The Financing for Development Conference in Monterrey in 2002 marked a major turning point in international financial cooperation.  The Monterrey Consensus represented a challenging but realistic agreement: developing countries agreed to undertake reforms to strengthen their policy and institutional approaches to achieve the Millennium Development Goals (MDGs); while the developed countries pledged both to support these efforts through increased Official Development Assistance (ODA) and debt relief, and to achieve the objectives of the Doha Development Round.

In the six years since Monterrey, much has been achieved: many developing countries have carried out far-reaching domestic reforms and their economic performance reflects the benefits of these reforms.  Developed countries have pledged to increase ODA – indeed, to double ODA to Africa, and have provided significant debt relief.   

But while pledges have been forthcoming, actual delivery has lagged behind.  This is threatening progress on the MDGs, in particular the first MDG, to cut poverty and hunger in half.  And major new challenges have emerged.

Climate change poses a growing challenge to the coping capacity of the most vulnerable people and nations.  Climate change has been recognised as a serious threat to the well-being of all countries, but particularly for the most vulnerable countries and peoples.  Climate change threatens to reduce agriculture yields in many parts of the developing world and erratic weather patterns are straining the resilience of poor farmers.

Over the past twelve months the global food crisis erupted, with the prices of some major food crops doubling. While global grain market prices have fallen from recent peaks, they remain 13 per cent higher than the average last year and 83 per cent higher than in 2005.  This has created enormous personal hardship for millions of individuals as well as social and political instability.  Indeed, the crisis has thrust at least 75 million more men and women into chronic hunger, raising the total number of those hungry to 923 million in 2007, and probably more as the food crisis has been accompanied by a fuel crisis and followed by a financial crisis in 2008.  As a result of high food prices, the proportion of hungry people in the world has increased, reversing a 30-year downward trend.  

The economic cost of hunger and malnutrition is very high.  Almost one billion people suffer from under-nourishment and about two billion people suffer from micro-nutrient deficiencies.  Children under two years of age face lifelong consequences in terms of health, education and productivity if they do not receive sufficient nutritious food. Studies from Latin America show GDP losses at over six per cent.  Yet investment in nutrition has significant benefit-cost ratios. 

In recent months, the financial crisis and the consequent economic downturn have created another threat to developing countries.  Weakening export markets due to recession, declining prices of agricultural commodities, reductions in direct foreign investment and remittances, all threaten to undermine the hard won gains in reducing poverty and hunger achieved in recent years.

The cumulative effect of these crises poses a serious threat to global economic growth.  But it is the poor people in developing countries, who are least responsible for today’s crises, who are in fact the most vulnerable to the impact and whose coping capacities and livelihoods are already seriously undermined. 

The Comprehensive Framework for Action (CFA) elaborated by the High Level Task Food on the Global Food Crisis, which was convened by the UN Secretary General earlier this year, has provided a road map in terms of the actions required.  It emphasizes a twin-track approach that acts simultaneously to address immediate hunger and malnutrition and to promote longer-term food production and productivity.   

The first track is to provide immediate support to protect the poorest and most vulnerable members of our global society from falling deeper into hunger and malnutrition.  Among them, women and women-headed households, children and other vulnerable groups must have their basic needs, especially their food and nutritional needs, addressed on an urgent basis. Food and nutritional assistance and other social protection measures, such as school feeding, mother/child nutrition, food for work, cash and voucher transfers and other targeted schemes, are critical, because they mitigate the impact of today’s crises on vulnerable households.  They act as a social stabiliser, smoothing out fluctuations in income and consumption, and they contribute to long-term growth and development.  The CFA urges a doubling of ODA for food assistance and other types of nutritional support and safety nets.    

The second track is to raise food production and productivity – especially by smallholder farmers.  Agricultural productivity, which has fallen from an annual growth rate of between three and four per cent during the 1970s and 1980s, to between one and two per cent today, must be restored.  With the world’s population projected to reach nine billion people by 2050, food production must double between now and then if the world is to be able to feed these growing numbers.  To achieve this, agricultural productivity must rise significantly.  As a first step, the negative effects of high agricultural input costs have to be addressed through programmes to enhance their access by smallholder farmers.

The CFA recognises that greater investment in agriculture and rural development, underpinned by expanded agricultural research, is necessary to achieving longer-term and sustainable food security, and ultimately economic growth and development.  Agriculture, including livestock, fisheries and forestry, has a proven track record for economic growth, poverty reduction and development.  The CFA has estimated that ODA for food and agricultural development needs to increase from the current level of three percent to ten per cent within five years, in order to raise agricultural production and productivity, especially of the world’s 450 million smallholder farmers.  If these smallholder farmers get the support they need, they have the potential to produce more food for themselves and their families, and to make an even greater contribution to global food security and to the achievement of the MDGs.  

In the face of today’s crises, the three Rome-based agencies, FAO, IFAD and WFP, are working together to address growing hunger, malnutrition and poverty, by providing humanitarian food and nutrition assistance and safety net support and by promoting agricultural and rural development in many of the most affected nations.

But more is needed. 

WFP’s annual requirements for food assistance programs have increased by almost US$3 billion to approximately US$6 billion in 2008 as a result of the global food crisis and growing immediate hunger and humanitarian needs. To meet acute hunger and humanitarian needs, WFP urgently requires close to US$3 billion in new contributions over the next six months.

The FAO Initiative on Soaring Food Prices has called for US$1.7 billion in funding to provide low-income food-deficit countries with seeds, inputs and services to boost production over the next 18 months to meet the immediate needs of vulnerable populations and increase food supply.  Additional funding will be needed to address the longer term needs for sustained growth of smallholder food supply.

IFAD is seeking additional funding to top-up the US$200 million it had already identified to respond to the needs of the 2008-09 cropping season. For the longer term – 2010-2012 – IFAD is seeking up to US$1.5 billion in the context of the 8th Replenishment of IFAD’s resources to finance a programme delivery of US$3.3 billion.  The 8th Replenishment is presently under negotiation.  The outcome of those discussions will set the course for IFAD in the run-up to 2015. 

The necessary incremental funding for food assistance, social protection, agricultural development, as well as budget and balance of payment support is estimated at between US$25 to 40 billion per annum to maintain progress towards achievement of MDG1. Approximately one-third of such an amount would be needed to finance immediate requirements in terms of food assistance, agricultural inputs and budgetary and balance of payments support, and two-thirds to invest in building longer-term resilience and contributing to food and nutritional security.

In order to overcome today’s crises, collaboration and cooperation is essential.  Developed and developing countries alike need to ensure that their respective contributions reinforce the welfare of all.  We must remember that, while the crisis for some may be the loss of luxuries, for others it may mean hunger, malnutrition and the consequences of desperate poverty.  Underpinning the reforms and other measures, to which all parties have already committed, must be the conviction that achieving the MDGs and other international goals is the essential foundation on which to build a world of peace, security and stability.

28 November - 2 December 2008, Doha, Qatar