U.K.'s DFID might reduce funding for FAO in light of 'patchy' performance

Mar 1 2011

The U.K.'s Department for International Development (DFID) on Saturday said it might reduce its contribution to the U.N. Food and Agriculture Organization (FAO) if the agency does not improve its performance, Reuters reports. "The threat to pull out of the Food and Agriculture Organisation (FAO) follows a review of British overseas aid ordered by the nine-month-old coalition government, which administers one of the world's biggest aid budgets. By contrast, the Conservative-led government said it would step up support for the FAO's U.N. sister agency, the World Food Programme (WFP), which it said had performed strongly," the news service writes.

"The review found that FAO's performance is patchy, particularly at country level, and that reforms need to be prioritised," DFID said, according to Reuters (Croft, 2/26).

The U.K. aid budget review, scheduled to be published on Tuesday, found that funds designated for the FAO are "not getting the best results in poverty-hit nations and may be better used elsewhere," the U.K. Press Association reports. International Development Secretary Andrew Mitchell is expected to make an announcement notifying the FAO that it "will be bypassed unless it implements reforms," according to the news service. The U.K. aid review will lead to food aid for an additional four million families and help for an additional 10 million children in the developing world, DFID said (2/26). "Mitchell is under pressure to make every penny count as his budget is one of the only parts of government spending that will see an increase this year," the BBC notes (2/26).

A second BBC story reports on the government's yet-to-be-released 7.8 billion pound (almost $13 billion) overseas aid budget. The budget shows the U.K. will end "direct aid to 16 countries, including Russia, China and Iraq ... [and] assistance for India will be frozen," the news service writes. "It also outlines plans for greater transparency and accountability, with an emphasis on funding programmes that deliver greater results and which, specifically, help girls and women. Resources will be concentrated on the 27 countries that account for three-quarters of the world's maternal mortality and malaria deaths, such as Ghana and Afghanistan," according to the BBC. Overall, the international development budget will rise by one-third. Mitchell said spending would be "better focused" (Wright, 2/27).

DFID, Gates Foundation Pledge Funds To Support Food Production Projects

On Sunday, DFID and the Bill & Melinda Gates Foundation said they would contribute funds to "a new collaboration that will focus on addressing threats to food production in the developing world, including crop diseases, pests, poor soils and harsh weather," Reuters reports.

The Gates Foundation will donate a total of $70 million to the effort, while DFID will contribute "$32 million over the next five years," according to the article (Gillam, 2/27). Under the new collaboration, Cornell University will receive a $40 million grant for its Durable Rust Resistance in Wheat project, the Wall Street Journal reports. "The immediate focus of the project is to help farmers in Africa and Southern Asia grow their own food and sell wheat for income. Many vulnerable farmers in East Africa are in the immediate path of a particularly dangerous form of stem rust called Ug99, first found in Uganda and named in 1999," the newspaper writes. Kathy Kahn, a program officer at the Gates Foundation, said, "More that 80% of the world's wheat is susceptible to this disease. So that's a tremendous threat to global food security both for the small-order farmers who rely on wheat and the urban poor who purchase wheat as part of their food" (West, 2/28). 

A Gates Foundation/DFID press release states that the "[f]unding will support efforts that quickly put new technologies into the hands of small farmers, such as new seeds and robust, low-cost diagnostic tools; advance existing efforts by researchers, crop breeders, and development programs to help small farmers manage crop diseases and grow more nutritious crops; and support agricultural research that promotes cutting-edge scientific innovations" (2/27).

India Aims To Address Rising Food Inflation

Indian Finance Minister Pranab Mukherjee announced steps on Monday aimed at reducing food inflation, Reuters reports. Mukherjee "said cold storage chains would be given infrastructure status, giving them tax benefits to drive construction of new facilities," the news service writes. "State-run agencies own more than a third of India's cold storage and warehousing capacity of about 60 million tonnes, and there is shortfall of about 32 million tonnes, industry officials said." According to Reuters, "[a]s much as 40 percent of India's fruit and vegetable production goes to waste because of inefficient networks and a lack of cold storage facilities, with much produce still sold on flat-bottomed carts by smallholders, even in the heart of its large cities, like the capital Delhi" (2/28).

In a budget speech before parliament, Mukherjee "pledged to introduce a food security bill in the next fiscal year, which would provide cheap grain to hundreds of millions of poor people while also prompting fears of spiraling subsidy costs," the Associated Press reports (Kinetz/Sharma, 2/28).

The government is also "preparing to gradually open its massive and fast-growing retail market to foreign supermarket chains such as Wal-Mart, in the hope that their investment and expertise can deliver lower food prices to consumers and a better deal to farmers," the Washington Post writes, noting that "[f]ood prices in India have been increasing about 10 percent to 20 percent a year over the past two years."

"We are at a juncture where [foreign direct investment] in multi-product retail is worth considering," according to the government's pre-budget Economic Survey. "It could enable farmers to get higher prices and consumers to have to pay less," it said. "The intention might be flagged Monday when the government presents its budget to Parliament, to fulfill an assurance Indian Prime Minister Manmohan Singh made when President Obama visited this country in November" (Denyer, 2/25). The AP notes that allowing more foreign investment in India's retail sector is "a contentious step some analysts believe is the only way to attract the necessary funds to expand the nation's food supply chain" (2/28).

In addition, an Al Jazeera video report looks at the rising tensions over food prices and examines agricultural production challenges in the country (Suri, 2/28).