House Hunger Caucus Briefing—"U.S. International Food Aid, Nutrition and Agriculture Development Pgrams"

Good morning and welcome.  Thank you Congressman McGovern for allowing me this opportunity to speak about MCC’s efforts to improve food security.

As I began to reflect on the topic of discussion this morning, I remembered a paper by Amartya Sen, that was published way back in early 1980’s when I was in graduate school, called ‘Ingredients of Famine Analysis: Availability and Entitlements’  which used data from famines in Ethiopia, Bangladesh and India to illustrate very powerfully, by looking a patterns of death and destitution among different occupations,  that food insecurity is  a complex issue involving policy,  production and asset dynamics.

I then jumped to reflect on my most recent trip to Mozambique and our beneficiaries in the northern   provinces. I thought about just how isolated they are — land use productivity is certainly low but even more, they are access constrained.  Though the communities I visited were near the city of Quelimane, we had to cross the river by boat as there is no bridge and the road conditions deteriorates rapidly once on the other side, clean water for food preparation is limited and they faced a stark income shock from a devastating coconut tree disease — coconuts have long been their livelihood.  This illustrates some of the complexity that affect food security.    Our program in the four northern   provinces is strategically investing in rural roads,  water and sanitation systems, land rights and income support for the farmers in the communities affected by the coconut disease, helping them to manage the disease spread, grow food crops better and diversify their income sources.

Today it is generally agreed that food insecurity has to do with both access and availability.  Sen’s analysis also really speaks to the complimentary natures of USG emergency food relief efforts and its investments in longer term, sustainable solutions to the poverty that leads to hunger.

Even before the global implications of a food crisis became apparent, compact eligible countries asked for MCC funds to support the infrastructure and agricultural investments needed for reliable access to sufficient, safe, and affordable food.   MCC responded.   All told, MCC has obligated $3.2 billion for investments in the world’s agricultural and the rural economies to increase productivity and income.

Within our country-driven approach, our partners have directed MCC grants to the very sectors essential for long-term food security: agriculture and rural infrastructure.

• Nearly 50 percent of MCC’s total worldwide investment of $6.7 billion benefits the people whose livelihoods are dependent on agriculture – in Africa, Central America, Eastern Europe and Asia.
• In fact, the Millennium Challenge Corporation (MCC) has obligated a total of $3.2 billion to support investments that directly contribute to improved food security in 17 of its 18 compact countries.
• This $3.2 billion is comprised of rural roads (52 percent), technology transfer (16%). Irrigation and water management (17%) and the rest on rural finance,  land tenure reform and agricultural research.

In Fact, around the globe MCC is investing in programs that matter for food security. Let me give you some concrete examples:

• Ghana is using $241 million of MCC funds to pro­vide farmer and enterprise training, enhance land tenure security, promote irrigation development, improve post-harvest handling of produce including cold and dry storage, improve credit, and rehabilitate rural secondary and feeder roads.  It is projected that the MCC program will help Ghanaian farmers increase the production of their staple crops by 11 percent and the production of high-value crops by 50 percent.
• Tanzania is using $189 million of its MCC investments to upgrade existing roads to improve access to markets anticipated to increase the tons of crops sold in four different zones.
• Benin is using 36 million of its MCC’s grant to support land tenure reform, including an emphasis on assisting rural land holders record their land rights, in order to improve incentives to make productivity enhancing investments in the land.
• In Honduras, the $72.2 million Rural Development Project is composed of farmer training and development, access to credit, farm-to-market roads, and an agricultural public goods facility. 
• Armenia is using $33 million of MCC funds to revitalize irrigation schemes that will supply water to farm plots of some 250,000 households, train some 60,000 households in crop productivity,  value-addition and marketing and upgrade major roads connecting rural areas to market centers.
• All of these programs, as well as the others that I did not mention, share a common vision of making     agricultural value chains work better, connecting small holders to markets, creating jobs and improving distribution and access systems for trade corridors, ensuring security of rights to land and access to finance where needed.
•  As we respond to country request for  agricultural assistance, MCC recognizes that women produce up to 80 percent of the food in some developing countries but they own 2 percent of     the land and receive only 1 percent of the resources allocated to agricultural enterprise.  We also recognize that because of gender differences and inequalities, the transition to commercial agriculture can have a negative impact on women’s resources and family well being, if these vulnerabilities are not well-managed.

• Just a couple of examples will illustrate how we are striving to implement our path-breaking gender policy and ensure that our programs contribute to improved well-being of rural women.

• • In Mali, where MCC is supporting the development of an     irrigated perimeter bring land into production, a portion of this land will be set aside for women to own and use as market gardens. The produce is a source of consumption as well as a marketable product providing income to the women. Women will also be able to participate in training and apply for commercial lots, along with men, if they so choose. Our irrigated perimeter investments in Burkina will similarly address the specific needs of local women.

• • I also want to share a powerful story from Nicaragua. First, however, I should clarify that while we have had a good program in operation that has included investments in agriculture, land tenure and roads, their government took unfortunate actions that go against good democratic governance and in response, we have had to suspend significant portions of our Compact there including the land tenure and roads activities. The rural business development activities (which support farmers to become more productive and earn more on both staple crops and high value horticultural and livestock activities) is on-going given that it is implemented outside the public sector and is really important to the livelihoods of very poor people in western Nicaragua.  The gender story, then, relates to the activity to improve commercial milk productivity and marketing. While women had a strong voice in the overall project design, as implementation rolled out and the ‘how-to’ was more specifically defined, a problem arose.  We started to hear from women that “the men are selling all the milk through your project. Please don’t leave us women without milk for our cheese” (both a consumption and income source). To make a long story short, the approach was modified and     now, while the men keep benefitting, the number of women participating sharply increased as did their earnings. A main part of the solution was reducing waste due to contamination through better practices making enough milk available for both uses.

• Many of our agriculture and rural development programs are just kicking into gear and     you will see on our most recent Quarterly Results Report, which should be on our website soon, that farmers are being trained, agribusinesses assisted, loans being made, new hectares of land put under production, land rights being registered and policy changes being made.  Some of our more mature programs are starting to show how this translates into outcomes that hold promise of achieving the impacts we are striving for:

• • • In Honduras, program farmers’ sales increases over the reporting period total $22.4 million ($11.2 million in net income). Employment income totaled $5.51 million, of which $1.97 million is new employment income generation.

• • • In Nicaragua, sesame seed producers receiving training and business development support saw, on average, a 130% increase in income from their previous harvest on land where they applied technical assistance and access-to-market support funded by MCC.

• • • • In Georgia, household farmers and direct beneficiaries of new jobs saw an increase in net household income of 711/household over a year.

Stepping back to the broad picture:

• MCC’s agricultural supply-chain and rural economy investments are helping increase agricultural productivity, value-addition, market access and a more attractive business environment, with the objectives of increasing rural incomes and access to food.
• These investments help farmers and rural businesses access productive inputs such as seeds, water and fertilizers, overcome bottlenecks that hinder the ability to get produce from farm to market, and engage in higher-value production to stimulate rural income growth.
• MCC’s infrastructure investments help address the challenge the rural poor regularly face—higher costs that limit their access to employment, markets, trade,  schools, and health clinics.  Building reliable infrastructure lowers the costs and improves access in ways that lead to better jobs, better education, and better healthcare.
• Moreover,  the MCC compact countries have often chosen to strategically package these different types of interventions in geographic corridors rather than building rural roads in one region while providing support to farmers in another.   This is important from the food security perspective.
• Complementing this portfolio of programs, MCC is also motivating policy reforms to sustain food security.

• • At the broadest level, our partners are embracing ongoing policy reforms, building a culture of transparency by fighting corruption; engaging all segments of their societies — including women — in defining development priorities and implementing action toward them; taking steps to build their capacity; and working to promote healthy business climates.

• • More narrowly, our projects often support and/or require policy reform that specifically relate to the outcomes sought.   For example, this might involve ensuring that agriculture related infrastructure such as roads and irrigation systems are supported with policy that generates sufficient budget for operations and maintenance to maximize effectiveness and useful life of the infrastructure investment.   Or, policies, for example, that encourage and facilitate agricultural trade and market development such as improved seed laws, land tenure reform laws such as we are supporting in Madagascar, Burkina,  or water pricing policy.
• I’ve mentioned direct investment and policy, a final aspect of MCC’s approach is the emphasis on and the efforts to attract the private sector.

• • • • • By motivating the right policy conditions and creating attractive procurement opportunities in agriculture and infrastructure, MCC partner countries become more attractive for the private sector.
        • MCC’s private sector initiatives and other staff are very actively pursuing opportunities to link major US and multination agribusiness with our MCA counterparts and the local private sector to leverage greater and more sustainable results.

Finally,  just a few words on coordination with USG agencies and others:

• MCC’s contributions to creating safe,  sufficient, and affordable food systems are undeniable.
• Yet, I would underscore that our tangible successes in enhancing food security will continue to benefit from a more coordinated and comprehensive synergy across all U.S.  Government initiatives aimed at this common goal to cut hunger and poverty.
• Just as MCC partners with countries, who seek investments in infrastructure and agricultural development that help bolster long-term food security, we must continue building similar partnerships with fellow government agencies to maximize our impact.
• Similarly, MCC is and will continue to coordinate with other leaders committed to ending global hunger such as the Gates Foundation, AGRA, the World Food Program, IFAD to mention a few.

To conclude, let me reiterate that MCC is actively working with our partner countries to invest in sustainable, market-based solutions to food security, on both the availability and access fronts.  Our investments in food systems are critical to helping the world’s poor provide for their families and communities.

Through the very programs we are funding, through the policy reforms we are putting into motion, through the efforts of the private sector we are mobilizing, MCC’s development assistance is already effectively helping to achieve long-term, sustainable food security in our partner countries.

I welcome the discussion to follow, and reiterate the Millennium Challenge Corporation’s commitment to being part of a shared vision for food security and agricultural development, particularly in Africa.

Thank you.