WASHINGTON — Even by the standards of a town used to summitry, this is a busy spring in Washington. This week, delegations from every corner of the globe are descending on the Foggy Bottom neighborhood for the World Bank and International Monetary Fund’s yearly spring meetings. Exactly a month later, leaders from the richest corners of the globe will be back in the region, headed to Camp David for the 2012 G8 Summit. With food security featuring on both agendas, now is the right time to get public-private partnerships working on solutions, and just plain working.
Food security and agriculture are enjoying a renaissance in international development after decades as second-rate causes among donors. When the G8 came together in 2009 in L’Aquila, Italy, its leaders pledged to commit $22 billion to fighting food insecurity among the world’s poorest. This battle against hunger, declared at the highest levels, is being fought both against long-term, structural food insecurity and against famines and other emergencies, like the one unfolding now in the Sahel, the area below the Sahara desert that stretches across the African continent.
Meanwhile, another neglected cause — donor partnerships with for-profit companies — has also become more prominent in the development community in recent years. The knock against public-private partnerships had been that the profit motive was incompatible with the nobler goals of easing human suffering and raising living standards. Only relatively recently have mainstream development thinkers begun to accept that the profit motive is, in fact, probably the surest way to guarantee sustained economic growth and development. What is needed most by developing countries, and the hungry people within them, is more business activity, particularly by companies (large or small) that grow, process, import, or otherwise sell food.
In some circumstances, humanitarian assistance, where food is given directly to starving people, is necessary. However, part of the key to eliminating those tragic scenarios is attacking the factors that allow them to recur. In the United States and Europe, farmers have the technology and infrastructure to mitigate bad weather or other supply shocks. Most Americans and Europeans have enough income to tolerate increased food prices. But across the developing world, most people are farmers working small plots of land with little to no modern technology, little to no market to sell surplus, and little to no income off the farm. Until a smallholder farmer can become a small business, or leave farming to make money elsewhere (perhaps in a different part of the agricultural supply chain) and thus buy food from others, this cycle continues. It is entrepreneurs and investors acting on the profit motive that break this cycle.
Unfortunately, in these difficult circumstances, investors are not going to go it alone. This is where donors come in: to mitigate risky investments by offering subsidized capital, employee training, or other inputs that change the cost-benefit calculation. From a donor perspective, this has the added value of catalyzing private funds for a multiplier effect — particularly appealing in a time of transatlantic budget austerity. Donors understand this — even in Europe, where skepticism of public-private collaboration has been more profound.
The problem, then, is not recognition. When statements are issued following these spring summits, they will sing the praises of public-private partnerships, and they will be sincere. However, when the proclamations reach the desks of those charged with implementing them, they get stuck. The reality is that the public and private sectors are two very different worlds. GMF convened a group of transatlantic experts to study food security partnerships in Africa and, in a report released today, the group found — after months of consultations in the United States, Europe, and Africa — that progress is impeded by the most basic of obstacles. Donors don’t know how to find or initiate conversations with interested businesses, and vice-versa. Once formed, partnerships often lack measurable goals, concrete steps, or a shared vocabulary. Partners often take on too much, rather than tackling specific, manageable challenges. Donors don’t understand or can’t deliver the flexibility that businesses need, driving them away with impractical rules or red tape. It is an unintentional disconnect between partners — not a lack of commitment — that prevents this crucial form of collaboration from taking root.
If transatlantic donors and businesses are ever going to get this right, now is certainly the time. The political will is established and widespread. Continuing budget austerity provides a compelling if unfortunate motivation for mobilizing private funds to fill the gaps. Ongoing food crises provide the moral imperative, and Africa’s coming demographic boom means that more businesses will want to tap those markets. This spring’s summits provide the platform for driving this home. Instead of spending time reaffirming high-level commitments, policymakers should take this opportunity to get down to basics.
Kate Ritterspach Thulin is a research assistant in the Economic Policy Program at the German Marshall Fund of the United States in Washington.
Image by USAID.