Aid agencies must pressure donors for cash, experts say

by Megan Rowling | @meganrowling | Thomson Reuters Foundation
Friday, 10 October 2008 14:33 GMT

Aid agencies must step up pressure on donors to keep their promises to tackle world hunger amid fears that global financial turmoil will sideline the food crisis, experts say.

In recent weeks, investors have lost confidence in banks, forcing governments to pledge hundreds of billions of dollars of taxpayers' money to stabilise their financial systems.

"There's no doubt there's going to be more pressure on politicians to deal with the problem in front of their eyes and the risk is that something like the global hunger problem will slip down the agenda," warned Tom Arnold, chief executive of Concern Worldwide, a Dublin-based aid agency.

Arnold said it was more important than ever to tackle hunger because a global economic slowdown would compound the effects of the jump in food and fuel prices since early 2006.

"We're going to be caught in a pincer movement of greatly increased need of the very poorest people at the same time perhaps as a squeeze on the resources to deal with them," he said, adding that donations from governments and individuals would be likely to come under pressure.

Concern is hosting an international conference to highlight ways of addressing hunger on World Food Day, October 16, in Dublin.

Experts say that the huge sums being raised to shore up banks around the world beg the thorny question of why aid agencies often struggle to raise much smaller amounts to feed the world's 925 million hungry.

"The world has shown that there's a lot of money on the table," said Nancy E. Roman, director of communications and public policy strategy at the U.N. World Food Programme. "It's very difficult then to say that you, WFP, feeding the hungry people, aren't going to get the $2 billion you need to fund the balance of your work this year."

Earlier this year, as global food prices soared to record highs, the U.N. food agency doubled its 2008 funding requirements to $6 billion. So far it has raised just over $4 billion, Roman said.

"The $700 billion that the U.S. has devoted to the financial crisis would fund our work for more than 100 years," she said. "I think it would be a tragic mistake if we allowed a financial crisis to become an excuse for not funding critical hunger needs worldwide."

Roman said the unstable financial climate meant WFP had a responsibility to articulate why feeding hungry people matters. "And it does matter, because hungry people are angry people, and they often move and migrate, and migration of course can create situations where civil unrest is more likely," she said.

Disturbances over high food prices broke out in several poor countries, mainly in Africa, in early 2008, with riots bringing down Haiti's government in April.

One potentially positive impact of the turmoil on financial markets is that it has dragged food commodity prices lower.

The U.N. Food and Agriculture Organisation (FAO) food price index hit a record high in June, before declining to a seven-month low in August, as international prices of cereals, vegetable oils and dairy products dropped sharply.

WFP's Roman said lower prices would help the agency reach more people, but would take a while to filter through to the markets where WFP buys its food aid supplies.

She added that even if food prices did ease, they would likely remain relatively high due to structural factors like increased consumption among the middle classes in developing countries, limited farm land and population growth.

Increased use of food crops like maize to make biofuels and rock-bottom world food stocks have also boosted prices in recent years.

According to Christopher Delgado, agricultural policy advisor at the World Bank, the main problem for poor people is rapid changes in food prices, which have become increasingly linked to fluctuating fuel prices.

"The underlying problem is price volatility," he said. "The fact that prices go down in the short term almost adds to the problem because instead of those things that could sustainably deal with the crisis occuring, the fact that prices go down will be a disincentive for certain kinds of investment."

Analysts say high prices could help the world food situation if they encouraged farmers to grow more crops. But as fertilisers and seeds have also become more expensive, few small farmers in poor nations have been able to profit by ramping up production.

Joachim von Braun, director general of the Washington-based International Food Policy Research Institute, said the global credit crunch would curb the amount of money available for long-term investment in agriculture, such as irrigation and developing new seed varieties.

He urged political leaders not to delay in tackling climate change - which is expected to lead to lower crop yields - or the longstanding neglect of agricultural science and technology. "We have to get our act together on these two factors otherwise we are programming for disaster in the middle of the century," he warned.

Jeffrey Sachs, a prominent development economist and special adviser to the U.N. secretary-general, told AlertNet that investing in farming in poor nations could help beat tough economic times.

"During the boom years, very little attention was given to the poor so maybe during the harder years, there will be more recognition that markets by themselves don't solve all of these problems, that if our bankers need help, maybe the world's poorest people need help," he said.

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