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Policy Paper

August 2012

Delivering on the Promise of a New Alliance for Food Security and Nutrition
Recommendations for Effective Development
For more information, please contact: Stephanie Cappa Manager Development Policy InterAction scappa@interaction.org

Since 2009 the United States has shown remarkable leadership in the fight against poverty, hunger, and malnutrition through agriculture-led growth. The leadership of President Obama, Secretary Clinton, Administrator Shah, Senators Leahy and Graham, and Congresswomen Granger and Lowey has helped reverse two decades of declining investments in agriculture and nutrition worldwide. The 2012 G8 summit at Camp David highlighted both progress made since the G8 LAquila pledge of 2009 and the remaining challenges that prevent the worlds billion hungry people from meeting their own food and nutrition needs. The launch of the New Alliance for Food Security and Nutrition, a commitment by G8 nations, African countries and private sector partners to lift 50 million people out of poverty over the next 10 years through inclusive and sustained agricultural growth, is one attempt to address these challenges with additional private sector investment. While additional private sector participation and partnership is vital, the New Alliance cannot deliver on sustainable poverty reduction goals until the following recommendations are incorporated: 1. Fulfill and sustain public investments; 2. Aim investments and policies at small-scale producers; 3. Involve civil society as leaders; 4. Hold private sector actors accountable for responsible investment; 5. Include gender equity, nutrition, environmental sustainability, and n climate resilience as priority outcomes.

Brian Greenberg Director Sustainable Development InterAction bgreenberg@interaction.org

To achieve poverty reduction and food and nutrition security goals, the InterAction Food Security/Agriculture Working Group strongly recommends both robust public sector financing and sustainable, strategic and effective leveraging of private sector investments. Along with host countries and G8 members, the U.S. government should play a lead role in holding private sector actors accountable for meeting both quantitative commitments and strong qualitative standards. This paper outlines such an approach.

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Responsible Investment Needed


Despite increased attention to African agriculture since the 2007-2008 food crisis, the challenges are still great. Over the next forty years half of the worlds population growth will be in Africawhich will have 1 twice the population of China in 2050. Yet the changing climate is estimated to decrease agricultural yields in some African countries by as much as 50 percent by 2020, and wheat could disappear from the 2 African continent entirely by 2080. To address these challenges additional investment is greatly needed. In 2009, FAO estimated a need for $83 billion dollars of annual net investment in developing country agriculture and value chains to meet the 3 growing demand for food. A 2010 World Bank report estimated that $10.3 billion of annual investment is needed to scale up direct nutrition interventions and combat the staggering global cost of undernutrition. Yet the 2012 Camp David Accountability Report shows that country-investment plans in agriculture, which 4 represent a fraction of the investment needed, are still 50 percent underfunded. Public financing alone cannot fill this gap, and large-scale private sector investments like those dominating current New Alliance plans is not in itself a sufficient pathway for poverty reduction. Coordination between host countries, donors, private sector actors and civil society will be critical to closing the gap in policies, programs, and financing for broad-based development. The recommendations below will help New Alliance members establish a plausible pathway to achieve gains for Africas small-scale producers and sustainable, poverty-reduction goals.

RECOMMENDATIONS 1. Fulfill and sustain public investment in agriculture and nutrition


Public investment in agriculture and nutrition security is critical and cannot be replaced by the private sector. Agricultural development requires public goods such as public agricultural research, extension services and infrastructure. Improvements in nutritional status require investments in health and protection systems as well as ensuring that food systems deliver a diverse and nutritious diet. Finally, public financing is critical to establishing an enabling environment for small-scale producers by allowing private investment to flow to these actors directly. Such investments can include infrastructure to facilitate market functioning and improved regulatory environments. Yet some donor governments still lag in meeting their 2009 LAquila commitments, as only 50% of these 5 funds disbursed to date. We ask that the U.S. government encourage lagging donor governments to fulfill their current commitments by the end of 2012. Futhermore, the U.S. and donor nations should continue robust public support for country-led agriculture and nutrition investment plans, and at a minimum sustain these investments over three additional years.

The Chicago Council. The Power of Private Investment Leveraging the Strengths of Business to Meet Food Security Goals. Chicago, IL: Chicago Council, June 2012. 2 IPCC. Climate Change 2007: Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge UK: IPCC, 2007. 3 FAO. How to Feed the World in 2050. Paper prepared for the High Level Expert-Forum on Feed the World in 2050. Rome: FAO, 2009. 4 G8. Camp David Accountability Report. Washington, DC: G8, 2012. 5 Ibid.

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2. Aim investments and enabling policies at smallholder farmers and producers


In Africa, small-scale farmers are the dominant private sector actors in agriculture, accounting for over 70 6 percent of agricultural production and over 75 percent of labor. Enabling policies and investments should therefore be directed at enhancing the effectiveness of small-scale and family farmers on-farm investments, while taking care not to erode their assets, know-how, and autonomy. In particular, investments and policies should pay attention to the needs and roles of women, promote sustainable farming methods, improve diet diversification and nutrition outcomes, support small-scale producer-led research, and increase resilience to climate change and other shocks. Yet the New Alliance Cooperation Frameworks focus on policy commitments, investments and technology for large-scale farming, with financial commitments centered around capital costs for business infrastructure and operating expenses. It is critical to demonstrate how such investments and policy reforms can benefit small-scale producers and improve food security. To establish such a pathway, we recommend that the New Alliance, G8 members and host countries: a. Channel significant direct investment toward small-scale producers and their organizations (following the guidance above), b. Prioritize small-scale producer representation in all private sector consultations, business roundtables, agriculture sector working group meetings, and c. Bolster local enterprise through improved policy, legal, and regulatory enabling environments while protecting against an erosion of local capacity. The U.S. government should play a strong role in helping to ensure that these recommendations are implemented, particularly given its current role as the co-chair of the Ghana and Tanzania agriculture sector donor working groups.

3. Involve local civil society, especially smallholder farmers organizations, as leaders


Country-ownership is at the heart of effective development practice, with the participation of both citizens and government leading to better targeting of resources, strengthened accountability, and ultimately in7 creased sustainability and success. Despite the link between civil society engagement and development impact, local civil society are still not 8 sufficiently involved in agriculture decision-making. A recent letter from African producer and civil society organizations signals growing alarm over initiatives not clearly tied to inclusive frameworks and process9 es, stating that the New Alliance risks seriously compromising Africa-led food security initiatives. As the New Alliance takes shape, G8 members and host countries must strengthen and formalize the participation and leadership of local civil society. Civil society must be represented on the New Alliance Leadership Council at the global level and in each consultation group and structure at the country level.
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African Development Bank. "Smallholder agriculture in Africa's changing economy." 2009. InterAction. Country Ownership: Moving From Rhetoric to Action. Washington DC: InterAction 2011. PROPAC, ROPPA, EAFF. Agricultural Investment for Strengthening Family Farming and Sustainable Food Systems in Afria. African Farmer Workshop Synthesis Report. Yaounde, Cameroon, 2011. 9 Letter signed by ROPPA, POSCAO-AC, REPAOC, WASCOF, CAOSAD, OSCAF, WANEJ, AFAO, REPAD, WAITAD, WABA, RECAO, NANTS, PASCiB and SYTO.

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The Cooperation Frameworks for Ghana, Ethiopia, and Tanzania state the intent of each countrys government to provide the human and financial resources and the mechanisms for dialogue with the private 10 sector, farmers and other stakeholders. We recommend the following as these dialogues and consultations occur: a. Structure consultations so that stakeholders can contribute to planning the meetings, prepare and participate fully, and influence the outcomes; b. Establish long-term, collaborative partnerships with civil society stakeholders; and c. Include womens organizations and representatives of other marginalized groups (espe11 cially the poor). G8 members, including the U.S. government, and country governments should also support an enabling policy, legal and regulatory environment for local civil society organizations, capacity-building, and resources where appropriate.

4. Private sector actors must be held accountable to clear standards of responsible investment
New Alliance private sector partners, like donors, must be transparent about current and committed levels of funding and be guided by the Rome principles, including support for country-led plans. Such commitments must include accountability mechanisms to ensure that private sector action contributes to sustainable, poverty-reduction goals. The New Alliance country frameworks commit G8 members to alignment with country plans, yet similar commitments from the private sector are absent. Although parties signal their intent to participate in an annual CAADP-donor Joint Sector Review process, private sector actors do not appear to be held accountable to any standard beyond meeting financial commitments. G8 members, including the US Government, and host countries must push private sector actors to align with strong established standards and plans and be held accountable for it. One positive note is the New Alliances inclusion of the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security (the Voluntary Guidelines) as a means of promoting secure tenure rights and equitable access to natural resources. As the New Alliance takes shape, we strongly support commitments of financial and technical support to implement these Voluntary Guidelines at the national level. In contrast, it is inappropriate for the G8 to encourage New Alliance countries to pilot the use of the Principles on Responsible Agricultural Investment (PRAI). The PRAI have seen no sustained or inclusive involvement by civil society actors and use of them risks legitimizing a framework on private and pri12 vate/public investment that has not been debated or endorsed by stakeholders. We strongly recommend that New Alliance actors adhere to the Voluntary Guidelines and move forward with pilot programs only in accordance with these standards.

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G8 Cooperation Frameworks to Support the New Alliance for Food Security and Nutrition in Ghana, Tanzania, and Ethiopia. 2012. 11 InterAction. Creating Strong Stakeholder Engagment in Feed the Future: Suggested Strategy and Guidelines. Washington, DC: InterAction 2011. 12 Ibid.

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5. Priority outcomes for New Alliance private sector investments must include gender equity, nutrition, environmental sustainability, and climate response
The New Alliance focuses heavily on increasing yields through improved technology, though broader approaches are necessary to achieve sustainable and equitable poverty reduction. For example, neither 13 increased yields nor increased incomes are sufficient to improve the nutritional status of populations. The G8 and the New Alliance should prioritize improved nutritional outcomes and produce a clear overall target and timelines to achieving them. Similarly, the New Alliance plans should specifically break out environmental sustainability and climate response goals, to be measured along country-defined indicators of success. As currently drafted, New Alliance plans do little to address or acknowledge environmental and climate challenges. Finally, though the New Alliance includes women among the primary beneficiaries of investment, it is unclear how these private sector commitments take the specific roles and needs of women into account or by themselves improve gender equity. To ensure the overall objective of this initiative is achieved, private sector actors must be held accountable for performance targets beyond mere production, to include improved capacity of smallholder farmers especially women to contribute to food security and nutrition, reduce 14 poverty, and achieve positive environmental goals.

CONCLUSION New Alliance success depends upon adopting these protections and processes
We applaud the G8s clear target of helping 50 million people out of poverty, and recognize that this goal requires a significant scaling up of the New Alliance as launched. However, a credible pathway from private sector investment to sustainable, broad-based poverty reduction must be established immediately. Adopting the recommendations above would be a strong start. Only once the above criteria are met and standards for corporate action, accountability, and local civil society engagement are established and operationalized, should the New Alliance be expanded beyond Tanzania, Ghana, and Ethiopia to additional countries with vetted country investment plans still waiting to be funded.

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Ruth Meinzen-Dick, Julia Behrman, Purnima Menon, and Agnes Quisumbing. Gender: A Key Dimension Linking Agricultural Programs to Improved Nutrition and Health. Washington, DC: IFPRI 2011. 13 Committee on World Food Security. Policy Roundtable: How to Increase Food Security and Smallholder-Sensitive Investment in Agriculture. Rome, 2011.