Funding Food Security - A Financial Lens on the L’Aquila G8

September 15, 2009

By Eric Lief - Among billed centerpieces of this year's G8 summit, world hunger is hardly a new topic for international political and policy focus. There has been an evolving consensus on substance and policy, and structural and programmatic impediments to progress have been widely documented.[1] What is new is the reality of a steady post-Cold-War decline in international agricultural development financing on the part of the G7, and implied agreement to close financing gaps, as evoked at L'Aquila:

"We will aim at substantially increasing aid to agriculture and food security including through multiyear resource commitments. In this respect, we welcome the commitments made by countries represented at L'Aquila towards a goal of mobilizing $20 billion over three years ..."

More than three decades ago, the 1974 World Food Conference "opened under the shadow of a world food crisis," and "set as its goal the eradication of hunger, food insecurity and malnutrition within a decade."[2] At the time, 35 per cent of the world's population - corresponding to just over 900 million people - was identified as undernourished. Twenty years later, world hunger was found to have declined, both in nominal and proportional terms, as follows: [3]

The drivers of these trends vary among regions and countries. Their drawbacks and contradictions notwithstanding, "Green Revolution" science and land use reform boosted gross production in parts of the developing world. At the same time, domestic subsidies among developed countries have fueled surplus food production, and thus concessional food exports, however unsustainable these may be.

The overall trajectory of progress against world hunger has since stalled, with serious deterioration in Africa embedded in the global equation. Current reports estimate a global undernourished population in excess of a billion people. International meetings on the problem have been not infrequent:

  • The 1996 World Food Summit set out an "immediate" goal of "reducing the number of undernourished people to half their present level no later than 2015."
  • Four years later, progress was negligible, and the Millennium Summit as a consequence endorsed the same goal.[4]
  • Last year's FAO High-Level Conference on World Food Security, U.N. General Assembly meeting on the global food crisis and Hokkaido G8 summit almost simultaneously evoked the issue of global financing shortfalls.

The weak track record of post-Cold-War agricultural development financing is clear, and difficult to reconcile with these repeated public attestations of the imperative to act. From a peak of $4.9 billion in 1988, bilateral agricultural development and related assistance funding on the part of the 22 member states of the Development Assistance Committee (DAC) of the OECD declined in nominal terms by almost 60 per cent to just over $2 billion in 2000. The partial recovery of recent years has been narrowly-led, as illustrated in the following table: [5]

Adjusted for inflation and exchange rate changes, current financing constitutes half or less of its 1988 value.

Against this backdrop, the L'Aquila statement on food security has been subjected to the usual process of post-G8 examination. Among other specifics, it has been noted that:

  • the leaders did not collectively "commit" to mobilizing $20 billion, only that they "welcomed" the commitment of some present who did so; and,
  • that the $20 billion was not specifically described as an "increase," in the way that the Gleneagles and Kananaskis commitments to Africa were described.

However esoteric the science of G8 language forensics may be, these points are likely symptomatic of what not to expect in the way of financing. For 2007, the latest year for which complete sector-specific data are available, G7 and DAC-supported agricultural development financing totaled $6.6 billion. A 3-year $20 billion increase would require additional annual funding averaging $6.7 billion, representing a (largely-unaccounted-for) doubling-plus. On the other hand, the US alone has budgeted just over $1 billion in bilateral 2009-10 increases, which alone would bring collective annual funding to a $20 billion total over three years.[6] The following chart represents these alternative scenarios:

While senior US officials have privately expressed the view that a doubling was intended at L'Aquila, neither the budgetary histories (represented previously) nor realities of the other G7 governments as yet come close to reflecting this. For 2009, G8 host Italy, for example, has enacted cuts to bilateral development assistance of 56 per cent, from €732 million to €321.8 million. The remainder of the G7 have thus far maintained or constrained previously-planned growth paths.

In the lead-up to still another World Food Summit (Rome, November 16-18, 2009), expectations regarding the financial impact of hunger summitry should be kept in perspective. Obviously, neither L'Aquila nor its predecessors represented mechanisms in any way structured to develop binding financial commitments akin to treaty assessments. Realization of each declaration of collective financial intent remains dependent on national budget processes and politics. The upside of building financial considerations seriously into summitry, whatever the issue focus, can be genuine international agreement on projected financial needs for later use in budgeting. Where these estimates are grounded in professional economic and financial research and modeling, their impact on national budget processes can be decisive. (The 2001 UN General Assembly declaration of commitment on HIV/AIDS leaps to mind.) Otherwise, each new financial target will be gauged for what it is: another symbolic output of a long series of meetings with - in this case -- world hunger a registered agenda item.

[1] e.g. "International Food Security," GAO-08-680.

[2] "Report of the World Food Conference," Rome, November 5-16, 1974.

[3] "Food, agriculture and food security." Technical Background document, World Food Summit, Rome, November 13-17, 1996.

[4] "The State of Food Insecurity in the World," FAO, Rome, 2005.

[5] Data extracted on 28 Aug 2009 17:11 UTC (GMT) from OECD.Stat.

[6] Department of State, Congressional Budget Justification for Foreign Operations, FY 2010, Table 4.

Eric Lief is a Senior Associate at the Stimson Center.