How much can the private sector do to end world hunger?

Tuesday, August 14, 2018

The following article by Foodgrains Bank director of public policy Paul Hagerman originally appeared in the August 7 edition of The Hill Times.

International Development Minister Marie-Claude Bibeau’s department is overseeing implementation of the International Assistance Innovation Program, aimed at giving the government ‘greater flexibility’ in its financing partnerships on projects abroad. (Photo:The Hill Times/Andrew Meade)

The private sector is ready, willing, and able to work with governments and non-profits to solve global poverty and hunger. At least that is the impression created by Canada’s Feminist International Assistance Policy and the recently created International Assistance Innovation Program. That’s good news. But is the optimism well founded?

Ottawa believes it is. It recognizes that the challenges of global development, which are articulated in 17 UN Sustainable Development Goals, demand enormous resources. Since Canada is currently at the back of the pack as an aid donor—and seems content to stay there—it is counting on innovative financing and leveraging the private sector to move “from millions to billions.”

But recent research by a Canadian civil society coalition in Senegal suggests that Canada’s faith in the private sector may be overly optimistic.

The Canadian Food Security Policy Group coalition, made up of nearly 30 Canadian organizations working in international development, commissioned the research to assess the impact of the New Alliance for Food Security and Nutrition (NAFSN) in Senegal. NAFSN was launched in 2012 by the G8 (now the G7), as a program for private-sector companies to join with governments in efforts to reduce hunger and poverty. Under a framework of pairing one African country with one donor country, Canada worked with Senegal to implement those goals.

Its research, published in 2017, found that actual investment from private companies did not match their promises at the outset of the program. Only one-quarter of the initial pledge of $770-million was invested. This was partly because of different corporate cultures in government and private companies and the challenges of working together, a finding that echoes earlier research by the coalition into public-private partnerships for food security.

The research also found that NAFSN had little impact on smallholder farmers or women, even though one goal was poverty reduction, and female farmers are among the poorest people in most African countries.

In May 2018, representatives of the Canadian and Senegalese governments, civil society and the private sector gathered in Senegal for a workshop to discuss the research. Following the workshop, a coalition of Senegalese civil-society organizations wrote an open letter to African governments and the G7 asking that future investment in agriculture start with smallholder farmers and their needs, rather than looking to private companies to lead the way.

This research forms an interesting background to a series of focus-group conversations carried out recently by the Canadian Foodgrains Bank with smallholder farmers in Ethiopia, Malawi, Nepal, and Nicaragua. In contrast to the NAFSN research on government and company initiatives, the focus groups took place in homes and farms, asking people how farming was changing, what problems they faced, and how they improved their farms.

Some of the questions involved agricultural companies. Are they helpful, harmful, or irrelevant to your farm? While some farmers said that companies were helpful, and some hoped that companies would increase their investment (in seeds, marketing, etc.), many others said the companies were largely irrelevant. There was a noticeable split based on size of the land they held. Those with the least land, who tend to be the poorest, felt that companies did not have cost-effective solutions to the challenges they faced, such as soil health, climate change, and marketing.

Those conversations with farmers, research on the G8 initiative in Senegal, and other research on innovative finance for development all point to similar conclusions. Agricultural companies and other private-sector actors can make positive contributions to food security, and public funds can leverage increased private investment. But so far, these companies and finance mechanisms are not reaching the poorest farmers in developing countries.

Canada’s stated goal is to support the poorest and most vulnerable, particularly women and girls. We know that public funds can do this effectively. Maybe it’s time for Canada to devote more money to aid.