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The private sector is not doing enough to reduce chronic hunger, even though its role is “essential”, says Jacques Diouf, Director-General of the UN’s Food and Agricultural Organization ahead of World Food Day on 16 October.
Public-private partnerships I Interactive map: Global hunger
 How should business be involved in the fight against global hunger?
Business is at the centre of production, is at the centre of marketing, is at the centre of processing of agricultural commodities and is at the centre of export and import. Therefore the whole process belongs to business. Starting from small business, with farmers and their organizations, or at the level of much larger companies all the way to multinationals, they are the key players in the process.
Governments have the responsibility to create the economic incentives for business to thrive. They also have the responsibility for basic investment in infrastructure to create the conditions for competitive activity and for productive activities, like irrigation systems, rural roads, major storage facilities and rural markets.
But all the other activities, including management capability, have to come from business if we are to increase food production to meet the needs of more than 850 million people today who are malnourished and undernourished. Also we have to address the expected increase of 3 billion persons by around 2050 that will bring the world’s population to 9 billion people.
World leaders have committed to the Millennium Development Goal of reducing the number of hungry people in the world by half by 2015. How close are we to realizing this goal?
Looking at negative past trends, between 1990 and 2000 we saw a cut in the share of agriculture in overseas development aid (ODA) by half, and ODA overall went down too. You do not secure growth in a sector by cutting your investment in it! If we were to continue that wrong policy we would not achieve the goals until 2150.
But the international community has committed to increase ODA. These are the commitments made at Monterrey (in 2002) and later endorsed at the G8 meeting last July at Gleneagles, and again during the recent meeting (September 2005) of the World Bank and the IMF, which also agreed on the cancellation of the debts of the least developed countries.
The EU has committed to earmark 0.7% of GDP for ODA by 2015, with an interim commitment to achieve 0.56% by 2010. The 10 new EU countries have committed themselves to meeting lower targets - 0.17% by 2010 and 0.33% by the year 2015.
If all these commitments are effectively fulfilled, and in addition we have the focus, as promised, in the new policies of the ministries of development to give higher priority to agriculture - which is the livelihood of 70 percent of the poor and is also the engine of economic growth in most countries where up to 80 percent of their population is in rural areas or whose livelihood derives from agriculture and rural activities - if this is done, then we will be able to reach the goal of 2015.
What is the status on business involvement in reducing hunger? Is business active enough on this issue?
To be honest, I really don’t think that business is doing what it can and should do. Naturally, business is the prime mover of production, trade and processing of agriculture and commodities and this in itself is a great contribution to providing food. But it provides food to the rich and those who are able to access food.
I believe that business should go beyond that and assist the small farmer in ensuring more production, thus enabling him to generate an income and employment. Imagine if we had 850 million hungry people becoming 850 million consumers with a capacity for acquiring goods and services, the first to benefit would be the business community. The overall economic growth and peace and stability of the world derive from those policies.
The business community needs to be more involved but this requires that specific policies be adopted which target small farming communities. Such policies would assist in the process of knowledge transfer, and by creating mini-estates around which small farmers can be actively involved as well as by supplying them through access to and or provision of inputs, storage, processing and marketing of their primary products.
The business community could be at the centre of all those units, which would involve small farmers more in production, generating income and employment. But unfortunately it’s not happening. I have not seen the major companies in agribusiness, agricultural marketing and imports do the type of things we have seen other major companies do. I would like to see the major companies in agricultural trade, in agricultural production and in agro-industries play a similar role that Bill Gates is playing for example.
But they are not. I believe that they have an ethical responsibility, a social responsibility, which in the end would translate into economic rewards for them with increased demand in a population which today doesn’t have an effective demand.
Rajat Gupta of McKinsey said to the UN that where development has succeeded, “business has been the engine of growth”. Would you agree with this statement?
Provided again that business is willing to be the engine of growth. If you look at it from the opposite angle, when there has been development, business has played a role. My problem is: where growth is not happening, what is the role of business?
We can easily understand the moral argument for business to assist in meeting the MDGs. But what is the business case for companies to take action?
It’s not only morally right, it’s economic common sense. I think any board would understand that turning 850 million people into consumers, with effective demands for goods and services - starting with food because that’s the primary need of people - would be in the interests of growth for those companies.
The Forum is exploring a new effort to catalyze public-private partnerships to reduce chronic hunger (particularly in Sub-Saharan Africa and South Asia) through increasing agricultural production, improving nutrition, and expanding rural market systems. Following a first meeting in June 2005, interested companies and experts are now preparing a strategy for coordinating efforts to reduce hunger in Africa. This initiative is driven by Forum member companies in the agri-business, food and beverage manufacturing, packaging and retail industries.
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