IFPRI Forum

October/November 2007

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FORUM: The first United Nations Millennium Development Goal (MDG) sets the target of reducing the world's proportion of poor and hungry people by half between 2000 and 2015. In your view, will we see a markedly different world in 2015 than we saw in 2000, in terms of poverty and hunger?

Sierra: I do think that the world of 2015 will be markedly different from the world of 2000. Whether the difference is positive or negative depends on the decisions and actions we take today. We all know the numbers by now: there are 1.2 billion poor people in the world (living on less than $1 per day) and 75 percent of them are rural; 852 million people suffer from acute and chronic hunger. Most of the poor are involved in farming or rely on natural resources for their livelihoods, so the first MDG will only be achieved by 2015 by harnessing the power of agriculture for development.

In terms of poverty and hunger and our progress in meeting the first MDG, the United Nations's MDG report for 2007 shows that countries are making slow progress on both fronts. Specifically, the number of people in extreme poverty fell from about 33 percent of total world population to below 20 percent between 1990 and 2004. Progress on hunger has been slower, and it remains to be seen whether all regions will meet this target by 2015, particularly in Sub-Saharan Africa and South Asia. But we need to ask ourselves critical questions as we make progress towards these goals.

First, what is the quality of the growth we're achieving? Economic growth has clearly contributed to poverty reduction over the past 20 years, but the accompanying rise in inequality is worrying. In East Asia, the region with the most significant growth between 1990 and 2004, income inequality is a major concern. Furthermore, the growth in some developing and middle-income countries is undercutting their environmental health and depreciating their natural resource base.

Second, are we making progress on hunger in all of its forms? If we focus our efforts solely on acute hunger, we're only reaching roughly 10 percent of the hungry. The other 90 percent who suffer from chronic and hidden hunger need to be high on our agenda as well.

What trends will most impact our ability to reduce poverty and feed the world? There are many global trends that are impacting the agricultural sector, which most of the poor still rely on for their livelihoods.

Shifting consumer demand is influencing research and production systems worldwide. As priorities of the market lean to high-value agricultural products from animals, fruits, and vegetables, they create new opportunities for farmers. We cannot let poor producers who traditionally furnished these items be squeezed out of the market because they cannot meet changing new demands for food safety and quality. We also need to ensure continued attention to the productivity of basic food staples as even a slight slackening of the steady yield growth of many years could lead to exploding prices of foods purchased by the world's poor. The last 30 years were a time of mostly relatively low food prices, which may have contributed to complacency about world food issues.

Global food prices have, however, increased 26 percent in the past three years due to drought and disease and pest epidemics, but also due to the rapid increase in the use of foodcrops to produce biofuels. While increased prices may positively impact the incomes of some farmers, many who are not connected to global markets will not reap the benefits. Also, the impact on the urban poor and many rural poor who purchase their food is significant.

Short-term climate variability and medium- to long-term climate change will increase risk and vulnerability in food production systems, aggravating price and food access problems. We are seeing this even today: with the shortening cycles of floods and droughts across the world, entire annual crop harvests are being wiped out in a matter of days.

Biofuels have already had an impact on crop production and land use patterns and subsequently on food prices.

FORUM: What do you see as the main responsibilities of developing- and developed-country governments in achieving meaningful and sustainable reductions in poverty and hunger? And what roles should international organizations such as the World Bank and the CGIAR play in reducing poverty and hunger?

Sierra: I'm glad you asked what developing- and developed-country governments need to do, because all too often these discussions focus only on the responsibilities of the developing ones. There are key areas—such as trade, aid, and climate change—where all countries need to make changes to achieve the first MDG.

The World Bank has advocated for both developing and developed countries to lower barriers to trade in agriculture. Much more progress is needed. We've learned that market liberalization has had both positive and negative impacts on developing-country economies, depending on how it was implemented. Organizations like the World Bank can help countries through the transition by supporting policy and regulatory reforms and expanding their capacity for implementation to enhance productivity and competitiveness. These efforts, matched with investments in science, technology, institutions, and infrastructure can help smallholder farmers reap the benefits of a global economy.

Richer countries must also do much more to finance global public goods—such as research for greater agricultural productivity while sustaining natural resources. The CGIAR is a key organization in this work. We also need to engage with our partner countries in the South to improve the efficiency of public spending in agriculture, and in contributing to clearer rules of the game in areas such as sanitary and phytosanitary (SPS) protocols that respond to the new realities of global trade.

The risks presented by climate variability and climate change are going to be especially challenging with regard to achieving the first MDG. The CGIAR needs to continue developing, testing, and rolling out new technologies with traits for drought and flood tolerance as well as pest and disease resistance. The Bank and other development organizations can help by funding the CGIAR and its national partners to address these challenges through new research and technologies and by creating the enabling environment (policy, governance, finance, empowerment) that allows these new technologies to have a positive benefit for societies and for the poorest in those societies.

Over the past 25 years, agriculture has been increasingly neglected by governments and donors, despite its growth and poverty-reducing potential. The problems of world poverty, inadequate growth in many agriculture-dependent countries, and growing pressures on the environment are mounting fast. These challenges can be tackled by using agriculture for development, but first the sector needs greater focus and funding.

The share of agriculture in official development assistance (ODA) declined sharply, from 12 percent of total ODA in 1990 ($6.6 billion) to 3.5 percent in 2004 ($3.4 billion). During most of that time, World Bank lending for agricultural activities also declined dramatically, from about 31 percent of total lending in 1990-1991 ($3 billion) to less than 10 percent in 2000-2001 ($872 million).

However, I'm happy to say that we have reversed this decline in recent years. World Bank lending in agriculture and rural development is now stable at around US$3 billion, and I think that number can and should increase. Moreover, a recent analysis shows that in the past five years 75 percent of International Development Association funds for agriculture have gone to Sub-Saharan Africa and South Asia, where poverty and hunger are most critical.

FORUM: In your view, which strategies, policies, and interventions have been most successful in eradicating extreme poverty and hunger so far?

Sierra: The success of the Green Revolution cannot be overlooked. The work by international and national agricultural research centers increased production, lowered food prices, raised rural incomes, increased caloric intake, and most certainly saved lives. Studies of the original Green Revolution show that there was, however, bad with the good. There are questions about the sustainability of intensive cultivation. Yields are leveling off in many areas, brought on by environmental impacts of soil degradation and salinity, chemical pollution, and aquifer depletion.

Kofi Annan has called for a Green Revolution for Africa, and Robert Zoellick echoed that call in a recent speech. But it is important for all of us to absorb the lessons of the last 50 years and make sure that the Green Revolution for Africa is an "ever"-Green Revolution adapted to the very different situation of Africa today compared to Asia 30 years ago. The especially difficult issues of geography, climate, demography, infrastructure, external policy environment, and institutional bases need to be factored in in deriving action plans. We have knowledge and technology now to make food production more environmentally and socially sustainable. We need to apply lessons learned from using subsidy programs to provide inputs to agriculture, many of which did not benefit the poorest farmers. We need a parallel investment effort in critical infrastructure—roads, electricity, information and communication technologies—to make it possible for poor farmers to reach markets. Moreover, we need to apply the lessons of empowerment to our efforts. We know from experience that the poor, themselves, are among the most valuable sources of agricultural knowledge and are adept at adapting and helping to generate new technologies. They must be part of the solution.

FORUM: In your view, what should be done now about the half of the world's poor and hungry population that the MDGs will not have addressed by 2015?

Sierra: The World Development Report 2008 does an outstanding job of outlining the issues we face that should determine our priority actions. The difficult message is that we need to proceed on all fronts. There are no silver bullets to solve the problem of poverty and hunger. Instead, we need to collaborate much more so that government actions and donor interventions achieve a critical mass of reform that will have measurable impacts. In other words, the totality of donor activities in developing countries needs to be greater than the sum of its parts.

There are exceptional new opportunities to invest in agriculture. New markets for high-value products—horticulture, livestock, feed, and processed biofuels—are expanding rapidly. Institutional innovations (in value chains, finance, public-private partnerships, and producer organizations) and technological innovations (in biology and information) are facilitating supply responses.

World Development Report 2008 identifies three typologies of countries where efforts to address poverty and hunger need tailored responses.

In agriculture-based economies, much of Sub-Saharan Africa, where agriculture accounts for 25-45 percent of GDP and where 70 percent of the poor are in rural areas, agriculture must be the engine of overall growth and poverty reduction. We need strong investment in science and technology, but also management systems, empowerment, infrastructure, and policy and regulatory reform to enhance sustainable use of natural resources.

In transitioning and urbanizing economies—those where agriculture contributes less to GDP but where rural poverty still presents a challenge to varying degrees—we need to focus on improving market access and addressing income inequalities, which prevent the poor who are net providers of food from earning a decent living and the poor who are net consumers of food from being able to afford it.

The challenge to achieving the first MDG is not going to be easy. However, I believe that we have the knowledge to meet that challenge. What we need now are resources and political will to make it happen. At the World Bank, our regions and many sectors are working with our clients to assess the needs and priorities to operationalize the recommendations of the new World Development Report, and we expect this to lead to concrete interventions that will move us closer to achieving the first MDG in a sustainable and equitable way.