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Focusing on Agricultural Development
Realizing agriculture’s potential to create economic opportunities in rural communities is clearly important to reducing hunger and poverty—yet most donors have been partners in a steady decline of support for agriculture and rural development.
Between 1985 and 2005, agriculture’s share of U.S. Official Development Assistance declined from more than 12 percent to just 3.1 percent.
In absolute terms, support for agriculture went from a high of almost $8 billion in 1984 to $3.4 billion in 2004.
To make matters worse, domestic policies in rich countries have exacerbated the effect of this disinvestment in agriculture and rural development.
U.S. and European Union farm policies shower subsidies on domestic producers and encourage production. Until recently, this had the effect of driving down the prices of world commodities and discouraging poor countries from investing in their own agricultural sectors.
A 2003 report by the International Food Policy Research Institute estimated that agricultural protectionism and subsidies in industrialized nations cost developing countries about $23 billion in lost annual income.
As long as commodity prices remained low, rich countries argued that it was not a problem for developing countries to neglect their agricultural sector and buy the food they needed on international markets.
Reinforcing this view, when the International Monetary Fund and the World Bank set policies on how developing countries could use financial supports, investments in agriculture were not favored. These institutions have since reoriented their focus and now provide more support for agriculture, but it has taken decades for them to begin to make these changes. In the meantime, as the recent hunger crisis has shown, developing countries were left vulnerable.
The 2008 global crisis in food prices pushed the number of hungry people past the 1 billion mark.
Worldwide, it underlined the urgent need to invest more in agriculture for the longer term and in nutrition assistance for vulnerable people now.