Extreme Poverty and the Sustainable Development Goals – Written evidence submitted by the UN World Food Programme to the House of Commons International Development Committee

 

Introduction

  1. The UN World Food Programme (WFP) is the world’s largest humanitarian organisation saving lives in emergencies and building a pathway to prosperity for people recovering from conflict, disasters, and the impacts of climate change. In 2020, WFP assisted 115.5 million people in 84 countries. Food and food-related assistance lie at the heart of the struggle to break the cycle of hunger and poverty.

 

  1. WFP changes lives while saving lives through risk-informed and integrated programmes that help build more resilient households and communities. By layering community and household asset creation, smallholder agriculture market support activities, climate risk management interventions, and climate change adaptation programming, WFP and its partners supports food insecure populations in their efforts to adapt and improve their lives and livelihoods, build self-reliance, and better withstand and recover from recurring shocks.

Extreme poverty, food insecurity, and malnutrition

Food insecurity and malnutrition as a driver of extreme poverty

  1. Extreme poverty and hunger exist in a vicious cycle. Inadequate food security and malnutrition are among the main causes of extreme poverty, affecting health, impairing physical and cognitive development and capacity, and negatively affecting the livelihoods and economic capabilities of vulnerable populations. Malnutrition in all its forms and diet-related non-communicable diseases (NCDs) contribute to a country’s disease burden, posing high social and economic costs on affected households, communities, and countries.

 

  1. The first 1,000 days of a child’s life are key to ensuring their future health and likelihood of staying out of poverty. If a mother is malnourished during pregnancy, that can be passed on to her children, leading to wasting (low weight for height) or stunting (low height for age). Child stunting, both physical and cognitive, can lead to a lifetime of impacts; adults who were stunted as children earn, on average, 22 percent less than those who weren’t stunted.

Food prices as a determinant of extreme poverty

  1. Food constitutes a major expenditure for poor households. A high proportion of household income spent on food leaves little room for other expenses, hindering households’ ability to graduate out of poverty. Globally, the high cost of healthy diets and persistently high levels of poverty and income inequality keep healthy diets out of reach for approximately 3 billion people, 1.5 billion of whom cannot afford to secure their essential nutrient needs.
  2. Rising food prices and falling wages associated with the COVID-19 pandemic mean that households are spending an increasing share of their income on food, leaving many unable to secure a nutritious meal. Global food prices have risen to 10-year highs, with the price of wheat currently up as much as 40 percent year-on-year and the price of maize up 38 percent. In Lebanon, the annual food inflation rate increased by 402.3 percent in 2021. WFP has found that in the most fragile states the cost of a nutritious diet can be up to 7 times higher than the cost of a diet that meets energy needs alone.

UK leadership in tackling extreme poverty and contribution to the achievement of Target 1.1 of SDG 1

  1. FCDO/DFID has played a leading role in supporting governments to establish their own social protection systems, working with governments, UN agencies, NGOs, and other partners to pilot, establish, and strengthen effective and accountable programmes aimed at poverty reduction. While the UK lacks a social protection policy, it has been a central theme and priority policy for the department. The last decade has seen significant increases in UK funding to social protection in fragile and conflict affected states.

 

  1. WFP supports governments to strengthen their social protection systems by providing technical advice and guidance, and by designing and implementing elements of programmes on behalf of governments. The UK has been a strong supporter of WFP’s social protection programmes, primarily in fragile and humanitarian contexts, with important levels of funding in the Sahel and East Africa.

 

  1. In its Annual Report and Accounts (2020-2021), social protection was highlighted as a “core part of the FCDO’s response to the socio-economic impacts of the pandemic on poor and vulnerable families, including loss of income”. In July 2020, DFID and GIZ implemented the Social Protection Approach to COVID-19 (SPACE), an expert advice helpline funded by UK aid and BMZ providing support to 35 countries to identify practical options for linking humanitarian assistance and social protection in the COVID-19 response.

 

  1. DFID also established the Better Assistance in Crises – Social Protection (BASIC) programme (2018-2024) to provide technical assistance on social protection. Global attention of the importance of social protection during the COVID-19 pandemic and the profile of SPACE provide an opportunity for BASIC to sustain momentum behind the humanitarian-development nexus agenda and drive impact. Most products and engagement to date have been targeted towards practitioners and country level support, however BASIC has begun expanding its technical assistance offer to governments and other global actors. In the coming years, BASIC is expected to increase its focus on key policy issues that will help tackle some of the key challenges to the greater use of social protection approaches in crises.

 

  1. Over the past decade, the UK has also led the agenda on cash-based transfers, humanitarian safety nets, and shock responsive social protection systems. FCDO/DFID has been a strong advocate for the use of cash transfers and contributed to the global evidence base on cash transfer programming, which presents a strong value for money case and a proven ability to deliver for the poorest. UK leadership has been pivotal to the increasing use of cash transfers in humanitarian assistance.

 

  1. WFP and FCDO have co-led the Grand Bargain Cash Workstream over the past 5 years, which pertains to increasing the use and coordination of cash-based programming. Under the workstream, aid agencies and donors commit to a number of priority action areas, including increasing the routine use of cash transfers globally, making cash more efficient and cost effective, building an evidence base to assess the costs/benefits/impacts/risks of cash, and mainstreaming gender. FCDO co-leads the Grand Bargain Cash Workstream Subgroup on ‘Linking Humanitarian Cash with Social Protection’ which advocates for stronger links between humanitarian cash and voucher assistance and social protection, in both preparedness and response activities across the humanitarian sector.

 

  1. Delivering on the commitment to poverty reduction set out in the International Development Act 2002 and to ‘Leave No One Behind’ will require that advancing social protection globally be at the forefront of the UK’s International Development Strategy, continuing its longstanding leadership in this area.

How might FCDO’s strategy, policies and programmes need to change as the number of people in extreme poverty grows due to the global pandemic or the effects of climate change?

Sustain investment and leadership in social protection globally

  1. About half the world’s poor, and some 60 percent of the chronically hungry, were living in fragile or conflict-affected states in 2018; and if poverty declines in more stable contexts, without action by 2030, around 80 percent of the extreme poor will be in fragile states (OECD, 2018). Climate change and the COVID-19 pandemic could accelerate this trend.

 

  1. While food insecurity is a driver of both poverty and fragility, social protection is a key solution that can be used to combat these challenges by addressing vulnerability across the food system. Social protection can improve:

 

  1. Before the COVID-19 pandemic, more than half the world’s population had either inadequate or no access to social protection, including two out of three of all children. The COVID-19 pandemic has demonstrated that governments with strong social protection systems are better able to respond to shocks; in 2021, over USD 2.9 trillion was devoted to social protection responses to COVID-19.

 

  1. Nevertheless, there remain significant gaps in social protection coverage globally; only 46.9 percent of the global population are covered by at least one social protection benefit, while the remaining 53.1 percent are left unprotected. In low-income countries only 1.1 percent of GDP is spent on social protection compared to 16.4 percent in high-income countries, and these national systems tend to be weakest in terms of coverage, adequacy of assistance, and sustainability of financing.

 

  1. Success in achieving the SDGs by 2030 must include investments in social protection. SDG 1.3 calls for the implementation of “nationally appropriate social protection systems and measures for all, including floors, and by 2030 achieve substantial coverage of the poor and vulnerable” in order to end poverty in all its forms. Yet social protection assistance accounts for only 0.84 percent of DAC countries’ total disbursed ODA (ILO, 2018).

Recommendations:

 

 

Invest in cash transfer programmes

  1. The UK has made a significant contribution to promoting the use of cash transfers in humanitarian programming and in national protection systems. Cash transfers have the advantage of providing immediate relief and reducing poverty, while also contributing to increased resilience of poor households by enabling them to save, invest, and cope better with shocks. WFP cash transfers include assistance distributed as physical bank notes, e-money, mobile money, or through debit cards or vouchers which are redeemable at locally contracted shops. WFP is the largest provider of humanitarian cash transfers. In 2021, WFP assisted over 36 million people in 69 countries with cash transfers worth USD 2.3 billion – 34 percent of WFP’s food assistance portfolio is now provided in cash. Over half of the cash in WFP programmes goes to women, most of whom lack access to financial services.

 

  1. Investing in cash transfer programmes can fully leverage market-based approaches that empower people to meet their urgent food and nutrition needs, and other essential needs according to their priorities. Cash transfers also have multiplier effects on local economies by enabling people to purchase food and other items locally, injecting cash directly into local markets and creating job opportunities. Between 2009-2019, WFP cash transfers injected around USD 6.8 billion into national economies.

 

  1. Cash transfers can also contribute to digital financial inclusion. Over 1.7 billion people, most of them women, do not have access to financial services. Cash transfers, such as those provided by WFP as well as Government to Person payment schemes increasingly supported by WFP, can provide first-time access to bank or mobile money accounts and financial services to unbanked populations, particularly women. Evidence suggests that when women are included in the financial system, they can save and invest, boosting economic growth, women’s economic empowerment, and reducing poverty. A study in Kenya found that when women had access to mobile money services – storing and transferring funds through a mobile phone – they increased their savings by more than a fifth, and extreme poverty was reduced by 22 percent. Scaling up cash transfers aligns with the Strategic Plan of British International Investment (BII) which commits to strengthening its approach to gender and diversity finance, setting a new target of 25 percent of all new investments to qualify under the 2X Challenge which seeks to boost financing for women and enhance their economic participation.

Recommendations:

 

Invest in agricultural productivity and innovation

  1. The majority of the world’s extreme poor – about 80 percent – live in rural areas, as such their incomes greatly depend on agricultural activities. Investments in agriculture are therefore likely to have a significant impact on poverty reduction. Moreover, with food prices set to remain high in 2022, increasing the productivity, sustainability, and resilience of agriculture can prevent price volatility in the long-term.

 

  1. Local supply chains in the developing world are often fragmented and inefficient, resulting in higher prices, greater losses, and less access to food for the poorest. Smallholder farmers are frequently made poorer by the inability to access markets due to low production and productivity and structural deficiencies, such as lack of transport and infrastructure. Investments to increase the productivity of agriculture will help to raise incomes, increase food supply, reduce food prices, and provide employment opportunities in rural and urban areas.

 

  1. Smallholder farmers often lack access to productive inputs and finance to support post-harvest management. Post-harvest losses have significant financial impacts for both farmers and consumers, disproportionately affecting women, who are largely responsible for managing post-harvest drying, cleaning, and storage. For rural families, many of whom already live on the edge, lost food means lost land, water, fertilizer, and income for those who can least afford it. Losses also deprive farmers of the opportunity to grow and strengthen their businesses. In sub-Saharan Africa, post-harvest losses can reach up to 30 percent.

 

  1. WFP trains smallholder farmers on how to use improved post-harvest handling methods, combined with simple but effective storage equipment. Participating farmers have so far been able to reduce post-harvest losses by up to 98 percent. Thanks to improved grain quality and the ability to hold on to their produce until prices rise during the lean season, they have managed to increase their income threefold and significantly improve food security. Strengthening the productivity and resilience of smallholder farmers is critical to reversing the trend towards rising hunger and reducing the share of people living in extreme poverty.

Recommendations:

Strengthen resilience to the impacts of climate change

  1. Disasters and their immediate impacts threaten to reverse development gains and slow poverty reduction and hunger alleviation. In 2019, direct economic losses of USD 70.4 billion due to disasters were reported by 53 countries, of which 60 percent were recorded in the agricultural sector. The incomes of the rural extreme poor largely depend on agricultural activities, making them highly vulnerable to climate change. In particular, smallholder farmers are increasingly exposed to climatic shocks and stressors and progressive land degradation. Adverse weather patterns and pests and disease reduce agricultural income and result in more variable production. Climate change will exacerbate these risks and income losses in the future.

 

  1. Supporting innovation, such as the introduction of stress-resistant crop varieties, can reduce the risk to which smallholder farmers are exposed. The UK, through its Climate Innovation Facility, is well-placed to invest in the scale up of technologies that help farmers in developing countries adapt to the impacts of climate change.

 

  1. Smallholder farmers, who are vulnerable to climate-related risks, also have limited access to the risk financing tools and services that can provide protection from the resulting financial losses. Weather index-based crop insurance mechanisms help smallholder farmers endure yield risks by supporting them to adapt their agricultural practices and by offering payouts to farmers when climate risks cross a pre-defined threshold at which they are likely to cause a significant fall in crop yields. WFP supports communities and governments to better prepare for, respond to, and recover from climate-related shocks through inclusive risk financing and insurance. WFP supports vulnerable households and smallholder farmers to manage climate risks and reduce vulnerabilities using an integrated set of tools that include access to microinsurance, risk reduction, and financial services. Through WFP’s flagship approach for climate risk management, the R4 Rural Resilience Initiative, smallholder farmers can access insurance by participating in risk reduction activities. Microinsurance supports households with a protective safety net to cope with climatic shocks through timely payouts and stimulates investment in more resilient livelihoods. In 2020, 2.2 million people were protected with climate risk insurance products developed and supported by WFP in 13 countries. By 2026, this number is set to rise to 4 million.

Recommendations:

In the Integrated Review, tackling climate change and biodiversity loss is defined as the UK’s “number one international priority”. The UK Government has also committed to doubling international climate finance to GBP 11.6 billion between 2021-2026. As such, the UK Government should:

 

 

 

ENDS

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