Importance of Natural Resources

Davos 2012 – Ensuring Food Security



Well, good morning everyone. I want to
thank all of you who are here at 9 AM. Start the day off on
a very important topic. In fact, this topic that we're discussing
this morning affects every person on Earth. It can't wait until tomorrow, and many
things are optional but this one is not. We're speaking, of course, about food.
We all have to eat. This topic, over the past decades, hasn't been at the top
of the alarm list in the world, or even a major focus in past decades
here at the forum. So why has it moved up to star status,
not only here, but in the G-20, the G-8 and elsewhere? Troubles on the food front. Anomalies, dislocations,
disruptions, distortions. But, at the same time,
there's also unprecedented need, knowledge, and opportunity. Today, indeed, we're seeing new
models of collaboration, innovation that could change the face of nutritional
security in the decades to come. Just a few key facts, the world
has never fed more people, and never with better quality food
and more nutrition. Never before has food existed
in such abundance. Global agriculture produces an estimated
17% more calories per person today than it did 30 years ago,
even with the 50% increase But all is not well. Today, nearly a billion people
will wake up and be unsure how
to fill even this humble cup which is the cup the World Food Program
uses to reach children. That's how much food they get a day
and that transforms their life. But a billion people, many of them will be
unsure how to fill even this cup. So one out of seven people on Earth today
are food-insecure. We know how to prevent the devastating personal
and economic effects of malnutrition. Yet, today, in the developing world, more than 200 million
people's brains and bodies are stunted by a simple lack of nutrition in
the early days of life. Seventy percent of brain growth,
we now know, occurs before two years old. If children do not have access to nutritious
food, the effects of that can never be reversed. You can see brain volume actually reduced up
to 40%. So investments in food and nutrition are not
only logical from a business point of view, but imperative to build healthy societies
and a healthy world. Yet since the early '80s, the official share
of development assistance for agriculture dropped sharply from about 17% to about 5%
and is finally back on the upswing. History has shown we cannot build a stable,
prosperous, educated world without food and nutrition. With that drain open at the bottom of the
development bathtub, progress simply cannot be made on all other
fronts. We also know this is critical for peace and
stability. If people don't have food, they have three
options: they can revolt, they can migrate
or they can die. We need a better plan and we have a great
panel to talk about the great things that are happening to help
turn the situation around. I just want to mention, we humans
can be self-defeating on this topic. Up to 40% of the food produced for human
consumption in the world today is lost or wasted. This is not just in the developing world,
where, after the farm gate, in the supply chain, you'll often see 40%
of the food lost due to lack of proper drying equipment and
storage equipment and other issues. But in the richer world,
you see 40% of the food lost also. In the value chain, it's wasted or lost
at the consumer level or retail level. So a very important and timely issue. We have a great group of leaders here with a
proven track record on investment solutions and on new ways of doing business. Today, we'll address the question to put it
starkly. Is hunger and malnutrition a Malthusian
nightmare that will hit us all like a brick wall as global demand for food
skyrockets in the next few decades, or an unprecedented opportunity
to create jobs and value through
the entire food supply chain with smarter technologies and a better way
to reach those who have been left out of food security and nutritional security, and what will it take
to unlock those investments? Paul Polman, you'll be heading up the B-20
which is the business aspects of the G-20 headed into the Mexico summit in June. In addition, Unilever's products are sold in
more than 180 countries across the world, and on any given day two billion people will
be using your products. How do you see new models of innovation and
collaboration driving investment of food and nutritional security, and what can world
leaders do to help make sure you keep investing in this area? Thanks Josette, and again admiration for
what you do with your cup. Keep it up, for all of us. The theme of the World Economic Forum great
transformation new models applies here more than ever, in my opinion,
and is incredibly relevant. I'm not in the Malthusian nightmare scenario
on this, although the statistics are daunting. But it's a tremendous opportunity for green
growth that we all need and for employment. Keeping that focus at this time
of equitable and sustainable growth, makes you very enthusiastic to work in this
area. The statistics are daunting. It's very clear, as the population goes from
seven to nine billion, I should say that's 77 million more people
every year, every three years in Indonesia,
you have to feed them. The FAO estimates that the supply of food,
despite the tremendous progress that has been made, has to go up by 70%
between now and 2050. In the next 30 years, the same amount
of food as we have produced and consumed in the last 10,000 years, that's what people
don't understand sometimes, that 70%. Separately, 70% of the world's water,
20% of the carbon emission, some other things, are related to food. The climate, the whole nexus, we were briefly talking out
of water, energy and food, are closely linked, which make it extremely
complex, but also tremendous opportunities. People reckon that the current trend of
climate change will reduce food yield by 20 to 40%, so they are closely
linked. Then, as Josette says, we're starting from
the wrong base where a billion people go to bed every day hungry and where, still, a child dies every six seconds
of malnutrition. We're not exactly on a level playing field, already today
before all these things happen. It's very clear, as the theme of the World
Economic Forum that applying yesterday's tools to tomorrow's problems
doesn't find the solution. Increasingly, we're very encouraged by the
new models that are out there. I just want to briefly mention three of them
to your question. The first one is a model that started here at
the World Economic Forum two years ago under the auspice of the WEF
and with the help of McKinsey, we put together what is called the new
vision for agriculture. It is a holistic model
that looks at employment. It is, in fact, a 20-20-20 goal. Twenty percent more employment,
20% reduction in CO2 emission, and 20% increase in yield. It started with President Kikwete in the
green growth corridor of Tanzania. It has subsequently extended to Vietnam with
the Minister of Agriculture Phat, or President SBY in Indonesia. I'm very pleased to see that President
Calderon is picking up on this as well in Mexico in anticipation of the G-20. It takes a holistic approach. The first thing is, obviously, be sure that
government policies are right, they're critical. Looking at the total supply chain involving
all the different stakeholders in the supply chain, governments, NGOs,
different businesses along the supply chain, and then, more importantly, tailoring the
solutions to the local circumstances. One-third of the global population
is actually in agriculture. Eighty-five percent of those people are
small-hold farmers. Seventy percent of the people on the bottom of the pyramid
are actually small-hold farmers. If we focus in this new vision of agriculture
on the small-hold farmer itself, we also solve to some extent
the issue of not only food security, but also of the billion people
going to bed hungry. It turns out that an investment in agriculture
actually has one of the highest returns of any investment you can make. This brings me to the second model, which is a
Unilever model where we've clearly made a commitment to decouple our growth from
environmental impact, where we have as part of that committed to
sourcing all of our raw materials sustainably as a very important part of this. Last but not least, directly link 500,000
incremental small-hold farmers to our supply chain. Needless to say,
you have to create the markets. Companies alone cannot do that. Often it's fairly inefficient, but we're
tracking and measuring that. We're well on our way with nearly 200,000
small-hold farmers linked to us, mainly with brands like Lipton Tea. The third model is – Bruno will expand on it
much more. It's the work we're doing that Josette
referred to on the B-20 with the food security. We're very proud, in fact, that we put 16
of the biggest food companies together in a taskforce to help the FAO, the World
Bank, the Ministers of Agriculture, prepare for the G-20 and food security. Again, under President Calderon,
that's high on the agenda. Here, obviously, it is a longer-term plan,
covering four or five elements, not surprising to you, investment in
agriculture has actually gone down over the last decade. It needs about 80 billion a year to get us to
an increase of 30 to 40% in production. Companies are committing to do that with
concrete action plans that are being measured. We expect governments to do the same in the
different places. Increased functioning of the markets is a key
part of that. Technology transfer, sustainability, and more
importantly, moving the debate from calories to nutrition,
which brings me to the nutrition part. It's very pleasing to see that the G-8,
under USAID and Rush, who is now leading that in Chicago coming up,
has nutrition written all over. In Mexico, we will certainly be moving more
towards building nutrition and furthering the recommendations. Women in agriculture. Women historically had no access to training,
land rights or tools, can increase productivity by about 30%. Half the small-hold farmers are women
so we'll be putting that in. The issue of land rights
needs to be further worked. So I'm very pleased to see that industry,
NGOs and governmental organizations are getting together around the G-20 on an
ongoing basis to put this agenda together. Well thank you Paul, and it's been a
transformation to really see business leaders like yourself having such a comprehensive
overview, and really looking at solving the basic issues in addition to how we move ahead
with investment. Ngozi Okonjo-Iweala, you've always struck me
as a very practical, solution-minded leader and you need to be even
more so now as Finance Minister of Nigeria. But just to follow on Paul's point on supply
chain, it's estimated by the World Bank, under your old hat, that $4 billion
worth of grain is lost in Sub-Saharan Africa post-harvest. It's about 40% and theoretically,
we could end hunger in Africa if we could figure out how to capture that
and ensure that people have access to it. What do you see from your new vantage point on
what's needed to get the kind of investment in the post-harvest infrastructure and to stop
the losses of wet maize and in other areas? Well thank you, Josette As you said, this is an area in which,
I think, if we don't all pay attention, then all the other developments
that we're trying to do beat in health, education and elsewhere will come to naught.
So it's a critical area. I do believe that even though many of the
crises of food security and farming occur in Africa, that Africa is perfectly capable
of feeding itself. But it needs a totally different approach
in terms of strategy. I think many countries now have seen that and
are beginning to transform the agriculture. The new approach, that takes into account
sustainability, employment and other issues that wrap in is very
welcome. I think that before we used to focus so much
on production. To some extent we still do, but that's not the
issue. I think the issue is how to transform
the whole value chain of agriculture, taking it from research where you have to look
at the nature of the crops that are being grown
and how to make them more hardy so that you don't lose so much
in terms of the losses post-harvest, all the way up the value chain to production,
to marketing, to the transportation and infrastructure for storage
and for distribution. I think that transforming our approach
into this value chain will make a tremendous difference to
dealing with the post-harvest losses. Very recently, the CEO of a major company
visited my country, and he made a remark that he was traveling
on the roads and didn't see one single cold-storage truck on the road. He said, now I can understand why you are
experiencing some of the problems you are in terms of storage losses. This illustrates why in Nigeria in particular,
we've taken a different approach. Bill and his foundation have been working
with us also in the agriculture front to look at the entire value chain crop by crop
of the major crops we produce and look at this issue of storage and
infrastructure, and how do we then put into the value chain
the proper storage facilities, the proper marketing, the proper price
information. I think it's a whole chain of events
to deal with these losses. That is, I think, the strategy that we need to
take. I'm happy to say that some African countries,
recently Malawi and Rwanda and Burkina Faso that have turned things around. They've doubled production, they've been able
to get it to market. They've turned from net food importers to net
food exporters, exporting to neighboring countries. It can be done with a change in strategy,
a change in approach, the right investments, Now, how? The issue is that the government alone
cannot do it. That is why this partnership with the private
sector is critical. That is why a linkage between what the small
farmers do and what the larger commercial agriculture
can do is also vitally important through our growth schemes, because they can
help provide that part of the chain that helps with marketing and storage
and processing and distribution. I just want to say one thing. I feel that the issue for us, in terms of food
security, is not so much production. If you take the continent, right now,
50% of the 446 million hectares of cultivable lands still available
in the world is in Africa, and we have some of the lowest indices
in terms of use of technology in production, irrigated land, use of fertilizers
and proof seeds. You can either see it as a disadvantage or as
an opportunity. There is an opportunity there to increase,
to improve production. But I feel that is not quite the issue.
The issue is access. The world can feed itself,
Africa can feed itself, but the question is that we have a vulnerable
population that soon will not have access. How do we then ensure access to these people? That access,
a lot of it lies with infrastructure. How do we get the roads and these facilities
and the storage and the distribution to areas where people may not have it? It even lies with peace and conflict. How do you solve problems in areas where there
may be conflict so that you can get access
to give people food? I think this issue of access to the most
vulnerable is critical to the issue of food security. Thank you. After this first round, we're
going to go to you to ask very short but direct questions
to our panel. Let's try to keep this moving
so that we can go to the floor very quickly. Bill Gates. Speaking about different
approaches in terms of strategy, you have been one who's looked at transforming
value chains and I, for one, am very glad that you've set your strategic sights
on the issues of food and nutrition and hunger. At the G-20 in Cannes last year,
you really laid down, I think, a new way of doing business, which is learning
between new partnerships south south, connecting business and government
and others together. How can these new models of collaboration
really make a difference to the hungry kid on the ground? Our foundation is probably best known for the
work we do in health. I want to make it clear why we think these
food issues are of such critical importance. For the billion plus people who don't get
enough food, the effects are quite dramatic. In fact, the reason that kids end up dying of
malaria and pneumonia is heavily influenced by the fact
that they're not properly nourished. If we could just solve the food issues alone,
that would have a huge impact on health statistics. Even more important, although harder
to measure is that when kids are malnourished at a young age, it has this permanent effect
on how well they develop. This is a very urgent problem. My annual letter came out this week, and the majority of it was focused on talking
about agriculture and what we can do. Historically, there was a lot of success, the
so called Green Revolution, people like Ford Foundation,
Rockefeller Foundation, and in a sense, that success, I think, led to
the complacency of the last 10 years. It's only in the last three or four years that
agriculture has gotten back on the agenda and people are saying, hey, let's get
a reasonable level of funding in for this. Unfortunately, that's coincided
with the financial crisis. So there were big commitments
made at L'Aquila. Only a pretty modest portion of those
were fulfilled. However, I'd say, I'm pretty optimistic about
the most critical problem in food security, which is helping out these billion people. I do think raising their productivity is going
to be absolutely key. Largely, they're not in the market whatsoever. Whatever they grow is what they're going to be
able to eat. As was said, the productivity of these farmers
is low enough that the opportunity to double or even triple,
in many cases, that productivity is clearly there. Better inputs, better information,
better seed markets in these countries are the key things that will get us there. So despite the fact that the financial crisis
means that keeping these aid dollars strong will be very difficult, I'm fairly optimistic
that this is coming back on the agenda. It was a significant part of the discussion
at the G-20. The G-20 is very interesting because it brings
in the middle-income countries, it brings in China and Brazil. Those are both countries who've done such a
fantastic job of feeding their own population. They bring both in a technological sense and
in an equity sense a lot of knowledge, including specific understanding, China in
rice, Brazil in tropical soil. If we can draw them in, there's a lot they can
do. We also have a private sector that, although
it focused mostly on temperate, rich-world crops, I think there are models of
partnership where we can take their intellectual property
and get it available with no royalty whatsoever and do specifically
adapted varieties for Asian and African farmers. We're starting to see some emerging examples
of that taking place. A lot of exciting potentials in the science,
as we're able to piggy-back the genetic revolution from human medicine
into the crops. We have let the research groups that work on
the poor-world crops, the CGIR groups, be underfunded.
They're funded at about half of their peak. Also, if you really look into it,
a lot of it now is very short-term funding, as opposed to the horizontal funding
that's necessary. I think as we do the G-20 in Mexico, we can
highlight that, highlight the new models of cooperation. Certainly, I know for the foundation,
this is an area of focus for us. The final group that needs to participate here
are the poorer countries themselves. We are seeing a lot of exciting activity
there. Nigeria has a new Minister of Agriculture who,
I think, is quite dynamic and ambitious. We've got countries like Ethiopia, really
willing to step back and re-look at how they do things. We have Ghana as a great example that has
made the investment, and has seen the results. The different factors are coming together,
and we can just track. The number of interest is the number that
don't have enough food. Can we get that from a billion to a half-
billion, eventually to zero? I think, with the right focus, we can. Thank you. It is my distinct pleasure to
welcome the new Director General of the Food and Agricultural Organization,
Jose Graziano da Silva. Jose, you had a major role in the Fome Zero
program supporting President Lula in what has turned to be a real transformation of the face of hunger and malnutrition
in Brazil. In fact, by a number of studies,
Brazil is defeating hunger faster than any nation on Earth. You come into a huge organization
with a huge mandate to really grapple with these questions, but I'm going to make it
an even harder question for you. Are we going to be able to feed the world in
20 years? Are you confident that the tracks are laid or do we need to look at whole new models
in doing this? What do we need to do to insure
we're on the right track and there will be enough food in the world? An easy question to welcome you to Davos. Well thank you, Josette.
I am confident we can do it. We can do and we now – we can feed the whole
population, seven billion that we have. As mentioned, the problem is not supply side. The problem is the access to food. People don't have the money to buy the food
they need or they don't have the access to water and land to produce it when they are
family subsistence farmers. What I believe that it's not only
the challenge to improve 70%, I mentioned as Paul mentioned, the problem is how to do that
without destroying the natural reserves as we are doing now, wasting water,
erosion soils, destroying forests. That's the challenge. Combining these two agendas, climate change
and food security, is the challenge. We need to improve production, that's right. We need to produce 70% more, that's right. We need to produce much more in Africa, where
Africa has the natural resources to do it, and there's where the food is needed. We need to stimulate
to developing countries to produce more. That's all right but even though,
even if we achieve the goal of 70% more, we are left behind 300 million people. That's something that people don't see
at the same time. So the problem is how to combine food supply
with a better access, stimulated the demand side. Normally subsistence agriculture
does not have the, let's say, the capacity to pull local development. We need to address the Mampu models
to stimulate local markets. I believe that the key issue is local markets
because nowadays, as you mentioned already, we lose 30% in storage, transportation,
post-harvest. We waste a lot of money also, money and food,
in transportation costs that are very high nowadays. So if we are able to combine local markets
with local circuits of food production and food consumption, it will help a lot to
improve not only the food production capacity but also to have helped access to food. Thank you. Bruno Le Maire, you became
a personal hero of mine last year where you really used the power of the G-20,
with the full support of President Sarkozy, to really do practical things not only on the
agriculture issue but for hungry people. Not only that, something not well known,
Bruno Le Maire joined me on the frontlines of the devastating drought
in the Horn of Africa. We went to Dadaab, the refugee camp;
to Wajir, Kenya. But in Dadaab, where you have the refugees
coming from Somalia, I was with him in a place where many children
were being lost, having not had food in weeks, sometimes up to six weeks. He kept his commitment to the trip even though
his wife and he welcomed a new child in their own family just three days earlier. I think that powerful connection
with the effects when all of this falls apart into the pillars of power in the G-20
really helped move the world. Could you talk about the things
that were accomplished there and how we take that forward and make sure
we don't lose momentum in future G-20s? Thank you, Josette, and thank you
for your very kind words. I think that the most important accomplishment
of the French chairmanship of the G-20 was to put the question of food security and
agriculture at the top of the agenda. Agriculture is back on the international
agenda at the highest level. As Bill just said, it is very interesting
to have China and India on board and opening the discussion with the countries which have to feed more than one billion
people each year, and which have been able to put some new
solutions on the table to meet this challenge. The second point I would like to stress today
is that for the first time, we have been able to take some very concrete
and specific decisions. I would like really to insist on this point, on this question of food security,
on this question of hunger all over the world, we have to get rid of big statements
and big declarations. The point is not to make some big statements
and big declarations on hunger in the world; the point is to take decisions and to be able
to put on the table practical solutions. This is really the key point. I'm very proud that altogether, we have been
able to take those decisive decisions and concrete decisions. I would like just to mention some of it. The first decision, which seems to me
maybe the most important one, is the creation of AMIS,
Agricultural Market Information System, which is a tool to put some more transparency
on commodities markets. We need transparency if we want to alleviate
the situation on commodities markets. The second decisions I would like to stress
is the Rapid Response Forum because it is a tool that will be headed by
the FAO, under the leadership of the FAO, which will put some more coordination in the
decisions of the most important countries when we are facing a crisis in food security. If we are looking back at what happened
in Russia due to the drought, when Russia decided to close their borders
because of the drought, there was a lack of coordination
among political leaders. Thanks to this Rapid Response Forum,
I'm confident that we will be able, in the next future, to take decisions
in a coordinated matter. The third decision I would like to stress is
the decisions that we have been able to take at the level of the G-20 on research. Research on wheat, and also because this
is an initiative that will be taken by the next Mexican presidency,
research on corn. Thanks to that kind of programs,
we will be able to improve productivity, we will be able to improve nutritional value
of the production in a sustainable way. That's why this question of research
is so important to me. The very last decision I would like to quote
is the Food Emergency Reserves, because we need that kind of tool
if we want to prevent food crises. You just mentioned the dramatic situation,
the terrible situation in the Horn of Africa. I really think that if we had
that kind of food emergency reserves, the situation would have been
really different. For the next Mexican presidency, and I will
finish my speech with those three remarks, I think that there are three challenges
that are of utmost importance for the next Mexican presidency
and for the G-20 presidency. The first point is to try to keep
everybody on board, because we have been able to try to define
a new model of cooperation during this G-20 when we tried to build concrete decisions
on food security. We have been able to work with international
organizations, with the FAO, with the WFP. We have been able to put NGOs on board,
and we need the support of NGOs. We need the critical aspects of the NGOs. Of course, we have been also able to work
with private investors. This is something completely new and if we
want to go the way of fighting against hunger, we need the support of private investors. As Paul said and as Bill said,
this new partnership between private and public investors
is of key importance if we really want to have concrete decisions. I just wanted to make a hint to the B-20
because I really think that this new partnership between
B-20 and G-20 is something very useful. The second challenge is to fully implement
the decisions that we have been able to take. Of course we can open a new set of discussions
and a new area of discussions, but we need to implement
what has been decided. My experience as a diplomat,
as a political leader, is that the key point is always
to concretely implement the decisions that have been taken at a political level. The third point, of course, is to be aware
that we are facing in the United States, in Europe, especially in Europe,
a terrible economic crisis and there is a risk
that the political leaders in Europe go away from this question of food security. We have to keep the focus on this question
of food security. We have to keep the focus on this question
of hunger all over the world and we should never forget that hunger
is not only an economic question, not only a question of policy; hunger is an economic
but also a moral disaster for the world. Thank you, Bruno. Stefan, if we could just get the risk
out of the value train, I think a lot of these problems would be
solved. Unfortunately the words food and risk
are deeply embedded. I don't know if farming is the riskiest
laden business in the world, but it ranks, I'm sure, very high on the list. Swiss Re has done very innovative work. I'm familiar with it because we've partnered
together on some weather disaster insurance that has
helped farmers in Ethiopia and elsewhere. Can this be scaled up? Can we get some of the risk out of farming so
families and the people that rely
on the food supply chain aren't devastated over and over again? Thank you, Josette. The short answer would be yes, but I think I
have to be a little bit more detailed. So in an emerging market poverty,
systemic agriculture and food security are closely linked. The start of a solution for all three
is farmer security. You have to see a farmer as an entrepreneur
who works on an open roof. He's exposed to many risks. One of the most important ones is, as
you mentioned, extreme weather. Look at this chain. If there is a serious drought
the farmer has no crops, has no income. Many give up their business,
walk to the cities and end up in the slums. What can we do as private institutions,
here I talk now to the financial institutions, to help the farmer to stay on the land
and do what other colleagues have said, produce food. Of course, and I think Ngozi said this,
you need access, but you also need access to financial markets. You need access to risk financing capacities. What are the instruments which are
usually available? It's access to credit, access to insurance
and reinsurance, but also access to investment,
to equity investment in this food chain. Sometimes even, which is helpful to start it,
is access to some sort of subsidies. May I give you, perhaps, one example
to demonstrate this works already and the only thing we have now to do is
scaling this up because the tools are there. I take this example you mentioned.
We worked together in Ethiopia. In 2008 we started with a project
which has some innovating parts in it. First of all, cash poor farmers could
pay for the drought insurance with their labor
but it was a very specific labor. What they did, they established
new irrigation systems or wells, so this makes their community more resilient
against weather impact. At the beginning in 2008 only 200 farmers
were in this program. Up to now more than 30,000 farmers
are in this project. We are now working on the so-called R4 Project
to scale this first now in Ethiopia to many, many thousands
and then also in other African countries or other countries even outside Africa. Well thank you. I think we've given you
enough topics here to step in. Do we have any hands up to ask questions? Please identify yourself
and make the questions direct. Even if he didn't raise his hand, I was going
to go to David Beckmann of Bread for the World first and then we'll go back there. Well my question, maybe I could ask you,
Josette or Mr. Graziano da Silva. It seems to me that the main issue is
how do you build political will? Because for 40 or 50 years
we've had lots of high-level statements about the feasibility of ending hunger
in the world and people have said over and over again,
all we need is the political will to do it. How do you build that political will
in countries? Josette, you've been involved in seeing
how countries around the world might build the necessary commitment. Mr. Graziano da Silva, Brazil is maybe the
leading example of a country that within your own politics managed to build
national will to reduce hunger. I'm interested in your reflections on how you
get the commitment, sustained commitment, to get the job done. Well I'm going to pass this to the politicians
on our panel but also Jose. But I would just say I was recently
in Brazil with Jose. We were at Brazil's conference
on food security. I think every governor from around Brazil
was there, local officials, and I have never seen people, thousands of
people, more on fire about ending hunger. It was imbued through the entire political
system that this was a national goal and people were excited about the possibility
but also feeling the pressure to change those numbers for Brazil. I was struck how deeply this was imbued in
Brazil. How did that change, because it certainly
wasn't there a decade ago? Yeah, in fact there has been a big change. I would say that the lessons
that we can get from the Brazilian experience, for sure we need this political commitment
to eradicate hunger but to achieve it, it's very important to demonstrate that we
can do it in a very quick way. That was one of the most important points. We have been able to scale up good practices
that were local to a national level and to improve them very quickly.
Not to make experiments. There was a decision made, there was a budget
available and we stated to implement it. To do it, as the government does not have the
proper structure to do it, we asked for partnerships among civil society, private sector, church, football teams,
everybody. So this was because the greatest problem
in the beginning of the hunger combat programs is to find the people that are hungry
because they are invisible. Sometimes you don't have even a number
to address, a bank account for them or something like that,
even a register of where to find them. So civil society involvement is a key issue to
quickly improve and scale up local programs. The second point I want to highlight is that
hunger combat needs practical measures. As Bruno mentioned,
it's not something difficult to do. We're not talking about sending a man
to the moon or something like that. It's practical things that are needed. So build on local experience that already
the people know how to do it. Facilitate this commitment and facilitate to
bring partnerships with local institutions that are again very important. I would like to address a third,
perhaps lesson or important issue, that hunger is an emergency issue but you
cannot address only this emergency situation because the environment that produces hunger,
the causes, the structure of things that are there will
remain there. So when you start an action you need to
address both at the same time and try to bring synergies
between different programs. Let me give an example. We started improving family farmers, but
family farmers do not have access to markets because people don't buy foods locally;
they don't have push power. So cash transfer programs
help you to bridge these two: the supply site to stimulate production,
and also to stimulate local markets. Cash transfer programs in Brazil were key
for the success of the Hunger Zero program. Thank you. I'm just going to ask if we can
take two or three questions together. Then we'll open it up and Bruno and Ngozi,
if you want to jump in on this question that was just asked also.
We have one back here. Shenggen Fan is going to call on you
if you didn't put your hand up and then we'll take this third one
and then we'll come to the whole panel. Please introduce yourself. Thank you. My name is Francois Meienberg. I'm working for an NGO called the Berne
Declaration, based in Switzerland. I haven't heard two words this morning and I
just wonder if the panelists believe that they are not an issue
if we speak about food security. The first word is biofuels. The possible concurrents,
producing biofuels and producing foods, concurrents for water, concurrents for soil
and so on. The other word is food speculation. Food speculation and price volatility,
is this also not an issue? Thank you very much. Thank you. Please? Thanks. Frank Kane from
The National newspaper, Abu Dhabi. I'd like to ask the businessmen on the panel
really whether there's been a failure of international capitalism here again in that
we seem not to have bridged an obvious gap in demand and supply. On the one hand there is one billion people
who are going hungry. On the other, Mr. Polman tells us
that investment in food and agriculture produces the highest return possible
of any investment. Why haven't the two come together? Has this been a critical failure
of capitalism? Thank you. Excellent questions.
Shenggen? Thank you, Josette. I'm Shenggen Fan from
International Food Policy Research Institute, part of the CGIAR research group. Okay, many of you have mentioned
about supporting a country without a country-driven program. But one of the problems we are facing
is a lack of country capacity to support, to build our country capacity. I don't know whether the global leaders
in food security can really re-engage the capacity building to build
the countries to lead, to drive and to arm
their development programs. Excellent and just one last one here. My name is Har Idain (phonetic)
from UAE. We can't hear you. My name is Har Idain from UAE. We thank your distinguished panel for the
excellent briefing. But you know there is something
which is called accessibility, availability and affordability of the food.

Accessibility, is it possible to get it
locally or internationally? Availability, is it available in the right way
and the right quantity and the right time? But the most important is the affordability. His Excellency Graziano, he said that is about
almost three hundred million. Is it affordable for the people
to buy it from the local market? So can we give enough quantity for the poor
people to buy it and to be affordable? This is my question.
-Excellent question. Political will, biofuels, speculation, failure
of capitalism, building country capacities, accessibility, affordability. We're just going to go through. Who wants to jump in first?
Bill? Well no one ever said
that capitalism solves everything. There are two things that it's known
to have a problem with. First is funding research and innovation. You always underfund it because the risk-taker
can't capture anywhere near the full benefit. The other is doing things for the poorest. The voice of the poor in a market-based system
is very feeble. So certainly in health for things like where
we're working on a malaria vaccine, here in agriculture in terms of particularly
the crops of Africa, the work that's gone into cassava, cassava
diseases, the work that's gone into sorghum is way, way less than you would do
if you were optimizing human welfare. But itג€™s simply ג€“ thereג€™s no market for that. So thatג€™s where government and
philanthropy always has to come in. It can never be done by price-based mechanism. Although you want to bring in
the actors who have competence, and so youג€™ve got to effectively create
some sort of price signal for them. Excellent. Paul? Yeah. In the theory of capitalism
we donג€™t disagree, I think the theory of capitalism
is a little bit simple on all the things weג€™re discussing in Davos,
there's a failure of the system to function. What is very important here
is property rights, for example. Business doesnג€™t get involved
in property rights. The governments need to figure
a lot of these things out, rules of law. Many of the countries in Africa
were able to feed themselves. Government changed and the feeding changed. R&D protection is very important
for bringing in technology, the rights of women, which are
in some countries more recognized than others. Functioning of markets not having
a Doah round or other restrictions. Export restrictions, weג€™ve seen from Russia
for example on grain export. So what we are not advocating here,
which is very important, itג€™s not them and us,
and business or government. For the first time we have an opportunity, when the issue becomes far more pertinent,
to just work together. To work together to find a solution. And that is where, for example, the project
like New Fishing for Agriculture comes in, why itג€™s so powerful.
Because it takes this holistic approach, that all the members of the panel
have been talking about. And I think we are past the time now to say
this group of people, or that group of stakeholders has let us down. The issue is far more complex, that it needs
to be solved at a different level, which is that corporation weג€™re talking about. Weג€™re going to go Ngozi, Stefan, Bruno,
and then weג€™re going to have Jose wrap up because we only have five minutes.
So Ngozi and then Stefan. Iג€™d like to put a little bit more optimism
to the question whether we get the financial market
interested in this type of production. There are at the moment only specialists
in this business. Insurance companies
and reinsurance companies are in. I summarize, in one sentence
what happens in India and China. There are roughly a hundred million
insurance premiums. Five to eight years ago today,
we had three billion both countries together. For our company, Swiss Re,
we remain the leaders in this company in both. Working with the government, with more than
a hundred million dollars premium there, and we earn money. So the key risk is for all investors
and all those who invest in the value chain, in stock, and everything. They would like to get rid of
the risk of weather. And this is why we invest
a lot of intelligence now, for example, together with IFC,
to create indices. Because if this innovation is there for all
the countries, for all the specific items, people can invest and can insure their credits
or their investment against this intake. This is the moment you get money
from the financial market. Thank you. Ngozi? Two quick comments on political will
and country capacity. I think the food price crisis of 2008 was
a watershed moment that woke many countries up and has contributed tremendously
to political will at the country level to try and take care of this situation,
because of the issue of price volatility. So you take my country for example. We import $67 billion worth of food
that we can produce. Itג€™s rice, itג€™s wheat for which we can
substitute cassava, itג€™s sugar and fish. These are all products we can produce. This thing woke us up to say, look, not only can we feed ourselves
but we can feed neighboring countries also depend on us, like Niger, Mali
where there are some issues now. So that plus a capable leader. I mean, Bill talked about our new agriculture
minister whoג€™s tremendously exciting, has put forward a very specific plan
of crop by crop. By which we can not only substitute
the 67 billion but we can export 10 billion dollars a year,
gaining back our position that we had in 1961. So a capable leader, and then infusing
the whole system with this will and this excitement that they have in Brazil
that we can do it. Then bring in the partnerships together
with the private sector, the foundations. I think this is what builds the momentum. Now, my last comment is that when you do that, you do then need international community
to also step up. I mean, for Nigeria I think working
with the partners we have we can do it. But for other countries
that have put down specific plans and have the political will, through the GFSP,
the Global Food Security Program. Theyג€™re expecting the support
of the international community to do this. When that is not forthcoming
itג€™s also a bit of a letdown. So we need to bring all parties together
to the table. Thank you. Bruno? Two very short comments. The first one, the question of price
volatility just to insist on the fact, that this was at the core of the decisions
and the discussions around G-20 leaders. The fact that we improved transparency, the
fact that we insisted on improving production, are very specific answers to this question
of price volatility. Iג€™d like also to mention the risk hedging
and insurance instruments that have been created by the World Bank. Iג€™d like to commend Bob Zurlick (phonetic)
for the tremendous job he has made to put his new instruments on the table. Which are very specific answers
to this question of price volatility, because I share your view, this is a key point
for the farmers all over the world. Second remark on the question
of political will. There is political will and Iג€™m quite
confident that with the Mexican presidency there will be a very strong political will
to go the way of fighting against hunger all over the world. There is a key point, which is the financial
support to the practical measures. We have to keep in mind that developed
countries are facing a huge debt crisis. Which means that we have to invent new
financial tools, new financial support. The fact that Paul and Bill are attending
this round table, shows that we are able to find new financial
tools to support those practical measures. Thank you. Jose, bring it all home,
not to put too much pressure on you. I will address only the last point
because I found it very important, how to afford the poorest people
to buy the food they need. I will start with that 75% of the poorest
now live in rural areas. That's saying three out of four. Those people that are malnourished or hungry,
already live in rural areas and most of them are farmers.
Very small farmers, subsistence farmers. So I would say that at least
three main actions. The first one is to better access to natural
resource, land and water are critical, especially in Asia and Africa. Second, better wages and better employment. Most of the poorest work as temporary workers
in agriculture or other sectors. The salary they receive is very low, especially when they are women,
itג€™s very, very low. Third, I would say that we need to bring
the food price down. The way to bring food price down nowadays,
even in speculation, it goes to the fact that production and demand
are very tight, so our stocks are very low. We need to improve production,
but also we need to improve stocks. Stocks to use in emergencies,
but stocks also to give support to the prices. Not to be so vulnerable to a country ban,
or a draw in some area, et cetera. We need better stocks, and stocks regulation is something that we
need a global institution to deal with. In spite of what Bruno said about
rapid response management, we need to deal with stocks. Thank you. I think we actually touched on
every question. This will be my last panel at Davos in my role
as head of the World Food Program. My term ends in April and Iג€™ll be joining
the World Economic Forum as Vice Chair. But I just want to take a moment
just to say a special thanks to Bill Gates and the Howard Buffet Foundation
thatג€™s represented here, for the support for Purchasing For Progress. Today WFP buys 80% of the food
we buy for Africa in Africa, from poor farmers in Africa
and throughout the world, and this type of innovation in making them
part of the solution and value chain. The Purchasing For Progress
looks specifically at farmers who really would not have a chance
to interact with markets, so a subsection of really, and itג€™s helping transform the face of hunger
in some communities. I want to thank you Paul, because there is a group of CEOs
whoג€™s changing the way we do business on food and nutrition, security. Also Stefan, this is ג€“ Iג€™ve got our band
of brothers and Dutch band of brothers, Fickey and Peter Bonker and the people here. A lot of it happened at Davos
and I want to thank you, Ngozi, whoג€™s a ג€“ and then Bruno for moving the world
to get behind this. We are on different ground
than we were in 2008 when the food crisis hit
and half the food drained from this cup for the many, many millions,
hundreds of millions of people in the world who live on $1.25 a day.
I didnג€™t know who to call. Today we are organized, and we are focused,
and countries like Saudi Arabia, the Brick nations are playing a major role,
not only in learning but in contributing to the generosity
of Europe, US, Japan, Australia and others, Canada, whoג€™ve really stood behind this issue. So Iג€™m feeling optimistic, I donג€™t believe
it will be a Malthusian nightmare, and I promise that weג€™ll keep this issue
very much alive with Lisa and her team here at the forum in the future.
Thank you. Iג€™m going to interrupt you
because you should not thank us, but I think we are going to speak
for the panel, because the dedication and the devotion
youג€™ve brought to the World Food Program, putting the interest of many,
always ahead of your own, bringing the cup to everybodyג€™s attention, we should be thanking you
because thatג€™s why weג€™re sitting here. And I would say we can have much more cups. Iג€™m bringing the cup to the forum.


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