Cash-strapped G8 looks to private sector in hunger fight

WASHINGTON Fri May 18, 2012 1:01pm EDT

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WASHINGTON (Reuters) - Buffeted by the euro zone crisis and distracted by political problems at home, the leaders of the world's industrial powers turned to the private sector on Friday to help fight hunger and malnutrition for up to a billion people struggling with shortages, droughts and rising food prices.

U.S. President Barack Obama announced a new public-private partnership program involving some $3 billion in corporate pledges, seeking to spur this weekend's summit of the wealthy Group of Eight nations to find new ways to help hardscrabble small-scale farmers in Africa - particularly women - who may hold the key to improved world food supplies.

"Some have asked in a time of austerity whether this new alliance is just a way for government to shift the burden onto somebody else. I want to be clear. The answer is no," Obama told an audience of several hundred that included rock singer Bono, a leading voice in the call to end global hunger.

"Even in these tough fiscal times, we will continue to make historic investments in development," said Obama, adding it was an "outrage" that children continue to die from starvation.

This year's meeting of the G8 - the United States, Britain, Germany, France, Italy, Japan, Canada and Russia - will focus on the economic headaches plaguing the world's richest countries, including worries over Greece, the future of the euro zone and proposals to tap emergency oil reserves to offset diminishing exports from sanctions-hit Iran.

But U.S. officials say the Obama administration also wants the G8 to take fresh steps to improve global food security, building on its 2009 summit in L'Aquila, Italy, which sought to mobilize $20 billion over three years to boost agricultural investments in poor countries.

"Reducing malnutrition and hunger around the world advances international peace and security, and that includes the national security of the United States," said Obama, nodding to domestic concerns during a U.S. presidential election year.

Global food prices soared in 2008, which led to increased hunger, malnutrition and social unrest, highlighting the years of underinvestment in agriculture in developing countries.

Food prices have remained high and volatile since, rising by 40 percent between June and December 2010 alone, while maize and wheat prices doubled during that period, raising the food bills of the world's poor countries.

Obama, who has made improving global food supplies a keystone of U.S. overseas development policy, said the new initiative would improve nutrition for 50 million vulnerable people, primarily in Africa, over the next decade.

The initiative includes a new partnership with agribusiness giants such as DuPont, Monsanto and Cargill, along with smaller companies, including almost 20 from Africa, which will commit some $3 billion for projects to help farmers in the developing world build local markets and improve productivity.

"There is no single group or simple solution that can solve the food issues facing a growing population," said Monsanto chairman's, Hugh Grant, in a statement announcing a commitment to invest $50 million over the next 10 years to support African agricultural development and growth.

Monsanto, the world's largest seed company, said its plans include work in Tanzania on development of corn that uses water more efficiently, and support for development of a network of agro-dealers.

In all, some 30 countries, home to about 26 percent of the 1.4 billion extreme poor, already have globally backed agricultural investment plans that need donor support. Among those countries are Bangladesh, Benin, Mozambique, Nepal, Nigeria, Rwanda, Sierra Leone, Zambia, Uganda, Tajikistan and Ethiopia.

One program already viewed as highly successful is the Global Agriculture Food Security Program, a public-private partnership that works with countries to boost agricultural productivity. The Obama administration would like to expand it.

"We want the private sector to bring their savvy, their innovation and their investments. It is a huge emphasis," Lael Brainard, U.S. Treasury under secretary for international affairs, said in an interview.

WOMEN AS THE VANGUARD

With global food demand expected to grow by at least 70 percent by 2050 and with sub-Saharan Africa home to up to 60 percent of the world's unused arable land, aid experts say African farmers - particularly women - must be the vanguard of the next agricultural revolution.

"If we get the ball moving and we create a genuine agricultural revolution and transformation in sub-Saharan Africa, hundreds of millions of people will benefit," Rajiv Shah, the director of the U.S. Agency for International Development, told Reuters in an interview.

Shah said the new U.S.-backed partnership would seek to address some of the roadblocks slowing crop yields in Africa, which are now about one metric tonne per hectare, compared with 7 metric tons (7.7 tons) per hectare in many other parts of the world.

Among the initiatives unveiled on Friday, U.S.-based farm equipment maker Agco Corp will invest $100 million over the next three years to implement model farms and training centers aimed at improving productivity for 25,000 smallholder farmers ranging from Ethiopia to Mozambique.

Swiss agrochemicals giant Syngenta said it would invest over $500 million in Africa in part to help develop seed products tailored for African farmers. Syngenta officials said the company expects to build a $1 billion business there over the next 10 years.

Other partnership projects include improved telecommunications access from British telecoms firm Vodafone and a potential African site for a proposed $2 billion fertilizer production facility planned by Norway's Yara International.

DuPont said it will invest more than $3 million over the next three years to help smallholder farmers in Ethiopia.

Neil Watkins, policy director at the U.S. aid group ActionAid, said the new initiatives might improve the lot of African women farmers, who already produce as much as 90 percent of the food grown on the continent but often lack access to appropriate low-cost technology, rural credit or state-of-the-art inputs such as seeds and fertilizer.

But he said sustained commitment on the part of both traditional donors and private investors would be required - and voiced concern it may be difficult to link up the world's giant agribusiness companies with some of its poorest farm laborers.

"These marginal farmers aren't likely to be targets for corporate investment," Watkins said. "Corporate investment is not a silver bullet for food security in Africa."

(Additional reporting by Carey Gillam in Kansas City, and by Alister Bull and Stella Dawson; Editing by Peter Cooney, Vicki Allen, Leslie Adler)

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