Crowd Sourcing Financial Solutions to Hunger: What Will the Policy Outcome Be?

By Ioulia Fenton

A recent FAO online forum invited suggestions and ideas on improving agricultural development. (Photo credit: Bernard Pollack)

Over the last few weeks, the UN Food and Agriculture Organization (FAO) held the 81st online Global Forum on Food Security and Nutrition. Drawing on 4,000 members from 170 countries and territories, the platform claims to allow “stakeholders such as academics, researchers, development practitioners, governments, and the civil society to actively participate in [key debates].”

The latest discussion, “Innovative financing for agriculture, food security and nutrition,” invited participants to comment on different Innovative Financing Mechanisms (IFMs) that have been suggested to complement Overseas Development Assistance (ODA) efforts in developing nations and come up with novel ideas of their own.

IFMs are mechanisms that lie outside traditional channels of funding (like ODA and private sector investment) that aim to reach under-serviced rural and poor populations. According to the FAO, they are needed now more than ever because, due to population growth and lifestyle change, the world’s food requirements are expanding at a time when ODA destined for agriculture is declining and private investment is found to be wildly lacking or even, at times, non-existent.

Thus far, around US$6 billion in additional funding has been raised through existing IFMs. These have included a mixture of public and public-private initiatives, including global taxes on everything from sugary drinks to deforestation; public-private investments in farming credit and produce marketing systems to support smallholder agriculture; and incentives for research and development such as public prizes to drive private sector innovation in agriculture. However, according to the Forum, the IFMs currently in use are not going far enough and improvement is needed if the world is to meet today’s global agriculture and food challenges.

The situation has been deemed so serious that, during its 9th Planetary Session in July 2011, the Leading Group on Innovative financing for Development, a group of 63 member countries of different levels of development that work alongside international and non-governmental organizations to promote the implementation of IFMs around the world, established an international task force to figure out how IFMs can help provide a much-needed boost to flagging agriculture and food security funding.

During the discussion, many participants provided possible financing mechanisms that they envision being useful to stimulate agricultural development and/or reduce global hunger. Building on his work in Latin America, José Luis Vivero Pol of the Belgian Université Catholique de Louvain, for example, suggested a debt-for-food scheme to “redirect debt swap schemes towards food security programmes.” Meanwhile, to incentivize financial institutions to provide banking and other services to groups that are usually considered too high-risk and low-reward, Muhammad Irfan Kasana of Agriculture Corner in Pakistan suggested a “collateral management model” to build trust between stakeholders.

Falana Adetunji Olajide from the Federal Ministry of Health of Nigeria made the point that no one-size-fits-all solution will do, but a tailored country approach focusing on making the livelihoods of its citizens sustainable must take priority.

Since many of the proposed market-based remedies aiming to reach the lowest socioeconomic groups have not succeeded in the past, some participants pointed to the usually neglected aspects behind these failures. Referring to his previously published op-ed on the subject, Christian Chileshe from Three C Management, a development consultancy in Zambia, suggested that instead of doing the same thing whilst expecting a different outcome, what we really need is a “serious inquiry into the social and psychological dimensions of smallholder agriculture finance.”

Bhubaneswor Dhakal, a Nepalese Resource Economist, argued that communities have many ideas for their own alternatives, but these are ignored by such top-down approaches as the IFMs, which are not new at all, but are just “old wine in new bottles.”

Other participants questioned whether IFMs are even the right tool to be dealing with the problems at hand in the first place. “Maybe thinking of hunger as a global economic problem takes us down the wrong track. Suppose we look at the hunger issue at the level of families and small communities. With decent opportunities, and freed of exploitation by others, every family and every community would find ways to provide for itself,” said Professor (Emeritus) George Kent from the University of Hawaii.

These perspectives are very varied, illustrating the breadth of ideas that complicate the issue. Including them all in the task force’s final policy recommendation report will be difficult. The biggest issue will be balancing opinions that see IFMs as a valid solution. Building on the Forum and its crowd sourcing of financial solutions to hunger, the question is can the task force maintain a truly participatory model or will the end result be more business as usual.

Ioulia Fenton is a research intern with the Nourishing the Planet project.

To purchase State of the World 2011: Innovations that Nourish the Planet please click HERE. And to watch the one-minute book trailer, click HERE.

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