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Development assistance to agriculture working for the poor In the recent past, some of the high profile donors like the World Bank, DFID, and even the G8 have pledged to refocus on rural development and agriculture as central objectives of poverty reduction.[1] <outbind://137/#_ftn1> More aid or better quality aid? Developed countries had pledged 0.7% of their GNP as aid, a target that is met by only 5 DAC members. United Kingdom provided 0.32% of its GNP as official development assistance (ODA) to developing countries.[2] <outbind://137/#_ftn2> Better aid, as well as more aid is needed to achieve growth and poverty reduction. Current aid practices impose heavy transaction costs on recipient countries, in terms of administrative and technical capacity, political capital and accountability. Aid needs to be made far more predictable, coordinated and poverty-focused and the language of national policy ownership needs to translate into practice on the ground. At the moment aid continues to be used to pressure poor countries into privatising services, liberalising markets and removing trade barriers. This is happening both through donor conditionality and selectivity, and through the use of technical assistance to promote donor countries' preferred reform agendas. In many cases, IFI-backed unilateral trade and investment liberalisation is leading poor countries to throw away their bargaining chips ahead of trade negotiations for WTO accession. ActionAid International is a member of an NGO alliance pushing for 'More and Better Aid to Agriculture'[3] <outbind://137/#_ftn3> Aid to agriculture promoting private sector growth in agriculture Aid to agriculture has often been used to open up markets, liberalize agriculture, and lead to support to high input intensive agriculture often benefiting private sector commercial interests. Structural adjustment and other reform programmes have often been criticised for their negative impacts on the poorest (often rural) sections of the country. It is often macro-economic policies that are at the root cause of food insecurity. For example, under various reform programmes imposed by the IMF, World Bank and the Regional Development Banks, countries such as Haiti, the Gambia and Pakistan have had to reduce import tariffs and domestic subsidies thereby decreasing their support and protection to farmers (for example against cheap imports). Aid is often used to privatise basic services including water. Privatising basic needs services such as health care, education, and water has become a focus of Multilateral Development Banks (MDBs), and is being pushed through loan conditions, and the direct financing of transnational corporations.[4] <outbind://137/#_ftn4> Nowhere can the negative impacts of inappropriate conditionality be seen more clearly that in the privatisation of water and electricity sectors.[5] <outbind://137/#_ftn5> FAO's technical department has identified agricultural trade liberalisation as one of the issues in which NGO partnership could be welcomed in the near future.[6] <outbind://137/#_ftn6> DFID in its recent strategy paper on 'the role of agriculture' identifies creating a climate that encourages private sector investment in agriculture and agricultural services, as a priority for agricultural development. It is also supportive of public-private partnerships.[7] <outbind://137/#_ftn7> Direct support to Industry Associations Private sector is often a direct beneficiary of official aid to developing countries either in terms of direct contracts, consultancy, through privatisation, or through public private partnerships. The International Service for the Acquisition of Agri-biotech Applications (ISAAA), which was established to promote the use of agricultural biotechnology in the Third World is funded by, among others, the World Bank, and agri-biotech companies: Monsanto, Pioneer Hi-Bred, Novartis, AgrEvo, and Cargill.[8] <outbind://137/#_ftn8> Revolving door between Aid agencies and MNCs Often there is a revolving door between official donors and companies they benefit. World Bank's "Staff Exchange Program," enables the World Bank and selected companies to exchange staff, ostensibly to share knowledge and experience in global development. Participating companies have included some of the most notorious and aggressive producers of hazardous pesticides (e.g. Rhône Poulenc, AgrEvo, Novartis and Dow AgroSciences). For taxpayer monies to support the placement of World Bank staff at these companies is antithetical to the Bank's mission to assist the poor; it also constitutes a gross violation of the Bank's pest management policy and a misuse of public funds.[9] <outbind://137/#_ftn9> Recommendations to DFID: Participation of the rural communities is vital in the design ActionAid International has used Citizen Juries as a tool of deliberate democracy to give greater say to the rural communities, especially women, smallholder farmers; landless workers to discuss and debate key policies affecting them. DFID should ensure the participation of rural communities in the design of its projects and policies. Respect national sovereignty ActionAid International believes that it is time for donors including DFID to make good their commitment to put poor countries and people in the 'driving seat' of reform, as the arbiters of policy change. To make this happen, genuine space must be created, at national and international levels alike, to debate best use of financial assistance to developing countries. Coherence DFID should help ensure greater coherence among the bilateral, multilateral, private and not for profit agricultural donors where possible. More and better aid ActionAid International believes there could be more analysis of the impact of overseas development assistance on food security, including financial aid to projects and programmes. Aid and assistance to the agricultural sector (for example technical know-how) still comprises a significant component of DFID's lending portfolio. The same is true for the World Bank, the IMF and other multilateral development agencies, to which the UK government is a significant financial contributor. Donor policies need to go beyond a projection of national interest and look to address the priorities of poor and marginalised people. Poor people are entitled to access public resources whether they are domestic or international. Loans for social sectors adds to the debt burden DFID should address the problem new loans accumulating and becoming unsustainable in the future, especially for the low-income countries adding to their existing debt burden. Where possible assistance to pro-poor agriculture and rural development should be in the form of concessional loans and aid. Food Aid The shortcomings of programme food aid and the increased need for relief food aid is increasingly recognised by the large majority of countries and reflected in the patterns of international food flows. International institutions, however, are not yet reflecting these developments appropriately. Much debate has ensued due to resource uncertainty and also wider questioning of the role of food aid apart from in humanitarian emergencies. There is a gradual recognition that food aid is no longer a major development resource but considerable adjustment is required on the part of all those institutions which are heavily involved with food aid, in particular WFP, some bilateral agencies and those international NGOs which rely heavily on food aid resource. ActionAid International believes that a structured policy must be adopted, which concentrates on the impact of food aid on local prices and therefore local farmers. Emergency food aid must be appropriate, accessible and affordable to hungry people, irrespective of class, gender or generation. Food aid should address people's needs without disturbing food production systems.[10] <outbind://137/#_ftn10> DFID should ensure that distribution of food aid should be avoided where food is readily available and local markets are functioning. DFID should support the reform of the International Institutions and their food aid policies to obtain a change of focus, with the prime objective of untying food aid to export interests. ________________________________ [1] <outbind://137/#_ftnref1> Better livelihoods for poor people: The role of Agriculture. © Crown Copyright 2002. http://www.oecd.org/dataoecd/40/43/2094403.pdf, December 2001. World Bank 'Reaching the Rural Poor - A Renewed Strategy for Rural Development', 2002. [2] <outbind://137/#_ftnref2> http://www.dfid.gov.uk/sid/ [3] <outbind://137/#_ftnref3> www.moreandbetter.org <http://www.moreandbetter.org/> [4] <outbind://137/#_ftnref4> http://www.aidwatch.org.au/index.php?current=17 [5] <outbind://137/#_ftnref5> ActionAid International UK. Money talks: How aid conditions continue to drive utility privatisation in poor countries. April 2004. [6] <outbind://137/#_ftnref6> Partnership Opportunities Review with Rome-based Food Agencies, by Livia Zoli - May 2003, Internal AA study [7] <outbind://137/#_ftnref7> Better livelihoods for poor people: The role of Agriculture. © Crown Copyright 2002: Brief extracts from this publication may be reproduced provided the source is fully acknowledged. [8] <outbind://137/#_ftnref8> Luke Anderson. Prague 2000 Issue Briefings SUBJECT: BIOTECHNOLOGY. Genetic Engineering Network, and Christina Cobb, Free Agency, August 2000. http://www.bicusa.org/ptoc/pdf/anderson_biotech.pdf <http://www.bicusa.org/ptoc/pdf/anderson_biotech.pdf> [9] <outbind://137/#_ftnref9> Marcia Ishii-Eiteman, et al. Prague 2000 Issue Briefings SUBJECT: AGRICULTURE. Pesticide Action Network, North America August 2000. http://www.bicusa.org/ptoc/pdf/panna_ag.pdf [10] <outbind://137/#_ftnref10> Food Aid. An ActionAid Briefing Paper. July 2003. ------------------------------------------------------------------------------------------- Ruchi Tripathi Food Trade Policy Analyst ActionAid Hamlyn House MacDonald Road London N19 5PG Ph: 44 207 561 7560 ActionAid's vision is a world without poverty in which every person can exercise their right to a life of dignity. 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