The United Nations’ agencies FAO and UNIDO, in collaboration with Hesat2030, have published a new report, Ending hunger is possible: An income-generating approach through value addition, that calls for a growth-driven approach to ending hunger by focusing on productivity and income in the agrifood sector. Hesat2030 Co-Chairs, Carin Smaller and David Laborde, guided the developed this report.
The report promotes policies to increase productivity on-the-farm, expand local food processing and provide the most vulnerable with the means to meet their basic needs. Doing so will allow for an effective way to redistribute production and consumption to where it is needed most.
The urgency to take action
The lack of action to end hunger has raised the cost of achieving this goal by 2030. While Ceres2030 had estimated that USD 330 billion would be needed to fund policy interventions between 2020-2030, revised estimates call for an extra USD 540 billion. Current inaction to end hunger has driven the cost up by USD 210 billion.
Nearly half of the additional public expenditure will finance social protection payments. However, such expenditure is not fiscally sustainable. Instead, as the new FAO / UNIDO report argues, an industrial development approach centred on jobs and income is needed.
Solutions for an income-generating approach to end hunger
Structural challenges, weak trade, and a chronic lack of access to financing have constrained agrifood systems in many low- and middle-income countries. The FAO / UNIDO report seeks to redress these challenges through its six solutions that will enable an income-generating approach to ending hunger and malnutrition.
Improvements in productivity through agricultural R&D, extension services and farm mechanization
Investment in agricultural research and development has a significant impact on productivity and is most effective when complemented with interventions, such as extension services, that provide farmers with training and information. The introduction of mechanical power can enhance labour productivity and thus make time available for other, off-farm, income-generating activities. The use of data and other technologies to optimize and automate agricultural processes also offers opportunities to improve agricultural productivity and sustainability.
Value addition and income generation through agrifood processing and improved skills
By transforming raw agricultural products into higher-value goods, farmers and local businesses can capture more of the final market price thus boost their financial returns, diversify their income and create newemployment opportunities. Improved cost savings can be generated by reducing post-harvest losses through better handling practices, improved packaging and cold storage. However, given the shortage of skilled workers, more vocational training is needed as is enrolment in science, technology, engineering and mathematics (STEM).
Financing small-scale producers and agrifood SMEs
The proposed solutions can only succeed if small producers and agrifood SMEs can access finance. Several ideas include to bring finance to the ‘missing middle’ - those requiring loans between USD 25 000 and USD 2 million - include factoring, supply chain finance or reverse factoring, outcome financing, real estate investment trusts, priority sector lending, asset monetization, and guarantees. Financing small producers will benefit from the participation of domestic investors to ensure the flow of capital and bring greater impact.
Investment to build and maintain infrastructure for irrigation, roads, storage and electricity
Improvements in transportation, power, irrigation and storage networks can reduce costs, increase market access, improve connectivity and strengthen supply chains, leading to more resilient and sustainable agrifood supply chains. The most effective interventions focus on electrification and irrigation infrastructure, combined with road infrastructure. Storage interventions, are also important to reduce post-harvest losses.
Trade and competition policy, and regional integration
Trade and competition policies, together with stronger regional integration, are essential to ensure that the benefits of increased investment result in opportunities for small-scale producers and agrifood SMEs. For example, low- and middle-income countries, need to improve the effectiveness of their competition regimes to address high levels of market concentration and the abuse of market power. Easing regional trade flows and lowering the cost of trade will result in new market opportunities for small producers and SMEs as well as improved access to cheaper food for consumers.
Accelerating income generation through social protection programmes
Social protection programmes provide cash or goods to people affected by hunger and poverty and thus enable a basic level of capital. With this security, they could increase future income streams through investments and savings. Households could be emboldened to seize opportunies and take more risk. Social safety nets can thus grant the opportunities to vulnerable households to work their way out of poverty by generating new income opportunities.
World Without Hunger Conference
Carin presented the findings of the report, alongside the FAO’s Chief Economist Maximo Torero, durning the opening session of the high-level ministerial conference, World Without Hunger organised by UNIDO, the African Union and the Government of Ethiopia currently underway in Addis Ababa.
As she noted during her speech, "A world without hunger is possible. We know how to do it and we know how much it would cost. Taking an industrial development approach where job creation and income-generation are prioritised would be a lasting path towards a sustainable future for all."
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