Thursday, April 24, 2008

Food & Society Memo Global Food Crisis Special Feature: Bloomberg: Bill & Melinda Gates Foundation Will Double Global Farm Aid as Food Crisis Worsens

Gates Foundation to Boost Farm Aid 50% as Food Crisis Deepens
By Christopher Swann

April 24 (Bloomberg) -- The Bill & Melinda Gates Foundation will increase spending on farming projects by 50 percent this year as surging food prices threaten starvation and social unrest in poor countries.

The world's largest charitable foundation will give grants for agricultural programs totaling about $240 million this year, up from $160 million last year, said Rajiv Shah, the foundation's director of agricultural development and a former adviser to 2000 Democratic presidential candidate Al Gore.

``We are ramping up activity,'' Shah said in a telephone interview yesterday from Seattle, where the foundation is based. ``The focus will be on encouraging extra supply, which is one reason global food prices have climbed so high.''

New funding from Gates for agriculture in poverty-stricken countries comes as food prices soar around the world. The Gates programs aim to increase farm productivity, a task that has received less attention from larger aid institutions.

The proportion of global development aid devoted to agriculture is 4 percent, according to figures from the World Bank. The share of World Bank financing devoted to farming dropped to 12 percent in 2007, from 30 percent in 1980.

``The strength of the foundation is that because it is not constrained by politics, it can afford to take a longer view on food supply,'' said Ruth Levine, a senior fellow at the Center for Global Development, an aid research group in Washington. ``They are working on research and activities that have been very under-funded'' by other groups, she said.

Boosting Output

The foundation plans to plow the additional funds into existing projects, including developing more resilient crops, training farmers and helping small producers gain greater access to markets for their goods, Shah said.

For the past two years, the group has invested in seeds that better resist disease and drought, particularly in Africa, where productivity lags behind other developing nations. The effort has already led to more disease-resistant maize varieties for East Africa and sweet potatoes fortified with extra vitamin A, Shah said.

As the global economy accelerated in the past five years, the number of people living on $1 or less a day declined by 150 million, according to the World Bank. Those gains may be reversed unless rich countries step up their donations, officials said.

Global food prices surged 57 percent last month from a year earlier, according to the United Nations, and the World Bank warns civil disturbances may be triggered in 33 countries.

Farm Subsidies

Governments from Guatemala to the Philippines to Indonesia are seeking to combat food inflation by curbing exports or removing import duties on basic food staples such as rice. Brazil called for an end to farm subsidies in developed countries that create price distortions and leave millions of agricultural producers in poorer nations unable to compete.

African countries are expected to be among the most vulnerable to rising food prices. About 70 percent of the continent's population works in farming, according to World Bank figures. Even so, Africa is dependent on foreign producers, importing a net $12.7 billion a year in food.

According to the Gates Foundation, 16 of the 18 most undernourished countries are in Africa.

``The challenge is to ensure that they can sell enough of their goods so that they have an economic incentive to use better techniques,'' Shah said. ``We are helping them to meet formal food standards demanded by bigger food producing firms and also talking to these companies in order to link them up with smaller farmers.''

He declined to say which food companies the foundation is negotiating with.

Radio Waves

The Gates crop-improvement program encompasses 16 African countries that aim to give farmers access to better-quality seeds through a network of 9,000 seed dealers.

Gates is also funding projects to provide information through radio broadcasts to help train farmers in Mali, Ghana, Malawi, Uganda and Tanzania. The foundation is funding the development of hermetic storage technology to protect cowpea -- one of the most important crops in West and Central Africa.

``Almost no country has achieved a rapid ascent from hunger and poverty without raising agricultural productivity,'' the foundation says on its Web site.

The charity, created in 1994 by the founder of Microsoft Corp. and his wife, focused initially on health and education. In May 2006 it created launched a drive for a ``Green Revolution'' in Africa, in partnership with the Rockefeller Foundation.

The Gates Foundation's agriculture staff has only about 35 employees, compared with about 250 staff working on agriculture at the World Bank, the Washington-based lender and grant-maker that's owned by its 185 member countries.

Last year the World Bank devoted $3 billion to agriculture projects.

``The sums of money might be small compared to the World Bank but they get a very big bang for their buck because they are focusing on long neglected areas,'' Peter Timmer, a visiting professor at Stanford University's Program on Food Security and the Environment. ``They have chosen a perfect time to focus on this area.''

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