FAO/IFAD/WFP Call Upon G20 to Redouble Efforts to Fight Hunger
Mexico- June 19, 2012
The UN food agencies based in Rome have expressed the wish that G20 leaders meeting in Mexico redouble their efforts to fight hunger. The UN Food and Agriculture Organization (FAO), the International Fund for Agricultural Development (IFAD) and the World Food Programme (WFP) have issued the following statement on the occasion of the G20 Summit in Mexico:
FAO-IFAD-WFP - Joint Statement at the outset of the G20 Summit:
1. We, the United Nations food and agriculture agencies - FAO, IFAD and WFP - welcome the priority given to food and nutrition security by the Mexican Presidency of the G20, keeping it at the forefront of the global development agenda in line with the Seoul Multi-Year Action Plan, building on G20 efforts under previous presidencies, and complementing actions taken within the G8 this year and since the L'Aquila summit.
2. We welcome the continuing recognition by the G20 of the pivotal role of smallholder agriculture to global food security and to boosting productivity in a sustainable manner. And we urge for food and nutrition security to remain prominent on the G20 agenda in the coming years.
3. Food and nutrition security is a common thread linking the diverse elements needed to build a peaceful, stable and sustainable future. Food and nutrition security must be at the center of the sustainable development agenda. This is a message that the United Nations food and agriculture agencies are jointly taking to Rio+20, with particular focus on smallholder agriculture.
4. Food security is closely linked to other issues on the agenda of G20- such as infrastructure development and restoring growth in countries in crisis. In the past few years we have seen how food insecurity can trigger instability and crisis, and the major toll that the latter can take on food security in return. We now know that food insecurity can have a long-lasting negative impact on the growth prospects of entire societies. This suggests that attention to food security needs to be maintained-perhaps especially so - in times of financial crisis and uncertainty.
5. Another lesson from recent crises, such as that affecting the Horn of Africa, is that we need to move away from a dichotomy between humanitarian and development assistance. We are already working in that direction.
6. Linking targeted social safety nets, cash transfers and cash for work programs with support to small-scale farmers is one example of how to promote win-win approaches that help build the social fabric and virtuous cycles of local development. By leveraging local food procurement and public-private partnerships through programmes such as the Purchase for Progress (P4P) initiative, hundreds of thousands of small farmers can connect to markets. Initiatives such as Purchase from Africa to Africans (PAA) can successfully link small-scale production to social programmes.
7. Only through sustained efforts and the integration and realigning of emergency, relief and development programmes will we enable communities to build resilience to recurring climatic shocks. We see boosting resilience as part of sustainable development, not limited to shock-prone areas. This speaks to a range of issues on the G20 agenda, including social protection, financial inclusion, and more sustainable agriculture and food systems. To that end, we call on the G20 to support the African Risk Capacity, a regional risk pooling facility for drought management led by the African Union.
8. Productivity growth - notably in smallholder agriculture - is a key component of more resilient and sustainable food systems. Also important, however, is reducing food losses and waste - currently close to1.3 billion tonnes, or more than one-third of food we produce. Reducing this wastage and loss could make a serious dent in the global number of undernourished people, while reducing pressure on natural resources such as land, water and biodiversity.
9. Today, around 900 million women and men are undernourished. Most are in Asia and in Africa. In the face of this dramatic reality, we express the wish that G20 leaders redouble their efforts to fight hunger. We are fully committed to working with them and others to support nationally and regionally-led efforts in achieving food and nutrition security for all women, men and children, in line with the Five Rome Principles. Given the higher prevalence of undernourishment in rural areas, the latter will often need particular attention.
10. Efforts to boost agricultural productivity, services, infrastructure and markets are most needed at the local, national and regional levels. Across the developing world, special focus is needed on building the capacity of 500 million small farmers to invest in producing more and better food, through sustainable practices and appropriate technologies, so they can better feed themselves and their societies.
At the policy level this requires keeping the goals of productivity growth and of sustainability together, putting in place enabling conditions and supportive investments for smallholders - women and men - to operate at their full potential.
11. Last year, the United Nations food and agriculture agencies contributed to an international organizations' report to the G20 recommending policy responses to food price volatility. This report has led to a number of initiatives undertaken with G20 sponsorship - such as the Agricultural Market Information System, the Rapid Response Forum, the Tropical Agriculture Platform, and others. Other initiatives, like the Platform for Agriculture Risk Management, are still evolving. Export restrictions are being removed for WFP's humanitarian food purchases.
12. The first recommendation in last year's report was to boost sustainable and resilient productivity growth in agriculture, especially in smallholder agriculture. This year's international organizations' report focuses on this topic. It recommends greater investment and better coordination in research and development, innovation systems and advisory services. More importantly it calls for more help to producers to adopt and benefit from existing technology. It also recommends developing smallholder-inclusive business models and undertaking policy reforms and complementary public investments to incentivize and de-risk smallholder-inclusive private investment.
13. The report recognizes that enabling smallholders to fulfill their potential for sustainable productivity growth requires their integration into well-functioning markets on fair, efficient and sustainable terms. It thus recommends developing inclusive value chains, improving infrastructure, and strengthening market institutions so that they work better for farmers.
14. Worldwide, women are drivers of change. It is critical to invest in women. The empowerment, education and equality of women are fundamental to improved food security, sustainable development and economic growth.
15. And so is assuring that all smallholders have secure access to productive resources. In this regard, we welcome the continued support of the G20 to the Principles for Responsible Agricultural Investment. We express the wish that similar support will be given by the G20 to the country-level adoption and implementation of the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Forests and Fisheries in the Context of National Food Security, recently endorsed by the Committee of World Food Security after intense consultations and negotiations between governments, civil society and private sector.
16. Finally, building a sustainable future requires broad partnerships, supporting developing country governments in their leading role and mobilizing around that the commitment of international agencies, civil society, the private sector and the wider humanitarian and development community. Ensuring food and nutrition security also demands inclusive partnerships. This is something to which we are fully committed in our own work.
17. Under the Mexican presidency the G20 has made new and significant efforts to reach out to other stakeholders, whether in civil society, private sector (including the B20), or government. We welcome these efforts and we view them also as precious opportunities for new partnerships to emerge to pursue global food and nutrition security, including all key stakeholder groups, starting with farmers.
Tackle Non-Tariff Barriers, Urges U.S. Expert
Zambia - June 18, 2012
A United States (US) trade expert has urged African countries to fight off the non-tariff barriers which are the biggest hindrance to the growth of infra-Africa trade.
Deputy Assistant Secretary for Market Access and Compliance at US Department of Commerce and International Trade Administration John Anderson hailed African countries for removing tariffs on goods but complained that the biggest enemy remained the non-tariff barriers.
Speaking from Washington through a teleconference, Mr Anderson said various African countries had, through economic grouping removed tariffs of goods but kept several inland barriers which were pushing up their goods.
Mr Anderson said with tariffs removed, the only cost for countries like Zambia in taking goods abroad, should be transportation cost but unfortunately several African countries were encountering unnecessary red tape in moving certain goods in foreign countries.
"It is important that intra-Africa trade gets lifted but Africa is its own enemy. Economic groupings are very important and we have seen that tariffs which were pushing the cost of business high have been removed.
"But we have noted that non-tariff barriers are still rife- regulatory hurdles, road blocks, unnecessary red tape and other unplanned costs when taking goods to the port are among the several factors that are really harming the growth of intra-Africa trade," he said.
He said with Africa and the USA opting for preferential trading deal under the Africa Growth opportunity Act (AGOA), Africa needed to
work on the trade challenges to not just take advantage of the US market but the huge market that exists within the continent.
The USA population is almost 400 million while the economic grouping population for the East and Southern Africa (COMESA) has more than 400 million people but growth of trade has been hampered by among other things poor infrastructure in Africa.
The 11th AGOA conference was held last week in Washington at which the US Secretary of state Hillary Clinton pledged her Government's commitment to helping Africa's trade grow through among other things like improving infrastructure.
And Amy Holman, Director of Economics Policy Staff at the US Bureau of Africa Affairs said that Africa can pick a leaf from Europe on how it has handled the non-tariffs barriers in a bid to boost trade.
"We have seen Europe transform in to one trading place and that is what Africa needs to do. Africa though has infrastructure challenges and wit the expertise that we have, we shall see how we can help," she said.
Ultimately, Ms Holman said, the consumers should be the targeted recipients of the benefits of all policy matters aimed at improving trade.
Fund Aims to Put New Technology in Poor Farmers’ Hands
London - June 19, 2012
Five donor governments are backing a new scheme to use innovative technology to help poor African farmers boost food security, they announced at the G20 summit in Mexico on Monday.
The initiative is supported by Britain, Canada, the United States, Italy and Australia, as well as the World Bank and the Bill and Melinda Gates Foundation. The aim is to provide funding of up to $100 million to bring tried and tested products to a wider market by providing incentives for the private sector, including grain traders, cereal millers and food processing firms.
The first three pilot projects will develop, market and distribute improved crop storage in Kenya, help Zambian farmers grow maize varieties rich in vitamin A, and reduce contamination of maize crops in Nigeria by the aflatoxin fungus, a potent carcinogen.
"Far too many creative and successful products have failed to get into the hands of the farmers who need them most,” Britain’s International Development Minister Andrew Mitchell said in a press release issued in London.
“Many promising pieces of agricultural technology have the potential to transform farming, but a lack of investment or a market for their goods prevents them from getting off the drawing board,” he added.
The World Bank said the “AgResults” initiative will use so-called “pull mechanisms” to encourage innovation through results-based payments such as prizes which are typically paid out when certain objectives or milestones are met.
The idea grew from a commitment by leaders at the June 2010 G20 Summit in Toronto to explore ways of harnessing private-sector innovations in food security and agricultural development in poorer countries, it noted.
Britain’s Department for International Development said similar financing has already made the production and supply of new life-saving vaccines much cheaper in developing countries.
“Building demand for new products and providing incentives to help get them to market will give farmers the tools they need to grow more healthy and sustainable crops," Mitchell said.
Additional pilot projects will be explored in the coming years, which could involve livestock vaccines and fertilisers, as well as new ideas to boost crop yields, decrease post-harvest losses, raise livestock productivity and improve nutrition, according to the World Bank.
Kate Dooley, policy spokesperson for Save the Children UK, said the fund would play an important role in identifying new channels for boosting agricultural production in developing countries.
"With malnutrition responsible for nearly 3 million child deaths each year, it is particularly encouraging that the initiative includes a pilot focused on biofortification - enhancing the nutritional value of crops,” she said.
“But ensuring children thrive beyond the fragile first 1,000 days of life requires a broader package of direct and indirect nutrition interventions."
On Tuesday, the U.N. Food and Agriculture Organization (FAO), the International Fund for Agricultural Development (IFAD) and the World Food Programme (WFP) issued a statement calling on G20 leaders meeting in Mexico to redouble their efforts to fight hunger.
They said food and nutrition security must be at the centre of the sustainable development agenda, with a particular focus on smallholder agriculture - a message they are taking jointly to the Rio+20 conference on sustainable development in Brazil this week.
“In the past few years we have seen how food insecurity can trigger instability and crisis, and the major toll that the latter can take on food security in return,” they said.
“We now know that food insecurity can have a long-lasting negative impact on the growth prospects of entire societies. This suggests that attention to food security needs to be maintained - perhaps especially so - in times of financial crisis and uncertainty.”
China Strengthens Grip On Africa
Windhoek, Namibia - June 18, 2012
The upcoming political transition in China will not result in a change in Beijing's Africa policy, according to Dr Martyn Davies of Frontier Advisory, a leading research, capital advisory firm that specialises in emerging markets.
Davies says there is a growing dependency factor for African economies on China's fixed asset investment spending, which will only increase for mineral exporting countries.
"China's focus is on oil and solid minerals, with agribusiness to grow in importance in the short term," he told a business meeting recently.
He said in the medium term, African countries that align their development needs to China's strategic interest will succeed, while others will falter, adding that China is important to Africa in many ways. China is the single largest investor in Africa and is also the single largest financier for Africa.
"If people don't think China is important to Africa, they are probably aliens," opined Davies.
Davies further told the meeting that Western countries had been accusing China of currency fixing and unfair trade, but he explained that in the last three decades countries that developed rapidly such as Indonesia and Singapore did so through a well-monitored monetary policy.
According to him, the Chinese currency has been appreciating rapidly in the last five years, while China remains competitive.
"The Westerners call China neo-colonialist, I call China the new capitalist," he said.
He said China has established the world's largest manufacturing platform, hence China is moving from being the leading producer to the leading investor and leading consumer.
He said if Walmart were a country, it would be China's fifth largest market. His presentation showed that China is the only country that invests in African manufacturing, having set up manufacturing plants in countries like Ghana, Angola and the DRC.
Chinese investments are seen as a sinister move, but he maintained that the in the vast majority of China's huge transactions it is the Chinese that get "screwed" and not the locals.
Davies said the reason why China is the second largest economy in the world is because in China "the state is the entrepreneur" and there is an understanding between the state and the private sector. The state finances local companies operating abroad to make them competitive, Davies said.
"We live in a situation where there is low trust between the state and the private sector. Let us fix that first before we compete with the Chinese," Davies told the meeting.
He also said that government should invest in education and establish high quality training institutions to educate people. Davies was speaking at a breakfast session themed "China's Agenda for Africa: What does this mean for Namibia?" which was organized by the PricewaterhouseCoopers Business School in Windhoek.
Crucial Pledging Conference to Save Millions of Hungry Children and Families Across Sahel
West Africa - June 17, 2012
Donors attending Monday's pledging conference in Brussels must address a massive funding shortfall - over $900 million - on work needed to tackle the food crisis in the Sahel.
Over 18 million people are facing hunger across West Africa - some even selling the clothes off their back to pay for food. But aid agencies are warning that, with the hunger season approaching in West Africa, many lives are at stake if donors do not step up on Monday.
Jasmine Whitbread, CEO of Save the Children said: "Families need help urgently, their lives hanging dangerously in the balance as donors are moving far too slowly to respond. This crisis is fast becoming one of the hardest to fund in decades but this summit could be the turning point. We welcome the initiative and urge of world leaders to take quick, decisive action."
"The hunger season is starting now. Families cannot wait any longer for action; there are too many already being pushed over the brink. There is a massive funding gap in this response and the governments gathering today can make all the difference in helping meet these immediate needs and also, longer-term, in breaking the hunger cycle in the Sahel," said Oxfam Regional Policy Manager Steve Cockburn.
Representatives from European states will be attending Monday's summit, and ministers from several West African states affected by the crisis.
Aid agencies, including Save the Children, Oxfam, World Vision and Action Against Hunger (ACF) have been calling for a pledging conference for months desperate to plug funding shortfalls and to work up long-term solutions that build resilience to future droughts and food shortages. The UN has estimated that to fully meet the needs of the people, $1.5 billion is needed.
"We have seen drought and food crises come up time and time again in West Africa. The case is clear for longer-term investment that focuses on helping families build their resilience so that the next time a drought hits, even the most vulnerable communities will be in a better position and can keep from falling over the edge," explained Patricia Hoorelbeke, ACF Regional Representative for West Africa.
As well as stepping up to plug the immediate funding shortfall, agencies are keen to ensure that future harvests are protected from harm, ensuring that the crisis does not continue into a second year.
"Our world is changing - sadly, drought in sub-Saharan Africa is no longer a rare occurrence. We need to break the cycle where drought turns into massive hunger and puts the lives of children at risk. We can do this now by investing in the longer-term and working with world leaders and the communities themselves, to build their resilience," said World Vision's EU Representative Marius Wanders.
Path to the 2012 Farm Bill: Bill Hangs in Balance
Washington, DC - June 15, 2012
Consideration of the 2012 Farm Bill moved ahead this week but progress in the Senate was slower than agriculture committee leaders had previously expected. It is unclear whether and by which path the bill moves forward next week, and below we go into some of the options. There is a reasonable chance a deal for debating and voting on the bill will be reached very early next week, though it is by no means a certainty.
Options for Moving the Farm Bill Ahead in the Senate
The Senate does not yet have a deal for how to move forward on amendments. (In last week’s post, we explained why having a deal on amendments is a critical piece of the Senate farm bill puzzle.) Almost three hundred amendments have been filed, and Chairwoman Stabenow (D-MI), Ranking Member Roberts (R-KS), Majority Leader Reid (D-NV), and Minority Leader McConnell (R-KY) are trying to come up with a much shorter list of amendments that will be offered and voted on.
Option #1: Senate Reaches a Deal Next Week
If Senate leaders can come up with a list of amendments to debate, then debate on the bill can move forward. Chairwoman Stabenow has repeatedly said this week that she and Ranking Member Roberts are working with Senate Leadership to get a deal. The earliest that we expect a possible deal to be announced would be early next week, possibly late Monday, more likely on Tuesday. The deal would represent a compromise between Democratic and Republican leadership and agriculture committee leadership on the number of amendments and which amendments would be offered and voted on during the floor debate. If a deal is reached, it might be reasonable to expect a fairly continuous series of votes one right after the other on all the amendments approved for debate
Option #2: Holding Pattern Continues
If it seems like a deal on amendments can be reached, but it hasn’t been reached by early next week, then the Senate could continue in the holding pattern of this week, or it could move on to other business while a deal is being negotiated.
The holding pattern of this week was characterized by Senators making floor speeches on the bill, and Majority Leader Reid moving forward with votes on two amendments at a time — the first two being one by Senator Shaheen (D-NH) to end the sugar program and the other by Senator Paul (R-KY) to turn the Supplemental Nutrition Assistance Program (SNAP) into block grants to states. The vote was on the “motion to table,” meaning that Senators were voting to table — or cease consideration — of the amendments. Both were defeated, by votes of 50-46 and 65-33 respectively.
Objections from Republican Senators blocked consideration on smaller batches of amendments that Majority Leader Reid brought up for consideration.
It is hard to guess how much longer the Senate would tolerate this holding pattern. Majority Leader Reid, without a deal and facing opposition from Republican leadership, could have stopped consideration of the bill this week. But, by allowing for votes on “motions to table,” he provided a temporary way forward while leadership continued to negotiate a deal. He may continue to offer that path next week if he thinks that a deal is well on its way to being reached, though patience may be wearing thin.
Option #3: No Deal, No Farm Bill
If they cannot come up with a list of amendments to debate and vote on, then the bill pretty much dies in the Senate for now.
A number of amendments have been filed that deal with hot-button political issues that have nothing to do with the farm bill. These include repealing the estate tax, weakening the Clean Water Act, preventing the regulation of farm dust, and a variety of foreign policy and defense issues, among others. These types of non-germane and controversial amendments add a layer of election-year politics to a bill that normally enjoys bipartisan support, and if Republican leadership hinges its support for a deal on having these types of election year politics amendments offered, then the deal in all likelihood will fall apart.
Amendments to Senate Farm Bill
Almost three hundred amendments to the bill have been filed, both related and not related to the farm bill. On Wednesday, NSAC sent a letter to Senators stating its position on the amendments that had been filed up through Tuesday, focusing on amendments that advance agriculture reform, food, and jobs.
On Thursday, NSAC joined over 90 organizations in a letter supporting passage of the amendment to re-link soil and wetland conservation requirements to crop insurnace premium subsidies, the largest farm subsidy in the new farm bill. Earlier, at the beginning of the week, NSAC also joined over 500 organizations on a letter opposing any farm bill that increased the size of the cuts to farm conservation programs beyond the ten percent cut in the pending Senate bill. A sign-on letter in support of beginning, minority, and veteran farmer amendments will be delivered Monday.
With rice and peanut interests being unhappy with the results coming out of the Senate Agriculture Committee markup, it has long been anticipated that an alternative proposal would be put forth, and that amendment was filed on Thursday by Senators Conrad (D-ND), Baucus (D-MT), Hoeven (R-ND), and Chambliss (R-GA). It would create an additional commodity program within the bill, similar to the current counter cyclical payment (CCP) program, except that it would be based on planted acres rather than historic base acres and would have significantly higher government-set target prices. The measure, which is still being scored to determine its cost, would be offset by striking two crop insurance provisions from the underlying bill – a measure to keep insurance coverage higher after multiple disaster years and a new peanut revenue insurance program.
The measure would allow producers to participate in both the revenue-based commodity payment program in the underlying bill and the proposed counter cyclical price-based program. It would create a new $65,000 per farm payment limit ($130,000 for married couples) that would be on top of the $50,000 ($100,000 if married) in the underlying bill. NSAC strongly opposes the payment limit provision in the amendment which would destroy the historic commitment made in the underlying bill.
Another measure filed this week would also attempt to nullify the crop insurance reform amendment introduced by Senators Coburn (R-OK) and Durbin (D-IL). In a clear sign that opponents of the reform measure are worried about its very good chances for passing, Senator Thune (R-SD) introduced an amendment to the reform amendment that would effectively kill the original amendment. NSAC strongly opposes the Thune counter-measure, though we believe a compromise could be worked out that would not gut the reform.
And in the House…
A draft farm bill has been put together by House Agriculture Chair Frank Lucas (R-OK) and is in the process of being evaluated by the Congressional Budget Office. If all goes according to the Chair’s plan, the bill will be finalized early next week and may become publicly available by the end of next week, with Committee debate and voting on amendments the following week. We will report in more depth on the House farm bill process next week if that plan is realized and thus details become known.
Also next week, the House Appropriations Committee is scheduled to take up the FY 2013 agriculture appropriations bill. For more on the appropriations measure, read our earlier post that details the bill reported by the Agriculture Appropriations Subcommittee, including proposed annual funding levels, major cuts to farm bill conservation programs, and legislative riders attempting to write policy to stop anti-trust enforcement in the livestock and poultry sector and do an end run around judicial review of GMO regulations.
IFAD President: Let’s Not Wait Another 20 years To Focus On Small Farmers
Rome, Italy - June 14, 2012
On the eve of his departure for Rio de Janeiro, Kanayo F. Nwanze, the President of the International Fund for Agricultural Development (IFAD), calls the Rio+20 conference a “once-in-a-generation opportunity” to transform the global agriculture and food system at the speed required by putting the developing world’s 500 million smallholder farms at the heart of action-oriented plans.
“There is no magic bullet that will eliminate poverty and guarantee sustainable food security overnight,” Nwanze said. “But at IFAD, we see the hope of a sustainable future embodied in rural people’s perseverance and endurance to overcome challenges and thrive doing so. More specifically, it is personified in rural women as they are the nurturers and educators of this generation and the next.”
“The Rio+20 conference is a chance to accelerate sustainable agricultural development,” Nwanze continued. “But if we are to be truly sustainable, then we must lift the heavy burden off the backs of rural women and men and replace it with equal access to agricultural resources and climate-smart tools to build their resilience.”
Twenty years after the Rio Earth Summit in 1992, world leaders will convene to discuss how to shape a sustainable future for the planet in the face of new and daunting challenges. While over the past twenty years global wealth has increased, so too has there been a rise in the number of hungry people. Climate change, population growth and constrained natural resource – as well as competition for those limited resources – represent huge challenges for food security.
“At IFAD, we believe that smallholder farmers are the anchor of sustainable development as they are the primary domestic private sector investor in rural areas,” Nwanze said. “Private sector investment, both domestic and foreign, can be the critical ingredient in achieving sustainable agricultural development and food security. But it has to be clearly directed toward enabling farmers to increase their productivity and incomes.”
As the single largest employer in the world, agriculture remains a critical sector for developing country economies. In most countries, agriculture accounts for more than 60 per cent of employment. IFAD’s experience has been that if given the right support, smallholder farmers can double or triple their production, even in the face of climate change and environmental degradation.
“When you improve small farmers’ ability to feed themselves, you also improve their ability to feed others,” Nwanze said. “They cannot do it alone. It is no coincidence that in countries where agriculture has taken off there have been large investments in research and infrastructure.”
At the Corporate Sustainability Forum, IFAD will host a session called The Sweet Spot: Cocoa’s Promise of Sustainability, Equity and Profitability for Smallholders and Business. During this session, Nwanze will outline how developing country governments should better evaluate the impact of policy decisions on smallholder farmers and their organizations, and create a suitable environment that will entice the private sector to invest more in agriculture.
Leading up to and during the Rio+20 conference, the Rome-based food and agriculture agencies of the UN – the Food and Agriculture Organization, IFAD and the World Food Programme – and Bioversity International, will host several events to promote dialogue and to identify required actions to pave the way for a food-secure future. On behalf of the agencies, Nwanze will give the opening remarks of an event on 19 June, which will focus on how to address challenges to food security on community, national and global levels.
FAO Advocates For Energy-smart Food Systems During UN Conference on Sustainable Development
Rome, Italy - June 14, 2012
Agriculture’s heavy dependence on fossil fuels is undermining the sector’s ability to feed the world, perpetuating poverty and undermining efforts to build a more sustainable world economy, FAO said today.
The warning came as the UN Food and Agriculture Organization released a study on “energy-smart” food production
and use ahead of the Rio+20 conference on sustainable development, where global energy challenges will figure high on the agenda.
Together, the world’s food production systems — from the farms where food is grown to further along the processing and marketing chain — consume 30 percent of all available energy, FAO’s study shows.
Most of that energy consumption — 70 percent — happens after food leaves farms, as it is transported, processed, packed, shipped, stored, marketed and prepared.
And a significant amount of all energy used in the food chain — about 40 percent — is simply lost due to food losses and waste (globally one third of all food, around 1.3 billion tons, is thrown away or lost to spoilage each year.)
Meanwhile, almost 3 billion people have limited access to modern energy services for heating and cooking, and 1.4 billion have zero or limited access to electricity, FAO’s report notes.
“Higher costs of oil and natural gas, insecurity regarding the limited reserves of these non-renewable resources and the global consensus on the need to reduce greenhouse gas emissions, could hamper global efforts to meet the growing demand for food, unless the agrifood chain is decoupled from fossil fuel use,” it says.
The report also points out that without access to electricity and sustainable energy sources, communities have little chance to achieve food security, and no opportunities for securing productive livelihoods that can lift them out of poverty.”
Food and energy, intertwined
“To feed the planet, the world’s food production systems require energy. At the same time, food production isn’t just using energy, it is also wasting it. Yet there are huge opportunities to improve energy efficiency in the food chain, as well as to produce sustainable energy within agriculture — these opportunities must be boldly explored, and I hope to see them figure prominently in discussions at Rio+20,” said FAO Director-General José Graziano da Silva.
At the upcoming Rio Sustainable Development Summit, governments are expected call for a scaling-up of the UN’s Sustainable Energy for All initiative, which aims to ensure universal access to basic energy services, improve energy efficiency, double the share of renewable energy in the global energy, and promote low-carbon development.
New paradigm for energy use in agriculture needed
“Cheap energy sources are becoming progressively scarcer, and energy markets more volatile,” said Alexander Müller, FAO Assistant Director-General for Natural Resources and the Environment.
”Feeding a growing world population will require a 60 percent increase in food production by 2050, but we are not going to be able to meet that goal the way we did during the Green Revolution, relying on fossil fuels,” Müller said. “A very different approach is required.”
‘Energy-smart food’ production
According to FAO, the energy-smart model of food production involves:
Increasing the efficiency of direct and indirect energy use in agri-food systems, without lowering productivity
Using more renewable energy as a substitute for fossil fuels in the agri-food chain
Improving access to energy services, in particularly renewable energy, for poor households to promote economic development through more integrated food and energy production
At each stage of the food supply chain, practices can be adapted to become less energy intensive, according to FAO’s new paper.
Soil tillage for land preparation is typically the single most energy-consuming operation in a cropping cycle — conservation agriculture, zero tillage and other sustainable intensification farming techniques can reduce the amount of energy used on farms.
Additional steps available at the farm level include greater use of fuel-efficient engines, relying less on non-organic fertilizers and pesticides by adopting integrated pest and weed management techniques, and shifting to crop varieties and animal breeds that require fewer inputs.
Another area for action: addressing water losses and other inefficiencies in irrigation systems, which decrease farming's overall energy efficiency and increase production costs.
Finally, there are several examples where the use of renewable energy (solar, wind, mini hydro and bioenergy) in farming systems and villages improves agriculture and rural livelihoods.
Post-harvest efficiency, energy from food production
With most energy losses in the food chain happening beyond the farm gate, there is great scope for improving food transportation and related infrastructure, better insulating storage facilities, cutting down on packaging, reducing food waste, and cooking more efficiently, FAO’s paper notes.
Agrifood systems can also produce a lot of energy. Biomass residues from food and forest production and processing, and other renewables such as wind, solar, mini-hydro and geothermal are possible sources of renewable energy that can be harnessed in energy-smart food systems. So far efforts to capture animal waste and other organic by-products to generate energy production have focused on farms, but the same could be done in food processing facilities. However, the risks and benefits of producing energy along the agrifood chain must be weighed carefully..
To help advance this model, FAO has launched an Energy-Smart Food for People and Climate (ESF) Programme, a multi-partner initiative that aims to assist member countries make the shift to energy-smart agri-food systems.
The programme focuses on three thematic areas: energy efficiency, energy diversification through renewable energy and improving energy access and food security through integrated food and energy production.
Key Issues At Rio+20
June 15, 2012
The biggest international event this year is the UN Conference on Sustainable Development or Rio+20 on 20-22 June. It was meant to celebrate the Earth Summit of 1992, to reaffirm the political commitments made then, and to come up with up-to-date action plans to counter the crises which have become much more serious than 20 years ago.
But the negotiations to produce an outcome document got bogged down with new concepts, especially the 'green economy', and now the developed countries appear reluctant to a simple reaffirmation of the original Rio equity principle, or to re-commit to provide finance and technology transfer.
A big breakthrough to tackle the world's environmental and economic crises is now beyond the reach of the Rio+20 Summit. But it can still be a success if it reaffirms old commitments and launches new processes to strengthen institutions and to initiate new goals and action plans. This article summarises the key issues that are being fought over and that will have to be resolved at Rio+20.
The Earth Summit in Rio in 1992 (known officially as the UN Conference on Environment and Development) was a landmark event which launched "Sustainable Development" as an internationally accepted concept .
Environmental problems would be seen in relation to and in the context of the development needs of developing countries. Sustainable development would have three pillars or dimensions - economic, social and environmental.
The Rio Principles, adopted after marathon negotiating sessions, achieved the integration of environment, development and equity elements. There were environmental principles such as precautionary and polluter pays, development principles like the right to development, and equity principles like the common but differentiated responsibilities.
The Commission on Sustainable Development was set up to follow through on Rio 92. It did well initially but it had a design flaw - it meets only 2 to 3 weeks in a year and has too small a Secretariat. That has proven to be far too weak institutionally to address sustainable development's three pillars. As crisis after crisis hit the world, the CSD was too weak to rise to the challenge.
Twenty years later, diplomats and political leaders meet again at Rio+20, known officially as the UN Conference on Sustainable Development. Diplomats will finish the negotiations on 13-15 June (and if not they may continue their negotiations or take part in informal consultations) to conclude an outcome document, that will be an action plan for the years ahead.
For four days, 16-19 June, there will be Sustainable Development Dialogues on ten themes, the summaries of which will be presented to the heads of government and state that are to attend the Summit proper, on 20-22 June.
And on the sidelines of these official events will be the People's Summit and other activities of social movements and NGOs, that will attract many thousands of people. But some feel these are not the sidelines or side events after all. They may be the real thing, the getting together of civil society that can change the existing order, rather than the stuffy events going on inside the Rio Conference Centre.
There is a general sense of disappointment that the official Summit will not deliver an Earth-shaking or game-changing outcome, or even an earth-saving one. The crises after 1992 - environmental and economic -- have grown bigger and more serious, this time posing real threats to the economy and to Earth as well.
Obviously the solutions have not been found in the 20 years after Rio 1992. And, seeing the way the official negotiations have gone, there may not be any major breakthrough either in Rio+20.
But neither should Rio+20 be a failure. If it cannot announce any breakthroughs, it can at least initiate new processes that can lead to stronger institutions and new methods of tackling the world's crises.
For this to happen, trust has to be rebuilt by reaffirming the principles and action framework of Rio 92. The commitments made on providing finance and technology transfer to developing countries have to be renewed and made relevant to the present needs. Action plans for various subjects should be endorsed. A commitment to bring about new or at least stronger institutions has to be made. And agreement has to be reached on the new issues that has taken a lot of the energy and time of the Conference preparation - the green economy and sustainable development goals (SDGs).
The following is a short summary of the key issues at Rio+20, and the differing views on them.
1. Reaffirming the Political Commitments?
For developing countries, a "must" in Rio is reaffirming the Rio principles, especially the common but differentiated responsibilities (CBDR), which brings equity in the centre of the obligations to save the world. All have the duty to take environmental action, but developed countries (due to their role in contributing to much of the pollution, emissions and resource depletion, and to their higher economic standing) have the leading role in reducing their own environmental impact, and in providing finance and technology transfer to developing countries to move towards sustainable development paths. Failure to fully reaffirm these principles is taken to be a retreat by the North from the global understanding of the environment-development nexus.
Developed countries are showing reluctance to update their endorsement of CBDR. Most of them only want a reference to reaffirming the Rio Principles but not have a special mention of CBDR. One or two countries don't even want any mention of CBDR. They want developing countries (except perhaps the poorest) to take on similar obligations as the North.
Absence of CBDR references would make developing countries reluctant to take on new concepts that may imply new obligations, such as green economy and SDGs. They are also worried that with the removal of the equity principle, the basis for international cooperation and for development assistance is threatened, with major consequences for future North-South relations.
2. The Green Economy: What It Is, What It is Not?
When this topic was placed on the agenda of Rio+20 as one of two priority issues, few if any officials of developing countries had knowledge of its meaning in international negotiating terms. Much of the energy of the process has gone into defining what it is not and what it is. Although the "green economy has been a concept in academic circles, it is still a new term in international diplomacy.
Developing countries are concerned that the 'green economy' will replace 'sustainable development' as the key paradigm in the environment-development nexus, with the loss of the Rio 92 consensus on the three pillars and the international commitments on finance and technology. They are also worried that the term may be misused as grounds for trade protection, loan/aid conditionality and new obligations on developing countries. They have thus been reluctant to give high status to the green economy term, insisting it is one of several concepts and tools that can be used to achieve sustainable development, and that it should not be used as policy prescription or a new international policy framework. They have thus tried to reduce the role of the green economy in the outcome document, which should state the principles or elements, and that each country should make use of the concept as a tool in its own way.
Some developed countries believe the green economy is a new important concept that can lead to changes in the way economies are organized. For example, greening the economy through government spending on environmental programmes such as clean energy and the creation of "green jobs" was seen as an important element for fiscal stimulus packages to counter the economic crisis. From this national use of 'green economy', some countries, especially in Europe, wanted Rio to endorse a UN green economy roadmap with environmental goals, targets and deadlines. However this faced resistance from developing countries and a few other developed countries. The negotiations are still intense on the meaning of what a green economy is, and how the term could be used and should not be used. The roadmap idea has diminished, with the green economy goals transferred to the sections on sectoral actions, and to the SDGs. However the green economy will remains a hotly contested issue in Rio.
3. Sustainable Development Goals (SDGs)
This is also a "new issue" in that it was not in the terms of reference in the General Assembly resolution that gave the mandate for Rio+20. It was proposed last year mainly by Colombia, and many saw it as a kind of alternative to the Green Economy roadmap. It has now gathered steam and is expected to be one of the key "deliverables" in Rio.
The developing countries have accepted SDGs as a concept and an operational tool. They have engaged in putting forward principles and elements that should frame the SDGs. A key principle should be common but differentiated responsibilities, so that any obligations arising from the SDG process would be treated with in an equitable manner. The G77 and China also want the three pillars (social, economic, environment) to be represented in a balanced way in terms of selected goals, and they are concerned that the EU has put forward only environment goals.
Rio+20 will launch a post-Rio process to decide on the goals and their details, since it is too late to come up with a definitive list. However, most developed countries, especially the EU, want a selected number of SDGs to be listed as priority goals, and to have some details if possible, so that Rio+20 can have some tangible results. They proposed the areas of energy, water, oceans, resource efficiency, land and ecosystems (including forests) and insist on having them in a list of "indicative" priority issues. The EU also proposed having many goals with target years in the texts on sectoral actions. However, the G77 and China do not want to mention any issues, since any list of SDGs have to have balance among the three pillars and there has not been mature discussion yet on how to select SDGs or how many there should be. It is critical of developed countries for only mentioning environment goals. It has refrained from naming any issues of its own.
Another key contested area is the nature of the SDG post-Rio process at the UN. Developed countries want the UN Secretary General to take charge of a process for experts to come up with the SDGs, whereas the G77 and China want the governments to drive the process and decide on the SDGs, so that whatever goals are selected are decided on by the governments, while inputs can be given by the UNSG and experts.
How the SDGs and the post-Rio process will relate to the MDGs and the post-2015 development agenda process is another issue. The "development community" has already started discussion on the follow up to the MDGs, and do not want a decision on SDGs to pre-empt the development agenda. Many developing countries are worried that a high status given to SDGs at summit level may marginalize the MDG-linked development agenda. Thus, how the SDGs and MDGs and their processes interface will have to be sensitively handled.
4. Institutional Framework for Sustainable Development (IFSD)
This is perhaps the most important issue because it is the lack of strong institutions dedicated to sustainable development that has enabled other agendas (such as WTO and bilateral trade and investment agreements, and deregulation and liberalization of finance) to have precedence over the environment and social development.
There is agreement that the Commission on Sustainable Development has been too weak and needs to be transformed into a more powerful body such as a Sustainable Development Council (proposed by EU, Norway, Switzerland) which meets more regularly and has more authority. The G77 and China has proposed a high-level political forum on sustainable development with annual Ministerial meetings, and with terms of reference to be decided on after Rio. There is also broad agreement that ECOSOC should be strengthened to take on the challenge of sustainable development. The negotiators have had matured discussions on the functions of an institutional framework, and in Rio the form will be intensely debated.
There is also broad agreement that UNEP has to be strengthened, with universal membership in a governing council, and more resources, and a bigger role in having some coordination among the large number of environment agreements. However there is an on-going dispute as to whether UNEP should become a UN specialized agency (which is strongly advocated by European countries and by Africa) or retain its status as a programme but be strengthened (which most other countries prefer).
5. The Means of Implementation (Finance and Technology Transfer): Re-commiting to Supporting the South or a Retreat from Rio 92?
The means of implementation (MOI) was a centerpiece of Rio 1992. Developing countries successfully argued that they could switch to environmentally sound development paths only if there was financial and technology-transfer support from developed countries. This was a much fought over area in 1992 and is shaping to be an equally hotly contested issue in Rio+20.
The developing countries insist that Rio+20 should at least renew the original commitments of developed countries to provide new and additional financial resources, and that once again they pledge to make efforts to meet the aid target of 0.7% of their GNP. However even these minimal aspects are being resisted by some developed countries, especially US and Canada.
The G77 and China has proposed that developed countries provide new sustainable development funding to developing countries, at least US$30 billion a year in 2013-17 and US$100 billion a year from 2018 onwards, and to set up a sustainable development fund. Actually this is not a new or big demand, since in 1992 the UNCED secretariat estimated that the Agenda 21 programmes would cost at least $600 billion a year for developing countries to implement, and that they should obtain new international funding of $100 billion a year. The developed countries have however objected to the G77/China proposals of figures or a fund.
On technology transfer, the situation is equally bleak. All major developed countries have objected to reaffirming the 1992 commitments to provide technology transfer on concessional and preferential terms to developing countries. For Rio+20, they have even objected to the term "technology transfer" in the title of the technology section. And if they propose to use "voluntary transfer of technology on mutually agreed terms" which implies sale of equipment on commercial terms, which is opposite to the technology transfer concept. Even mild language to have a balanced approach to IPRs has been rejected, as has the concept of enhanced access by developing countries to environmentally sound technology.
Should developing countries agree to new concepts like green economy and sustainable development goals, which carry the prospect and implication of new obligations, if there is no longer even the promise of international support, and if there is a retreat from and denouncement of the original global pact of 1992? This is one of the big issues that Rio+20 may have to confront.
Success in Rio: What Would It Take?
A successful outcome from Rio would include:
A reaffirmation of the original Rio principles and commitments adopted 20 years ago in the original Rio Summit. At the least this would mean that the political leaders and especially the developed countries are not retreating or backtracking from what they agreed all these years ago. The most important Rio principle that needs reaffirming is the common but differentiated responsibilities, which means that the developed countries agree they have to do much more in terms of reducing pollution and emissions and in their use of natural resources, and that they have to provide finance and technology to developing countries, so that every country has the means to move towards sustainable development pathways.
A recognition that the crises in environment and economy are even more serious today than 20 years ago, and adoption of new commitments by the political leaders that are adequate enough to tackle these crises in a systemic and systematic way.
An agreement to significantly strengthen the institutions for addressing sustainable development in a serious and adequate manner. The present UN Commission on Sustainable Development showed early promise but turned out to be too weak as it only meets 2 to 3 weeks in a year, and it has a small secretariat. It has to be radically reformed or else transformed into a new Council or Forum on Sustainable Development which can meet the challenges thrown up by the global crises in the three dimensions - environmental, economic and social. Meetings must be scheduled regularly, and not just for a few weeks, and the secretariat must become a strong organisation with more staff and dynamism. The Rio summit should adopt a decision to have this strong institution to and launch a process to determine the details. The UNEP meanwhile should be given a mandate to strengthen its organization and operations, with more resources, so that it can work more effectively to build a strong environment pillar.
There must be clear commitments to support developing countries to take on more responsibilities in addressing environment, economic and social problems. Thus the summit cannot backtrack on the "means of implementation." There should be a re-commitment to new and additional financial resources for sustainable development, and to technology transfer on concessional and preferential terms, as was committed 20 years ago in Rio and on many other occasions since then.
The Summit should launch a process to decide on and flesh out sustainable development goals. However the goals should also be backed up by concrete action plans, with details on the financing and technology transfer aspects to implement these plans. The SDGs should interface properly with the post-2015 MDGs process. Meanwhile there should be a strong implementation plan for the actions recommended in the section on sectoral issues in the outcome document.
Rio+20 - the 'Landscape Approach'
Rio De Janeiro, Brazil -June 18, 2012
A new and awkward term is doing the rounds at the UN Conference on Sustainable Development, also known as Rio+20, in Rio de Janeiro, Brazil. It is "landscape science/ agriculture/ approach", which now embraces "eco-agriculture", "forest landscape restoration", "territorial development", "model forests", "foodsheds", "participatory watershed management", "community-based natural resource management", "biological corridors", and many other connected concepts.
This is no fringe effort - its collaborators are the UN Environment Programme, the Food and Agriculture Organization, the International Fund for Agricultural Development, the World Resources Institute, and Conservation International, among others.
What is it?
As higher temperatures and erratic rainfall affect the lives of rural dwellers, this approach helps them develop and use their land and water resources more efficiently to earn a livelihood, produce food, maintain livestock and take care of other needs. But they do it in a manner that causes minimum damage to the environment while helping to restore and maintain biodiversity, according to Sara Scherr, president and CEO of EcoAgriculture Partners, a co-organizer of the Landscapes for People, Food and Nature Initiative, a US-based non-profit organization.
The initiative hopes to use spatial technology, for instance, to advise rural communities on which portion of the land in their village should be put under agriculture, or left alone to revive, to ensure the ecological balance is maintained.
It falls under the broader ambit of sustainable development. The Rural Futures programme of the African Union, launched in 2010, is based on a similar approach, better known as integrated rural development.
How is it different?
But unlike the integrated rural development models from the 1970s and '80s, where a lead organization devised and financed a "top-down" plan within a defined project period, landscape initiatives are led by local stakeholders, said Scherr.
"There are several such initiatives where communities, pastoralists, farmers, the private sector, people from agriculture, water and other sectors, conservationists, have come together - we have found more than 300," she noted.
These efforts are known by different names, but the initiative's collaborators thought it would be useful to band them under a single umbrella, which would help not only to create awareness but also funding, "otherwise these initiatives struggle to raise money sectorally."
Lindiwe Sibanda, head of the Food Agriculture and Natural Resources Policy Analysis Network, a think-tank based in South Africa, said: "It doesn't matter what it is called - we are interested in its motives and results. Any initiative that helps reduce hunger and improve rural lives should be welcomed."
The landscape approach is a bit more than integrated development, said Tim Benton, the UK Champion of the Global Food Security Programme, who teaches at the University of Leeds. The use of remote sensing, resource monitoring, and spatial analysis are part of landscape science and provide the tools to communities to assess the impact of their actions on a rural landscape.
Benton said the expansion of mobile phone technology could help make such information available to communities at their fingertips.
Food and Nutrition Security Should Stay High on the Agenda at the G20 Meetings
Washington, DC - June 15, 2012
Food and nutrition security must remain at the top of the agenda as G20 leaders prepare to meet in Los Cabos, Mexico next week. Severe food and nutrition insecurity continues to persist, the key drivers behind the food crises in 2007/08 and 2011 have not been resolved, and the current global economic crisis is further worsening the situation. According to the 2011 Global Hunger Index, more than 50 countries are experiencing “extremely alarming,” “alarming,” or “serious” levels of hunger; Sub-Saharan Africa and South Asia continue to be hunger hot spots.
Ensuring food and nutrition security will become even more difficult due to the growing complexity of global challenges, such as population growth, increasing consumer demand from the growing middle class in developing countries, high and volatile food prices, energy scarcity, and climate change. Against this worrisome background, development aid from donors dropped for the first time in 15 years, falling by 3 percent from 2010 to 2011.
Last year’s G20 Summit led to important actions in strengthening global food security efforts and resolving problems related to price spikes and volatility. Of these actions, one that has shown progress is the creation of the Agricultural Market Information System (AMIS), which includes indicators such as the Excessive Food Price Variability Warning System developed by IFPRI and the Rapid Response Forum (RRF). However, progress has been slow on most of the other actions. For example, the Agricultural Price Risk Management tool has not shown significant progress and only the Agricultural Price Risk Management (APRM) + Platform on Agricultural Risk Management (PARM) has been launched but it still needs validation, and no clear action has been taken with regard to other risk-coping tools. Similarly, there has not been significant progress on financial regulation and the regional humanitarian reserves pilot.
This year, the G20 must take additional steps to rein in food price volatility by addressing structural problems and responding to long-term drivers of food security. Priority actions should include assuring the implementation of the action plan of 2011 by reducing the competition between food and fuel, promoting free and open trade to calm food markets, and supporting regional humanitarian food reserves to address food emergencies.
G20 leaders should also continue to emphasize innovative partnerships to address food security issues, including strengthening the engagement of nonstate actors, especially the private sector, in global food security efforts. In addition, the G20 is an opportunity to engage with emerging economies such as Brazil, Russia, India, and China as they increase their role in global policymaking, especially in forging South–South cooperation.
While price volatility is still an issue, this year there is also a strong focus on increasing food production and productivity, promoting food security, and fostering economic growth in a sustainable manner. G20 leaders should focus on productivity and assuring sustainability, by examining agricultural research and development and crop yield stagnation.
Scaled-up investments in science and technology and support for improved country capacities are fundamental to accelerating progress and achieving development objectives. Technological innovations such as biotechnology, nanotechnology, and biofortification, are crucial to increasing agricultural productivity, building resilience to weather-related shocks, enhancing the nutritional value of food crops, and ensuring food safety. Similarly significant efforts should be made to improve the access to inputs such as improved seeds and fertilizer.
IFPRI makes the following recommendations to the G20 policymakers:
Speed up progress on action-plan items from previous G20 meetings and develop clear accountability indicators;
Keep food and nutrition security at the top of the agenda of current and future G20 meetings;
Invest in agricultural research and development and improve farmers’ access to improved seeds and fertilizer;
Improve information to better prioritize needed investment to increase sustainable agricultural productivity;
Avoid excessive market speculation by providing more timely, accurate information on food prices, stocks and production;
Increase the availability of weather information to improve the capacity of appropriate early warning mechanisms to climate shocks and to increase the availability of weather index insurance suppliers; and
Enable a positive environment in which to increase and link private and public investments in agriculture and encourage mutual accountability between governments, the public and private sectors, and civil society.
IFPRI, a member of the CGIAR Consortium, contributed to the International Organization and B20 documents to provide background information and recommendations for the G20 members. As a premium global food policy research institute, IFPRI is well positioned to share evidence-based research on food and nutrition security and provide support to country-led strategies for strengthening food policy capacities.
2012 to Be Record Year for U.S.-Africa Trade
Washinton, DC - June 14, 2012
The African Growth and Opportunity Act (AGOA), the cornerstone of the U.S. trade and economic relationship with sub-Saharan Africa, has been a great success both for the United States and for its African partners, according to Assistant Secretary of State Johnnie Carson.
"Since the inception of AGOA in the year 2000, there has been a 300 percent increase in total two-way trade between the United States and Africa," Carson said June 13 in a telephone briefing previewing the 11th U.S.-Sub-Saharan Africa Trade and Economic Forum, also known as the AGOA Forum, in Washington June 14-15.
"We have had major success with AGOA over the years," said Deputy U.S. Trade Representative Demetrios Marantis, who joined Carson on the call. "It has really helped to promote new nontraditional and value-added exports from Africa."
Both Carson and Marantis praised this diversification of exports as beneficial both to the participating African economies and to the United States. Two-way trade since AGOA's start has totaled more than $716 billion, reaching $95 billion in 2011 alone. Marantis said 2012 is set to be another record year, as trade is up 22 percent from the same point last year.
To enhance this growth, Marantis and Carson said, Africa needs to expand its infrastructure. The 2012 AGOA Forum will focus on how to overcome the challenge of lacking infrastructure, which is often cited as a hurdle to both international and regional trade in Africa.
"By working through this AGOA Forum to help enhance Africa's trade infrastructure, we hope that we will help our partners in sub-Saharan Africa better take advantage of the opportunities that AGOA provides," Marantis said. He said also that helping to develop Africa's infrastructure "really helps to reinforce Africa's own efforts to achieve regional economic integration," and that the United States prioritizes support for the initiatives already under way led by countries across the region.
Both diplomats addressed the issue of third-country fabrics, a critical provision of AGOA that provides significant support to the textile and apparel sectors that is set to expire in September. Carson and Marantis called on the U.S. Congress to renew the provision, which they said is fundamental to the continued success of AGOA as it helps to promote growth and opportunity across Africa. They said the provision has bipartisan support in Congress, and the Obama administration has made its rapid passage a top priority.
In planning for Africa's long-term economic success, Carson encouraged governments across the continent to practice democratic values.
"Good institutions and judicial systems help to strengthen the opportunity for greater economic development and market growth," Carson said, adding that countries that practice democracy "also help to produce better environments for free-market economic activities."
AGOA, signed into law by then-President Bill Clinton in 2000, was designed to promote U.S. trade and investment ties with sub-Saharan Africa. It provides trade preferences to the 40 participating African countries through the removal of nearly all tariffs on exports. It has successfully broken down many trade and customs barriers in an effort to stimulate economic growth, encourage economic integration and help bring sub-Saharan Africa into the global economy.
The 2012 forum is bringing together more than 600 participants, including top U.S. and African government officials, private-sector leaders and civil society representatives. It was preceded by a two-day civil society program June 12-13 in Washington and is complemented by the African Women's Entrepreneurship Program June 4-23, whose participants are attending the forum. The Corporate Council on Africa will host its infrastructure conference June 18-20 in Washington, and the U.S.-Africa Business Conference will be held in Cincinnati, Ohio, June 21-22.
UNDP, EAC to Boost Food Production, Promote Agricultural Opportunities
Kigali, Rwanda - June 14, 2012
The United Nations Development Programme (UNDP) and the East Africa Community (EAC) this Tuesday 12th June 2012 launched a new initiative to boost food production, job and income opportunities for farmers through advancing agriculture value chains in East Africa.
The initiative spearheaded by UNDP's African Facility for Inclusive Markets (AFIM) and the EAC Secretariat brought together multiple stakeholders representing governments, UN agencies, private sector, farmers, financiers and civil society from Kenya, Tanzania, Uganda, Rwanda, Burundi and Ethiopia for an East Africa Project Facilitation Platform (PFP).
The East Africa PFP is discussing partnerships and value addition of the various stakeholders in strategic agro-food value chains, especially sorghum, soy and dairy. Project promoters presenting planned interventions include Africa Harvest, East Africa Dairy Development Project and UNIDO/UNDP.
"A new private sector is emerging in Africa with great potential for creating new jobs, generating higher incomes and delivering products and services for all.
"Agriculture value chains and agri-business are critical to advance food security and economic opportunities," said Aeneas Chuma, UNDP Resident Representative and UN Resident Coordinator for Kenya, who opened the workshop in Nairobi.
"UNDP's African Facility for Inclusive Markets is brokering partnerships and building capacity to develop inclusive markets that contribute to the achievement of the Millennium Development Goals (MDGs), especially toward food security and inclusive economic growth. The level of participation for this East Africa platform is very encouraging, and we will launch similar initiatives in Southern and West Africa," said AFIM Manager Tomas Sales.
"We are highly grateful for UNDP's support of this important regional initiative to reduce hunger and food imports by strengthening selected value chains, increasing food production and reducing post-harvest losses," stated the EAC representative Ms. Jennifer Gache.
Farmers Get New Credit Facility
Kampala, Uganda - June 12, 2012
Following increasing challenges in doing business in Uganda, the Uganda National Chamber of Commerce (UNCCI) is promoting new lending innovations to suit local trade and investments.
The chamber is, therefore, calling on financial institutions to provide an equitable borrowing environment between the local investors and their foreign counterparts. The director UNCCI, Gloria Turyamureeba, recently urged financial institutions to favour agriculture, the fulcrum of the country's economy.
"Oil and gas do not feed this country. Banks ought to find possible ways of financing the agricultural sector as we wait for government supplements," she said.
In response to the call, Stanbic bank has developed a structured trade finance product, the collateral management. According to Allan Tuhairwe, the bank's head of finance and trade, the product is a great financial solution tailored to suit small and medium enterprises (SMEs) in the trading and agricultural sector.
The product will target local producers, importers and exporters, trade and farmers associations, all of whom may need support to secure short-term credit but do not have fixed assets.
"With this product, a borrower can secure the desired credit using the traded commodities as collateral security. What the bank needs is a warehouse receipt from a collateral management group," he said.
This means that the borrower only has to present documents about a contract to supply, export or import goods to the collateral management group who will verify the value of these goods. The collateral managers will then write to the bank on behalf of the borrower and an agreement will be reached for the bank to make a 70% direct financing payment in the borrower's name.
This helps the borrower engage in business with a possibility of paying back in the near future.
"This is a short-term lending system. Our interest is calculated on a daily basis; the quicker one pays, the less the interest," Tuhairwe said.
Richard Wangwe, the head Agriculture at Stanbic, said: "Farmers can now start groups and do business. This initiative does not go for people who want less than Shs 20m."
According to the warehouse receipt systems (WRS) Act 2006, if the borrower fails to pay in a stipulated time, the lender has recourse to collateral that can be sold off to recover payment. Currently, Stanbic is closely working with the Coronet Group Ltd who act as the collateral managers.
"We act as the mediators between the bank and borrower. Our work is to value the goods, monitor them and ensure repayment of the loan," says Christian Baine, the Executive Director Coronet group.
Baine says the initiative should be adopted by the local investors who are always in need of short-term loans but lack security. With collateral management, he said, one is able to strike more deals because of the availability of credit.
Coronet currently deals with dry agricultural products like cereals, flour and grains for exporters and any dry traded goods for importers. "We do not have enough facilities for perishables, but we plan on acquiring them to also help people like florists and those dealing in vegetables," Baine promised.
On average, most financial institutions in the country allocate less than 10% of their loan book to agriculture.
Rural Banks Urged to Finance Agriculture in the Rural Areas
Ghana - June 19, 2012
The former Managing Director of the ARB Apex Bank, Mr. Emmanuel Kwapong, has called on Rural and Community Banks (RCBS) to finance agriculture in the rural areas to serve the rural financial market.
He urged RCBS, whose main economic activities are located in the rural areas, to structure their business models to enhance agriculture for the rural people who formed a greater percentage of the country’s population.
Mr. Kwapong made the call at the 17th Annual General Meeting of Dumpong Rural Bank at Asakraka in the Kwahu South District at the weekend.
He said financing agriculture could be profitable and sustainable if investment was in capacity building, training of staff and developing appropriate products to serve the agriculture value chain at all levels.
Mr. Kwapong commended the board and management of the bank for their performance, which saved the bank from being liquidated in 2004 and urged them to initiate pragmatic action and programmes to make its existence meaningful and relevant in the area.
The Chairman of the Board of Directors of the Bank Mr. Emmanuel Bonna, said the bank recorded a net profit before tax of GH¢91,645 last year as against GH¢24,607 two years ago, representing 272.43 percent.
He said during the year under review, the bank’s total deposit went up from GH¢2,835,967 in 2010 to GH¢3,956,961 last year, an increase of 39.53%.
The bank granted advances, loans and over draft totaling GH¢2,085,265 to customers in the transport, cottage industry, construction, agriculture, commerce and salary workers last year as against GH¢1,012,401 in the year under review, an increase of 105.95%.
Total assets of the bank also increased from GH¢3,173,753 two years ago to GH¢4,356,078 last year, an increase of 37.25% while its short term investment portfolio stood at GH¢800,000 at the close of the financial year with a share capital of GH¢153,518.
The General Manager of the bank, Mr Jasper Ahadizi, urged the shareholders to purchase more shares as they envisaged that the capital requirement of rural banks might be reviewed upwards very soon.
He advised customers owing the bank to pay back for others to benefit.
In an address read on his behalf, the acting Managing Director ARB Apex Bank, Mr. Duke Osam-Duodu, advised the bank to manage their advances well to avoid large amount of non- performing loans on their balance sheet.
He appealed to customers of the bank to honour their loan repayment obligations on time to enable others to enjoy the facility.
Mr. Osam-Duodu advised RCBS to raise adequate capital to meet their maintenance cost of the ICT infrastructure in terms of software maintenance, repairs, depreciation, upgrade and replacement.
He appealed to RCB’s to consider cooperative mergers to mobilize adequate funds to provide financial services in a wider catchment area.
He said in light of the complex and rapidly changing environment, rural banks should be expected to enhance their operational efficiency and risk management to enable them to operate effectively in the dynamic banking industry.
Climate Conversations -Business backs agricultural growth corridors in Africa
Angola - June 18, 2012
Zacharia Elises expects to harvest more than five tonnes of maize this season at his 1.5 hectare farm plot in Catandica in Mozambique. This yield level is more than three times the average for the area. Successful investments have been a key support to his accomplishment.
The innovative extension service and marketing company Empresa de Comercialização Agricola (ECA) has provided him with seeds, fertiliser and advice. ECA, one-third owned by local farmers, is one of an economic cluster of related agricultural businesses. These range from seed and feed production to brewing, milling, and pig and poultry farming.
These businesses’ common denominator is financing from the Catalytic Fund. Managed by AgDevCo, the fund was launched in 2010 as part of the Beira Agricultural Growth Corridor. It is backed by international agribusinesses and the governments of Mozambique, Britain, Norway and the Netherlands.
Early-stage agribusinesses are rarely provided with commercial capital, but the Catalytic Fund provides ‘social venture capital’ on attractive terms to local entrepreneurs who have a solid business plan and the capacity to execute it.
The concept of agricultural growth corridors was launched at the U.N. General Assembly in 2008 by Yara International ASA, a global firm specialising in agricultural products and environmental protection agents. Consequently taken on and adapted locally by Mozambique and Tanzania, the concept adopts a business development perspective to farming, using catalytic financing as a key mechanism to promote growth.
Locating areas suitable for productive farming, which also have backbone infrastructure available, is the starting point for undertaking cluster and value chain analysis within the corridors.
Public-private partnership, coordinated investments and government support aim to tackle bottlenecks and value chain risks, creating viable business opportunities while actively looking at the integration of smallholder farmers into those value chains.
The two growth corridors - Beira in Mozambique and the Southern Agricultural Growth Corridor of Tanzania (SAGCOT) - have launched investment blueprints to identify specific opportunities while setting out the model underpinning the corridor-based approach. The two corridors aim at catalysing combined investments of $5 billion over a 20-year period, with analysis showing a multi-billion dollar potential for annual farming revenues.
EXPANDING YIELDS AND INCOME
With a projected global population of 9 billion in 2050, and improved income levels fuelling dietary changes, agriculture businesses are set to expand. The increasing demand for food, feed and fuel must be met without compromising sustainability.
Yara is engaged in the multi-stakeholder Green Corridor initiative in Tanzania's SAGCOT. Yara, together with Syngenta, the universities of Sokoine in Tanzania and UMB in Norway, have launched a research project examining the effects of best practice in sustainable farming.
Preliminary field trials have demonstrated a high potential to double yields and farmer income levels without expanding farm acreages, while keeping greenhouse gas emissions at the same level.
GROW AFRICA INITIATIVE
While several African countries have seen impressive economic growth figures over the last decade, food insecurity remains at severe levels. The poor, many of whom themselves are smallholder farmers, are at risk.
Transforming smallholder farmers into emerging farmers, putting an emphasis on entrepreneurship, allowing them to profit from the growing agricultural markets - all this has the potential to bring about fundamental change.
But it requires long-term leadership and commitment from all sectors, working together to build the necessary capacity and appropriate market conditions to enable farmers to thrive as the driving force of sustainable food security.
Bringing the experiences from Mozambique, Tanzania and similar examples to scale is now the key objective of the recently established Grow Africa Initiative, formed as a partnership platform linking the African Union Commission, NEPAD and World Economic Forum, as well as the private sector, farmers’ organisations and development partners.
The objective of Grow Africa is to help expand private-sector investment and mobilise transformative partnerships that can accelerate sustainable agricultural growth in line with country-identified priorities.
Shaky Infrastructure Falls Under Washington Spotlight
Washington, DC - June 18, 2012
Africa needs to be spending U.S.$93 billion each year on infrastructure, according to the African Development Bank (AfDB), more than double the current outlays. The deficit is hampering growth and contributing to poverty and inequality. "Millions of poor households in Africa lack access to even the most basic infrastructure services, and universal access to modern services is 50 years away in most countries," the bank reports.
About two thirds of the total $93 billion is needed for new investment, with the remainder for maintenance. The AfDB breakdown includes $41 billion for power, $22 billion for water and sanitation, and $18 billion for transport.
In Washington this week, officials from some 20 African governments will gather with business leaders and U.S. officials to explore investment opportunities in such infrastructure-related sectors as energy and renewables, transportation, water, and technology. The biennial infrastructure conference is hosted by the Corporate Council on Africa (CCA), whose members include more than 200 of the largest and most active American companies operating in Africa.
Stephen Hayes, who has been president and chief executive officer of the organization for 12 years, explained in an AllAfrica interview why infrastructure is important both for CCA members and for the countries where they are doing business.
Why does the CCA choose to make this a key focus?
As a country and as a government, we haven't put the emphasis on infrastructure that it deserves. And our membership includes a growing number of infrastructure companies.
But infrastructure is not only important to infrastructure companies is it?
That's right. If a country is going to develop, it has to invest in infrastructure. Infrastructure or lack thereof impacts the whole economy, and it affects all companies doing business there in a major way. This is why the infrastructure conference has become our most popular and probably most successful program. There is not another conference [that focuses on] U.S.-Africa infrastructure.
Why are you having the conference in the midst of the annual forum that is mandated by the African Growth and Opportunity Act (Agoa)?
We thought it important to address issues that are going to make a difference and that will help to make Agoa more effective. Agoa isn't working well, and everybody knows it, whether they want to say it or not. One of the reasons is the lack of infrastructure in Africa. Most countries can't really use AGOA. There are other issues, but infrastructure is key, and we want everyone, including governments, to recognize that. If we hadn't moved our infrastructure conference up against the Agoa forum, I question whether the U.S. government would have made infrastructure the theme!
From your vantage point, what more should the U.S. government be doing on infrastructure in Africa?
We could be doing much more. Agoa is clearly not enough There needs to be far more private-sector to public-sector engagement on Africa. Look at the bi-national commissions that are going on [with Nigeria and South Africa]. These need to involve the private sector. How can you talk about development issues and not have the key people who are responsible for development in the dialogue? You assume too much on that basis without understanding how businesses really operate and survive.
How can you talk about energy and not have the oil companies and power companies at the table? It makes no sense. There needs to be more trust so that the private sector and public sector can start working together. And that needs to happen within Africa as well as within the United States.
Governments can help considerably, but a lot of the capital comes from the private sector. Until you have people working together in a more comprehensive way, then the development process is going to be very slow, and that makes it harder for companies to invest. We need a more comprehensive approach. We haven't had a statement from leadership about Africa since President Obama's stop-over in Ghana in 2009. And there needs to be a plan of action behind it.
Is the United States losing out on key opportunities in Africa?
If not losing out, there is at least the danger of falling behind many others in Africa. Our involvement in Africa hasn't decreased per se. It also hasn't increased significantly. What is changing is the greater number of investors in Africa.
It's good that you've got these other investors now taking an interest. But U.S. long-term interests are absolutely vitally linked to Africa. If we are not one of the significant investors in Africa in the next 10 years, then those nations that are invested in Africa will be the primary partners to African countries, and we will be left out. That will hurt our political interests and our economic interests. It's also going to diminish our access to resources since - like it or not - a very high percentage of the world's resources comes from Africa. If we are not part of that market, we are going to have to be far more inventive than we ever have been to find out ways to replace those resources.
Is interest in Africa rising in the business community?
Yes, absolutely. That's a really encouraging thing. Over the last six to nine months we have seen a far broader range of companies coming into CCA. They are joining because they see Africa as an important market. These include the largest consumer companies in the world. Proctor & Gamble, Colgate, Walmart have all joined CCA - not because we exist. It's because Africa exists. They are making major investments, and they feel we are one of the better tools to use.
IBM, Microsoft and Motorola Solutions have joined CCA as well. These are pretty important companies to infrastructure, as is Cummins Engines, which is doing a lot of infrastructure and is starting to work on vocational training. Bloomberg News has also joined because they now see Africa as a business destination and not just a place from which to report crises. Merck has come back as a member. Cargill, the largest private grain company in the world, has also re-joined. So despite the economy these last three years, we have seen our membership increase every year. And while most companies haven't made major investments yet, they are getting to the stage of making investments.
You have outlined what the United States needs to do to promote investment in Africa. What changes does Africa need to make to attract needed capital?
Regional co-operation is very important. Those economies aren't going to work well unless there's more harmonization of customs and duties. Countries need to be operating on the same rail gauge, for example, so you don't have to switch engines at the border. There needs to be a viable road system connecting countries. River transport needs to work. The ports must work.
Regionalization would make it a lot easier for companies to invest too. Major companies - the ones Africa says they want, like Proctor & Gamble - need larger markets. They can't go into a market of 10 million people. Many of our members have been telling us to work on regionalization more than we have in the past.
What do you hope to see coming out of the conference?
Our primary goals are getting more companies engaged in Africa. The workshops themselves are educational, but conferences are a means to bring people together. Most important is the networking.
So you are expecting deals to come out of this?
Absolutely. Several countries are bringing their projects with them - what's available, what's coming down the pike. Companies can't plan bids if they only learn about opportunities three weeks in advance, which is what has happened so many times over the last decade. (That really means the deal is already done somewhere.) So, yes I think there will be opportunities presented. We've set up more informal networking – like we did at our summit last year. And summit participants tell us that worked.
Good Infrastructure to Boost Taxes - MPs
Tanzania - June 18, 2012
Tanzania will continue to lose revenues through tax incentives unless the government invests heavily in the improvement of the country's infrastructure to create conducive business environment.
Members of Parliament said here on Sunday that tax incentives to local and foreign investors were inevitable under the current situation, which they described as unfriendly to business.
They were debating a report by Policy Forum on tax incentives and revenue losses in Tanzania, which shows that the country losses tax revenues amounting to six per cent of Gross Domestic Product, with beneficiaries being a small group of foreign investors.
"I can hardly see an alternative to tax incentives due to our harsh business environment...poor and bureaucratic services, erratic power supply and poor roads are big disincentives to investors," charged Mr Ezekia Wenje (Nyamagana -Chadema).
He argued that the alternative was to put in place smooth and friendly business environment that would easily attract investors into the country without necessarily seducing them through tax holidays, that deny the government massive tax revenues.
Another legislator, Ms Sabreena Sungura (Special Seats - Chadema), cited Kigoma, saying although the region has developed a Special Economic Zone (SEZ, investors would hardly invest. "Poor infrastructure is the root cause of excessive tax incentives to investors...which investor would invest in Kigoma, for instance, where there is no any reliable means of transport," queried Ms Sungura.
She, however, decried the system under which incentives were provided, saying the system itself was providing loopholes for corruption. The lawmaker faulted the system of entrusting the minister with the sensitive responsibility of awarding incentives to applicants.
The MPs decried massive tax evasion on top of incentives, charging that the country has great potentials of collecting high taxes and running its affairs independently. Dr Titus Kamani (Busega - CCM) said multiple taxes were discouraging tax compliance.
Presenting a report, Dr Ernest Ngowi said tax incentives narrow the tax base, citing the 2008 annual report by Tanzania Revenue Authority (TRA) that showed only 39 large taxpayers contributed about 80 per cent of the country's tax revenues.
The revenue collection agency further claims that out of 15 million potential taxpayers, only 1.6 million pay taxes. The informal sector that accounts for between 40 and 60 per cent of GDP and about 70 per cent of the country's workforce goes virtually untaxed.
$500bn Infrastructure Plan to be Presented to SADC Leaders in August
South Africa - June 19th, 2012
A Southern African Development Community (SADC) Regional Infrastructure Master Plan (RIMP), which could involve cross-border projects with a combined investment value of up to $500-billion, has been finalised and will be presented to the subregion’s heads of State for offical sanction at an upcoming summit, scheduled for Maputo, Mozambique, in August.
The plan proposes the development of regional power, transport, water, communications, tourism and metrology infrastructure over the 15-year period, from 2012 to 2027.
The RIMP has been broken down into its respective subcomponents, with deployment expected to be pursued over three five-year intervals, with the first implementation period having been outlined for 2012 to 2017.
SADC secretariat deputy executive secretary for regional integration João Caholo says the master plan is the product of ‘deep’ stakeholder consultation and will be presented to regional infrastructure ministers in Luanda, Angola, next week and then to a gathering, in the same city, of the bloc’s finance ministers in July.
Chaolo and his team also hope to convince the finance ministers to align the implementation of the plan with the establishment of a SADC development fund, or bank, with an initial capitalisation of between $600-million and $1-billion.
He stresses, though, that the master plan is not dependent on the creation of such a regional financing mechamism. “But we need leadership and commitment from the 15 SADC member States,” he avers, explaining that these countries are the “sole custodians” of the RIMP.
The initiative is based on an assessment that intraregional trade is currently constrained by a lack of ‘connectivity’ and that the development of transborder infrastructure could stimulate further growth and development, as well as facilitate a transition away from the current over-reliance on mineral and agricultural resources within SADC economies.
At present, intraregional trade comprises less than 20% of total trade and the bulk of that trade takes place between South Africa and the other 14 member States. Recent research published by Standard Bank shows that South Africa’s trade with the rest of Africa rose to R220-billion, or 17% of the country’s total trade with the world. But the bank concludes that “South Africa does not trade enough with Africa” and that the country’s “weak economic diplomacy” on the continent means that full commercial value is not being gained.
“One of the critical missing links is infrastructure,” Caholo asserts. But he acknowledges that far more also needs to be done to reduce the red tape and improve standards harmonisation so as to facilitate greater intraregional trade and investment.
Power interconnector projects feature prominently in the plan, including transmission network proposals that move beyond the SADC boundaries into East Africa, such as the Zambia–Tanzania–Kenya Interconnector.
In fact, Caholo stresses that there has been a deliberate effort to align the RIMP with moves to foster the so-called Tripartite-Free Trade Area, or T-FTA, involving the SADC, the Common Market for Eastern and Southern Africa and the East African Community blocs.
The T-FTA negotiations began last year and should they be concluded, the area would span from Cape to Cairo, include 27 countries, 533-million citizens, and represent a combined gross domestic product of $833-billion. A preliminary date of 2013 has been set for the T-FTA’s launch.
Caholo reports that the RIMP has also be aligned with the 51 priority infrastructure projects identified by the African Union, under the Programme for Infrastructure Development in Africa, or Pida, which includes the much-vaunted Inga hydropower project, of the Democratic Republic of Congo (DRC), as well as the proposed North-South transport corridor, linking Lubumbashi, in the DRC, to Durban, in South Africa.
The Pida is also likely to receive support from the World Bank, whose newly appointed VP for the Africa region Makhtar Diop is on record as saying that infrastructure projects that promote further regional integration are likely to be prioritised by the bank in the coming years.
Once the plan has been officially endorsed, the SADC secretariat will conduct road shows in Brazil, China, Europe, India, Japan, the UK and the US to expose potential investors to the opportunities available within the RIMP.
Caholo says that, while the member States will be the primary drivers, the challenge is too large for the countries to tackle alone and there will be scope for foreign participation, as well as for the private sector. The investment need in the energy sector alone over the coming five years is estimated to be $42-billion.
The immediate priority, though, is to undertake technical, environmental and financial feasibility studies for the project so as to prepare them for presentation to investors.
A Project Preparation Development Facility (PPDF) has already been established at the Development Bank of Southern Africa, but Caholo says additional resources are required to enable it to carry out the feasibility investigations.
The PPDF has already received some grant funding from KfW, of Germany. The member States will be asked to inject further capital to enable it to prioritise, select and progress projects to a bankable stage.