Press Release No. 23/35

Joint Statement by the Heads of the Food and Agriculture Organization, International Monetary Fund, World Bank Group, World Food Programme and World Trade Organization on the Global Food and Nutrition Security Crisis

February 8, 2023

Washington, DC: Food and Agriculture Organization (FAO) Director General Qu Dongyu, International Monetary Fund (IMF) Managing Director Kristalina Georgieva, World Bank Group (WBG) President David Malpass, World Food Programme (WFP) Executive Director David Beasley and World Trade Organization (WTO) Director General Ngozi Okonjo-Iweala issued the following joint statement calling for continued urgent action to address the global crisis on food and nutrition security.

We offer our deepest sympathies to the people of Türkiye and the neighboring Syrian Arab Republic who have suffered the recent earthquakes. Our organizations are closely monitoring the situation, assessing the magnitude of the disaster, and working to mobilize necessary support in accordance with each organization’s mandates and procedures.

Globally, poverty and food insecurity are both on the rise after decades of development gains. Supply chain disruptions, climate change, the COVID-19 pandemic, financial tightening through rising interest rates and the war in Ukraine have caused an unprecedented shock to the global food system, with the most vulnerable hit the hardest. Food inflation remains high in the world, with dozens of countries experiencing double digit inflation. According to WFP, 349 million people across 79 countries are acutely food insecure. The prevalence of undernourishment is also on the rise, following three years of deterioration. This situation is expected to worsen, with global food supplies projected to drop to a three-year low in 2022/2023. ^[1] The need is especially dire in 24 countries that FAO and WFP have identified as hunger hotspots, of which 16 are in Africa. ^[2] Fertilizer affordability as defined by the ratio between food prices and fertilizer prices^[3] is also the lowest since the 2007/2008 food crisis, which is leading to lower food production and impacting smallholder farmers the hardest, worsening the already high local food prices. For example, the reduction in 2022 of the production of rice, for which Africa is the largest importer in the world, coupled with prospects of lower stocks, is of grave concern. In response to the inflation of food, fuel and fertilizer prices, countries have spent over US$710 billion for social protection measures covering 1 billion people, including approximately US$380 billion for subsidies. ^[4] However, only US$4.3 billion has been spent in low-income countries for social protection measures, compared to US$507.6 billion in high-income countries.

To prevent a worsening of the food and nutrition security crisis, further urgent actions are required to (i) rescue hunger hotspots, (ii) facilitate trade, improve the functioning of markets, and enhance the role of the private sector, and (iii) reform and repurpose harmful subsidies with careful targeting and efficiency. Countries should balance short-term urgent interventions with longer-term resilience efforts as they respond to the crisis.

1. Rescue hunger hotspots

We call on governments and donors to support country-level efforts to address the needs in hotspots, share information and strengthen crisis preparedness. The WFP and FAO need funds urgently to serve the most vulnerable immediately. In 2022, WFP and partners reached a record number of people – more than 140 million – with food and nutrition assistance, based on a record-breaking US$14 billion in contributions, of which US$7.3 billion came from the United States Government alone. WFP sent over US$3 billion in cash-based transfers to people in 72 countries and provided support to school feeding programs in 80 countries, including 15 million children through direct support and more than 90 million children through bolstering government national school feeding programs. FAO has invested US$1 billion to support more than 40 million people in rural areas with time sensitive agricultural interventions. These activities were primarily focused on the 53 countries listed in the Global Report on Food Crises. The World Bank is providing a US$30 billion food and nutrition security package covering the 15 months from April 2022 to June 2023, including US$12 billion of new projects, which have all been committed ahead of schedule. This also includes US$3.5 billion in new financing for food and nutrition security in hotspots. In addition, the Bank has allocated US$748 million from its US$1 billion Early Response Financing modality of IDA’s Crisis Response Window (CRW) to mostly address needs in hotspots and is mobilizing additional funds for the CRW. Funding for the IMF’s Poverty Reduction and Growth Trust (PRGT) must also be mobilized to provide concessional financing to low-income countries facing balance of payment needs. The IMF's new Food Shock Window has so far supported Ukraine, Malawi, Guinea and Haiti, while nine countries facing acute food insecurity benefited from IMF financial support through new programs or augmentation of existing ones, with a focus on strengthening social safety nets and policies to help address the impact of the food crisis. The Global Alliance for Food Security (GAFS) is supporting greater crisis preparedness through the development and operationalization of multi-sectoral Food Security Crisis Preparedness Plans across 26 counties, which should be supported by governments and donors. GAFS also continues to monitor the severity of the food crisis and the financing of the global response through the Global Food and Nutrition Security Dashboard. We also welcome efforts by all parties to mobilize more funding for Africa’s agricultural transformation, as noted in the Dakar Declaration^[5] and we want to thank David Beasley, Executive Director, of the WFP, for the tremendous work done during his tenure.

2. Facilitate trade, improve the functioning of markets, and enhance the role of the private sector

Countries should minimize trade distortions, strengthen the provision of public goods, and enable the private sector to contribute meaningfully to improved food security outcomes. We repeat our urgent call for countries to (i) avoid policies such as export restrictions, which can impede access to food for poor consumers in low-income food-importing countries; (ii) support trade facilitation measures, to improve availability of food and fertilizer, (iii) support trade finance initiatives in a transparent and in non-discriminatory manner; and (iv) adhere to the commitments made at the WTO's 12^th Ministerial Conference. ^[6] While countries have lifted some export bans on wheat and rice, new export restrictions and bans, particularly on vegetables, are hampering availability on global markets. Global food security can be strengthened if governments support both food producers and consumers in a smart and targeted manner, such as by strengthening the provision of public goods in ways that improve farm productivity sustainably. Countries can use e-voucher schemes for fertilizers and avoid large-scale public procurement and subsidized distribution schemes, either on farm inputs or farm products, that crowd out the private sector. The WBG’s US$6 billion IFC Global Food Security Platform supports farmers to access fertilizers and other critical supplies while helping private companies make longer-term investments, focusing on improving the resilience of agri-food systems and fertilizer use efficiency. Countries should follow FAO's International Code of Conduct for the Sustainable Use and Management of Fertilizers to sustainably manage nutrients for food security.^[7]

3. Reform and repurpose harmful subsidies with careful targeting and efficiency

Countries should reform and repurpose general universal subsidies towards temporary, better targeted programs for global food security and sustainable food systems, considering the key aspects of (i) efficiency, (ii) cost and fiscal sustainability, (iii) flexibility, (iv) administrative complexity, (v) equity, and (vi) strengthened resilience and sustainability. Most of the global social protection response to inflation is in the form of subsidies, half of which are untargeted, inefficient, and costly to already constrained governments. Support should be scaled up for countries to strengthen and deploy comprehensive, actionable and shock responsive social protection strategies. Policies and reforms supported by financing from IMF and the World Bank have focused on the transition from broad-based measures to more targeted approaches. Countries need to re-examine and reform their support to agriculture, which amounted to about US$639 billion per year between 2016 and 2018, and has since been on the rise. Of every dollar spent, only 35 cents end up with farmers.^[8] Much of this support incentivizes inefficient use of resources, distorts global markets, or undermines environmental sustainability, public health, and agricultural productivity. Without ignoring the inherent trade-offs associated with large scale policy reforms ^[9], this funding should be reformed and repurposed in ways that strengthen the resilience and sustainability of the agri-food system, such as the adoption of good agricultural practices, research and innovation (including in fertilizer application efficiency and alternatives to synthetic fertilizers), extension and advisory services, improved infrastructure and logistics, and digital technologies that improve productivity sustainably. The FAO new science and innovation strategy and the agri-food systems technologies and innovations outlook, ^[10] together with the One CGIAR Initiative, plays a pivotal role across these areas to deliver global benefits of individual country reforms.^[11]

Action is already under way to address underlying structural challenges in social protection and in the food and fertilizer markets, but more concerted action across these three key areas is needed to prevent a prolonged crisis. We are committed to working jointly and with impact to support the most vulnerable.

This is the third Joint Statement by the Heads of the Food and Agriculture Organization, International Monetary Fund, World Bank Group, World Food Programme, and World Trade Organization on the Global Food and Nutrition Security Crisis. The previous Joint Statements can be accessed here (1) and here (2) .

Contacts:

The World Bank Group: David Theis, dtheis@worldbankgroup.org
IMF: Nicolas Mombrial, nmombrial@IMF.org
FAO: FAO News and Media, FAO-Newsroom@fao.org
WTO: Bernard Kuiten, bernard.kuiten@wto.org
WFP: George Fominyen, George.fominyen@wfp.org

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References

[1] FAO. 2022. Crop Prospects and Food Situation – Quarterly Global Report No. 4, December 2022. Rome. https://doi.org/10.4060/cc3233en . Additional notes: While global food commodity prices are softening in tandem with global demand, they remain above historical averages , draining the resources of importing economies. Local food prices remain high, impacting the poor who spend more of their budget on food . Emerging evidence suggests that gaps in food affordability is leading to poorer nutrition outcomes , especially affecting children. Today, women are more food insecure than men in every region of the world, and the current crisis is widening this gap.

[2] WFP and FAO. 2022. Hunger Hotspots. FAO‑WFP early warnings on acute food insecurity: October 2022 to January 2023 Outlook. Rome. https://docs.wfp.org/api/documents/WFP-0000142656/download/?_ga=2.256731330.858355092.1673881754-618635265.1673881754

[3] https://www.fao.org/documents/card/en/c/cb9427en

[4] Gentilini, Almenfi, Iyengar, Valleriani, Okamura, Urteaga, and Aziz. 2022. Tracking Global Social Protection Responses to Inflation- Living paper v. 4, December 2022. Washington, DC: World Bank. https://documents1.worldbank.org/curated/en/099400012222223378/pdf/P176585074ebcd0260a3ca04efbbb3c25c0.pdf

[5] AfDB. 2022. Dakar Declaration on Food Sovereignty and Resilience, January 2023. Dakar. https://www.afdb.org/sites/default/files/2023/01/27/dakar_ii_declaration_food_sovereignty_and_resilience_.pdf

[6] WTO. 2022. Ministerial Declaration on the Emergency Response to Food Insecurity Ministerial Conference Twelfth Session Geneva, June 2022. Geneva. https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/WT/MIN22/28.pdf&Open=True

[7] FAO. 2019. The international Code of Conduct for the sustainable use and management of fertilizers. Rome. https://doi.org/10.4060/CA5253EN

[8] Murphy-McGreevey, de Preneuf, and Sample. 2022. New Report on Repurposing Agricultural Support to Transform Food Systems, February 2022: Washington, D.C. https://www.ifpri.org/news-release/press-briefing-new-report-repurposing-agricultural-support-transform-food-systems

[9] FAO. 2021. Multi-Billion-Dollar Opportunity: Repurposing agricultural support systems to transform food systems. Rome. https://www.fao.org/3/cb6562en/cb6562en.pdf

[10] FAO. 2022. The State of Food Security and Nutrition in the World 2022. https://www.fao.org/documents/card/fr/c/CC0639EN

[11] One CGIAR. (Accessed 6 February 2023). https://www.cgiar.org/food-security-impact/one-cgiar/