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U.S. Department of State

Diplomacy in Action

Global Agriculture and Food Security Program

FPC Briefing
Marisa Lago
Assistant Secretary for International Markets and Development, U.S. Department of the Treasury
Foreign Press Center
Washington, DC
October 5, 2010


Date: 10/05/2010 Location: Washington D.C. Description: Marisa Lago, Assistant Secretary for International Markets and Development, U.S. Department of the Treasury, holds a roundtable discussion on Food Security at the Washington Foreign Press Center on October 5, 2010. - State Dept Image

Video

3:00 P.M. EDT


MODERATOR: Welcome to the Foreign Press Center. We are delighted and privileged to have with us here Marisa Lago, who is the Assistant Secretary for International Markets and Development from the United States Department of the Treasury. The topic is food security, broadly defined, but specifically, the Assistant Secretary is going to review and discuss the increased demand and urgent need for assistance from the Global Agricultural and Food Security Program, and also the United States call for international partners to help with this important effort.

I’m going to turn it over to you, Assistant Secretary.

ASSISTANT SECRETARY LAGO: Thank you. Thanks so much for coming together. And I thought what might be helpful would be to give a little bit of background about what the food security – or probably a better phrase, the food insecurity – challenge is about before turning to the Global Agricultural and Food Security Program.

Today, for the first time in history, there are almost a billion people living in hunger. We know that a few years ago, when the Millennium Development Goals were announced, the number one goal was by 2015 to cut hunger and extreme poverty in half. It was an ambitious goal and it’s one that has proved to be challenging. Some countries are making progress towards that, but we have to be open-eyed about the fact that it’s a challenging goal.

Why? In 2007 and 2008, we saw food price spikes. Add to that a rise in global population, climate change, which also has other facets related to it – soil erosion, water shortages. And if you pile on top of that the global financial crisis, you can see the challenge that we face.

Another factor that might not be as evident immediately is if we look at the patterns of global development assistance over the past 30 years, the role of agriculture has steadily decreased. So that’s the context against which we view global food – the global food security issue.

You could ask, “Why food security?” We look at it as – to put it into words, actually, of an African ambassador to the U.S., that food security is economic security is national security. In many poor countries and, in particular, in Africa, the agricultural sector is key to economic growth. The majority of the rural populations in many countries are dependent upon agriculture.

From the U.S.’s perspective, some of you may have followed the Obama Administration’s recent release of the Presidential Policy Directive on Development. It’s the first time that there has been an Administration-wide directive on development, laying out, in the same way that our National Security Strategy does, what our development policy is. And the reasons we’re looking at food security are the same reason we’re looking at development assistance overall. It’s a national security issue, it’s an economic growth issue, and it’s a moral imperative.

So with our focus on food and security, we know that the solution is to increase agricultural productivity. A simple way of putting the goal is to say that we’re looking forward to the day when a small farmer in Africa can grow as much per hectare as a small farmer in China or in India, countries that have made very significant strides in their agricultural productivity.

So against this backdrop, the international community came together in 2009 at a very, very senior level to address the issue. The first was the Group of Seven. When they – the Group of Eight – when they met in 2009, they jointly agreed that they would mobilize $22 billion – thanks so much. The G-8 and other countries in early or in mid-2009 came together and said, “We will commit $22 billion for agricultural development assistance.” This was followed by the Group of 20, which got much more specific, saying, “How are we going to operationalize this?”

And what they agreed was to set up a multilateral fund that would be able to scale up assistance to the agricultural sector. It’s called Global Agricultural and Food Security Program. It is one of the most hard to pronounce acronyms – GAFSP. So from now on, I’ll call it GAFSP.

So far, GAFSP has attracted $880 million in pledges. And it’s from an interesting array of donors. The U.S. has pledged 475 million; Canada, 230 million; Spain, 90 million; South Korea, 50; and the Bill and Melinda Gates Foundation, 30 million. So you can see it’s an interesting array of different geographies, countries from different segments of the world, but also bringing in the private philanthropic sector. Under the program, the eligibility is for the world’s poorest countries. It is countries that are eligible for concessional development assistance from the World Bank. So that’s how we define the universe of countries.

The GAFSP program, the fund, has a couple of innovative features in how it’s set up. The first is that on the steering committee that makes the determinations about the awards, there are an equal number of representatives – excuse me – from donor countries and from recipient countries. And this is rather unusual in global funds of this type. For any who are interested, the members – the developing or the recipient country members on the steering committee are Senegal, Sierra Leone, Bangladesh, Mongolia, and Haiti.

Another interesting feature is that – I so apologize – another interesting feature is that on the steering committee that oversees the awards, there are two representatives in an advisory capacity from civil society organizations; one that represents CSOs in the northern hemisphere, the other in the south. The one in the north is called ActionAid and the one in the south I won’t pretend to pronounce. It is a – it’s in French – R-O-P-P-A. But what it is, it’s an umbrella organization for farmers’ organizations in West Africa.

Another innovative feature of this fund is that countries, when they apply for funding, can decide which of the multilateral development bodies will be the ones who supervise their grant awards. The World Bank serves as the fiduciary and administers the fund. But the countries say as they’re applying who it is that they would want to be their development partner. We’ve seen so far some countries have chosen the World Bank, others have chosen IFAD, and we’ll get to others as we discuss the actual awards that have taken place so far.

Another feature of the governance is how the program is put together. We call upon the countries to specify what their agricultural development plan is and we also look to them to specify not just what their food need – their food security need is, but also how they as a country are contributing support to the agricultural plan. We’re looking for them also to have some skin in the game.

We’re bullish about this model because we know that many countries, including the U.S. provide bilateral agricultural assistance to countries, but we believe that by coming together in a multilateral fund, we can increase the effectiveness, the impact of the funding. We don’t have fragmented funding, small bits from a multiplicity of donors. And the other is that we get to tap into the agricultural development expertise that is lodged in the regional development banks in the World Bank in IFAD.

So here is where we are – a snapshot of where we are today. As I said, this grew out of meetings of world leaders in 2009. The first call for proposals was made in May of this year with the first round of proposals due in June. And the first round of awards has already been made. They were made in July of this year for a total of 224 million. They went to five countries – Rwanda, Haiti, Bangladesh, Sierra Leone, and Togo. And I thought I would highlight two of the countries just to give you a sense of what we mean when we say that we’re looking for the countries to have some skin in the game.

In Rwanda, between 2007 and 2009, the government increased its own investments in the agricultural sector by 30 percent. In Sierra Leone, the percentage of the national budget that was dedicated to agriculture went from 1.6 percent to 9.9 percent in this year’s budget. So that’s tangible evidence that the country is itself invested in its agricultural sector. I would actually note that just a few months ago, I was in Africa and I was struck – and one of the countries that I visited, I was there, among other things, to speak about the program. I expected that the agriculture minister would be engaged. I was pleased to see that the finance minister was engaged, and when I met with the vice president, the vice president as well was also actively engaged in developing the country’s agricultural development plan and in focusing on how that plan could be turned into a strong application for funding.

The types of things that the awards – we anticipate that the awards will be used for: new farming techniques, allowing the country to use new seeds, access to irrigation, and then one critical facet is connecting the rural farmers to their markets, so a focus on rural infrastructure that allows the farmers to get their products to market.

We also had a second round of applications and those applications were due by October 1st. And that now leads to what is the challenge and why we’re here today. By the deadline of October 1st, we received 21 applications. These applications requested almost a billion dollars worth of funding, but the program only has on hand around $120 million worth of funding. So unless new donors come forward, we’re going to have to turn away or push off strong applicants – applications from countries that have done their part. They’ve developed their agricultural development plan; they’ve firmed up their own budgetary support for agriculture. We feel as if the recipient countries have lived up to their part of the bargain and we are looking to expand the pool of donors.

The timing is particularly appropriate, given last week there was a meeting a meeting of the UN General Assembly where there was a discussion of the Millennium Development Goals, and we know that this coming weekend are going to be the World Bank and IMF annual meetings, including, as an integral part of the meetings, the World Bank development committee.

Looking forward, we see that in November, there will be the G-20 heads of state meeting in Seoul and, as I mentioned earlier, they have made food security a core part of their agenda. And so it’s for that reason that we have wanted to reach out to spread the message about the successes of the program and the fact that we’re at an inflection point in which we see the strength of the program, the strength of the proposals, and are hoping that it will be matched by additional donor strength.

And I welcome taking your questions. Yes.

QUESTION: My name is Josefina Ilustre. I’m with the Malaya Philippine news daily. My question is – well, last September 27, there was a consortium in New York addressing global hunger where they said that the IRRI, International Rice Research center was trying to help farmers with latest technology to increase rice productivity. But they also said that rice is not enough because you have to have nutritious food if you’re really going to attack the global hunger problem, not just food, but nutritious food. Is there a component in the program that requires the African, or those who have been – who are going to provide funding to make sure that it would include not just increasing farm productivity and all that, but the food will include nutritious components?

ASSISTANT SECRETARY LAGO: One of the nice features of the way the fund is structured is that there’s a technical advisory group which is made up of some of the world’s leading experts, and they have taken all of the applications that have come in and they review them on their technical merits and then make the recommendations to the steering committee. And so I think that that provides a good level of assurance that the programs that are being put forward are solid programs that will address the core issue at play here, which is food and security and how to address it. So you note that the title is The Global Agricultural and Food Security Program, and so food security is an integral part of it.

QUESTION: I’m Bill Tomson with Dow Jones. And just maybe I’m missing something, but we started talking about $880 million that’s pledged.

ASSISTANT SECRETARY LAGO: Yeah.

QUESTION: Two hundred and twenty-four million was given out and there’s only 120 million left?

ASSISTANT SECRETARY LAGO: Yeah.

QUESTION: I’m wondering who hasn’t lived up to their pledges.

ASSISTANT SECRETARY LAGO: Oh, it’s not a matter of not living up to the pledges. It’s – these are multiyear commitments, and so these pledges of 880 million will be coming in over the years. What we are looking for is to attract additional donors now so that we will be able fund the applications that are before us with pledges from new donors, and then to continue – have the program continue in future years as the multiyear pledges from the additional donors roll in.

Thanks for pointing that out.

QUESTION: What’s the Obama Administration doing to attract donors other than its own pledge? I mean, is there – has the President – has the Secretary of State been meeting with people or have they been –

ASSISTANT SECRETARY LAGO: We have been – I can speak for the Treasury Department, that we have been very focused on this. The Obama Administration has been focused on food and security on both a bilateral basis, because the U.S. bilaterally provides a lot of agricultural food assistance, and then also multilaterally. And an event like this is part of a continuation of our trying to draw attention to this.

I can personally speak to numerous phone calls to counterparts in other countries. We use fora where we interact with our colleagues to raise the profile. We’re extremely pleased to have attracted the attention and the support of the Bill and Melinda Gates Foundation. We work with the agricultural ministers in other countries to have them also tell the story. There was a recent op-ed piece, an article that was penned in the Guardian, in the online version of the Guardian, which was written by two agricultural ministers – Rwanda and Sierra Leone – in which they told in their own words the story of it. And so we do think that education and getting the word out is a large part of it.

MODERATOR: You have the copy of that, by the way, in your packet of that article that’s referred to.

ASSISTANT SECRETARY LAGO: Oh, thanks. Thanks for including that.

MODERATOR: You’re welcome. Rebecca.

QUESTION: Yeah. Rebecca Christie from Bloomberg. A couple of clarifications, then I have an actual question, too. But this is the second round of funding that you’re going to get out?

ASSISTANT SECRETARY LAGO: Yeah.

QUESTION: And the 224 that you handed out, is that also multiyear so it’s sort of – it’s part of the 880, but it’s not like it’s all cash on hand. Everything we’re talking about is multiyear just in terms of getting the numbers to add up?

ASSISTANT SECRETARY LAGO: With respect to the 224 that has been committed to the five countries, now obviously if they implement a long-term strategy --

QUESTION: Right.

ASSISTANT SECRETARY LAGO: -- they’re not going to be spending 224 million on day one.

QUESTION: Right, so you’re waiting for the money to come back in to pay for that? I mean, part of that will come from future pledges; is that the expectation?

ASSISTANT SECRETARY LAGO: I think the expectation is that we’re taking the 880 and have – we’ve taken the funds that are on hand and allocated the 224 already to the countries. We know that of the cash on hand, we have approximately an additional 120 million. And then, I guess the reason we see the time sensitivity and the – why we’re so eager to have additional donors is the technical committee is now reviewing the 21 proposals that came in. We anticipate being in a position in early November to be able to make decisions about which are the strongest of the proposals. Our sense is that there are going to be quite a number of very strong proposals, and wanting to have money on hand to be able to make the commitments to as many of the strong proposals as we can.

QUESTION: Got you. So you’ve got about 350 million on hand right now?

ASSISTANT SECRETARY LAGO: Well, 224 is committed.

QUESTION: Two-twenty four plus 120?

ASSISTANT SECRETARY LAGO: Plus the 120.

QUESTION: Okay.

ASSISTANT SECRETARY LAGO: Exactly. That’s how the numbers work.

QUESTION: So what I wanted to ask, though, was Bob Zoellick yesterday mentioned that food prices were of serious concerns. I was wondering if there’s anything that you’re doing to address food prices or anything like that as part of this initiative.

ASSISTANT SECRETARY LAGO: The issue on this initiative is to build up the capacity within the countries. It is not an issue of food prices on a day-by-day or month-by-month level. It really is a recognition that 30 years of decreasing investment in this sector have left countries vulnerable, coupled with other things like climate change that are making the challenge even harder. And so looking for long-term plans to build up the infrastructure for agriculture, build up the infrastructure that will allow countries to meet their food needs.

QUESTION: Do you feel like you’re going around with a collection plate, and will you go to Congress?

ASSISTANT SECRETARY LAGO: With respect to Congress, certainly. We have been working with Congress because Congress provides our funding for initiatives like this. And so we have gone to Congress as have some of the countries – some of the recipient countries themselves to tell their story to congressmen, to their staff. And we have had a very productive working relationship with Congress on this.

QUESTION: Yes. Mina Al-Oraibi. I’m with Asharq Al-Awsat newspaper. It’s an international Arabic-language paper. So I wanted to ask a few questions. My first is: Are you hoping that this pitch, so to speak, to get further donor countries interested – for the World Bank, do you expect anything over the weekend, and also for the G-20 meetings? And are you hoping that the G-20 countries will make new announcements? Because I know this was very closely tied to G-20 meeting last time, right?

ASSISTANT SECRETARY LAGO: We’ll take advantage of any forum where we interact with our colleagues. And certainly this weekend, the world’s finance ministers come here, and so that’s a great opportunity in both formal settings like this, in the development committee itself of the World Bank, but I think as importantly, and quiet conversations in the bilateral discussions that we have with our colleagues. And then, similarly, if one fast-forwards, the G-20 is – the G-20 heads of state is preceded by G-20 finance ministers; another opportunity.

QUESTION: Hi, I’m Xavier Vila with Spanish public radio station. Who do you talk to directly when you are looking for new funds? I’ve seen Spain - as a country - be useful, do you go to the Spanish Government directly or do you go to the European Union? That’s one question.

And the other one would be the IMF just told us today that the recovery is going to be jeopardized because the sovereign debt in Europe, which is pretty bad – those are pretty bad news for Europe, so probably the capacity of the countries over there to put money on the table for stuff like this is going to be jeopardized, too. Are you – what are your feelings about that? Do you think it’s going to be difficult to find money?

ASSISTANT SECRETARY LAGO: We don’t kid ourselves about the challenge that all of us – governments look and have to make hard decisions. We’re pleased by the fact that even in the face of the financial crisis in 2009, we saw the heads of state prioritize this. And so that – the situation in 2009 wasn’t particularly rosy either.

With respect to whom it is that we speak with, in different countries, different people are responsible for food security, and so we will speak with heads of state, with finance ministers, with agriculture ministers. We don’t get hung up on what the organizational structure is.

And then with respect to your question about Spain and the EU, Spain has been one of the leaders in this from the very beginning, and we view it as significant having another major developed economy, a European economy, as one of the contributors. But if you look at the World Bank meeting, the EU is there with a seat at the table, and so we would also look and raise the issue with our EU counterparts.

QUESTION: Thank you.

MODERATOR: Do you have a question?

QUESTION: Ivan Pilschckikov, Russian Information Agency, ITAR-TASS. Russia is one of the biggest grain exporters and how do you think this year, the forest fires of this summer, how will they affect global food prices and global food security?

ASSISTANT SECRETARY LAGO: With respect to the broader issue of the prices, I’m going to put that off and focus on the food security. It is interesting when one looks at a country like Russia and seeing what role can a Russia play in the global food security initiative. So most of the ways that countries can contribute. One way is directly by funding it, but another – and in particular, as a G-20 nation, we think that we look to the G-20 to be leaders because it was their commitment, actually, to set up the fund. But there are other ways in which countries can be vital contributors, and that is by contributing their expertise. What we’ve seen in some of the applications is that a country in Africa will look at a model that had been successful in China and say, you know what, we face similar situations of having farms on steep slopes and so we’ll take the learning that we see from the other country. And so with respect to Russia in particular, want to see a role as a robust donor and also as a provider of expertise. Because as you say, Russia is such a food-exporting nation.

QUESTION: Thank you. Gabriel Plesea, Romanian Libera. Two issues that I wanted to address. To follow-up with the Spanish colleague in Washington mentioned Spain’s contribution and the European Union. Is there a way for a European Union member country like Romania to also qualify, be eligible for this sort of help? That is number one. But within the European Union there are ways to help to contribute to member states agriculture.

The other question about these awards, these grants – nonrefundable, awards of money, and I see that awards involve the World Bank. Are these in a form of a loan or what? Thanks very much.

ASSISTANT SECRETARY LAGO: Great. Thanks for the two questions. With respect to the first with – about Romania, the eligibility criteria is whether a country is an IDA-only, I-D-A. IDA is the concessional part of the World Bank and it is a way of focusing on the most low-income countries, so Romania would not be eligible for it by the definition or terms of the program.

With respect to your second question, which I think is a good one – what is the oversight of the program – we are bullish on the program and on getting the dollars put out to good use, but we want to make sure that they’re properly spent. As I said, each country can determine which is going to be – which of the multilateral development banks will serve as the supervisory entity, and what will the supervisory entity, whether it be African Development Bank, the Inter-American Development Bank, the Asia Development Bank, the World Bank, IFAD, what will their role be? It will be to make sure that there are the appropriate fiscal controls to make sure that there are the appropriate safeguards as the funds are being used. And so we take great comfort in the role of the banks.

In addition to that, these banks have agricultural development expertise, and so that’s something that they also add to the mix.

QUESTION: Josefina Ilustre, Malaya Philippines. I noticed that the first recipients are mostly from Africa. Of the second round that you have, are there any from Asian countries?

ASSISTANT SECRETARY LAGO: Well, actually, I think you’ll notice that in the first round, if I recall correctly, Bangladesh was in the first round of recipients. I don’t have the breakdown in front of me, but we clearly had applications from Asia. There are not geographic restrictions on this. I don’t think it was surprising that in the first round we saw a lot of African nations. If one looked at the distribution of very low-income countries and countries where food insecurity is a challenge, but the – in the same way that we had Haiti covering the Western Hemisphere, we had Bangladesh, and then we also had African nations, I would anticipate that we’re going to see geographic spread in the next round of awards as well.

QUESTION: I wanted to ask – I mean, you said you have the second round of applications now and then by November would get ready to –

ASSISTANT SECRETARY LAGO: -- finish our analysis of them.

QUESTION: Right. So what’s the deadline and when do you need the funds? And if you don’t get the funds by, say, December, do you turn down the applications? What happens to the funds?

ASSISTANT SECRETARY LAGO: Those are tough questions that we’re confronting now is what to do as we finish the analysis and if we determine that there are more sound applications, and that’s what we’re struggling with. And that’s also why we’re sounding the call at this point, having seen the number and on our – just our preliminary look, the strength of the applications that have come in.

QUESTION: Is it fair to say, because I asked the question about how many years are the funds, and you said some are multiyear and so forth.

ASSISTANT SECRETARY LAGO: Yes.

QUESTION: So maybe it’s not fair to say there’s a hundred and whatever left, because that might be meant for several years. As it stands now, if you don’t get any further contributors, how does it narrow you? Could you accept one out of the 21, 10 out of the 21?

ASSISTANT SECRETARY LAGO: Countries ask for different amounts, and so not having finished the technical analysis, I can’t tell you at this time. I think as I mentioned, the total amount that was requested was close to a billion, and so I think that begins to give a sense of what the gap is that we’re confronting.

QUESTION: So it’s a big gap. And tell me what, how do you feel about having to choose, pick and choose? I mean, if –

ASSISTANT SECRETARY LAGO: That is – again, that is why we are so persistently and so vocally out trying to raise awareness, one, about the issue that is out there, the challenge, but then secondly about the fact that there is an initiative that works that’s tailored effective to address the particular challenge.

Great, thank you very much for the time.

QUESTION: Thank you.

MODERATOR: Thank you for coming.

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