Briefing Papers Number 3, June 2008

Number 3, June 2008 briefing paper Ending Hunger: The Role of Agriculture by Charles Uphaus Official Development Assistance (ODA) to Agriculture, 1980-2005 20% 10,000 US$ million (commitments* constant 2004) 8,000 % of total ODA 15% 6,000 10% 4,000 5% 2,000 0% 1980 1985 Bread for the World Institute provides policy analysis on hunger and strategies to end it. The Institute educates its advocacy network, opinion leaders, policy makers and the public about hunger in the United States and abroad. 0 1990 1995 2000 2005 *Commitments is a firm obligation expressed in an agreement or equivalent contract and supported by the availability of public funds, undertaken by the government, an official agency of the reporting country or an international organization, to furnish assistance of a specified amount under agreed financial terms and conditions and for specific purposes, for the benefit of a recipient country. Source: OECD International Development Statistics—Creditor Reporting System. Key Points • Increasing agricultural productivity in developing countries is necessary to reduce hunger and poverty, especially in the face of rapidly rising food prices. • Agricultural and rural development strongly determines whether a developing country is likely to achieve broad-based economic growth and the Millennium Development Goals. • Declining rates of poverty and hunger in Asia, where agricultural growth helped raise incomes of poor people in rural communities, provides valuable lessons for sub-Saharan Africa. • In recent decades, rich and poor countries alike have diverted resources away from promoting agricultural growth in developing countries, disadvantaging smallholder farmers. • Disinvestments in agriculture have been compounded by protectionist trade and agriculture policies in rich countries. New investments would be more effective if these policies were reformed. Charles Uphaus is a policy analyst for Bread for the World Institute. Abstract A spike in global food prices has increased hunger. A prolonged period of higher prices threatens to stall or reverse progress in achieving the Millennium Development Goals (MDGs). Of the 862 million poor people around the world who are chronically hungry, 75 percent live in rural areas and depend on agriculture for their earnings. Increasing agricultural productivity in poor countries is critical to reducing hunger. It increases food supply, which lowers food prices. Poor people benefit the most because they spend a much greater share of their income on food. Increasing the productivity of smallholder farmers also raises their incomes, improving their ability to cope. Over the last twenty years, donors have been partners in a progressive decline in support for agriculture and rural development. A substantial increase in funding for agriculture is needed but aid by itself won’t be enough. Reforming trade distorting policies in rich countries is also necessary. In addition, developing countries themselves have to provide supportive policies, along with additional investments, for donor resources to be effective.