Averting Food Crisis in Asia and the Pacific: ADB’s Mission Impossible!
By Avilash Roul, NGO Forum on ADB

In the last four decades, the Asian Development Bank (ADB) has been engaged in eradicating poverty in Asia and the Pacific region through ways and means prescribed, advocated and implemented by the ADB. The development model which the ADB advocates poverty alleviation has invested approximately US$123 billion in more than two-thousand loan projects in its 48 developing member countries (DMCs). Ironically, most of the DMCs are facing the crisis in 2008 to feed their people! The worst hit among the DMCs is Bangladesh. Even the International Rice Research Institute (IRRI) and the ADB, having their headquarters in the Philippines, could not arrest the rising high price of rice in the Republic itself. Worse, the cost of food grains alienates the poor people from institutions. Has the development method preached by the Bank gone wrong?

The present crisis has no single-straight forward case and effect. The lopsided demand-supply chain, restrictions on exports by producers, global environmental change and profitable-marketization of agriculture probably have aggravated the world food scenario. However, the increasing emphasis on the market to decide on the world food demand is perhaps the sole important reason of the prevailing civil strife on food. Can ADB be able to rescue the current situation?

Market can’t decide who must eat what! No body should deny that right to food is an integral part of human rights. However, more than 850 million people go to bed every night without a proper meal. Moreover, the market-driven solution to feed the world has collapsed in nearly 36 countries and more countries are sitting over latent food crisis. The international financial institutions (IFIs) have failed to follow their mission of eradicating poverty. World Bank President Robert B. Zoellick admitted during a press conference at the World Bank headquarters that “the effect of this food crisis on poverty reduction worldwide is in the order of seven lost years.”[1] In fact, the role of the World Bank and the ADB in poverty reduction is at large questionable.

The world population is 6.67 billion and still adding one per second. Almost half of this number of people depends on rice. But the world population has 85.5 million hectares of productive arable land. It is estimated that one hectare of productive land is lost every 7.67 seconds. Sometimes, the Malthusian concept came surprisingly in a frequent time interval to the poor countries. Since 1960s, the international development institutions have been supporting countries on agriculture, irrigation, water resource management and so on to eradicate poverty in the regions. The argument put forward by IFIs is that the irrigated land made up about a fifth of the arable area in developing countries has doubled to about 200 million hectares. During last decade, the World Bank invested $13.2 billion in agricultural and water management, out of which US$5.6 billion was specifically for agricultural water management that went to South and East Asia, and China, India, Indonesia, and Pakistan.[2] Similarly, the ADB has invested a large chunk in Asia and the Pacific region. But have they reduced poverty? The question does not have a fair answer from the development mandarins.

Is ADB feeding Asia and the Pacific

Rice production has more than doubled—from 254 million tons in 1965 to 576 million tons at present. Moreover, ADB’s developing member countries account for eight of the world’s top ten rice producers. Over the last three decades, the ADB has been cooperating with IRRI to improve the rice-related research projects by supporting US$17.3 million in various projects. In 2004, the ADB President said on the eve of International Year of Rice that enhancing the productivity of rice-based systems through greater investments in physical infrastructure, science and technology, and strengthening institutional and human resource capacities will bring further boosts in food security, reduce hunger and poverty, enhance nutritional values, and improve quality of life.[3] The latest venture of the ADB with IRRI is to produce drought-resistance rice in South Asia. On the contrary in 2004, the ADB lent only US$198 million for agricultural activities. Similarly, the ADB allocated loans in agriculture and natural resource amounting to US$314 million and US$807 million in 2005 and 2006, respectively. In 2006, the largest amount went to energy, finance and transport and communication. In 2007, the total amount has gone to agricultural activities which is merely US$146 million. While 620 million people are still under poverty line in Asia and the Pacific, the ADB’s priority is to strengthen the private sector involvement.

Bangladesh is about to face a severe crisis of food shortage to feed its large poor people. About 30 million of the country’s 150 million people could go hungry very soon. The cascading effect will be on the boarding India – one of the largest rice producing/exporting countries – that stopped exporting rice in the face of the crisis. A large migration from Bangladesh is on the sleeve. The IFIs, especially the ADB, has so far invested US$1.6 billion in 51 agriculture and natural resource projects till 2006. However, out of the 176 loans amounting to US$8.2 billion for Bangladesh, majority have gone to energy sector (29 loans), finance (10), transport and communication (27), and industry and trade (17). Even with other development partners, the ADB has been guiding the formulation of the development plan of Bangladesh. But the country is facing severe food crisis. The only excuse of the development agencies are last year’s devastating cyclone in the country that has created this grave situation. Is it the only reason?

The shortsighted visions, truncate projects and programs designs have actually created the present situation. ADB projects are not directly linked to address poverty eradication but to facilitate private involvement in the development process. The evaluation of the effectiveness of ADB projects has many shortcomings. Development assistances from beyond countries, coupled with national design on more agriculture production through the development of irrigation management, could not arrest or reduce the number of hungry stomachs.

The impacts of climate change have already reduced the production of grains. Again, to mitigate the emissions, the drive for agro-fuel or biofuel has transformed the traditional crop lands into cash crop. In the end, the production of staple grain has been decreasing but the cash crop is increasing with profitable employment/wages. The vicious cycle is not yet completed for the food cycle. To feed the hungry, the science-biotechnology frontier will be placed hurriedly with genetic modified seeds and the owner of that technology will call the deal. The crisis is not as simple as it looks like. As population is increasing, the responsibilities to feed the hungry without politics must be the norm for countries as well as development institutions. Self sufficiency should be the norm rather than market intervention for the eradication of hunger.

End notes

1 World Bank (2008), “Food Price Surge Could Mean ‘7 Lost Years’ in Poverty Fight, Zoellick Says,” Press Release, 11 April 2008, Washington: World Bank.

2 World Bank (2006), Water Management in Agriculture: Ten Years of World Bank Assistance, 1994-2004, Washington DC: The World Bank.

3 http://www.adb.org/Documents/Speeches/2004/ms2004067.asp