Article — From the June 2009 issue
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Article — From the June 2009 issue
On the third morning of the Rome hunger summit I sat in the back row of the Iran Room, where the United Nations held its press conferences, and listened to the remarks of Josette Sheeran, executive director of the World Food Program. The WFP is the largest humanitarian organization in the world, part of the elite club of NGOs that have spent billions trying to end world hunger. Sheeran had just completed her first year as executive director of the WFP, and already rumor had it she might be next in line for president of the United Nations. “High food prices and increasing demand present a huge, historic opportunity,” said Sheeran.
The World Food Program had been recycling agricultural surpluses and sending them across the world since 1962. Now, Sheeran declared, the program was facing the biggest challenge in its history, and if her organization and the famine-relief industry in general did not take immediate action, the number of hungry people in the world would soon double. “The bottom billion will become the bottom two billion,” said Sheeran. It was the 1970s all over again. By percentages, as bad as it got. By real numbers, beyond the beyond.
The press scribbled in their notebooks and tapped their laptops. And Josette Sheeran smiled. An ex- journalist, she had learned the subtleties of media relations at the Washington Times, the conservative daily broadsheet founded and bankrolled by the Reverend Sun Myung Moon’s Unification Church. Sheeran joined the church in 1975 and could boast a classic ’70s de-programming story wherein her father—the former mayor of West Orange, New Jersey—stormed a church-run school and tried to rescue his daughter. The attempt failed, and Sheeran remained a member of the church for more than two decades, even as her spiritual leader declared, “I will conquer and subjugate the world” and, “I am your brain.” She reached a pinnacle of sorts as the managing editor of the Times. Then, having exhausted the social, political, and professional possibilities of Moon’s church, Sheeran left the paper, converted to Episcopalianism, took a job as an undersecretary of state for the George W. Bush Administration—and, finally, decided to feed the hungry.
Sheeran was now directing the World Food Program’s $6 billion budget. She commanded their vast fleets of barges, camels, donkeys, planes, trains, trucks, and elephants. When Sheeran finished her remarks I followed her out of the Iran Room and asked if she could explain what she had meant when she said, “High food prices and increasing demand present a huge, historic opportunity.” Where was room for opportunity in high food prices and increasing demand? Were not high food prices driving riots and famine across the globe? Were not there more hungry people than ever before?
“There was a time when we did not know how to produce enough food in the world,” Sheeran said, and gave me a dazzling smile. “Now we do.” Of course, every hungercrat at the Rome conference understood there was enough food for everyone, even if the fact of food paled before the privilege of purchasing it.
As Sheeran began the narrative of how the World Food Program would eradicate world hunger, we were joined by her second in command, Nancy Roman, the WFP’s director of communications, who observed Sheeran the way campaign managers monitor their candidate. “This is not your grandmother’s food aid,” Sheeran quipped as Roman kept watch.
In the beginning, most of the contributions to the World Food Program came in the form of food, but as the years went by a growing proportion of the contributions came in the form of cash. Originally, the organization had focused on delivering its rice and beans directly to those who had the bad luck to inhabit the most cursed spots on earth. But as grain surpluses went down and the price of shipping went up, the WFP took the logical step of purchasing food supplies from sources closer to the famine, in many cases even from within the borders of the affected country. Thus did the WFP purchase 18,000 metric tons of corn and beans from Rwanda last year, for $6.3 million, and 210,000 metric tons of food from Uganda, for $55 million. Which made these countries’ respective presidents, Paul Kagame and Yoweri Museveni, happy to cooperate with the WFP’s designs for the future.
In fact, World Food Program plans called for the presidents of Rwanda and Uganda to travel to New York just a few months after the Rome hunger summit. There, at United Nations world headquarters, presidents Kagame and Museveni would welcome the WFP’s newest program. And on that morning, Josette Sheeran revealed, the African presidents would be joined by none other than Bill Gates.
Gates, Sheeran explained, was going to help the WFP expand its program of local purchasing to small farmers and grain traders in the farther reaches of their client nations. Such purchases, as logistically difficult as they might be, would increase and support the agricultural efforts of these so-called smallholders. “This is the next wave of the story,” said Sheeran.
Grain purchases from small farmers and traders would put cash into the hands of hundreds of thousands of people and encourage farmers to plant and harvest more and more food. In addition, the WFP would put these farmers in contact with other groups, who would in turn help them acquire better seeds, fertilizers, and pesticides, more advanced irrigation systems, larger warehouse facilities, and improved access to roads. Thus could a poverty-stricken peasant move from being a recipient of food aid one year, to creating a bit of surplus the next, to making a profitable business out of it a few years down the line—and supplying food for others.
In order to realize these plans, the World Food Program would guarantee a market where none might now exist. They would do so, in part, by “forward contracting,” whereby the WFP would promise to purchase a certain amount of a farmer’s output, at a certain price, either one, two, or three years down the line. Such guarantees would give small farmers the incentive to plant more crops, since they could count on an eventual market for their goods. A WFP contract might even help farmers get credit from the local bank, or perhaps a bit of crop insurance.
Josette Sheeran told me the acronym for her pilot program: P4P, which stands for Purchase for Progress. The $76 million program would be funded by the Howard G. Buffet Foundation, the Bill and Melinda Gates Foundation, and the government of Belgium. In its first year of forward contracting, P4P would commit the World Food Program to purchasing 40,000 tons of food from 350,000 small farmers. “We are studying a proposal with Bill Gates on a way to do the contract,” Sheeran said.
P4P was designed to mimic sophisticated global markets. Along with its purchase guarantees, P4P included plans to support countrywide commodity exchanges, which the WFP hoped would develop along the lines of the Chicago Board of Trade. (In Ethiopia and Uganda, exchanges have already opened.) In the new paradigm, the smallest farmer can benefit from the biggest market.
In some cases, P4P would not purchase a farmer’s grain immediately but instead would encourage him to warehouse his product and receive a receipt. More mysterious than rice or millet, this slip of paper presented a number of intriguing possibilities. First of all, the receipt allowed the farmer to register with his countrywide exchange, a place in the capital city where all the grain from all the country’s farmers could be bought and sold. Henceforth, the rural farmer could follow fluctuating prices with the technology of his mobile phone. The once indigent peasant could become a commodity trader and peg his sale to any time of the year. In this way, he could forecast, model, and leverage more financing. No matter that commodity speculation and grain hoarding had helped trigger the world food crisis. No matter that the recent Agribusiness Accountability Initiative declared that massive and unregulated commodity-market speculation “has pushed the prices of wheat, maize, rice and other basic foods out of the reach of hundreds of millions of people around the world.”
Of course, the WFP would take no responsibility for market peaks, valleys, doldrums, and crashes. The happy news was that the solution to world hunger would no longer have to be about the food. It could be about the money. And I imagined the sowers and reapers of Africa, Asia, and South America transformed into a massive cartel of grain dealers—leveraging, diversifying, and cornering markets, driv ing the price of rice and beans as high as the market could bear. The peasant-turned-trader could wait as long as he liked to go to market and, while he waited, place bets on which way the market would move. He could hoard in the great tradition of grain dealers, hedge in the great tradition of bankers, and eventually pull in enough profit to render obsolete every guarantee and support of the World Food Program, quit farming, and go into insurance and banking for himself.
Thus the new paradigm. Thus the end of world hunger. And thus the end of my conversation with Josette Sheeran, who had to run to her next meeting. Nancy Roman stayed behind, so I asked her about rising food costs and all those riots. Higher wheat and rice prices could conceivably help farmers, higher grocery bills might benefit agribusiness, and speculation in commodity markets might be a boon for investors of all shapes and sizes—but how did such financial fluctuations affect the urban underclass of Nigeria and the rural poor of Guatemala?
“Listen,” said Nancy Roman, “speculation always drives up the cost of everything. Housing, telecommunications, shoes . . .”
Before she joined the WFP, Roman had been president of the G7 Group. She had made her living explaining Washington policy to hedge-fund managers, and as a result she could situate virtually any political or social phenomenon within easily comprehensible financial constructs, and she could explain why, in the midst of the world food crisis, the Ospraie Special Opportunity Fund and the BlackRock Agricultural Fund had gone on their latest buying sprees, snapping up grain silos, grain elevators, fertilizer-distribution centers, and huge tracts of land. Indeed, as the world’s best and brightest focused on food security, the solution to the age-old problem of hunger appeared increasingly to coincide with the age-old techniques that the best and the brightest themselves employed to ensure their own security. The solution to world hunger was more investment all the way up and all the way down the line, and all investments were speculative.
“What people are uncomfortable about is when you speculate about food,” continued Roman, “something so fundamental to life. When you’re speculating on something that is the essence of life, when you’re speculating in that space—” and here she stopped. She gazed across the pressroom and she frowned.
“People don’t like that,” she said.
Frederick Kaufman is the author of A Short History of the American Stomach. His last article for Harper’s Magazine “Wasteland,” appeared in the February 2008 issue.
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