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G8 to commit $20bn for food security

July 10, 2009

By Guy Dinmore and Giulia Segreti in L’Aquila, published on FT on July 10, 2009

World leaders on Friday pledged to commit $20bn over three years for a “food security initiative” to develop agriculture in poorest countries, but aid agencies responded with scepticism, pointing to a chain of broken promises and a habit of switching around existing budgets.

The G8 summit of rich countries in L’Aquila, central Italy, had aimed to pledge $15bn. Ministers described how a last whip-round before delegations left came up with an extra $5bn to make a bigger headline figure.

“There is an urgent need for decisive action to free humankind from hunger and poverty,” said a joint statement of 40 heads of government and international organisations convened by the G8.

How much of the promised money was new or how it would be managed remained unstated. Officials said a substantial amount of the $3.5bn promised by the US was a new allocation. UK officials candidly admitted that the UK pledge of $1.8bn had been reallocated to food and agriculture from other aid lines.

Even some of the eight African leaders present were left in the dark about the substance.

President Jacob Zuma of South Africa told reporters he did not know details. “It has not  been discussed who will and how it is going to be administered,” he added. Diplomats said the World Bank would probably be the choice of the Obama administration.

A history of broken pledges by rich countries has NGOs on their guard. The G8 pledge at Gleneagles four years to give $50bn in development aid by 2010, with half going to Africa, has left a gap of at least  $15bn gap so far. The G8 does not say how it will make it up.

“Much of this funding is recycled,” commented Oxfam aid agency, giving the initiative a cautious welcome. “But the new money makes a down-payment on eliminating hunger. With a billion people facing hunger, more new money is still needed.”

The summit statement addressed the scepticism, declaring: “Commitments to increase overseas development aid must be fulfilled. The tendency of decreasing ODA and national financing to agriculture must be reversed.”

“G8 summits suffer from a severe case of déjà vu,” ActionAid UK said. “ Every year leaders gather to make announcements that are less than they seem and give promises that they will almost certainly break. The song remains the same, only the words change.“

Born out of the surge in global food prices last year and the financial crisis hitting budgets of developing countries, the initiative is focused on helping smallholder farmers over the long term. But it promised not to take resources from emergency relief.

Josette Sheeran, head of the UN World Food Programme which tackles both food emergencies and longer-term projects, says she has only 25 per cent of the budget needed this year for $6.4bn of assessed needs.

“Price pressure on the poorest people has not alleviated despite a fall from last year’s peaks in global prices,” Ms Sheeran points out, noting that in 80 per cent of countries food is more expensive than a year ago. “We are cutting rations.”

She calls the new fund a “huge step forward”. From 1969 to 2004 the proportion of the world’s population suffering from hunger dropped from 30 per cent to 17 per cent. Now it is on the rise again.

“We are reopening in countries we pulled out of,” Ms Sheeran says, naming Kyrgyzstan.

Silvio Berlusconi, Italy’s billionaire prime minister, was stung by accusations last week that Italy had cut its aid budget, saying he would rectify the mistake. Despite that assurance, Marcello Fondi, a senior foreign ministry official, later disclosed that his ministry’s aid budget would fall by a further 10 per cent in 2010, according to Save the Children spokesman Adrian Lovett.

Franco Frattini, foreign minister, told the FT that the $480m pledged by Italy for the food security fund would be new money.

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