Date Released: 
13/05/2009

Announcement

The Government will invest $464.3 million over four years, with $38.7 million in 2009-10, to support increases in food production globally and strengthen the ability of countries in the Asia-Pacific region and Africa to address food insecurity.

Australia was quick to respond to the global food crisis last year, making major contributions to targeted World Food Programme and World Bank trust funds. While this assistance helped deal with the immediate effects of rising food prices, addressing food insecurity is a long-term challenge requiring major investment.

The Food Security through Rural Development measure will help lift agricultural productivity in developing countries by working with other donors and research institutions using environmentally sustainable approaches. It will also improve rural livelihoods by improving the functioning of markets in ways that increase job opportunities and incomes for the rural poor.

The measure will also support social protection mechanisms to enable vulnerable people to better deal with natural and economic shocks.”

Source:

Press Release by Minister for Foreign Affairs, 12 May 2009: Budget Papers

Context

The effects of ongoing food price volatility, together with serious oil price fluctuations and falls in global economic growth have been devastating for the poor. According to the United Nations, there are currently close to one billion malnourished people globally. Although prices for staple commodities such as wheat, rice, soybeans, corn and palm oil have eased since the peaks experienced in early 2008, they remain high compared to pre‑2006 prices. Volatile food prices combined with the global recession will mean increased hunger and risk of malnutrition, particularly amongst the landless poor, children and women.

Global population growth of one per cent per year, increased consumption and the diversion of food crops for biofuel production and for intensive feeding of livestock, have all increased the total global demand for food, resulting in food shortages in particular countries. Changes in climatic conditions, soil degradation, scarcity of arable land, a decline in the standard of rural infrastructure and use of outdated agricultural practices have affected the global community’s capacity to respond. Over 90 per cent of the poor in East Asia and the Pacific live in rural areas with most dependent on agriculture and fisheries for their livelihoods. A decrease over the past several decades in investments in agriculture and agricultural research and development has compounded the problems in developing countries of food insecurity and persistent rural poverty.

Response

Direct spending on rural development is estimated to be $230 million in 2009‑10, or approximately six per cent of total ODA. Australia’s response will include both short and medium‑term investments to support increased agricultural productivity, better functioning of rural markets, trade reform, improved fisheries management and removal of barriers to rural private sector growth. Action to extend social protection measures will be a major component of the Government’s aid response to the global recession.

A 2009‑10 budget initiative to address food security through rural development, costing $464.2 million over four years (see Box 1) is a central component of Australia’s action plan, announced by the Government in May 2008, to improve long‑term food security. In 2009‑10, programs promoting food security through rural development will be expanded in East Asia, South Asia and the Pacific. For example, a Pacific Regional Agricultural Marketing Access Program will increase agricultural exports to Australia and other destinations by helping Pacific Island countries meet trading partners’ quarantine requirements. Consistent with Australia’s increased attention to development needs in Africa, support for increased agricultural productivity and social protection programs in Africa will be a focus of increased Australian assistance.

Box 1: Food Security through Rural Development
The Government will invest $464.2 million over four years, to support increases in food production globally and strengthen the ability of selected countries in the Asia‑Pacific region and Africa to address food insecurity. Targeting major causes of food insecurity, the initiative consists of three components.

The first component will lift agricultural productivity, by working with other donors and research institutions using environmentally sustainable approaches. A key strategy will be to invest in the critical science and innovation upon which productivity depends. Core funding will be increased for the Consultative Group on International Agricultural Research (CGIAR). The international research centres that are members of CGIAR include the World Fish Centre, the International Rice Research Institute, the Africa Rice Centre and the International Institute of Tropical Agriculture. Additional funding for Australian Centre for International Agricultural Research (ACIAR) will expand its support for collaborative research partnerships between Australian researchers and their counterparts in developing countries. Partnerships will be enhanced with the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and other centres of Australian expertise.

The second component will improve rural livelihoods, through improving the functioning of markets in ways that increase job opportunities and incomes for the rural poor. Key markets targeted will include agricultural input and output markets, land, finance and labour markets. This component will also help Pacific Island countries to achieve better returns from sustainable management of tuna fisheries and coastal fisheries. Expanded assistance will increase poor people’s access to financial services, including savings and insurance schemes and microfinance.

The third component will build community resilience, through supporting social protection mechanisms to enable vulnerable people to withstand natural and economic shocks that increase food prices. The initiative will strengthen and expand existing formal and informal social protection programs — such as school feeding programs, micro‑insurance, crop insurance and food and cash-for-work programs — implemented by governments, NGOs and church groups, and support the creation of new mechanisms where none exist.

Increased funding will build on successful current large‑scale program support (such as agricultural livelihoods training in 45 provinces of Vietnam) as well as smaller‑scale projects (such as assisting local farmers in the Solomon Islands to identify better performing varieties of subsistence root crops). The Australian Centre for International Agricultural Research (ACIAR) will play an expanded role in Australia’s increased support for measures to improve food insecurity and rural development. Australia will also provide increased core funding for the Consultative Group on International Agricultural Research (CGIAR) with the aim of increasing the rate of productivity growth for food crops, livestock and fisheries.

Sources