International Food Security
(World Food Summit Follow-up)
(AIARD's Response)
International Food Security
(World Food Summit Follow-up)
(AIARD's Response)
November 7, 1997
Priscilla Clapp
Special Representative for Food Security
U.S. Department of State, Room 5332
2201 C St. NW
Washington, DC 20520
Dear Priscilla,
The Association for International Agriculture and Rural Development (AIARD), is a United States-based professional association representing international development professionals in every state of the Union and with growing numbers of international members. Our Association welcomes the increased attention brought to United States international agricultural and rural development policy as a result of World Food Summit follow-up activities.
We respectfully submit the following initial comments and ideas regarding the Interagency Working Group (IWG) Discussion Paper on International Food Security:
1. Place Recommendations in a Strategic Framework
The current draft of the report contains many good ideas. Some strategy is implied by the section headings, but with re-framing we believe that it could both be made more strategic and simultaneously set forth a plan to gain increased support by Congress and the U.S. taxpayer. We believe there is need to develop a "super strategy" that would prioritize the best activities proposed in the paper and weave these activities throughout the U.S. development agenda in ways that ensure that food and agriculture remain at the forefront of the political and development agenda in the U.S. Such a strategy should be based on problems and needs of developing countries, build on known U.S. strengths and incorporate lessons from our previous development experience.
2. Broad-based Economic Growth and Development Should Be A "Cornerstone"
We submit that broad-based, sustainable economic growth should be a primary cornerstone of such a strategy. We believe that the report should make more explicit what has been proven to be true in development programs -- that agricultural and rural development offer the lowest cost, highest payoff sources of economic growth and development in poor, agrarian-based developing countries. Evidence has shown that by getting agriculture "moving", you move all else, and that the returns to investment in agricultural research, technology development, and other rural investments have a higher rate of social and economic return than do investments elsewhere.
In the post-cold war environment, this fact also provides an effective base from which to argue, through this document and other venues, for broader U.S. taxpayer support for international food and agricultural development -- i.e. it is in the best interest of the United States to invest in the broad-based economic growth of developing countries, not only to alleviate human suffering wrought by poverty and food insecurity, but to help the U.S. in the long run by "growing" markets for trade.
Broad-based rural development is a key concept. We have recently come to appreciate that only about half of the total income of rural areas of poor countries is generated from agricultural, on-farm activities. In rural areas peppered with small farms of one to five hectares, the producer -- however poor -- is generally much better off than non-farm rural workers and more likely to gain from the agriculturally-based initiatives prescribed by the paper.
3. Focus on U.S. Strengths in Helping Developing Countries Deal
With the Realities of the Global Marketplace we believe that the report should also address U.S. strengths in helping developing countries deal with the dynamic realities of the global marketplace -- particularly the economic policies that will help developing countries to compete effectively, prosper, and ultimately become better trading partners.
While the report cites the fact that an enabling economic environment is fundamental to food security, it does not highlight a role for the U.S. in providing policy consultation to help developing countries adjust to the changing opportunities of the global marketplace.
A paper by David Bathrick, former AIARD President, soon to be published through AIARD collaboration with the International Food Policy Research Institute (IFPRI), contains information that might be helpful. The paper discusses daunting policy changes faced by developing countries trying to deal with new realities of the global marketplace. The following are among the areas that are identified where U.S. expertise could be used: (1) land tenure and titling issues; (2) strategies to help determine national comparative advantage and competitiveness, (3) policies that assure linkages with other sectors; (4) management and marketing support services; (5) infrastructure services to support market systems; (6) communication and information systems; (7) establishment of appropriate rural financial markets, and, (8) market-driven agricultural technology generation and dissemination systems.
4. Recognize the U.S. University Capacity and Contribution
While the report does a good job recognizing and supporting increased funding for the CGIAR, it gives less focus to the accomplishments of the win-win scientific and educational partnerships established and nurtured through the long-term investment of the United States in Title XII (particularly the Collaborative Research Support Programs). The CRSP program is the one broad-based Title XII program that has continued to be explicitly and consistently supported by the U.S. Congress.
The introduction indicates that "American firms, cooperatives, foundations, non-profit groups and all levels of government have a great capacity to mitigate hunger." Hopefully, the final report will include U.S. universities in that statement. Further, on page four, the report indicates that U.S. universities will continue to internationalize their agriculture programs, without recognition that federal government support is needed. The contributions that state universities and land-grant colleges have made to international agricultural development would never have been possible without what was formerly a strong commitment to international agriculture on the part of the U.S. Congress and USAID.
More should be said about the capacity of U.S. universities in applied and basic research as well as education and training and that this capacity needs to be strengthened and funded in order to continue to foster long-term relationships with institutions in developing countries. Building on the success of previous technical cooperation activities with institutions in developing countries, many universities are now establishing long-term partnerships with these same institutions. Development assistance support would enormously increase their usefulness in advancing the development goals of both the U.S. and developing countries.
5. Specify Focus on Human Capital Development
We would like to encourage much more emphasis in the report on human capital development appropriate to the needs of rural areas, i.e., formal training at the post-secondary level down to the secondary and primary levels, as well other non-degree programs and extension services (especially for women who account for up to 80% of household food production in sub-Saharan Africa, 65% in Asia, and 45% in Latin America and the Caribbean). The U.S. has continuously delivered results in this area and government policies should support continuing this work.
Since the time of the first papers by Nobel Laureate T.W. Schultz some 35 years ago it has been shown that the returns to education, including particularly education in rural areas, have been unequaled. Issues related to human capital development in rural areas frequently falls between the cracks of Ministries of Agriculture and Education in developing countries. We should not let this happen in the U.S. report.
We fear that some of our more skeptical Third World colleagues could interpret the "light touch" on human capital to mean that the U.S. does not really want to give people the capacities to help themselves so that they will continue to be dependent on technical assistance and intervention.
6. Broaden the Role of the Private Sector
While it is appropriate that the report primarily address what the public sector will do, a long-term food security strategy should not be too dependent on the public sector. A longer-term vision is required to address food security to more effectively mobilize the private sector to assist in addressing food insecurity.
We know that our U.S. agribusiness colleagues support a foreign assistance objective of global food security, but they believe that, historically, U.S. foreign assistance programs have not been very successful in either establishing a foundation for investment or encouraging the participation of U.S. agribusiness. It is in the national interest of the United States to actively support and participate in international agricultural development schemes that increase global trade and investment opportunities for U.S. agribusiness.
In general, the document's proposed actions can be strengthened by a greater emphasis on mobilizing private sector producer organizations, both internationally (i.e., trade associations) and locally (i.e., farmer organizations) in support of investments in trade-driven infrastructure, technology, and institutions. The document does not acknowledge the existence of these private sector groups or explicitly articulate the roles they could play in ameliorating food insecurity. This also points to the need for the public and private sectors in the U.S. to articulate complementary roles for both sectors in support of the alleviation of poverty, the root cause of food insecurity.
Perhaps some of the examples used in the current draft could be slightly re-framed to focus more on mobilizing the private sector.
For example, it is recommended that the "U.S. government ... [establish] "a 'one-stop shop' for small and medium-sized companies to acquire information on government programs to facilitate their business in food insecure countries. This would have a counterpart structure in U.S. embassies. Such a shop might not need to be established within the U.S. government, but within an umbrella association of trade associations, with the umbrella association serving as the liaison between the member associations and the U.S. government as a source of information.
In Attachment 1 of this document we share ongoing efforts to incorporate the private sector effectively in development programs. You have probably contacted the private sector about providing additional examples, but please feel free to contact us if we can be of further help in this area.
7. Greater Use of Information Technology
We strongly support the proposals in the discussion paper to exploit new technologies (advanced global communications systems, Internet, GIS) that can provide improved access to, integration of, and utilization of data and information and can be used to facilitate developing countries making their own decisions regarding resource use.
These technologies can help spread knowledge about the products of agricultural research and development more rapidly, to help address environmental and social challenges in a faster and more efficient ways than have been available in previous development eras.
8. Use Language with "Teeth" and Commitment
We recommend that the report use language with "teeth" and commitment i.e. phrases that indicate that the U.S. WILL do... ( the proposed action) vs COULD CONSIDER doing... (the proposed action). While the group writing the report may not feel that it is their prerogative to make such a commitment, many of the examples given are, indeed, already ongoing efforts, and could be stated in more emphatic language. Attachment 2 reflects our recommendations in this regard.
9. Take a Positive Stance Regarding Resources
While tight public sector budgets are a reality, we recommend that the report should not "throw in the towel" too soon in this regard. Rather, to gain U.S. public support for the document and show the public what needs to be done, more emphasis could be placed on informing the public about the critical issues and the U.S. role in addressing them, and then devising innovative ways to increase support for these programs both through public and private sector resources. If we state up front that expanded resources will be not be available, it could become a self-fulfilling prophesy.
10. U.S. Leadership
Finally, the report specifies what is being done by individual agencies, but does not specify who will lead the effort at the highest levels. A high level push will be needed, beyond the writing of this report, so that relevant agencies and organizations continue to coordinate efforts. It will take clout to keep agencies focused on seeing their efforts as part of an overall, global effort to increase food security, and to keep Congress and the President focused on ensuring a stream of resources into these programs, proportionate to need.
In conclusion, AIARD appreciates the opportunity to comment on the report and is pleased to provide any additional information that will help in your important mission to devise a widely acceptable plan for U.S. follow-up to the World Food Summit. Please do not hesitate to contact me at #202-775-6611 if clarification or expansion is needed on any of the points made in this correspondence.
Sincerely,
Susan G. Schram President, AIARD
Private Sector Examples
Examples Submitted by Texas A and M University
(1) Private Sector, NGO, University Partnership in Development
McDonalds Corporation leads a group of firms, two universities and an environmental NGO to conduct research and development in the Amistad region of Panama and Costa Rica. The corporations provide funds and convene the oversight board, the NGO conducts field operations, and the universities provide the technical and overall project leadership. The five-year, $ 2 million project is regarded as one the most successful interventions in populated steep lands ever attempted in Latin America.
Now producing citrus, vegetables and coffee through land and water conserving technologies, Amistad communities undertake full operational leadership of the Amisconde project this year. The public-private group now seeks to expand the program elsewhere in Latin America. In addition to McDonald's Corporation, the group includes Coca Cola, Keystone Foods, Conservation International, Clemson University and Texas A&M University.
(2) US/ASEAN Business Council, Food and Agriculture Committee
Several corporations and Texas A&M comprise a task force to improve poultry supply in Indonesia. This project is a prototype activity to develop modes of public-private cooperation to reduce food costs in Asian countries. Other countries and other foods will later be studied. The central proposition is that firms and agencies responsible for different links in a food supply chain can reduce costs and improve quality by working together. Partners in the project include Praxair, American Soybean Association, McDonald's Corporation, Tyson Foods, Cargill, Pioneer Hi-Bred and Texas A&M University.
Examples from the Agricultural Biotechnology for Sustainable Productivity (ABSP) project at Michigan State University.
The Agricultural Biotechnology for Sustainable Productivity (ABSP) project assists developing countries in developing, accessing and managing biotechnology to address agricultural constraints of importance to developing countries. It looks to develop public/private partnerships in this area, as much of the technology is proprietary and not available openly. Experience with private companies is summarized below:
1. DNA Plant Technology, Inc. and Agrobiotecnologia de Costa Rica (ACR).
DNAP was an small biotech company in New Jersey when the project commenced in 1991. It is now headquartered in Oakland California and is owned by Semanis Seeds, a Mexican conglomerate. At the outset of ABSP, DNAP and ACR were joined together to explore improved technologies for micropropagation of tropical crops, mainly banana and pineapple (although coffee and ornamental palm were also explored). The goal of the project was to develop cost-effective, large-scale micropropagation methods (using bioreactors) which would allow for the production of significant amounts of healthy, disease free planting material in Latin America. The standard method of propagating banana is to take one sucker from a plant and plant it in another locations. While this may seem economical, it spreads disease and reduces yields (and increases the use of pesticides and fungicides).
As this project was underway, DNAP was presented with another opportunity to work with a small company in Indonesia, Fitotek Unggull. The project was essentially the same, except that Fitotek concentrated on the production of pineapple.
We at ABSP have found that this is the simplest way to involve the private sector in an agricultural research and development collaboration, i.e. private to private...the companies can operate under trade secret and contract law agreements.
2. Seeds and the Central Research Institute for Food Crops (CRIFC).
ICI Seeds (now Garst Seed Company) is located in Slater, Iowa. This company teamed with researchers at CRIFC to develop insect resistant maize using the cryV Bacillus thuringiensis gene, to train Indonesian scientists and thus transfer the technologies, and to explore possible commercialization of products derived from the program. The long-term objective was to develop tropical maize with insect resistance to Asian Stem Borer, an important insect pest in the tropics.
The project succeeded in training Indonesian scientists in molecular techniques (genetic engineering, molecular mapping, entomology, breeding, etc.) and in developing insect resistant maize. However, this maize still needs to be backcrossed into tropical varieties. More importantly, the issue of intellectual property rights (or lack thereof in Indonesia) has inhibited transfer of the materials to Indonesia for inclusion into their breeding programs. IPR issues (and biosafety) are addressed later, but we have found this to be an important area for continued educational initiatives.
3. Pioneer Hi-Bred and the Agricultural Genetic Engineering Research Institute (AGERI).
This is a recent collaboration between Pioneer and AGERI in Giza Egypt.
Like the ICI-CRIFC collaboration, this project seeks to develop insect-resistant maize of importance to Egyptian agriculture. Unlike the ICI-CRIFC collaboration, research agreements clearly indicating intellectual property rights and future ownership of inventions and licensing options were developed before the project commenced. This requires substantial inputs of time and money before actual research begins and can be difficult for donor agencies to accept. This agreement took about 10 months to complete, but now research is proceeding and the path to commercialization appears uncluttered.
All of the above examples were managed under the ABSP project and funded by USAID (either the Washington, DC office of Agriculture or through mission programs). An additional activity directly funded to a private company is the Monsanto-Kenya Agricultural Research Institute (KARI) project on developing sweet potato resistant to Feathery Mottle Virus (FMV). This is a devastating virus of sweet potato and Monsanto has donated their technology to address this infection.
Examples from Sri Lanka
Contributed by an Experienced Private Consultant
The creation of JOBS through foreign investment and trade is the key. Every time there is new investment, additional jobs are created and even if these are high-tech or supervisory positions, it still creates a "job pull" that drags or pulls up others. Trade is another key -through trade, both exports and imports, jobs are created -particularly when exports involve many small scale farmers or workers.
In Sri Lanka, tens of thousands of jobs were created in rural areas during the period 1991-93 with President Primadasa's "200 garment factories" program. The GOSL put incentives in place to attract garment factories to rural areas. And they came -- 200 + or - and built factories in rural areas employing primarily young women plus other supervisory personnel. The exporting of garments also provided additional jobs in transportation, in the port, etc. With a steady paycheck, the thousands of rural workers created a substantial demand for goods and services -- everything from clothes to household appliances... and they could afford private medical services, and even had discretionary income to boot.
Another example is the gherkin industry in Sri Lanka, which grew to around 8,000 MTons of pickled/brined gherkins/year of exports. This was a private sector program from day one. The GOSL (Ministry of Agriculture and Food) REFUSED to get involved as they didn't think it was their role to support "commercial interests." Nevertheless, to produce 1 ton of brined gherkins required 20 or so hectares of production which usually involved 80 families, each growing 1/4 acre more or less.
This gave each family enough income during the three month gherkin growing cycle to equal the GOSL's minimum wage for a 12 month period. And many thousands of families grew gherkins during 6 or even 9 months (depended on weather - during monsoon it was very difficult to grow gherkins) of the year - therefore with a 1/4 acre, they could earn twice or three times the yearly minimum wage. All of this was led by the private sector. USAID helped indirectly through several agricultural projects: MARD, MED, CSFD and the AgEnt project. Gherkins in Sri Lanka were a MAJOR success providing jobs, cash income for what had been subsistence farmers.
These are the kinds of programs which contribute to food security...jobs equal $$ --> demand for goods and services --> better/greater ability to purchase foods and take care of themselves.
An Example of Win/Win Cooperation with Central America
Contributed by Chemonics
1. A family-owned agribusiness specializing in melons, Lindemann Produce, Inc. is based in the San Joaquin Valley, CA. One of the top five packer/shippers of cantaloupe and honeydew in the U.S., and the largest shipper (approximately 6 million cartons per year), Lindemann sells to a customer base of about 2,000 companies including wholesalers, retail outlets, and food service. Prior to 1986, the company was a domestic supplier as well as an exporter to Japan, but had never imported melons. As such it was a seasonal shipper, beginning in Arizona with May harvests and moving back to California for the summer, before finishing up in the fall in Arizona.
2. Lindemann's human resource potential, e.g., sales force and technicians, are available year-round, but due to the seasonal supplies of product, are underutilized. The company would like to offer a year-round presence in the marketplace. Lindemann does not offer an exclusive product; it does sell under a respected label and has a proven ability to sell melons.
3. In 1986, when PROEXAG's advisors initiated contact with Lindemann's owners, the company had no offshore staff or infrastructure, no prior knowledge of how to do business offshore, and had incurred a few bad experiences with Mexico.
4. In late 1986, PROEXAG was contacted by a Central American exporter with Guatemalan and Salvadoran melon production looking for marketing alternatives to complement his existing receivers who were largely concentrated on the U.S. east coast. Convinced that these receivers were overloaded, he was seeking additional outlets for planned expansion in his own exports. He focused his search on a company with strengths in the West and Midwest. PROEXAG's advisors developed a short list of reliable firms with these capabilities.
5. The exporter contacted Lindemann Farms (now known as Lindemann Produce, Inc.) and a deal was made. As a result of PROEXAG's market linkage, some 20,000 boxes of melons were shipped during the 1986-87 season.
6. In 1987, PROEXAG advisors organized a training course in California for 16 Central American packinghouse managers. The program was timed to coincide during the North American harvest and peak season, which is counterseasonal to Central American production. The orientation included visits to the Los Angeles wholesale market, visits to retail outlets for quality inspection, and training in grading, sorting, and packing of melons. Lindemann participated as a collaborator in the training and received the Central Americans on their facilities. Representatives from the Panamanian firm UCAPE, the Salvadoran firm El Rico, S.A., and the Honduran firm Agropecuaria Montelibano participated in the course, all of whom eventually marketed fruit through Lindemann.
7. In addition to this 1987 tour, PROEXAG organized a trip in the fall of 1987 to the lower Rio Grande Valley by a group of Salvadoran melon growers accompanied by PROEXAG's marketing advisor. The trip was made in conjunction with efforts to open the Mexican overland route to markets in the U.S., offering an alternative to the traditional ocean route into South Florida ports. George Lindemann joined the group in McAllen, Texas and met three more producers from El Salvador. One signed a contract for the 1987-88 season.
8. Lindemann Produce, Inc. was among the first U.S. companies to recognize the strategic importance of accessing ports of entry other than South Florida. During the 1987-88 season, Lindemann became one of the main users of the Mexican overland route for melons from El Salvador and Guatemala, pioneering the entry of fruit through Nogales, and strongly reinforcing the use of McAllen as an alternate port of entry. Also in conjunction with PROEXAG, Lindemann's sales staff toured facilities at the port of New Orleans, and trial shipments of melons were conducted. Although the physical infrastructure and services surrounding the port were good, there were two problems with New Orleans -- higher ocean transportation costs relative to landing the same product in south Florida, and lack of sufficient mixer commodities to sell in combination with melons.
9. During its second import season 1987-88, Lindemann Produce, Inc. expanded its volume to 195,000 boxes of melons with an estimated port-of-entry value of $2.15 million. Contacts and relationships with Central Americans were further strengthened following the season with a trip to California organized by El Salvador's export organization FUSADES. Additional Salvadoran growers participated, and several new relationships were created.
10. Over the 1988-89 season, its third year in the importing business, Lindemann reached a volume of 360,000 cartons, with an estimated value of $3.2 million. Contacts were made with additional growers, resulting in suppliers from four countries: Guatemala, El Salvador, Costa Rica, and Panama.
11. By the fourth year or the 1989-90 season, Lindemann Produce, Inc. had expanded its initial imports of 20,000 boxes from one supplier in 1987 to some 635,000 cartons estimated at $8.4 million from 12 companies in five countries. Lindemann's competence as a marketer became vital.
12. More importantly for PROEXAG's advisors, Lindemann began to realize some important things about working in Central America:
* Technology transfer in practical matters is a continuing and ongoing need. A postharvest handling and quality control team was put in place in El Salvador by Lindemann during January/February of 1990. The team provided advice on picking, grading, sizing, packing and cooling.
FUSADES underwrote two-thirds of the cost. A tremendous incentive, the importer was further able to concentrate on quality improvements.
* Lindemann Produce, Inc. also initiated action to improve its ability to receive and manage produce at various ports of entry. While maintaining its sales base in California, it hired agents or deployed employees to McAllen, Texas and Pompano Beach, Florida. Their function was to monitor product arrival condition, which can tend to be quite variable, and thereby help in setting prices and determining sales destination. Pre-cooling conditions in El Salvador were less than optimal, and container malfunction a frequent occurrence thereby making it vital that each arrival be inspected and feedback provided to the sales department. Fair quality melons must be disposed of quickly, and as close to the port of entry as possible. If shipped to a distant market, rejection is ensured and grower returns are diminished.
Both of these strategies, which essentially involve an increased reliance on the importer to provide quality control and technical assistance, helped to relieve the pressure on PROEXAG advisors of providing postharvest handling assistance as well as monitoring arrivals. As early as the second season, Lindemann began to provide its own people on an as-needed basis to work with growers in resolving production, harvesting, and packing problems. Because of the company's unique position as a grower/shipper (in contrast to strictly a sales agent), it was able to supply its own technicians, or to identify other experts to assist. As their import business grew and became an increasingly important part of their year-round ability to supply melons, enlightened self-interest, i.e. getting fruit to market in the best possible condition, and selling it at the best price realistically obtainable, served as the catalyst to important services being provided to the region's shippers by their importers.
13. During the 1990-91 season, Lindemann expanded its volume to 750,000 estimated at $6.5 million in sales. It also expanded its sourcing from five to six Central American countries, adding Nicaragua as a result of contacts made at a September 1990 workshop in Managua organized by PROEXAG and APENN for Nicaragua's potential nontraditional agricultural exporters. Lindemann made arrangements with three farms to supply honeydews. Technical assistance was provided by PROEXAG, a U.S. melon production specialist separately contracted by the farms to provide on-site expertise, and Lindemann. PROEXAG also provided guidance to Lindemann and the growers in transportation matters.
14. In 1991 isolated cases of salmonella were traced to Honduran and U.S. domestic melons. Although neither of these incidents involved Lindemann or its suppliers, it served as the basis for U.S. importers of Central American melons largely at Lindemann's initiative to form an alliance which effectively implemented a quality control program in CentralAmerica in 1991.
15. In planning for the current 1991-92 season, Lindemann expected to receive 1.1 million cartons of melons. Due to a series of production problems encountered by one of their Salvadoran suppliers, total imports for the season which will finish later this month are estimated to be approximately 950,000 cartons of canteloupes and honeydews from six countries (Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, and Panama) with an estimated sales value of $11 million. The Central American import deal now represents close to one-third of Lindemann' s $38 million business, and has made Lindemann perhaps the only year-round supplier of melons in the U.S.
16. Cognizant of the various costs associated with the production and distribution of melons, Lindemann has initiated a number of activities aimed at reducing costs, improving product quality, and increasing returns to growers:
(World Food Summit Follow-up)
(AIARD's Response)
November 7, 1997
Priscilla Clapp
Special Representative for Food Security
U.S. Department of State, Room 5332
2201 C St. NW
Washington, DC 20520
Dear Priscilla,
The Association for International Agriculture and Rural Development (AIARD), is a United States-based professional association representing international development professionals in every state of the Union and with growing numbers of international members. Our Association welcomes the increased attention brought to United States international agricultural and rural development policy as a result of World Food Summit follow-up activities.
We respectfully submit the following initial comments and ideas regarding the Interagency Working Group (IWG) Discussion Paper on International Food Security:
1. Place Recommendations in a Strategic Framework
The current draft of the report contains many good ideas. Some strategy is implied by the section headings, but with re-framing we believe that it could both be made more strategic and simultaneously set forth a plan to gain increased support by Congress and the U.S. taxpayer. We believe there is need to develop a "super strategy" that would prioritize the best activities proposed in the paper and weave these activities throughout the U.S. development agenda in ways that ensure that food and agriculture remain at the forefront of the political and development agenda in the U.S. Such a strategy should be based on problems and needs of developing countries, build on known U.S. strengths and incorporate lessons from our previous development experience.
2. Broad-based Economic Growth and Development Should Be A "Cornerstone"
We submit that broad-based, sustainable economic growth should be a primary cornerstone of such a strategy. We believe that the report should make more explicit what has been proven to be true in development programs -- that agricultural and rural development offer the lowest cost, highest payoff sources of economic growth and development in poor, agrarian-based developing countries. Evidence has shown that by getting agriculture "moving", you move all else, and that the returns to investment in agricultural research, technology development, and other rural investments have a higher rate of social and economic return than do investments elsewhere.
In the post-cold war environment, this fact also provides an effective base from which to argue, through this document and other venues, for broader U.S. taxpayer support for international food and agricultural development -- i.e. it is in the best interest of the United States to invest in the broad-based economic growth of developing countries, not only to alleviate human suffering wrought by poverty and food insecurity, but to help the U.S. in the long run by "growing" markets for trade.
Broad-based rural development is a key concept. We have recently come to appreciate that only about half of the total income of rural areas of poor countries is generated from agricultural, on-farm activities. In rural areas peppered with small farms of one to five hectares, the producer -- however poor -- is generally much better off than non-farm rural workers and more likely to gain from the agriculturally-based initiatives prescribed by the paper.
3. Focus on U.S. Strengths in Helping Developing Countries Deal
With the Realities of the Global Marketplace we believe that the report should also address U.S. strengths in helping developing countries deal with the dynamic realities of the global marketplace -- particularly the economic policies that will help developing countries to compete effectively, prosper, and ultimately become better trading partners.
While the report cites the fact that an enabling economic environment is fundamental to food security, it does not highlight a role for the U.S. in providing policy consultation to help developing countries adjust to the changing opportunities of the global marketplace.
A paper by David Bathrick, former AIARD President, soon to be published through AIARD collaboration with the International Food Policy Research Institute (IFPRI), contains information that might be helpful. The paper discusses daunting policy changes faced by developing countries trying to deal with new realities of the global marketplace. The following are among the areas that are identified where U.S. expertise could be used: (1) land tenure and titling issues; (2) strategies to help determine national comparative advantage and competitiveness, (3) policies that assure linkages with other sectors; (4) management and marketing support services; (5) infrastructure services to support market systems; (6) communication and information systems; (7) establishment of appropriate rural financial markets, and, (8) market-driven agricultural technology generation and dissemination systems.
4. Recognize the U.S. University Capacity and Contribution
While the report does a good job recognizing and supporting increased funding for the CGIAR, it gives less focus to the accomplishments of the win-win scientific and educational partnerships established and nurtured through the long-term investment of the United States in Title XII (particularly the Collaborative Research Support Programs). The CRSP program is the one broad-based Title XII program that has continued to be explicitly and consistently supported by the U.S. Congress.
The introduction indicates that "American firms, cooperatives, foundations, non-profit groups and all levels of government have a great capacity to mitigate hunger." Hopefully, the final report will include U.S. universities in that statement. Further, on page four, the report indicates that U.S. universities will continue to internationalize their agriculture programs, without recognition that federal government support is needed. The contributions that state universities and land-grant colleges have made to international agricultural development would never have been possible without what was formerly a strong commitment to international agriculture on the part of the U.S. Congress and USAID.
More should be said about the capacity of U.S. universities in applied and basic research as well as education and training and that this capacity needs to be strengthened and funded in order to continue to foster long-term relationships with institutions in developing countries. Building on the success of previous technical cooperation activities with institutions in developing countries, many universities are now establishing long-term partnerships with these same institutions. Development assistance support would enormously increase their usefulness in advancing the development goals of both the U.S. and developing countries.
5. Specify Focus on Human Capital Development
We would like to encourage much more emphasis in the report on human capital development appropriate to the needs of rural areas, i.e., formal training at the post-secondary level down to the secondary and primary levels, as well other non-degree programs and extension services (especially for women who account for up to 80% of household food production in sub-Saharan Africa, 65% in Asia, and 45% in Latin America and the Caribbean). The U.S. has continuously delivered results in this area and government policies should support continuing this work.
Since the time of the first papers by Nobel Laureate T.W. Schultz some 35 years ago it has been shown that the returns to education, including particularly education in rural areas, have been unequaled. Issues related to human capital development in rural areas frequently falls between the cracks of Ministries of Agriculture and Education in developing countries. We should not let this happen in the U.S. report.
We fear that some of our more skeptical Third World colleagues could interpret the "light touch" on human capital to mean that the U.S. does not really want to give people the capacities to help themselves so that they will continue to be dependent on technical assistance and intervention.
6. Broaden the Role of the Private Sector
While it is appropriate that the report primarily address what the public sector will do, a long-term food security strategy should not be too dependent on the public sector. A longer-term vision is required to address food security to more effectively mobilize the private sector to assist in addressing food insecurity.
We know that our U.S. agribusiness colleagues support a foreign assistance objective of global food security, but they believe that, historically, U.S. foreign assistance programs have not been very successful in either establishing a foundation for investment or encouraging the participation of U.S. agribusiness. It is in the national interest of the United States to actively support and participate in international agricultural development schemes that increase global trade and investment opportunities for U.S. agribusiness.
In general, the document's proposed actions can be strengthened by a greater emphasis on mobilizing private sector producer organizations, both internationally (i.e., trade associations) and locally (i.e., farmer organizations) in support of investments in trade-driven infrastructure, technology, and institutions. The document does not acknowledge the existence of these private sector groups or explicitly articulate the roles they could play in ameliorating food insecurity. This also points to the need for the public and private sectors in the U.S. to articulate complementary roles for both sectors in support of the alleviation of poverty, the root cause of food insecurity.
Perhaps some of the examples used in the current draft could be slightly re-framed to focus more on mobilizing the private sector.
For example, it is recommended that the "U.S. government ... [establish] "a 'one-stop shop' for small and medium-sized companies to acquire information on government programs to facilitate their business in food insecure countries. This would have a counterpart structure in U.S. embassies. Such a shop might not need to be established within the U.S. government, but within an umbrella association of trade associations, with the umbrella association serving as the liaison between the member associations and the U.S. government as a source of information.
In Attachment 1 of this document we share ongoing efforts to incorporate the private sector effectively in development programs. You have probably contacted the private sector about providing additional examples, but please feel free to contact us if we can be of further help in this area.
7. Greater Use of Information Technology
We strongly support the proposals in the discussion paper to exploit new technologies (advanced global communications systems, Internet, GIS) that can provide improved access to, integration of, and utilization of data and information and can be used to facilitate developing countries making their own decisions regarding resource use.
These technologies can help spread knowledge about the products of agricultural research and development more rapidly, to help address environmental and social challenges in a faster and more efficient ways than have been available in previous development eras.
8. Use Language with "Teeth" and Commitment
We recommend that the report use language with "teeth" and commitment i.e. phrases that indicate that the U.S. WILL do... ( the proposed action) vs COULD CONSIDER doing... (the proposed action). While the group writing the report may not feel that it is their prerogative to make such a commitment, many of the examples given are, indeed, already ongoing efforts, and could be stated in more emphatic language. Attachment 2 reflects our recommendations in this regard.
9. Take a Positive Stance Regarding Resources
While tight public sector budgets are a reality, we recommend that the report should not "throw in the towel" too soon in this regard. Rather, to gain U.S. public support for the document and show the public what needs to be done, more emphasis could be placed on informing the public about the critical issues and the U.S. role in addressing them, and then devising innovative ways to increase support for these programs both through public and private sector resources. If we state up front that expanded resources will be not be available, it could become a self-fulfilling prophesy.
10. U.S. Leadership
Finally, the report specifies what is being done by individual agencies, but does not specify who will lead the effort at the highest levels. A high level push will be needed, beyond the writing of this report, so that relevant agencies and organizations continue to coordinate efforts. It will take clout to keep agencies focused on seeing their efforts as part of an overall, global effort to increase food security, and to keep Congress and the President focused on ensuring a stream of resources into these programs, proportionate to need.
In conclusion, AIARD appreciates the opportunity to comment on the report and is pleased to provide any additional information that will help in your important mission to devise a widely acceptable plan for U.S. follow-up to the World Food Summit. Please do not hesitate to contact me at #202-775-6611 if clarification or expansion is needed on any of the points made in this correspondence.
Sincerely,
Susan G. Schram President, AIARD
Private Sector Examples
Examples Submitted by Texas A and M University
(1) Private Sector, NGO, University Partnership in Development
McDonalds Corporation leads a group of firms, two universities and an environmental NGO to conduct research and development in the Amistad region of Panama and Costa Rica. The corporations provide funds and convene the oversight board, the NGO conducts field operations, and the universities provide the technical and overall project leadership. The five-year, $ 2 million project is regarded as one the most successful interventions in populated steep lands ever attempted in Latin America.
Now producing citrus, vegetables and coffee through land and water conserving technologies, Amistad communities undertake full operational leadership of the Amisconde project this year. The public-private group now seeks to expand the program elsewhere in Latin America. In addition to McDonald's Corporation, the group includes Coca Cola, Keystone Foods, Conservation International, Clemson University and Texas A&M University.
(2) US/ASEAN Business Council, Food and Agriculture Committee
Several corporations and Texas A&M comprise a task force to improve poultry supply in Indonesia. This project is a prototype activity to develop modes of public-private cooperation to reduce food costs in Asian countries. Other countries and other foods will later be studied. The central proposition is that firms and agencies responsible for different links in a food supply chain can reduce costs and improve quality by working together. Partners in the project include Praxair, American Soybean Association, McDonald's Corporation, Tyson Foods, Cargill, Pioneer Hi-Bred and Texas A&M University.
Examples from the Agricultural Biotechnology for Sustainable Productivity (ABSP) project at Michigan State University.
The Agricultural Biotechnology for Sustainable Productivity (ABSP) project assists developing countries in developing, accessing and managing biotechnology to address agricultural constraints of importance to developing countries. It looks to develop public/private partnerships in this area, as much of the technology is proprietary and not available openly. Experience with private companies is summarized below:
1. DNA Plant Technology, Inc. and Agrobiotecnologia de Costa Rica (ACR).
DNAP was an small biotech company in New Jersey when the project commenced in 1991. It is now headquartered in Oakland California and is owned by Semanis Seeds, a Mexican conglomerate. At the outset of ABSP, DNAP and ACR were joined together to explore improved technologies for micropropagation of tropical crops, mainly banana and pineapple (although coffee and ornamental palm were also explored). The goal of the project was to develop cost-effective, large-scale micropropagation methods (using bioreactors) which would allow for the production of significant amounts of healthy, disease free planting material in Latin America. The standard method of propagating banana is to take one sucker from a plant and plant it in another locations. While this may seem economical, it spreads disease and reduces yields (and increases the use of pesticides and fungicides).
As this project was underway, DNAP was presented with another opportunity to work with a small company in Indonesia, Fitotek Unggull. The project was essentially the same, except that Fitotek concentrated on the production of pineapple.
We at ABSP have found that this is the simplest way to involve the private sector in an agricultural research and development collaboration, i.e. private to private...the companies can operate under trade secret and contract law agreements.
2. Seeds and the Central Research Institute for Food Crops (CRIFC).
ICI Seeds (now Garst Seed Company) is located in Slater, Iowa. This company teamed with researchers at CRIFC to develop insect resistant maize using the cryV Bacillus thuringiensis gene, to train Indonesian scientists and thus transfer the technologies, and to explore possible commercialization of products derived from the program. The long-term objective was to develop tropical maize with insect resistance to Asian Stem Borer, an important insect pest in the tropics.
The project succeeded in training Indonesian scientists in molecular techniques (genetic engineering, molecular mapping, entomology, breeding, etc.) and in developing insect resistant maize. However, this maize still needs to be backcrossed into tropical varieties. More importantly, the issue of intellectual property rights (or lack thereof in Indonesia) has inhibited transfer of the materials to Indonesia for inclusion into their breeding programs. IPR issues (and biosafety) are addressed later, but we have found this to be an important area for continued educational initiatives.
3. Pioneer Hi-Bred and the Agricultural Genetic Engineering Research Institute (AGERI).
This is a recent collaboration between Pioneer and AGERI in Giza Egypt.
Like the ICI-CRIFC collaboration, this project seeks to develop insect-resistant maize of importance to Egyptian agriculture. Unlike the ICI-CRIFC collaboration, research agreements clearly indicating intellectual property rights and future ownership of inventions and licensing options were developed before the project commenced. This requires substantial inputs of time and money before actual research begins and can be difficult for donor agencies to accept. This agreement took about 10 months to complete, but now research is proceeding and the path to commercialization appears uncluttered.
All of the above examples were managed under the ABSP project and funded by USAID (either the Washington, DC office of Agriculture or through mission programs). An additional activity directly funded to a private company is the Monsanto-Kenya Agricultural Research Institute (KARI) project on developing sweet potato resistant to Feathery Mottle Virus (FMV). This is a devastating virus of sweet potato and Monsanto has donated their technology to address this infection.
Examples from Sri Lanka
Contributed by an Experienced Private Consultant
The creation of JOBS through foreign investment and trade is the key. Every time there is new investment, additional jobs are created and even if these are high-tech or supervisory positions, it still creates a "job pull" that drags or pulls up others. Trade is another key -through trade, both exports and imports, jobs are created -particularly when exports involve many small scale farmers or workers.
In Sri Lanka, tens of thousands of jobs were created in rural areas during the period 1991-93 with President Primadasa's "200 garment factories" program. The GOSL put incentives in place to attract garment factories to rural areas. And they came -- 200 + or - and built factories in rural areas employing primarily young women plus other supervisory personnel. The exporting of garments also provided additional jobs in transportation, in the port, etc. With a steady paycheck, the thousands of rural workers created a substantial demand for goods and services -- everything from clothes to household appliances... and they could afford private medical services, and even had discretionary income to boot.
Another example is the gherkin industry in Sri Lanka, which grew to around 8,000 MTons of pickled/brined gherkins/year of exports. This was a private sector program from day one. The GOSL (Ministry of Agriculture and Food) REFUSED to get involved as they didn't think it was their role to support "commercial interests." Nevertheless, to produce 1 ton of brined gherkins required 20 or so hectares of production which usually involved 80 families, each growing 1/4 acre more or less.
This gave each family enough income during the three month gherkin growing cycle to equal the GOSL's minimum wage for a 12 month period. And many thousands of families grew gherkins during 6 or even 9 months (depended on weather - during monsoon it was very difficult to grow gherkins) of the year - therefore with a 1/4 acre, they could earn twice or three times the yearly minimum wage. All of this was led by the private sector. USAID helped indirectly through several agricultural projects: MARD, MED, CSFD and the AgEnt project. Gherkins in Sri Lanka were a MAJOR success providing jobs, cash income for what had been subsistence farmers.
These are the kinds of programs which contribute to food security...jobs equal $$ --> demand for goods and services --> better/greater ability to purchase foods and take care of themselves.
An Example of Win/Win Cooperation with Central America
Contributed by Chemonics
1. A family-owned agribusiness specializing in melons, Lindemann Produce, Inc. is based in the San Joaquin Valley, CA. One of the top five packer/shippers of cantaloupe and honeydew in the U.S., and the largest shipper (approximately 6 million cartons per year), Lindemann sells to a customer base of about 2,000 companies including wholesalers, retail outlets, and food service. Prior to 1986, the company was a domestic supplier as well as an exporter to Japan, but had never imported melons. As such it was a seasonal shipper, beginning in Arizona with May harvests and moving back to California for the summer, before finishing up in the fall in Arizona.
2. Lindemann's human resource potential, e.g., sales force and technicians, are available year-round, but due to the seasonal supplies of product, are underutilized. The company would like to offer a year-round presence in the marketplace. Lindemann does not offer an exclusive product; it does sell under a respected label and has a proven ability to sell melons.
3. In 1986, when PROEXAG's advisors initiated contact with Lindemann's owners, the company had no offshore staff or infrastructure, no prior knowledge of how to do business offshore, and had incurred a few bad experiences with Mexico.
4. In late 1986, PROEXAG was contacted by a Central American exporter with Guatemalan and Salvadoran melon production looking for marketing alternatives to complement his existing receivers who were largely concentrated on the U.S. east coast. Convinced that these receivers were overloaded, he was seeking additional outlets for planned expansion in his own exports. He focused his search on a company with strengths in the West and Midwest. PROEXAG's advisors developed a short list of reliable firms with these capabilities.
5. The exporter contacted Lindemann Farms (now known as Lindemann Produce, Inc.) and a deal was made. As a result of PROEXAG's market linkage, some 20,000 boxes of melons were shipped during the 1986-87 season.
6. In 1987, PROEXAG advisors organized a training course in California for 16 Central American packinghouse managers. The program was timed to coincide during the North American harvest and peak season, which is counterseasonal to Central American production. The orientation included visits to the Los Angeles wholesale market, visits to retail outlets for quality inspection, and training in grading, sorting, and packing of melons. Lindemann participated as a collaborator in the training and received the Central Americans on their facilities. Representatives from the Panamanian firm UCAPE, the Salvadoran firm El Rico, S.A., and the Honduran firm Agropecuaria Montelibano participated in the course, all of whom eventually marketed fruit through Lindemann.
7. In addition to this 1987 tour, PROEXAG organized a trip in the fall of 1987 to the lower Rio Grande Valley by a group of Salvadoran melon growers accompanied by PROEXAG's marketing advisor. The trip was made in conjunction with efforts to open the Mexican overland route to markets in the U.S., offering an alternative to the traditional ocean route into South Florida ports. George Lindemann joined the group in McAllen, Texas and met three more producers from El Salvador. One signed a contract for the 1987-88 season.
8. Lindemann Produce, Inc. was among the first U.S. companies to recognize the strategic importance of accessing ports of entry other than South Florida. During the 1987-88 season, Lindemann became one of the main users of the Mexican overland route for melons from El Salvador and Guatemala, pioneering the entry of fruit through Nogales, and strongly reinforcing the use of McAllen as an alternate port of entry. Also in conjunction with PROEXAG, Lindemann's sales staff toured facilities at the port of New Orleans, and trial shipments of melons were conducted. Although the physical infrastructure and services surrounding the port were good, there were two problems with New Orleans -- higher ocean transportation costs relative to landing the same product in south Florida, and lack of sufficient mixer commodities to sell in combination with melons.
9. During its second import season 1987-88, Lindemann Produce, Inc. expanded its volume to 195,000 boxes of melons with an estimated port-of-entry value of $2.15 million. Contacts and relationships with Central Americans were further strengthened following the season with a trip to California organized by El Salvador's export organization FUSADES. Additional Salvadoran growers participated, and several new relationships were created.
10. Over the 1988-89 season, its third year in the importing business, Lindemann reached a volume of 360,000 cartons, with an estimated value of $3.2 million. Contacts were made with additional growers, resulting in suppliers from four countries: Guatemala, El Salvador, Costa Rica, and Panama.
11. By the fourth year or the 1989-90 season, Lindemann Produce, Inc. had expanded its initial imports of 20,000 boxes from one supplier in 1987 to some 635,000 cartons estimated at $8.4 million from 12 companies in five countries. Lindemann's competence as a marketer became vital.
12. More importantly for PROEXAG's advisors, Lindemann began to realize some important things about working in Central America:
* Technology transfer in practical matters is a continuing and ongoing need. A postharvest handling and quality control team was put in place in El Salvador by Lindemann during January/February of 1990. The team provided advice on picking, grading, sizing, packing and cooling.
FUSADES underwrote two-thirds of the cost. A tremendous incentive, the importer was further able to concentrate on quality improvements.
* Lindemann Produce, Inc. also initiated action to improve its ability to receive and manage produce at various ports of entry. While maintaining its sales base in California, it hired agents or deployed employees to McAllen, Texas and Pompano Beach, Florida. Their function was to monitor product arrival condition, which can tend to be quite variable, and thereby help in setting prices and determining sales destination. Pre-cooling conditions in El Salvador were less than optimal, and container malfunction a frequent occurrence thereby making it vital that each arrival be inspected and feedback provided to the sales department. Fair quality melons must be disposed of quickly, and as close to the port of entry as possible. If shipped to a distant market, rejection is ensured and grower returns are diminished.
Both of these strategies, which essentially involve an increased reliance on the importer to provide quality control and technical assistance, helped to relieve the pressure on PROEXAG advisors of providing postharvest handling assistance as well as monitoring arrivals. As early as the second season, Lindemann began to provide its own people on an as-needed basis to work with growers in resolving production, harvesting, and packing problems. Because of the company's unique position as a grower/shipper (in contrast to strictly a sales agent), it was able to supply its own technicians, or to identify other experts to assist. As their import business grew and became an increasingly important part of their year-round ability to supply melons, enlightened self-interest, i.e. getting fruit to market in the best possible condition, and selling it at the best price realistically obtainable, served as the catalyst to important services being provided to the region's shippers by their importers.
13. During the 1990-91 season, Lindemann expanded its volume to 750,000 estimated at $6.5 million in sales. It also expanded its sourcing from five to six Central American countries, adding Nicaragua as a result of contacts made at a September 1990 workshop in Managua organized by PROEXAG and APENN for Nicaragua's potential nontraditional agricultural exporters. Lindemann made arrangements with three farms to supply honeydews. Technical assistance was provided by PROEXAG, a U.S. melon production specialist separately contracted by the farms to provide on-site expertise, and Lindemann. PROEXAG also provided guidance to Lindemann and the growers in transportation matters.
14. In 1991 isolated cases of salmonella were traced to Honduran and U.S. domestic melons. Although neither of these incidents involved Lindemann or its suppliers, it served as the basis for U.S. importers of Central American melons largely at Lindemann's initiative to form an alliance which effectively implemented a quality control program in CentralAmerica in 1991.
15. In planning for the current 1991-92 season, Lindemann expected to receive 1.1 million cartons of melons. Due to a series of production problems encountered by one of their Salvadoran suppliers, total imports for the season which will finish later this month are estimated to be approximately 950,000 cartons of canteloupes and honeydews from six countries (Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, and Panama) with an estimated sales value of $11 million. The Central American import deal now represents close to one-third of Lindemann' s $38 million business, and has made Lindemann perhaps the only year-round supplier of melons in the U.S.
16. Cognizant of the various costs associated with the production and distribution of melons, Lindemann has initiated a number of activities aimed at reducing costs, improving product quality, and increasing returns to growers:
- Provision of on-site technical assistance locally in Central America in harvesting, packing, and shipping. Lindemann has had as many as 10 technicians in Central America. In some cases suggested improvements, e.g., modifications to a roller in a Honduran packhouse were made overnight, resulting in improved efficiencies.
- Introduction of superior U.S.- produced cartons to replace lesser quality Central American cartons.
- Continued training of Central American contract suppliers at Lindemann's California facility (every year since the 1987 PROEXAG-sponsored course).
- Encouragement of freight distribution among multiple ocean carriers (independents and conference)
- Increased level of involvement by Lindemann representatives in rate and space negotiations with the commercial carriers and third-party carriage with the multinationals;
- Exploration of alternate ports of entry, e.g., Tampa and Philadelphia;
- The company and its staff are now more global in their perspective. Having coped with Central American problems Lindemann is well-positioned to take on new experiences elsewhere;
- Two-way technology transfer, i.e. Lindemann has identified through its Central American suppliers new sources of technologies and applied these to its domestic operations, e.g., an Italian-made planter.
