Tuesday
November 2
2010

kevin keepper

After ’07-’08 Crisis, A New Focus on Food Security, Sustainable Solutions

This is the first in a series of interviews with Simon Winter, TechnoServe’s Senior Vice President of Development. He is responsible for leading and managing strategy, knowledge management/thought leadership, strategic planning, program development, and leading fundraising and partnerships. He is also responsible for managing and incubating innovative programs, including in India, Europe and for capital access for SMEs. Previously, he was Regional Director for Africa. Simon joined the NextBillion Advisory Board this week.

Kevin Keepper: What has been your impression of the Obama Administration’s approach to food security?

Simon Winter: While the global drive for increased attention to food security was initiated before the Obama Administration came in to office, this administration began to clearly define a U.S. commitment to this initiative. They did so by articulating development as an important part of diplomacy and defense early on. The release of Feed the Future (FTF), a “whole-of-government” strategy in May 2010 which transcends the office of USAID, was an important step in this direction. The strategy is a comprehensive embrace of four key elements: better availability of food through improved productivity and volume of production, improved access to food by increasing incomes for the poor, improved utilization of food (or improved nutrition), and increased stability of food markets and supply chains which thereby reduces the risk that the poor will fall back into food insecurity.

My impression of this effort so far is that there is still a risk that we may end up with a productivity-led set of initiatives without securing adequate channels to market. These channels are critical so that as surpluses are produced, they can deliver improved incomes for the poor producers – rather than contributing to new boom and bust commodity cycles. While the need to be market driven is given prominence in both of the two key pillars of food security, agriculture and nutrition, the implications of this in terms of practical programming are still to be seen – especially on the nutrition side.

KK: What is lacking in the nutrition component and are there other major gaps in knowledge right now around food security?

SW: At present, nutrition programs tend to be about improving the quality of food through fortification, distributing food supplements, or delivering public education programs such as teaching lactating mothers how to graduate an infant. These tend to be very single-shot efforts and do not take a sustainable, market-oriented approach – largely because they have been driven by highly skilled health professionals or development professionals rather than people from the private sector. On the business side, GAIN and its corporate partners have been doing a great job in supplying improved food and nutrients to meet demand established by the likes of the World Food Program (WFP) and national governments in need of food aid. What we are doing at TechnoServe is trying to identify opportunities for more systemic changes that will lead to growing private markets for more nutritious food.

The goal is to foster sustainable solutions that raise the nutritional level of poorer consumers at the base of the pyramid without depending on public subsidies into the future. We believe significant attention needs to be given to identifying the opportunities that private actors can play in enhancing the quality of food, in food processing, in ensuring food safety and in developing new more nutritious products for the poorer consumers than has yet been the case. And then we seek to identify the catalytic role that the public donors and their implementation partners can play in bringing these opportunities to market.

The question then becomes what might this emphasis on nutrition mean on the food supply side? Might this create new market opportunities for smallholder staple crop farmers, who are able now to not only produce enough to feed themselves but can produce surpluses as well? Among many constraints, this depends on smallholders becoming competitive staples producers – and frankly the evidence here is mixed as to the conditions under which they can be efficient producers of food staples. Many from agro-industry and the finance world, as well as a number of economic historians, observing how grain industries have developed, say it needs to be done commercially. A center-pivot irrigation scheme, for example, we know to work on 20 to 50 hectares of land, not on 1-2 hectares, as there is a minimum scale at which to operate economically. And rain-fed grain production is highly risky in much of the developing world. The solution would be for smallholders to group their farms and agree how to handle tractors, center-pivot irrigation and the infrastructure to make their farming efficient. But again, there are not well-proven models for this type of organized activity.

KK: Of the four key elements of food security, which is the most important to move ahead with immediately?

SW: An important point to make in this description is that food self-sufficiency is not necessarily the most efficient solution to the food crisis and to food insecurity. From the TechnoServe perspective, the access pillar is most important. We understand access to be getting markets working for food so that people can, on a daily basis, access the food that they need – taking into account quality and nutritional value – at a price they can afford. And they are doing this with sufficient income either from partaking in the food market directly or from non-food income sources (non-food ag or off-farm income). For example, your best income opportunity may be to focus on a non-food crop like cotton or a high-value crop like coffee. And if importing food produced by a neighboring country that’s far more efficient in producing that maize or rice makes sense economically, why not do it that way? Those farmers who are best suited in producing rice and maize will get the best incomes rice or maize farmers are able to get. This is simply Ricardo’s 19th century concept of comparative advantage. It seems too often to be forgotten when talking about food security, and we see that in the recent food price crisis with prices swinging up again.

When countries like Russia ban exports of their key staple foodstuffs because they want to make sure there was enough available locally, trade barriers are resurrected that get in the way of an efficient flow of resources. In contrast, we are interested in increasing income opportunities and then optimizing the access to food through market systems. Now, this isn’t new thinking and it does come out in the current FTF strategy. However, the models for how you get small farmers to increase their incomes at significant scale are still not well established. There are some good models around high-value crops, but when it comes to grains and staples, there’s not a lot of research on how to do these things in a replicable and scaleable way.

I think because of the lack of research in how to repetitively succeed with income-generating grains and staples programs, we are seeing a cautious approach. There is a reasonable concern about trusting ourselves to allocate hundreds of millions of dollars to new programs when we don’t know what the best practice is. It’s easier to allocate money to things like nutrition programs, because you know if you run mass-based education programs around how to improve feeding your under 1,000 day-old child, it’s going to have an impact. I think at this stage people are veering towards allocating resources to the things they know will work and therefore we will see a continuation of this behavior in the immediate future. The challenge is that this conservative behavior inhibits exactly the kind of innovation and risk-taking that is required to make a much more fundamental change.

Q: Though you alluded to one lesson already, what were the major lessons from the food price crisis of 2007-2008?

A: I think the major lesson (unrelated to FS directly) was that the distortions in global food markets brought about by advanced countries’ food subsidies and food policy regimes (biofuel policy, farm subsidies, etc.) still are far and away the biggest impediments to the most efficient allocation and distribution of food around the world. Far more money is spent on those food subsidies and agricultural subsidies than is spent on development.

The second lesson is that we need to focus on opportunity as much as we focus on adversity. Higher food prices actually create opportunities for many small farmers, local entrepreneurs and processors in poor countries. And given subsistence farmers tend to buy little in the market – the downside of this mostly affects the landless and those in the most marginal climates. Food prices are now much higher and rising again and new opportunities exist for producing and processing foods in the poor countries. This opportunity is yet to be explored effectively.

Considering the food crisis and the implicit effects ultimately comes back to the point around a business-building imperative: we need to focus on value chains as an intricate part of food security. If you’re developing a maize sector- look at it as a maize sector; look at the sector all the way from input supply to how to stimulate the local markets and on to regional market access.

Lastly, the food crisis highlighted the need for coordination at all levels. What you saw in terms of that reversion to more protectionist kinds of nationalistic strategies flew in the face of efforts to coordinate development regionally and globally. We have to guard against this impulse. And even within the good things that are happening – such as WFP’s Purchase for Progress program that is stimulating local and regional demand to supply WFP, this needs to be coordinated more closely with those development programs that are working on the supply side.

The food price crisis was a major contributor to putting agriculture and nutrition back as a front and center development challenge – we are looking forward to seeing increasing attention to learning and applying the lessons from the new round of efforts.

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