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The Price of Hunger

United States, June 23, 2008

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Los Angeles Times
June, 2008

What would it really cost to end global hunger? The United Nations estimates that it would take at least $30 billion per year to solve the food crisis, mainly by boosting agricultural productivity in the developing world. Over the decade that it would take to make sustainable improvements in the lives of the 862 million undernourished people, that amounts to $300 billion.

Three hundred billion dollars is a lot of money, and the U.S. government won't foot the bill alone. But it's less than half of 1% of the world's combined gross domestic products, not an unreasonable sum to invest in ending the misery and degradation of hunger. After all, Congress shelled out $21 billion last year for foreign aid and this week it approved $162 billion for the wars in Iraq and Afghanistan for fiscal 2009. The U.S. spent $340 billion in 2006 alone on public and private research and development. Directing just one-tenth of that seed money to sustainable, high-yield agriculture in the developing world could trigger a second Green Revolution.

Business has already figured out that rising energy costs, climate change and improving standards of living are going to make food more expensive. Private capital is already buying up farmland and other agricultural investments around the world. (That hot money is also steaming up the commodities market, causing food inflation.) Will governments, particularly ours, try to steer some of that money away from the next speculative bubble and toward addressing the root causes of food insecurity? The next U.S. president can't merely write checks for emergency food aid (or threaten to investigate commodities traders). He should call on business and private charities, which are among the world's largest aid donors, to team up to increase the amount of food grown worldwide and its affordability.

In this series of editorials, we have argued that it is in the U.S. national interest both to address the burgeoning hunger crisis and, by improving the impact and visibility of its aid efforts, restore America's tarnished global image as the humanitarian superpower. It's also in the interest of U.S. corporations, which have been targeted in the Muslim world and elsewhere, to help the hungry and to be perceived as respectful partners in global development. Overt acts of hostility toward U.S. corporations abroad, such as kidnappings, terrorist attacks on employees and boycotts of iconic American brands such as McDonald's, have been increasing. And the climate of rising anti-Americanism itself imposes a business risk in many areas of the world. Meanwhile, American companies spend millions trying to improve their images. They can get more for those dollars by joining with government and charities in market-based agricultural development projects that will help the hungry and that also have a chance of becoming profitable. For in the long run, aid and charity are not sustainable; what sustains is profit.

There is already a model that is yielding results: global development alliances sponsored by the U.S. Agency for International Development. The agency is working with the Schaffer Global Group on a factory in Mali, with Heinz to help Egyptian tomato farmers and with Coca-Cola on clean water projects in a dozen countries. One pilot project that is smashing stereotypes is a deal between the private charity MercyCorps, USAID and Wal-Mart to help small farming co-ops in Guatemala sell their produce to the much-vilified American chain, now the largest retailer in Guatemala.

Shareholders will insist that such investments make business sense, but they have warmed to public-private partnerships that help solve their problems and earn them PR points at the same time. And many of the problems that companies face doing business in poor countries are, in fact, development problems they can't solve without government help and charitable funds. Such partnerships are also more cost-effective for taxpayers and appear to produce more lasting results. In short, the model works. Yet the rural development programs to date have been small, scattered and pathetically underfunded. The cash-strapped USAID has invested only about $2 billion since 2001 on such deserving projects (while it must spend $1.5 billion a year on emergency food aid). We should be spending vastly more on famine prevention -- now.

Agricultural credit is another challenge. Grass-roots micro-credit programs that loan poor entrepreneurs up to $1,500 have proved successful. And the World Bank and private lenders will grant multimillion-dollar loans for big infrastructure projects. But in most countries, a rural family seeking a medium-sized loan, perhaps to buy a refrigerator truck to hurry its produce to market, is out of luck. (In Africa, up to two-thirds of all food spoils before it can be sold.) Innovative nonprofits such as Root Capital, which lends to sustainable agricultural projects, are showing how to fill the gap. But their scale is still tiny. Of course, it's incalculably harder to build agricultural credit institutions than simply to ship corn from the Midwest. But that's the only way to end hunger.

Until now, it was the rural poor who often died of hunger or related disease, and they died quietly. But changing demographics are making this hunger crisis more visible. For the first time in history, according to a new U.N. report, half of the Earth’s population now lives in urban areas. When the urban poor cannot afford to buy food, they don't starve silently. Since 2007, food prices have triggered unrest in 30 countries and brought down the government of Haiti. As food and energy prices continue to rise, hunger is likely to foment more political instability, more resentment of Americans' burning food calories as biofuel, more babies stunted for life, more radical Islamism and probably more wars. Is it worth $30 billion to prevent that?

Previous editorials in the food diplomacy series are available online at latimes.com/opinion.