happened. Rural incomes improved. The number of hungry fell—in some countries such as China, India and many parts of Africa, quite dramatically.
With a renewed emphasis on rural development—to be promised by the G8—this progress could be accelerated. As would further sales of mobile phones as farmers spend part of their higher incomes on the products of the G8!
