ACDI/VOCA’s Response to the Global Food Crisis

Background

Drastically increased real food prices and rising food production costs are having a profound and pervasive effect on the developing world. The food crisis has resulted in widespread hardships, especially in Africa, where some of the world’s most vulnerable populations live.

Over the past 3 years, world food prices are estimated to have surged by 80 percent. Some staple crops such as rice have tripled in price in just the last 2 years, while the price of maize has increased 80 percent in the same time period. While fuel costs are now in decline, their earlier surge exacerbated the situation by raising commodity transportation, production and farming input prices. The exact number of impacted people is difficult to determine, but the very real danger of increased hunger and famine is indisputable. Although the increase in food prices has abated somewhat in recent months, an estimated 75-100 million additional people have been pushed into poverty and food insecurity as a direct result of this crisis.

Agriculture receives only 4 percent of total U.S. foreign assistance, while most developing countries are also only allocating 4 percent of their budgets to the agriculture sector. One positive effect of the crisis is that it has renewed the focus of the international community and donor organizations on agricultural development. Developing country governments feel the pressure to increase their budgetary allocations to agricultural development. Many donors and organizations, such as the Bill and Melinda Gates Foundation and the World Bank, are ramping up their own agricultural program funding. United States emergency funding has been allocated for direct distribution of food, relief activities such as input provisioning, as well as longer-term transitional strategies. United Nations organizations such as the World Food Program (WFP) and the Food and Agriculture Organization (FAO) have developed strategies to provide food relief and emergency seed and input assistance to smallholder farmers.

These increases stem from the realization that global food demand is steadily growing, and agricultural productivity needs to grow concurrently. However, the global financial crisis is not only threatening to eclipse concerns about the food crisis, it is further contributing to the already dire situation. The financial crisis undermines investment in agriculture and distorts the prices of key inputs such as fertilizer, which portends a further decline in agricultural production. Financial instability and reduced access to credit are inhibiting the commercial sector’s acquisition and transportation of goods.

While there are differing views on how long the food crisis is likely to last and how pervasive it will be, there is consensus on the urgency of action to both alleviate immediate hardship and to forestall future crises.

Where ACDI/VOCA Can Contribute the Most:

Recent events have reinforced the importance of ACDI/VOCA’s existing food security programs and affirmed our role in mitigating disruptions of the food supply. Our 45 years of experience in agricultural cooperative development and smallholder farmer capacity building has strengthened the agriculture sector around the world. However, this food crisis illustrates to us the need for a comprehensive response to the global food situation. Our focus is on agribusiness systems, enterprise development, community development and financial services. Food security is addressed through all of these areas, and includes activities such as direct distribution of rations to vulnerable populations, cash-for-work programs, improving staple crop and horticultural production, promoting improved nutrition, and savings mobilization and improved access to credit.

ACDI/VOCA promotes the benefits of collective action to get greater access to inputs and to participate in targeted value chains. We have helped reform agricultural policy and built public-private agribusiness partnerships. We have also enhanced individual household capabilities through improved farming techniques and promotion of farming as a business. We have developed and refined our capacity in market analysis and commodity management to the point that we are approached by others to provide these services. And in many countries, we have implemented competitive grants programs that empower local organizations and communities to take responsibility for addressing their own needs—both immediate and long-term.

Our Strategic Response

ACDI/VOCA’s activities and programming already ameliorate the effects of the global food crisis¹, but more strategic efforts are obviously needed. Considering the nature of the crisis and our capacity to contribute to its alleviation, ACDI/VOCA’s response will be a balance between near- and longer-term actions.

In the near term, we will increase our internal technical capacity and resources to design and manage food security programs that meet immediate needs. We will also work with the relief and development community to help inform and shape a well-planned response to the crisis. And where our development programs contain the necessary surge capacity, we will initiate proposals for emergency responses².

In the longer term, ACDI/VOCA’s role as a leading agricultural development organization places us in a strong position to build the capacity of farming communities to withstand future food crises. Our approach will include the following steps:

• Participate in national and international efforts to inform funders about the food crisis and to encourage them to dedicate sufficient and well-targeted resources to its alleviation through agricultural development.



• Continue targeting the most chronically vulnerable populations while looking for new opportunities to apply ACDI/VOCA programming strengths.



• Continue to build ACDI/VOCA resources in health and nutrition as a part of overall food security.



• Provide financial services that support increased productivity and improved village and farm-level storage³.



• Support access to finance for increased productivity and quality of food produced in areas of surplus as important elements of a food crisis response.



• Emphasize financial institution strengthening by developing innovative lending products for agricultural production players, building local risk assessment and management skills, and promoting methodologies to significantly increase outreach and market depth of access to financial services through financial institutions, input suppliers or other market actors.



• Build awareness of food crisis responses by collating and synthesizing ACDI/VOCA’s experiences. Through our website, publications, talking points, e-newsletter and other media, raise awareness among the public, donors, the U.S. Congress, think tanks, media, the development community, etc., of the nature and scope of the crisis.



• Continue to target women in development projects, as women have a demonstrably higher return on food security investment at the household level.

¹ACDI/VOCA addresses food security and household asset stabilization in a number of countries. In Haiti, Uganda and Rwanda, ACDI/VOCA works specifically on food security projects designed to address availability, access and utilization of food to reduce the vulnerability of targeted communities.

²In Haiti, where we are a Title II implementer, we recently distributed 15 metric tons of U.S. commodities, as well as hygiene and water kits in hurricane relief.

³At the producer level, support programs that mobilize savings and provide access to inputs on loan terms that are consistent with the business cycle of the farming community and support broader rural development objectives by providing access to finance for marketing and market infrastructure.