As food inflation shot to almost 60 percent in Ethiopia in 2008, the beneficiaries of a safety net programme offering cash to build resilience to face shocks opted for food.
The rising prices "may have reduced the hoped-for long-term impacts of the programme [to help people become more resilient and break the cycle of dependence on food aid]" said John Hoddinott, a senior research fellow at the International Food Policy Research Institute (IFPRI).
The global food price crisis that led to nearly a billion malnourished people in 2008 is not over, said David Nabarro, coordinator of the UN Secretary-General's High-Level Task Force on the Global Food Security Crisis. "Food systems in many countries are not working for poor people."
The economic slowdown has exacerbated the situation. "It means both developed and developing countries have even less funds to invest in social protection programmes to help people become more resilient [and prevent them falling into the poverty trap]."
The challenges of the food price crisis to social protection programmes will be one of the major issues the global community will focus on at the two-day High Level Meeting on Food Security for All in Madrid, which begins on 26 January.
|Those who invest funds – donors, development banks and private entities want to be confident that the multilateral systems for supporting development work, and deliver results: the money will come in response to well functioning systems|
UN Secretary-General Ban Ki-moon and José Luis Rodríguez Zapatero, Prime Minister of Spain, will co-chair the meeting, where progress made since the Food Summit in Rome in 2008 will be analysed.
In its most recent report the UN Food and Agriculture Organisation (FAO) said the food price crisis had pushed another 40 million into hunger in 2008, bringing the global number of undernourished people closer to a billion.
Food is not going to get cheaper soon; prices of major cereals have fallen by over 50 percent from their peak earlier in 2008 but are still high compared to previous years, said FAO's State of Food Insecurity in the World 2008.
The purchasing power of cash transfers in Ethiopia had been steadily eroded by escalating food prices since the beginning of the Productive Safety Net Programme (PSNP) in 2005, and then spiked in 2008, according to a new joint crop and food security assessment report by FAO and the World Food Programme (WFP). The number of PSNP participants opting for cash transfers dropped from 74 percent in 2005 to 48 percent in 2008.
"Food price inflation is obviously a major challenge for cash transfer programmes, but we didn't predict the scale of inflation during the current food price crisis," wrote Stephen Devereux of the Institute of Development Studies (IDS) at the University of Sussex, in a blog on Wahenga.net, the website of the Regional Hunger and Vulnerability Programme.
The IDS conducted a study in eight districts of Ethiopia in 2008 and found that most households preferred "food only".
What has been done so far
The High Level Task Force, set up in May 2008 in response to the food crisis, had adopted a twin-track approach: emergency interventions, and addressing the underlying structural problems in the food sector by improving agricultural development and seeking to change the way trading systems work.
Nabarro pointed out that since April 2008, the Task Force had developed a Comprehensive Framework for Action (CFA), which proposed that poorer countries allocate additional budgetary resources to social protection systems and increase the allocation to agriculture in their public expenditure.
The CFA also urged donor countries to double their overseas development assistance for food aid, other types of nutritional support, and safety net programmes, and to increase the percentage of assistance invested in food production and agricultural development from the current 3 percent to 10 percent within five years, to reverse a historic under-investment in agriculture.
Nabarro said UN agencies and the Bretton Woods institutions had rallied to the call and had scaled up their operations in the past eight months, and the Task Force members have been working together in at least 27 poor countries to mitigate the impact of the crisis and promote agricultural development.
The European Union has approved a US$1.2 billion facility to boost food production in developing countries affected by the food crisis, he noted. The first tranche of the money is expected to be released soon.
At the Madrid meeting, the task force, along with governments, NGOs and the private sector, will look at strengthening links, broadening partnerships, with NGOs and the private sector, and will consider a financial coordination mechanism to help countries access funds more efficiently.
But the billion-dollar question is: how do you motivate donors to commit in a credit crunch? "National governments work with international organisations like FAO, WFP, IFAD and the World Bank to highlight priority areas for investment," said Nabarro. "Those who invest funds – donors, development banks and private entities want to be confident that the multilateral systems for supporting development work, and deliver results: the money will come in response to well functioning systems."
Action Against Hunger, an international NGO, released a new study this week after conducting household surveys in Ethiopia, Sierra Leone, Liberia and the Central African Republic, which noted that food inflation did not conclusively result in an immediate increase in acute malnutrition at the national level, but had a significant and consistent impact on livelihoods and dietary diversity in all four countries.
"The Global Food Crisis may resemble a slow-onset disaster rather than a seasonal spike, meaning people may have more time to adjust, and malnutrition rates will only show increases in months or years later."