Attachments
EXECUTIVE SUMMARY
The development community has not delivered on the goal that it set in 2015 to end hunger by 2030. Today, 733 million people face hunger; or one in 11 people in the world (FAO et al., 2024). If we continue with business as usual, by 2030, hunger will be higher than it was in 2015 when the world committed to eradicating it under United Nations 2030 Agenda for Sustainable Development. According to current projections, we will barely reach pre-COVID-19 hunger levels by 2030, let alone achieve any progress, despite economic recovery in many countries.
Today, it would cost an additional USD 540 billion to end hunger by 2030, largely through social protection programmes (von Braun et al., 2024). In 2020, it was estimated that it would cost an additional USD 330 billion to end hunger by 2030 (Laborde, Smaller and Parent, 2020). The lack of investment during the last four years contributed to this additional cost of USD 210 billion to end hunger by 2030.
Recent global shocks and more immediate drivers of hunger and malnutrition have also intensified underlying structural challenges, making the hunger crisis worse. Driving the rise in hunger are economic shocks and downturns, conflicts, and climate variability and extremes. Economic vulnerabilities are exacerbated by high dependency on food imports making countries particularly susceptible to global price fluctuations. Additionally, climate variability and extremes, such as the record-breaking temperatures and severe flooding in 2023, have significantly impacted food production and availability, further deepening the food crises in affected regions (FAO et al., 2024).
It did not have to be this way. The shocks of the past decade did not need to lead to the current hunger crisis. If the public and private sectors had responded differently, if the development community had committed the additional resources needed, and if global solidarity had been stronger, the hunger crisis could have been averted.
A world without hunger is possible. The world continues to produce more food per inhabitant every year. The problem is not the lack of food at the global scale, but the discrepancies between where it is produced, and where it is consumed, and the lack of economic means for vulnerable population to buy it. We know how to end hunger, and we know how much additional money is needed. One simple way is to give people money, through cash transfers; the most common type of social protection programme. If we end hunger this way, it will cost an extra USD 540 billion to end hunger by 2030, with nearly half associated with large and recurrent payments every year, making this option not fiscally sustainable for most countries and partners.
Another way to end hunger is through income-generation, especially among the agrifood systems. This is the focus of this report. An income-generating approach, based on growth in productivity and incomes for the poorest and most vulnerable through value addition, is the most resilient, sustainable and lasting way end to end hunger (UNIDO, 2023a, 2023b): it combines expanding food production and providing the economic means for population to buy food; this is the most effective way to redistribute production and consumption to where it is needed most.
For value addition to play its vital role towards increasing food security and ending hunger, a number of intervention areas are highlighted below. First, additional investments are needed to improve productivity and incomes on the farm through agricultural research and development (R&D), extension services, farm mechanization and technology adoption such as information and communications technologies (ICTs). Second, there is also still a significant need for investment to build and maintain infrastructure for irrigation, electricity, rural roads, and storage to reduce post-harvest losses.
Less well explored is how to generate income for people affected by hunger and poverty through value addition in agrifood processing, distribution and retail. The most effective investments are in agrifood processing, particularly by small and medium-sized enterprises (SMEs) in domestic and regional markets. Agrifood processing can expand opportunities for producers, enhance food security, and facilitate the development and transformation of the food system at large. More specifically, it can reduce post-harvest losses for more nutritious foods through better handling practices, improved packaging and cold storage. This can simultaneously improve food safety through measures such as basic food preservation methods (e.g. drying and fermentation), or advanced industrial processes (e.g. pasteurization and food fortification). To complement these investments and meet the labour demands of the food processing sector, there is a need for more vocational training and increased academic enrolment in science, technology, engineering and mathematics (STEM).
None of these investments, and technology adoption, is possible without innovative and equitable solutions to scale up finance. One of the biggest challenges in the agrifood sector is access to finance, particularly for the “missing middle”: small-scale producers and agrifood SMEs looking for loans of between USD 25 000 and USD 2 million. These actors can support the productivity and income growth needed to end hunger and poverty. Several innovative solutions that emphasize the value of relationships and trust between farmers, SMEs and their buyers, traders and wholesalers are: (i) factoring; (ii) supply chain finance or reverse factoring; (iii) outcome financing; (iv) real estate investment trusts; (v) priority sector lending (PSL); (vi) asset monetization; and (vii) guarantees. Critical to all seven solutions is the need for increased participation by domestic governments and investors.
But how to reduce risk and create confidence in the human and financial capital of the poor and hungry? Here, social protection programmes can play a transformative role: not just as a tool to give people money, but also to give people insurance, and to give lenders confidence, backed by government-financed programmes. The role of social protection programmes, particularly cash plus programmes, which combine cash transfers with economic interventions, such as road building or improved farming techniques. For banks or other financial institutions, the regular flow of cash, could act as an insurance policy and an incentive to an otherwise risky client.
Finally, better trade and competition policy, combined with stronger regional integration are essential to ensure that the additional income generated benefits small-scale producers and agrifood SMEs. This includes reforming harmful trade policies, trade facilitation, and better enforcement of competition law and policy by regulators.
Many of these priorities are essentials for the Food and Agriculture Organization of the United Nations (FAO) and United Nations Industrial Development Organization (UNIDO). For example, the joint FAO and UNIDO Agrifood Systems Transformation Accelerator (ASTA) programme working in eight countries to improve access to finance and markets for the missing middle. The Food Loss App, developed by FAO, is an innovative technological advancement in the fight against food loss. The UNIDO CAPFISH-Capture project in Cambodia generates additional income for fishery processors and SMEs by investing in fishery value chains, through innovative blended finance mechanism including grants, guaranteed loans and enterprises’ own investment. The joint UNIDO-International Trade Centre Trade, Competitiveness and Market Access Programme (TCMAP) builds trade and productive capacities, and promotes intra-African trade aligning closely with the Regional Economic Communities’ regional integration agendas and the African Continental Free Trade Area (AfCFTA). UNIDO is also supporting the development of rural infrastructure through integrated agro-industrial parks, such as in Ethiopia.
Only through an integrated, properly sequenced and well-financed approach will it be possible to eliminate hunger. The income-generating approach can only be achieved if the different interventions mentioned above are all financed and deployed through coordinated international efforts.