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Fighting climate change for the sake of the poor

Author : Rajendra Kumar Pachauri

Over the last 18 months or so there has been a major surge in the spread of public understanding on the subject of climate change, particularly in respect of human actions being a cause for changes in the earth’s climate system. However, this increase in awareness has not yet translated into action at the global level to bring about a reduction in the emissions of greenhouse gases (GHGs), the increased concentration of which has now increasingly affected the earth’s climate. The impacts of climate change are particularly harmful for some of the poorest societies on earth.

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The Right Solutions at the Right Time

Author : Josette Sheeran

Although the United Nations always has crises to solve, delegates at this year’s UN General Assembly (UNGA) in New York seemed to have an exceptional number on their plates. With America’s financial turmoil creating a bleak backdrop, the gathering seemed to hum with palpable angst about the future. One world leader after another strode to the podium to tell how high food and fuel prices were devastating the poor in their countries – and threatening to reverse economic growth and the significant gains we have made in fighting poverty. UN Secretary-General Ban Ki-moon warned

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Food for the Hungry: the case for buying locally

Author : Josette Sheeran

Last month, I spoke to a group of British parliamentarians who sit on something called the International Development Committee. Their role is to scrutinise the work of the Department for International Development. ”DFID” – as it is known - is the arm of the British government concerned with promoting development, supporting the alleviation of poverty across the globe, and funding multilateral organisations like the UN World Food Programme.Members of the International Development Committee asked me to travel to London to speak to them as part of their inquiry into the work of the World Food Programme (WFP) and the support it receives from DFID. As part of the inquiry, an open invitation was issued to any organisation or individual with an interest in global food security to contribute written evidence.

It was an opportunity for organisations like Oxfam, who work with WFP, and others who have an opinion about the way we do our work, to express their opinion, and to influence the line of inquiry. Reading the input from these organisations and individuals is a bit like discovering the comments of your teachers after the headmaster has asked them to contribute to your end of term report.

What has been really interesting, is that a lot of the inputs are encouraging, recommending and cajoling WFP into doing more of something that is already very much part of the fabric of our work: the local procurement of food for the hungry.

It is always comforting to hear independent voices recommend something that is so central to WFP’s policy, and in promoting local procurement in developing countries, I think we have been ahead of the curve. Where I would admit we may have been slower – until more recently – is in promoting the extent of WFP’s involvement in local procurement, the fact that we have been doing it for decades, and explaining the reasons why we think it is so important.

As a major player on global food markets, WFP has been in the business of buying basic food commodities from one source or another for pretty much the past forty years. One of our guiding principles is to get the best price for the food we buy, so we can stretch the precious money we receive off donor governments and use it in the most efficient way to feed the world’s hungry.

The experts who run WFP’s food procurement unit realised fairly early on that there were obvious advantages if food could be purchased close to where it is going to be used. Food that is sold by small farmers in regions like sub-Saharan Africa, might not be as cheap as that which you find in the sophisticated North American and European markets, but if you buy locally, you can cut down dramatically on the costs of transport and storage.

More importantly, these savings are among a number of positive advantages that come with local procurement. Foremost among these is the opportunity to use WFP’s local procurement policy as a way of investing in the sometimes fragile agricultural economies of the developing world.

With our “purchasing power” we can make a real difference. In 2007 that meant ploughing US$612 million into developing countries where we purchased more than 1.6 million tonnes of food from small farmers. To put this in perspective, by virtue of our local procurement policy, WFP put more money into
Africa in 2007 than the World Bank.

The question we are now asking ourselves is how we can use this big “purchasing footprint” - that stretches from Uganda and Ethiopia to Pakistan, Colombia and beyond – to support small farmers in a way that helps their business grow and contributes to the evolving economies of the developing countries where they live.

Our first step has been to set up a “Purchase for Progress” unit at WFP headquarters in Rome, which is launching a set of pilot activities – primarily in Africa – to explore how we can take this exciting concept further. We want to work with a broad range of partners, including governments, UN agencies, non-governmental organisations, farmers, traders and research institutions to see how we can use WFP’s purchasing power to sustainably develop the agricultural sector.

With the escalation in global food and fuel prices, and the tremendous impact this is having on the hungry in the developing world, this initiative really could not have come at a more vital time. Now is the moment when we can really benefit from a local procurement policy that cuts down on transportation costs and helps to connect farmers in the most vulnerable communities to markets.

The timing of the International Development Committee’s inquiry into WFP’s work coincided with this extraordinary era of high food commodity prices, and gave us a welcome platform to explain not just the role that local procurement can play in helping us to reach our goals, but also the other factors that are making WFP’s mission yet more challenging.

But for everything that local procurement offers, we have to remain realistic that the capacity among the agricultural economies of the developing world is not yet sufficient to support the needs of an agency like WFP which aims to feed more than 70 million people this year. We will continue to focus efforts on using our funding wisely to support small farmers wherever we can and to help them improve their crop yields.

For now though, we have to accept that even in the ideal situation where WFP receives its full budget in untied cash, we would still have to purchase some of our food from markets in North America, Europe and the industrialised economies of Asia.

These are challenging times for the world’s hungry and for the agencies that have been set up to help them. If we are going to protect them we will need to confront these challenges with a variety of tools. Local procurement is one powerful tool among the many we need to use.

Microfinance, micro-impacts?

Author : Jean-Michel Severino

poti__re_de_m__re_en_fille_DIERICKX_Philippe_AFD_droits_c__d__s.jpgThese few lines came to my mind after one of our Board of Directors’ meetings devoted, among other things, to a new participation in an important microfinance institution in Morocco - a country famous for its involvement in the sector. I have, for a long time, been an avid supporter of microfinance. And I am particularly proud of the important increase in the amount of investments made in this sector by my organization, AFD, over the past 20 years: through 60 projects and nearly 300 million euros invested, we have helped more than 1.5 million people make their way out of poverty. We now want to go further, encouraged in this by GCAP’s very positive evaluation of our involvement. I see microfinance as a powerful tool against exclusion; it allows people who have been traditionally excluded from the financial systems to have access to credit. Great tribute must be paid to the pioneers of this revolutionary approach.

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Agriculture and energy in Africa

Author : Jean-Michel Severino

GUINEE_d__cortiqueuses_du_riz_de_mangrove_CAVALIER_Mathilde_AFD.jpgHaving just returned from Senegal, I want to share my thoughts with you on an issue that became strikingly clear to me: the favorable perspectives shaping up for Africa’s agriculture and their complex implications for future energy choices.

While traveling through the irrigated rice production area in the Senegal River Valley, you could see the new opportunities that rising world prices of agricultural commodities could bring to African agriculture. The changes in Senegal are down right impressive. To be sure, the dramatic upturn in world prices is spawning many challenges for net importers of agricultural commodities and for the World Food Program, as Josette Sheeran so emphatically points out in this blog. In addition, it is creating a fair amount of social and political tension in some urban areas. In order to be beneficial for all, this price surge must therefore incite cities to become better suppliers and service providers to their rural peripheries, so that cities also reap the benefits of improving conditions in rural areas. (I will come back to this fundamental relationship in another column.)
I am convinced that if managed intelligently, the rise in world prices can offer real long term opportunity for Africa’s economic development. The prices for African products are once again attractive, and this is opening up new commercial opportunities for both food and export crops. The Senegalese farmers I encountered are starting to invest again, a sure sign of better days to come.

All bets point to a trend of rising agriculture prices that will continue through the coming years. Of course there is an element of speculative buying at present price levels. Current market volatility makes corrections not unlikely, and is a surefire guarantee of short-term price fluctuations, which could prove a bit dicey. But several structural factors (rising demand for agro-fuels, world-wide demographic growth, increasingly meat-based diets, and climate imbalances) indicate that the trend will continue, and this will significantly raise the returns on investments. African agriculture, which has enormous potential, could greatly benefit from this trend in both the short- and mid-term.

The Senegal River Valley offers a perfect example of an agricultural zone where margins of productivity are still quite wide. Irrigated areas could be expanded even further, given abundant water resources, improving technical capacities of traditional farmers, and a rapidly modernizing agro-industry (the latest irrigation technologies, increasingly productive tools). With major investments in infrastructure, Senegal has the capacity to create near perfect conditions for developing a highly competitive agricultural sector in the Valley. Current price trends combined with expanded irrigation capacities, in a country where the agricultural sector already accounts for 18% of the economy, could translate into a highly stabilizing dynamic for the national economy. The same could also be said for other regions, such as Mali, where irrigated agriculture in the Office du Niger zone still offers considerable potential.

But the indispensable expansion of agricultural production in Africa makes the energy capacity a growing problem. Indeed, any modernization in production methods presupposes sustainable access to energy. It is needed for pumping water, exporting food-stuffs, and ensuring effective cold chain facilities for storing and distributing perishable goods. This question made more pressing by the energy crisis currently sweeping the continent. In recent years, this crisis has shaved economic growth for West African countries by 1 - 1.5 percentage points. Senegal’s electricity sector is particularly affected where, even as I write, supply is still falling short of the 8% to 10% annual increase in demand. As for local farmers, they fear that rising energy prices will offset the benefits of rising agriculture prices.

This raises a touchy issue: the choices nations must make in terms of their energy policy. In fact, the current reality of high global energy prices could be the incentive for many African countries to turn to new energy sources. The most rational choice would obviously be to start immediately promoting the development of renewable energy (wind, solar, biomass, hydroelectricity), whether it be for reasons of environmental protection, energy independence, mid-term price competiveness, or the logic of preserving exhaustible resources. But this raises the dilemma of “unfair competition” from fossil fuels, which are lower cost investments and have the advantage of being immediately available, and often are largely subsidized.

This brings us to the fundamental question: Can Africa wait for clean energy given that current trends are offering immediate opportunities for economic growth? Does this question not pit long-term environmental logic against short-term growth logic? In light of our own past energy choices in the developed world, can we legitimately tell Africans that they should not acquire polluting power plants, even if necessary for responding to their pressing energy needs? Do they really the choice of going either for equipment that is readily available and still rather inexpensive or energy options that are wiser in the long-term (including for economic growth) but that are currently very costly and technically more complicated to set up?

While we should not wait any longer to promote renewable energy sources, their effective implementation corresponds to a long-term objective. And it’s quite obvious that developing countries will be unable to handle the entire technical, financial and operational burden on their own. This is why we must offer long-term help by extending financial and technical support to both public and private players. The experience of developed countries could be effectively transferred gradually with the goal of anticipating future needs. But given the scope of immediate global food needs and the commercial opportunities that are available now, we simply can not deny Africa a right to economic growth. An approach that balances short-term economic opportunities and promotes emerging environmental standards seems therefore to be the smartest choice.

Senegal’s electricity sector reforms offer a good example of such an approach. This ambitious project, supported by AFD, consists of a sector recovery plan (2007-2012) based on financial and institutional restructuring. It promotes bolstering electricity output and seeking new investments, as well as a policy that discourages waste and encourages energy efficiency. In addition, the reforms are coupled with a political will to develop renewable energy sources in Senegal, a country where 80% of energy output is currently thermal. Three massive regional hydroelectric projects also are going to be implemented, and several production units devoted to solar and wind energy will be created.

If effectively managed, these reforms will enable Senegal to sidestep the unfortunate position of having to choose between economic growth and environmental concerns.

JMS

Hunger in the 21st century: the need to “feed smarter”

Author : Josette Sheeran

For those of us who work in the humanitarian world, the dawn of the twenty-first century has dealt us a difficult hand. As the expert practitioners in the game of preparing and planning for sudden, unpredictable events, we at the World Food Programme, the world’s largest humanitarian agency, have become the recognised experts in emergency response.

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