STATEMENT BY DEPUTY EXECUTIVE DIRECTOR OF THE WORLD FOOD PROGRAMME MR. JOHN POWELL

Transcription

1 STATEMENT BY DEPUTY EXECUTIVE DIRECTOR OF THE WORLD FOOD PROGRAMME MR. JOHN POWELL FOOD AID SEMINAR WORLD TRADE ORGANIZATION GENEVA, SWITZERLAND MAY 17, 2005

2 Let me take a few minutes to talk about the goals of the World Food Programme. Agencies like the World Bank and UNDP invest large sums of money in the infrastructure of developing countries to help bring them into the economic mainstream. WFP also seeks to invest in infrastructure -- the human infrastructure so crucial for development. We invest -- as you saw in this short film -- in nutrition. We strengthen the nutritional well being of the poor, particularly women and children, both during food crises and on an ongoing basis in chronically poor communities. Our overall regular budget in dollar terms now makes us the largest humanitarian agency in the world -- but sadly we and our NGO partners fall far short of meeting needs. Unfortunately, the bulk of what we do today percent -- could be described as "ambulance work". We scramble to react to crises -- the Indian Ocean tsunami, Darfur, Hurricane Mitch, North Korea. Yes, we focus on nutrition, but relatively more on an emergency basis. A rising tide of political and weather-related food crises has consumed the bulk of our resources and we have had less to address chronic hunger, despite that fact that 9 out of 10 deaths from malnutrition occur quietly far away from the cameras of CNN, BBC or TV5. That is a critical point -- the member states of the United Nations are failing to address chronic hunger adequately among the poor today. The last thing we want is a WTO agreement on agricultural trade that could inadvertently make the situation any worse. To understand the importance of food aid, you need to understand some of the basic statistics on hunger and I would highlight the following: -- hunger and malnutrition cause more deaths than AIDS, malaria and tuberculosis combined -- 25,000 a day, more than 10 million a year. Seven out of 10 of those deaths are among children. Those are not our numbers by the way, but WHO's. -- malnutrition is still the greatest threat to health worldwide with micronutrient deficiencies ranking number 8 (WHO 2002). It is really stunning that the world's biggest killer in 2005 is still what it was in Again, those are WHO's statistics, not ours. -- Finally, our colleagues at FAO estimate that chronic hunger has risen by 62 million from 790 million in the mid 1990s to 852 million today, despite very significant reductions in global poverty. At WFP we see the terrible impact of hunger and poverty close up and we could not be more supportive of the "pro-poor" approach you are taking in the Doha Round. A more open and fair world trading system can really help address both these problems. The elimination of agricultural subsidies that distort production and trade hold out great promise, especially for developing countries and, first among them, the nations of Africa. Disciplines on food aid can be helpful and we support the idea, but we must ensure they do not come at the expense of the hungry poor. The hungry need more than the assurances of help they received in the Marrakesh Agreement -- they need real help. Given recent history, a Doha Round Agreement on Agriculture that inadvertently undermines assistance to the needy would be both a moral and public relations disaster. 2

3 I will not go too much further into these statistics as I am sure you get the point. Something is very seriously wrong on the hunger front and we need WTO and its member state representatives to understand and to help. I am confident you have all heard about UN reforms and the repeated litany by member states that UN agencies must do a better job of coordinating their policies and activities. Well, if you will forgive me, that has to go for member states as well. All of your governments solemnly pledged to meet a series of Millennium Development Goals in The first of these MDGs is to cut the proportion of people suffering from poverty and hunger in half by Since then, there has been some remarkable progress with very substantial boosts in ODA by the European Union, the US and others. Japan continues to be extremely generous with its foreign aid. The latest estimates put total ODA at nearly $80 billion -- up dramatically from mid 1990s levels. But member states are allocating these funds in ways that are inconsistent with the goals they signed on to at the Millennium Summit in There is too little appreciation that cutting poverty does not necessarily reduce hunger as well. Food aid has plummeted from a high of 15 million metric tons in 1999 to 7.5 million last year. The drop in food aid from 2003 alone was over 25 percent and food aid as a percentage of global grain production was a mere 0.3 percent -- the lowest level in decades. At the same time, investment of ODA in agriculture and food security has dropped from 12 percent in the early 1980s to a mere 4 percent today. Like WTO, WFP has an Executive Board and representatives who rotate in and out. Over time, quite a few have cited an old saying about hunger: "Give a man a fish and he eats today, teach a man to fish and he will eat for a lifetime." A good point. Well, if you look at donor funding these days, not only are we not giving the hungry man his fish, we are not investing enough to teach him to fish either. And I rather suspect that some of the hungry are afraid the rich will soon be after their fishing rods as well. Obviously, you as WTO representatives cannot change donor funding patterns but you can be helpful in how you treat the question of disciplines on food aid. After what I have said, you may find it surprising that WFP strongly supports the idea of disciplines on food aid. In fact, we would like to see a firewall between commercial food transactions and food aid. Over the years, we have been called on to explain past food aid practices we had no role in designing or executing. We very much want food aid that meets genuine nutritional needs -- both chronic and in emergencies -- and does not substantially interfere in markets, domestic or international. Mr Morris outlined the kind of disciplines we support last week. In our view, they should serve two purposes -- to strengthen the nutritional impact of food aid for those who need it and to minimize any commercial distortion both internationally and on local markets. 1. First, food aid must be sufficient. That is very clearly not the case today. We feel developing countries should call on donors to meet -- at a minimum -- the level of food aid donated when the Doha Declaration was signed in November That was 3

4 almost 11 million metric tons. 1 Is that reasonable? Yes, in fact global food aid has averaged 11 million tons per year since What is important here for the poor is that we have a strong commitment to food aid and a minimum commitment of 11 million metric tons under the Food Aid Convention -- regardless of world market prices. The hungry poor need our help more in periods of high prices, not less. 2. Second, food aid should be carefully targeted based on food security assessments so it reaches the most vulnerable groups. Vulnerability Analysis and Mapping that helps us target our food aid effectively is a key element. We work with FAO to determine the levels of need and in recent years we have received welcome help from the EC, UK, Italy, Germany and the United States in sharpening these assessments. My colleague David Kaatrud will talk in more detail on this later on. 3. Third, food aid should be monitored both to ensure that it reaches the intended beneficiaries and that it does not have any negative impact either on local production or imports. It should also be monitored to see that it does not promote chronic dependence. You should know that just since 1992, we have graduated more than two dozen countries from food aid simply because they no longer needed it. These include: Bosnia, Botswana, Brazil, Comoros, Costa Rica, Croatia, Equatorial Guinea, Guyana, Jamaica, Kosovo, Lebanon, Mauritius, Mexico, Morocco, Panama, Paraguay, Philippines, Serbia & Montenegro, Thailand, Timor Leste, Togo, Tunisia, Turkey, Vietnam. How many aid agencies can make similar claims for the assistance they provide? Issues like tied versus untied food aid and donations of cash versus commodities are getting quite a good deal of attention. At WFP, we try to look at these questions through the eyes of our beneficiaries. Does a destitute family in Chad, North Korea or Sri Lanka care if the food they eat is tied or untied aid or where it was purchased? I have managed and visited dozens of WFP operations and I assure you no WFP beneficiaries ever ask. They care if the food arrives on time and regularly. It is also useful to remember that the OECD Development Assistance Committee specifically exempted food aid from its recommendations on tied aid. Does WFP prefer to receive cash for food aid? In most cases, definitely yes -- though some cash pledges have taken up to a year to appear as food on the tables of beneficiaries. But we know how to manage in-kind contributions to maximize their efficiency. We often borrow from government or other stocks while waiting the arrival of an in-kind shipment, allowing us to move as quickly with an in-kind donation as with most cash donations. Wherever we can, we make it a high priority to buy locally and regionally in developing countries. Last year, we spent US $550 million on food, non-food items and transport in Africa and US $1.3 billion in the developing world. Local and regional purchases are not always simple -- we do not want to drive up prices in areas where food is in short supply as happened in southern Africa during the 2002 drought. We are studying this issue carefully at the moment to improve our performance. 1 World Food Programme 2004 Annual Report, Rome, 2005, Annex 1, Global Food Aid Profile, p.48. 4

5 Few people realize this but a growing portion of food aid is now coming from developing and middle-income countries and WFP is very actively encouraging that phenomenon. Why? For two reasons: First, take a look at the global food aid tables. As you can easily see, the tonnage provided by many of our traditional major donors has dropped sharply. We need to diversify. Second, we believe all countries -- especially developing nations -- should play a role. Ending hunger must be a global commitment by all or it will fail. As it turns out, many of these new donations are made in kind -- Russia, Vietnam, Thailand, Kenya, South Africa, India, Malawi and Algeria. India, Kenya and Malawi are now in the ranks of WFP's top 25 donors. It is critical for us to keep up this momentum. WFP absolutely opposes any discipline that would discourage donations of commodities by these countries or by more traditional donors who give food aid in kind like Italy, France or the United States. Please note that we oppose disciplines that discourage donations of commodities, but we ourselves place quite a number of disciplines on in-kind donations ourselves. Most importantly, we require full cost recovery for such donations. We also target their use to emergencies or development operations approved by our Executive Board and monitor them to ensure we are not affecting markets. We almost never monetize food aid and our Board has restricted the practice, though we do swap commodities. Ninety percent of our development portfolio must be focused on LDCs and LIFDCs, So we are very much in favour of disciplines that clearly direct how commodity donations are used. All these disciplines still allow, for example, contributions like a 1 million metric ton pledge we have received from India. This multi-year pledge is allowing us to distribute biscuits in Afghan schools on a broad scale. One Afghan child in four dies before reaching the age of five and malnutrition rates are high. We are using school feeding to improve child nutrition and attract more children -- especially girls -- to school. Please remember that WFP s disciplines on food aid are your disciplines on food aid. They are multilateral and your governments created them and incorporated them in our General Regulations. They have the tremendous advantage of simultaneously focusing food aid on those in need and minimizing any commercial impact. Whatever disciplines on food aid come out of the Doha Round, WFP believes that they should be articulated and monitored by the Rome-based Food Agencies. WFP compiles data on global food aid -- government-to-government or programme food aid, emergency food aid, and project food aid by WFP and NGOs. FAO monitors trends in production and trade, so together we have the needed expertise to monitor food aid disciplines. We will need to do a lot of analytical work with you and our colleagues at FAO in the months ahead. I would like to raise a few points on that score I think you'll find interesting. Very few development or trade economists study food aid trends and those who do tend to focus heavily on prices -- in periods of low prices, there is more food aid and, therefore, they conclude this is in-kind dumping of commodities. But you would see similar spikes in food aid during periods of low prices even if all food aid were 5

6 provided in cash simply because the same amount of money would buy more commodities. Several major donors tend to have consistent funding levels that they allocate for food aid and these funding levels have a degree of inertia to them. So while there is an inverse correlation between food aid volumes and prices, the picture is really a good deal more complicated. There is another important factor at play that makes analysis of food aid very difficult -- namely politics. Funding for emergency operations in places like Kosovo, Afghanistan (in Taliban times), the CIS states, and North Korea takes place in a highly charged political context. There are countries for whom it is incredibly difficult to raise resources even though everyone accepts that there is widespread and severe hunger and malnutrition among their poor. Flows of both emergency food aid and government-to-government food aid are clearly affected by politics. A clean, straightforward economic analysis is not easy. WFP feels that the most workable solution for WTO is not to focus on the source of food aid -- cash versus in-kind, surplus versus non-surplus -- but on its use. The question then is: Is this food aid donation being used to address bona fide emergencies or to assist vulnerable groups with clearly defined food security problems? Is food aid to a rural community where half the children are chronically malnourished and suffering from micronutrient deficiencies commercial displacement? Obviously not. These children and their families are not real participants in the commercial market. Finally I would draw your attention to a few facts on targeting the poor. WFP's food aid is more heavily concentrated on the neediest than virtually any other type of international assistance. We have a genuine poverty focus. Some details on that are in the publication "Are We Reaching the Hungry" which we are distributing today. The statistics in this publication are from OECD and the UN Secretariat, and more data reflect the same pattern. Our goal is to work with you and learn to appreciate your trade concerns. In turn, we hope you will appreciate our desire to protect our beneficiaries. Our positions are not carved in stone and we hope to work successfully together in the months ahead. WFP believes we can construct a Win-Win situation if we work to raise commitments to global food aid at the same time we undertake disciplines. And the key to fair and effective disciplines lies in sound needs assessment, targeting and monitoring. 6