New Commitments to the Global Agriculture and Food Security Program (GAFSP) Inspired by United States¡¯ ¡°Matching¡± Challenge
TOKYO, October 12, 2012¡ª At a Ministerial meeting on the margins of the IMF/World Bank Annual Meetings today, U.S. Treasury Secretary Timothy Geithner challenged the international development community to commit new financial resources to the Global Agriculture and Food Security Program (GAFSP) ¨C a multidonor trust fund established in 2010 to improve food security in the world¡¯s poorest countries.
Secretary Geithner stated that the United States is prepared to contribute an additional $1 to GAFSP for every $2 contributed by other donors, up to a total U.S. contribution of $475 million. Japan and the Republic of Korea responded immediately, each pledging an additional $30 million, and the Bill & Melinda Gates Foundation indicated its intent to double its commitment.
The U.S. will also include the pledges made earlier this year - from Canada, the Netherlands, and the United Kingdom ¨C in this challenge, bringing total financial commitments to GAFSP to date to $1.3 billion.
¡°Today the United States is demonstrating once again its commitment to lead the global fight against hunger and malnutrition,¡± Secretary Geithner said. ¡°By investing in GAFSP, we will mobilize funding from a diverse range of sources and set into motion innovative programs that will help communities become more self-sufficient, farmers increase their productivity, and families climb out of poverty.¡±
International food prices have spiked three times in the last five years. Even before the major food price volatility that began in late 2007, hundreds of millions of people suffered from chronic hunger and malnutrition.
"The real tragedy of volatile food prices is that short-term price spikes have damaging long-term consequences for the world's poor and most vulnerable," said World Bank President Jim Yong Kim. "A mother should not have to choose between feeding her children and sending them to school. Lasting solutions require sustained commitment, coordination and vigilance from the international community. These new commitments are critical to our efforts to end hunger.¡±
In response to high and volatile food prices, donors and developing countries are working together to increase agricultural productivity, improve food and nutrition security, and better connect farmers to markets so that they can sell their crops and increase their incomes.
¡°GAFSP is working in partnership with Liberia, and many other countries, to help us achieve our aspirations of a vibrant agricultural sector, healthier, better-fed children, and a dramatic decrease in poverty and hunger,¡± said President Ellen Johnson Sirleaf of Liberia.
GAFSP has allocated $658 million to 18 countries and is expected to directly benefit at least 8.2 million people by increasing agricultural productivity, raising rural incomes, and connecting farmers to markets. It is already seeing results on the ground. For example, some beneficiaries have seen their cereal yields quadruple and have almost doubled their net sales from the project areas.
¡°The global community must focus on making long-term investments to help small farmers,¡± said Mr. Geoff Lamb, President of Global Policy & Advocacy at the Gates Foundation. ¡°Agricultural development is two to four times more effective at reducing hunger and poverty than any other sector, and is a key part of our strategy to combat food insecurity.¡±
Launched at the request of G20 leaders, GAFSP represents a global effort to aid vulnerable populations afflicted by hunger and poverty. The program provides funding through two channels, one for the public sector and one for private sector operations. GAFSP¡¯s public sector window provides grant financing to the governments of low-income countries that have developed comprehensive strategies to improve their own food security. Demand for GAFSP¡¯s grant resources has far outstripped supply to date and many countries with strong proposals have been turned away due to a lack of financing.
¡°GAFSP is an important means by which the Korean government and its people can share our economic development experience with low-income countries to accelerate growth, reduce poverty and improve the lives of their people,¡± noted Korean Minister of Finance Bahk Jae Wan.
Recognizing the important role that the private sector plays in agriculture, GAFSP¡¯s private sector window invests in small and medium-sized agribusiness companies as well as financial institutions that work with smallholder farmers. GAFSP mitigates the perceived risks that dissuade some private sector investors from working in the agricultural sector of low-income countries in the past
¡°As for agricultural assistance, it is necessary to improve access to financial resources not only for the public sector but also for the private sector, including companies engaging in production, processing and distribution,¡± said Japanese Senior Vice Minister of Finance Tsutomu Okubo. ¡°Private sector development is a key part of the process needed to create jobs and to support improved agricultural programs.¡±
Meeting participants agreed to reconvene in 2013 to assess progress against the U.S. challenge and to review the status of GAFSP programs. Donors underscored the commitment to the successful fund, but noted that GAFSP needs additional resources if it is to continue making an impact in developing countries.
