The growing consensus, momentum and commitment to eradicate world hunger may seem overly ambitious in view of the slow progress in reducing the number of hungry people in the world in recent decades.

Jomo Kwame Sundaram, Assistant-Director General for Economic and Social Development, FAO. Credit: ©FAO/Alessia Pierdomenico

After all, declining food prices in the second half of the 20th century, thanks to increasing production, were not enough to eliminate poverty and hunger in the world.

In the 1960s and 1970s, many governments invested a great deal to increase agricultural, especially food production. In the second half of the 20th century, agricultural productivity rose rapidly. But intense price competition reduced food prices, with consumers benefitting more from productivity gains – thus helping to reduce poverty.

Meanwhile, transnational agri-business has profited greatly from innovations in agricultural production, credit, processing and marketing value chains in recent decades.

More recently, food prices have gone up again as productivity and production have risen more slowly than before, partly due to reduced public investments in recent decades, slower productivity increases in the last decade, as well as recent increases in demand for food crops.

Recent food price increases have been associated not only with significant supply and demand changes, but also with biofuel mandates and subsidies as well as much greater commodity speculation.

In the unlikely event that food prices go down again after the recent increases since 2006, food would become more affordable, while reducing farmer incomes and the incentive to produce more food, which could eventually cause food prices to rise once again.

Fiscal redistribution?

Poor countries are doubly handicapped by their limited tax capacities, resulting in low tax rates on low incomes. While there is little excessive taxation of small farmers these days, there are also modest urban-to-rural resource transfers through the fiscal system or other transfer arrangements.

Government spending to raise agricultural output, productivity and incomes has also been shaped by political considerations, especially the desire to secure rural political support. However, with a few notable exceptions, government spending on agriculture is rarely biased to the poor.

While agricultural taxation is generally proportional to land owned or to output, such public expenditure tends to benefit the relatively better-off in agriculture with much rural spending benefiting plantations and larger farmers more than smaller smallholders, tenants or sharecroppers.

This is generally also true of improved rural infrastructure or social services, including health and schooling, as well as agricultural support in the form of subsidised fertiliser or other inputs – typically distributed according to the amount of land owned. Nevertheless, the poor may have benefited in so far as the rising tide of greater output lifts all boats.

Social protection necessary

There is currently enough food being produced to feed everyone in the world. The problem is that most of the hungry cannot afford to adequately feed themselves, lacking the means to do so. Hence, the only way to reduce hunger in the near term is to enhance the incomes of the poor.

More than three quarters of the over 1.2 billion “dollar a day” poor in the world live in the countryside. Reducing poverty will therefore require significantly higher rural incomes, especially for the poor. Since most rural incomes are related to agriculture, raising agricultural productivity can help raise rural incomes all round.

However, to realise the commitment to “no one left behind” in the face of the likely protracted global economic slowdown as well as higher underemployment and unemployment for years to come, the only way to eradicate hunger soon will be by establishing the social protection floor. The 2011 U.N. General Assembly endorsement of the recommendation to establish a social protection floor implies that the means to do so are available.

Historically, social protection has developed in relation to urban formal sector wage employment. But in developing countries, rural social provisioning has often involved “workfare” rather than state welfare as with India’s National Rural Employment Guarantee Act.

FAO’s distinctive approach to cash transfers — which accelerates the transition ‘from protection to production’ — helps ensure more sustainable means to overcome hunger and poverty, thus pointing the way forward to achieving the Zero Hunger Challenge.

*Jomo Kwame Sundaram is Assistant Director-General, Economic and Social Development Department, UN Food and Agriculture Organization, Rome.  

After two decades of crisis more and more Japanese want to do business for society, not just for money. Credit: Daan Bauwens/IPS.

By Daan Bauwens
TOKYO, Mar 2 2013 (IPS)

After two decades of economic stagnation and serial natural disasters, a growing number of young Japanese believe social entrepreneurship is the best way to rebuild their society.

Masami Komatsu (37) is one of them. He founded his investment company Music Securities in 2001, a few years after the Japanese banking crisis of 1998. ‘There was no more investment in vulnerable sectors as music, traditional crafts or sake brewing,” he tells IPS. “We made it possible for people to start investing in what they personally think is important and should be kept alive.”

However, Music Securities does not work by way of donors and donations. It is an investment fund with returns that currently ranks among the best performing in Japan, managing over 33 billion yen (27 million euro) worth of investments held by over 50,000 shareholders including some of the nation’s most wealthy companies. In 2009 Komatsu set up the first retail microfinance fund in Japan, allowing individuals to invest in microfinance projects in Cambodia.

At this moment Music Securities is the largest private financier in the reconstruction of companies that suffered losses from the tsunami. “A month after the catastrophe had happened we visited the area and suggested our plan to the local business leaders,” Komatsu tells IPS. “We had the feeling we had to do something. Not volunteer, but use our existing business to resolve the problems of the stricken areas.”

At this moment more than 25,000 individuals have invested a total of more than 100 billion yen (810 million euro) in the tsunami fund.

In 2001 Music Securities was ahead of its time. It took until 2005 before the concept of social entrepreneurship – a revenue-generating business whose objective is not personal gain but the pursuit of a social goal – was thought of at Japan’s oldest university Keio in Tokyo.

But in recent years, the phenomenon seems to be gaining momentum rapidly. In 2011, Fukuoka on the Japanese Island of Kyushu was the second city in the world to be named a ‘social business city’ for spreading the concept of social business across the Asian continent. Nobel Laureate Muhammad Yunus, who developed the idea of social business, opened the world’s first social business research centre on the grounds of Kyushu University.

According to Japan’s Ministry of Economy, the number of social businesses went up from virtually none in 2,000 to a total of more than 8,000 in 2008, employing over 320,000 people. There is no data on the current number, but everything points to the fact that the phenomenon has been even more on the rise since then. For instance, at the NEC-ETIC Social Entrepreneurship School in Tokyo, numbers of applicants have risen five-fold since 2010.

Since the start, Nana Watanabe has been one of the driving forces behind social entrepreneurship in Japan. Through her work as freelance journalist and photographer, she introduced more than 100 social entrepreneurs to the Japanese public between 2000 and 2005 through several publications.

“Japan was left without role models after the bursting of the bubble economy,” she tells IPS. “It led to a general state of depression, the country didn’t know what to do. In 1999 I discovered the new wave of social entrepreneurship, coming up among elite students in the states. I immediately thought: this is what we need.”

In 2011 Watanabe founded the Japanese branch of Ashoka, an international NGO supporting the work of over 2,000 social entrepreneurs in 60 countries around the globe.

“Social business is definitely an emerging phenomenon,” she tells IPS, “and the reason behind it is simple: people are getting increasingly disappointed in Japan’s large companies. Today’s young have seen their parents sacrifice their lives in exchange for the promise of lifetime employment, only to be have been laid off in recent years. More and more young people prefer to start on their own.”

“The myth of Japanese government efficiency has collapsed,” says Toshi Nakamura, leader of Kopernik, an on-line market place offering technological solutions to problems in rural communities in developing nations.

“Up until the middle of the nineties people had faith in the government’s technocrats to drive the economy and provide social services,” he tells IPS. “This is no longer the case and people realised that a number of social issues had to, and can be tackled by ordinary citizens.”

It is not just disappointment in Japan’s companies or government that inspires the Japanese to get involved in social business. “After the financial crisis we have seen a return to traditional values,” says Japan’s leading business analyst Kumi Fujisawa. “People aren’t looking for short term gain but concentrating on long-term perspectives. There’s a return to idealism, people want to contribute to society again.”

According to polls organised by the Japanese government, the value of work is being reconsidered in Japan since the start of the financial crisis. The number of people that answered that they wanted to work ‘to contribute to society’ rose sharply after the burst of the asset bubble, from 46 to 64 percent in 1991. That number is above 65 percent at present.

“It is the result of a new inward-looking attitude,” says Hirofumi Yokoi, president of the Akira Foundation, one of Japan’s most influential organisations fostering social entrepreneurship that was founded in 2009.

“Growing uncertainty and anxiety about the future have lead to a change in behaviour. For lots of young Japanese, social business is not just a way to solve economic, social and environmental issues. It is also a way to tackle personal challenges. They will have to work as a part of a community and develop self-confidence, friendship, mindfulness, self-actualisation and social inclusion.”

“It is true that people start to reconsider the value of work,” Nana Watanabe tells IPS, “but most still lack the courage to act upon it. Social business is definitely taking off but we need to be cautious not to overestimate its success.

“First of all, it requires people to be very creative and imaginative. Next, at the moment it is very fashionable to say you will start a social business. But in the end, the majority are still looking for security and money.”

The severe crisis crippling Spain is also sparking some creative responses, such the Okonomía project, a teaching initiative that helps individuals and communities to understand the workings of the economy and make more informed decisions to manage their finances.

“Things have gotten so bad, with people out of work, losing their homes and watching their savings vanish, that something has to be done to economically empower people,” said activist Raúl Contreras, one of the academics behind this initiative that in February will open its first school in Benimaclet, a multicultural neighbourhood in the southeastern city of Valencia.

Contreras – an economist who also heads the company Nittúa, which sponsors this project – spoke with IPS about the powerlessness and fear that is taking hold of many people who do not understand how the economy works and how it affects their lives, and are thus made vulnerable to manipulation.

“Doubts, ignorance and fear – in some cases spread intentionally – lead to mistakes, anxiety and difficult situations that could be avoided if people are better informed and equipped to make decisions or choices,” Nittúa’s website reads.

One out of every four economically active persons is currently unemployed in Spain, where dozens of families are evicted daily from their homes for failure to meet their mortgage payments, and the measures implemented by the right-wing government of Mariano Rajoy to address the crisis involve huge cuts to health, education and other basic services.

Hundreds of thousands of people in Spain fell prey to “preferential shares” and other financial product schemes and lost all their savings. As the crisis deepened and banks became desperate for cash, they convinced more and more savers to buy these products, taking advantage of their lack of understanding of the ins and outs of investment, and using misleading and distorted sales pitches.

Okonomía – which is financing its start-up needs through a crowdfunding campaign – calls itself a “popular economics school” that “develops dialectical educational processes, building on the reality and economic knowledge of each participant, to enable participants to understand their economic situation so that they can make informed and conscious decisions, both individually and collectively, that will lead to the transformation of society through economic empowerment.”

The school is formed by professionals from the fields of economics and education and its activities include training multiplying agents who will spread their newly-acquired knowledge in their immediate social environment.

“The school won’t solve people’s problems, but it will provide a toolbox to help individuals make more informed decisions based on their specific needs,” Contreras explained, highlighting the project’s cross-cutting approach to solidarity economy, as it emphasises sustainable alternatives.

While the head of Nittúa stresses the solidarity aspect of this economic model, he says it is not the school’s intent to preach any one model or solution. Rather it seeks to give participants an understanding of economics in general, including a range of economic alternatives, such as ethical banking, responsible consumption, fair trade and the cooperative model.

“A large part of society has realised that a different way of teaching economics is needed,” Carlos Ballesteros, a lecturer on consumer behaviour at Madrid’s Comillas Pontifical University, told IPS. “Ninety-nine percent of the world’s business schools stick close to the neoliberal paradigm,” which is profit-driven and based on maximising earnings.

Ballesteros said that while Okonomía’s target public is civil society as a whole and its main objective is to teach and inform, on the understanding that “the economy is everyone’s responsibility,” it also aims to gather and systematise knowledge on solidarity economy practices that may prove useful to people working in that field.

Okonomía offers semester courses, with in-person classes held every two weeks. The methodology is based on the popular education model developed by Brazilian educator Paulo Freire (1921-1997), who believed that “to teach is not to transfer knowledge but to create the possibilities for the production or construction of knowledge.”

In each session an issue is presented and material is provided to facilitate reflection. “The learning process is a group activity. The classes are not lectures, but rather dialogue-based and interactive,” Contreras said.

He added that after each session the conclusions drawn from the group’s discussions are published online and posted in an intranet, which will form a database of the school’s results, a sort of “Wikipedia of Popular Economy”.

Economist Arcadi Oliveres, one of Okonomía’s advisers, said this project is valuable because it “seeks to reveal to the people the underlying workings of the economy” and “because we’re really in the dark” when it comes to the financial world, he told IPS.

Oliveres, a professor of applied economics at the Autonomous University of Barcelona, believes that “people don’t know that there are alternatives to the traditional economic system” and calls for critically aware citizens who can make informed decisions.

Independently of how financial markets and governments behave, the actions of common citizens also have an impact on the economy, so that people must be conscious that they too can make irresponsible choices as consumers or that their deposits can go to financing environmentally-harmful corporate activities, the economist argued.

“We have to start asking ourselves where our money goes – what do I do with my savings, where do I deposit them and why? – and learn to take control of our finances,” Contreras said.

The aim of the school is to help people “understand and then make free, but conscious decisions,” he added.

The expert noted that he has not found similar projects anywhere else in the world and that Okonomía, which combines a methodology inspired by Paulo Freire with social innovation methods, has the potential to be replicated outside of Spain “with the support of the social fabric of neighbourhoods and communities”.