The reverse in progress and the persistently high levels of hunger, food insecurity and malnutrition in recent years have put the world off track to meet Sustainable Development Goal (SDG) Targets 2.1 and 2.2 – to end hunger, food insecurity and all forms of malnutrition by 2030. Previous editions of this report have repeatedly highlighted the intensification of several major drivers of food insecurity and malnutrition, specifically conflict, climate variability and extremes, and economic slowdowns and downturns, combined with the well-established underlying factors that contribute to food insecurity and malnutrition, such as lack of access to and unaffordability of healthy diets, unhealthy food environments, and high and persistent inequality. Not only are these major drivers increasing in frequency and intensity, they are occurring concurrently more often, and in combination with the underlying factors, resulting in increasing numbers of hungry and food-insecure people. Depending on the major driver or combination of drivers affecting food security and nutrition in a country, addressing them will require a portfolio of policies across six transformative pathways, as outlined in detail in The State of Food Security and Nutrition in the World 2021.
To attain the scale of actions needed, sufficient levels of and equal access to financing to address food security and nutrition challenges are essential. The theme of this year’s report focuses on the financing to meet SDG Targets 2.1 and 2.2 – financing to end hunger, food insecurity and malnutrition in all its forms.
Food security and nutrition around the world
Food security indicators: latest updates and progress towards ending hunger and ensuring food security
The assessment of global hunger in 2023, measured by the prevalence of undernourishment (PoU) (SDG Indicator 2.1.1) reveals a continuing lack of progress towards the goal of Zero Hunger. After rising sharply from 2019 to 2021, the proportion of the world population facing hunger persisted at virtually the same level for three consecutive years, with the latest estimates indicating a global PoU of 9.1 percent in 2023. In terms of population, between 713 and 757 million people (8.9 and 9.4 percent of the global population, respectively) were estimated to be undernourished in 2023. Considering the mid-range estimate (733 million), about 152 million more people may have faced hunger in 2023 compared to 2019.
Africa is the region with the largest percentage of the population facing hunger – 20.4 percent, compared with 8.1 percent in Asia, 6.2 percent in Latin America and the Caribbean, and 7.3 percent in Oceania. However, Asia is still home to the largest number: 384.5 million, or more than half of all those facing hunger in the world. In Africa, 298.4 million people may have faced hunger in 2023, compared with 41.0 million in Latin America and the Caribbean, and 3.3 million in Oceania. There is a clear trend of rising PoU in Africa, whereas progress is being made in Latin America and the Caribbean, and it is relatively unchanged in Asia. In all regions, the PoU is still above pre-COVID-19 pandemic levels.
Updated projections show that 582 million people will be chronically undernourished in 2030, pointing to the immense challenge of achieving SDG 2 (Zero Hunger). This is about 130 million more undernourished people than in a scenario that reflected the world economy before the COVID-19 pandemic. By 2030, 53 percent of the global population facing hunger will be concentrated in Africa.
Going beyond hunger, the global prevalence of moderate or severe food insecurity (SDG Indicator 2.1.2) also remains far above pre-pandemic levels, with little change in four years, after the sharp increase from 2019 to 2020 during the pandemic. In 2023, an estimated 28.9 percent of the global population – 2.33 billion people – were moderately or severely food insecure, meaning they did not have regular access to adequate food. These estimates include 10.7 percent of the population – or more than 864 million people – who were severely food insecure, meaning they had run out of food at times during the year and, at worst, gone an entire day or more without eating. The prevalence of severe food insecurity at the global level rose from 9.1 percent in 2019 to 10.6 percent in 2020 and has remained stubbornly unchanged since then.
The prevalence of moderate or severe food insecurity in Africa (58.0 percent) is nearly double the global average, whereas in Latin America and the Caribbean, Asia and Oceania, it is closer to the global estimate – 28.2, 24.8 and 26.8 percent, respectively.
One guiding principle of the vision put forth by the 2030 Agenda is to ensure that no one will be left behind. More detailed information about the food insecurity of different population groups helps monitor progress towards the realization of this vision. Results for 2023 show a pattern of decreasing food insecurity with an increasing degree of urbanization at the global level. The prevalence of moderate or severe food insecurity was 31.9 percent in rural areas compared with 29.9 percent in peri-urban areas and 25.5 percent in urban areas. A comparison of the food-insecurity status of men and women shows that the prevalence of food insecurity has remained consistently higher among women than among men, globally and in all regions, since data first became available in 2015, although the gender gap has narrowed in most regions in the last two years.
Cost and affordability of a healthy diet
The cost of a healthy diet (CoHD) indicator provides national-level estimates of the cost of acquiring the cheapest possible healthy diet in a country, defined as a diet comprising a variety of locally available foods that meet energy and nutritional requirements. The CoHD is then compared with national income distributions to estimate the prevalence of unaffordability and the number of people unable to afford a healthy diet. In this year’s edition of the report, the indicators are updated to 2022.a New food price data and methodological improvements have resulted in updated estimates of the cost and more accurate estimates of the affordability of a healthy diet, leading to a revision of the entire series of both sets of indicators.
The CoHD has risen worldwide since 2017 (the first year for which FAO disseminates estimates) and continued to rise in 2022, peaking at an average of 3.96 PPP dollars per person per day in 2022. This represents a surge in the global average CoHD, from a 6 percent increase between 2020 and 2021 to an 11 percent increase the following year.
When compared across regions in 2022, the CoHD was highest in Latin America and the Caribbean (4.56 PPP dollars) followed by Asia (4.20 PPP dollars), Africa (3.74 PPP dollars), Northern America and Europe (3.57 PPP dollars), and Oceania (3.46 PPP dollars).
Despite the increase in the CoHD, the number of people in the world unable to afford a healthy diet fell for two consecutive years, from 2020 to 2022. Worldwide, an estimated 35.4 percent of people in the world (2.83 billion) were unable to afford a healthy diet in 2022, compared with 36.4 percent (2.88 billion) in 2021.
However, the recovery has been uneven across regions. The number of people unable to afford a healthy diet dropped below pre-pandemic levels in Asia, and Northern America and Europe, while increasing substantially in Africa, where it rose to 924.8 million in 2022, up by 24.6 million from 2021, and by 73.4 million from 2019. A comparison across country income groups shows that the recovery path has been slower for low-income countries, where a healthy diet was out of reach for 503.2 million people in 2022 – the highest number since 2017.
The lack of improvement in food security and the uneven progress in the economic access to healthy diets cast a shadow over the possibility of achieving Zero Hunger in the world, six years away from the 2030 deadline. There is the need to accelerate the transformation of our agrifood systems to strengthen their resilience to the major drivers and address inequalities to ensure that healthy diets are affordable for and available to all.
The state of nutrition: progress towards global nutrition targets
Turning to the trends for the seven global nutrition targets, virtually no progress has been made for low birthweight among newborns, with a prevalence of 15 percent in 2012 and 14.7 percent in 2020. It is projected that 14.2 percent of newborns will have low birthweight in 2030, falling short of the 2030 global target of a reduction of 30 percent.
Progress has been made in increasing the global exclusive breastfeeding rate among infants under six months of age, rising from 37.1 percent in 2012 to 48 percent in 2022. However, the world is off track to achieve the 2030 target rate of 70 percent.
Among children under five years of age, the global stunting prevalence declined from 26.3 percent in 2012 to 22.3 percent in 2022. It is projected that 19.5 percent of all children under five will be stunted in 2030. The global wasting prevalence declined from 7.5 percent in 2012 to 6.8 percent in 2022. With 6.2 percent of children under five projected to be wasted in 2030 – more than double the 3 percent global target – the world remains off track for this indicator. The global prevalence of overweight has stagnated and stood at 5.6 percent in 2022. By 2030, 5.7 percent of children under five are projected to be overweight – almost double the 2030 global target of 3 percent.
Globally, the prevalence of anaemia in women aged 15 to 49 years increased from 28.5 percent in 2012 to 29.9 percent in 2019 and is projected to reach 32.3 percent by 2030 – far from the 2030 target of a 50 percent reduction.
New estimates of adult obesity show a steady increase over the last decade, from 12.1 percent in 2012 to 15.8 percent in 2022. The world is off track to achieve the 2030 global target to halt the rise, with more than 1.2 billion obese adults projected for 2030.
More countries are off track than on track for most of the seven 2030 global nutrition targets.
Compared with the global estimates, least developed countries have much higher levels of stunting in children under age five and of anaemia in women aged 15 to 49 years, and the same worrying rise in adult obesity.
The double burden of malnutrition – the co-existence of undernutrition together with overweight and obesity – has surged globally across all age groups. Thinness and underweight have declined in the last two decades, while obesity has risen sharply. Double-duty actions will simultaneously tackle undernutrition, overweight and obesity by leveraging the common drivers shared by all forms of malnutrition.
A new definition of financing for food security and nutrition
A wide range of estimates of the cost of meeting SDG Targets 2.1 and 2.2 exist. However, there is no coherent picture of the total amount of financial resources being spent on food security and nutrition and its decomposition, nor of the cost of meeting SDG Targets 2.1 and 2.2, in part due to the absence of an agreed upon definition of financing for food security and nutrition. Without a standardized definition, it will not be possible to assess adequately the existing levels and gaps in financing for food security and nutrition.
Challenges in defining and measuring financing for food security and nutrition
Currently, several definitions of financing for food security and nutrition are applied, leading to stark differences in estimations of the current levels of financing. For example, even in the case of official development assistance (ODA), which is the most advanced in terms of having a global tracking system and a standardized common aid database, there is no standard definition of, nor gauge for, the measurement of financing going to support food security and nutrition. This void results in vastly divergent estimates of how much money is being spent, and where and with what efficiency it is spent, on food security and nutrition, negatively impacting the subsequent analysis of trends and outcomes needed to assess the path towards meeting SDG Targets 2.1 and 2.2.
Disentangling what constitutes financing for food security and nutrition remains a non-trivial and challenging exercise. This predicament poses a multitude of challenges, not only in tracking the current levels of financing going to food security and nutrition, but also in identifying under-financed areas, ensuring accountability of institutions, and tracking the impact of interventions financed.
Food security and nutrition are complex multidimensional concepts that do not neatly fit into sector-defined frameworks. Interventions to achieve food security and nutrition span various sectors and dimensions of economic, health, social and environmental development, among others. However, financing flows and budgets are normally defined and classified by sector and, within each sector, by purpose. In shifting from a sector-based classification system to an outcome-based measure, complex issues arise regarding the contribution of sector-based resources to food security and positive nutrition outcomes.
There is now a broadened understanding of food security and nutrition and how they are critically linked, despite the limited consensus on the scope of interventions that contribute to food security and nutrition. Healthy diets and health status are main determinants of nutritional status, but multiple factors related to food security (e.g. availability and affordability of nutritious foods), practices (e.g. related to food and feeding, care, and health seeking) and services (e.g. clean water, health, education and social protection) all influence the ability and mechanisms through which individuals can achieve healthy diets and adequate health. However, to date there have been limited efforts to include this range of interventions in comprehensive measures of financing for food security and nutrition.
Importantly, the current definitions do not include the financing of interventions more specifically designed to address the major drivers behind the trends in hunger, food insecurity and malnutrition that have been identified in past editions of this report – conflict, climate variability and extremes, and economic slowdowns and downturns, combined with structural underlying factors: lack of access to and unaffordability of nutritious foods, unhealthy food environments, and high and persistent inequality.
A new definition of financing for food security and nutrition
Financing is the process of providing funds for the public and private sector to engage in economic activities, make purchases or carry out investments. Financial resources may be provided by one or a combination of four sources: i) public domestic, ii) public foreign, iii) private domestic, and iv) private foreign. Each source may provide financing through a range of financial instruments to finance short-term and long-term interventions on commercial or concessional terms (e.g. grants or loans below market rates).
The new definition of financing for food security and nutrition presented in this report comprises core and extended definitions. The core definition includes the financing flows that support efforts addressing the main determinants of food security and nutrition. The extended definition builds on this, to include financing flows that contribute to addressing the major drivers and underlying structural factors behind recent increases in food insecurity and malnutrition.
Financing for food security and nutrition refers to the process of providing or obtaining financial resources to ensure that all people, at all times, have stable, physical, social and economic access to sufficient, safe and nutritious foods that meet their dietary needs and food preferences for an active and healthy life, and suitable food preparation and handling, feeding, caring, and health-seeking practices, and access to health, water and sanitation services to ensure a continued adequate nutritional status. Additionally, it covers expenditures and investments that aim to ensure that all individuals are protected against short-term or long-term instability in food security and nutrition, caused by various climatic, economic, social, commercial and political factors. Financing therefore encompasses all the interventions aligned with the six transformative policy pathways designed to strengthen the resilience of agrifood systems to the major drivers behind hunger, food insecurity and malnutrition – namely conflict, climate variability and extremes, and economic slowdowns and downturns – and address the underlying structural factors: lack of access to and unaffordability of nutritious foods, unhealthy food environments, and high and persistent inequality.
To generate a framework for increased financing and improved finance targeting, it is imperative to gain an understanding of the major drivers of food insecurity and malnutrition, and of the countries affected by these major drivers. In the last ten years, the frequency and intensity of conflict, climate extremes and economic downturns have increased, undermining food security and nutrition around the world. Furthermore, high levels of income inequality exacerbate the effects of these drivers.
While each of these major drivers is unique, they often interact to create multiple compounding impacts transmitted through agrifood systems to the detriment of food security and nutrition. As a result, all dimensions of food security are likely to be affected, including food availability, access, utilization and stability, as well as the other determinants of nutrition, specifically practices (e.g. caring, feeding, health-seeking and intra-household resource allocations), and health services and environmental health (e.g. immunization, water and sanitation, and availability and affordability of, and access to health services). This is corroborated by the association found between the occurrence of these drivers and the food security and nutrition indicators.
Alarmingly, the majority of low- and middle-income countries are affected by at least one of the major drivers, and where there are multiple drivers occurring, the compounding impacts lead to the highest increases in hunger and food insecurity.
To move from the definition of financing for food security and nutrition to an application of this definition to measure levels of financing for food security and nutrition requires an understanding of how financing flows are categorized and reported, and then the development of guidelines for mapping these flows to the definition. For this report, initial mapping and guidance have been developed and applied to arrive at partial estimates of financing for food security and nutrition and their patterns.
Data to apply the new definition of financing for food security and nutrition exist only for some of the financing flows; hence, it is not possible to take a realistic stock of how much financing is available, let alone calculate the financing gap to support efforts to meet SDG Targets 2.1 and 2.2. Therefore, data sources and methodologies must be advanced to ensure there are better data for evidence-based decisions on financing for food security and nutrition. This report thus also calls for universal adoption and transparency in the use of a standardized approach for operationalizing the new definition in its mapping and application to financial data.
Current levels OF and gaps in financing to end hunger, food insecurity and malnutrition
Available data mostly allow for tracking only public spending flows, official development assistance (ODA) and other official flows (OOF). Private financing flows are generally more difficult to track.
Irrespective of exactly how much financing is needed to meet SDG Targets 2.1 and 2.2, the cost of not mobilizing it can be significant and detrimental.
Tracking current levels of funding for food security and nutrition
General domestic government expenditure on agriculture per rural inhabitant at the global level barely changed between 2010 and 2021 in low-income countries (LICs) and only saw a very slight increase in lower-middle-income countries (LMICs) towards the last years of the period. In these two country income groups, public spending on agriculture was only USD 8 and USD 37, respectively, per rural inhabitant, on average, in the period from 2010 to 2019. It was much higher in upper-middle income countries (UMICs) and high-income countries (HICs) and it increased systematically only in UMICs.
Public spending data are not readily available for all countries to enable application of the core and extended definitions of financing for food security and nutrition.
In two low- and middle-income countries, Benin and Uganda, public spending on food security and nutrition seems to have been growing. On average over the periods of analysis, 65 percent of the total public spending on food security and nutrition in Benin and 73 percent in Uganda was allocated to food consumption and health status; the remaining share addressed the major drivers behind recent increases in hunger, food insecurity and malnutrition.
Other eight MICs also show an absolute increase in their public spending on food security and nutrition. The share of public spending on food security and nutrition that goes to the major drivers of food insecurity and malnutrition tends to be on average higher for these MICs.
Global ODA and OOF flows for food security and nutrition amounted to USD 77 billion in 2021, of which the majority corresponds to ODA. Not even a quarter of these flows for all aid sectors were allocated to food security and nutrition between 2017 and 2021.
The composition of ODA and OOF flows for food security and nutrition is, by and large, very stable over time and, by 2021, most resources were flowing to food consumption (USD 35 billion out of USD 77 billion), and fewer were allocated to addressing the major drivers of food insecurity and malnutrition (USD 27 billion), and even fewer to health status (USD 15 billion).
On a per capita basis, on average, over the period from 2017 to 2021, ODA and OOF flows amounted to USD 30 in LICs, compared with USD 10 in LMICs and USD 8 in UMICs. Official development assistance and other official flows for food security and nutrition, from 2017 to 2021, overwhelmingly grew more for Africa across regions and for LMICs across income groups.
Under “private sector”, non-commercial private financing and commercial private financing are lumped together.
Philanthropic flows to food security and nutrition amounted to only USD 4 billion per year on average between 2017 and 2021, mostly to support food consumption and health. Cross-border remittances are estimated at USD 735 billion on average over the period from 2017 to 2022 (at current prices). Of these flows, nearly half were allocated to uses that likely contributed to food security and nutrition. Most of this sum was used for food consumption, rather than investments in agriculture and other food systems activities.
According to United Nations Trade and Development, between 2017 and 2022, foreign direct investment amounted to an average of USD 19 billon for “food and agriculture”. The 2023 edition of State of Blended Finance estimates that, on average over the period from 2020 to 2022, 26 percent of blended finance transactions, amounting to USD 1.2 billion per year, were “aligned” with SDG 2. Net banking loans amounted to an average of USD 10 billion between 2017 and 2021, and exhibit an almost continuous decline.
The cost of policies and interventions to end hunger and malnutrition by 2030
Due to existing data gaps, economic models are often used to estimate the necessary additional investments, mostly to reduce hunger, but also to address nutrition concerns.
Studies provide different cost estimates. The findings are that policies and interventions to get on track towards meeting SDG Targets 2.1 and 2.2 would require additional resources from now until 2030 ranging from USD 176 billion to USD 3 975 billion to eradicate undernourishment, plus an additional USD 90 billion to meet selected global undernutrition targets. Estimates jump sharply to USD 15.4 trillion when adding the types of transformational policies that would require financing in order to increase the affordability of healthy diets for millions while still reducing undernourishment.
The cost of inaction or slow action
The cost of not bridging the financing gap is that millions of people, by 2030 and beyond, will still be hungry, food insecure, malnourished and unable to afford a healthy diet, with medium- to long-term socioeconomic and health repercussions.
Acute and chronic food insecurity are affecting the people in most need of food assistance. Failing to fund this assistance will have negative consequences for individuals, local communities and donor countries. Furthermore, failing to finance the actions that will address the structural drivers of food insecurity and malnutrition will result in higher social, economic and environmental costs.
The double burden of malnutrition confers a serious and negative economic impact on individuals and populations. Severe levels of this double burden are shifting towards the poorest countries.
Although transformative policies may cost billions of USD, the cost of not financing them would easily be in the trillions of USD. The Food and Land Use Coalition’s Global Consultation Report estimated that current food and land-use systems generate worldwide health, nutrition and environmental costs amounting to USD 12 trillion a year in 2018 prices. The 2020 edition of this report provided evidence that under current food consumption patterns, diet-related health costs linked to mortality and non-communicable diseases are projected to exceed USD 1.3 trillion per year by 2030. The State of Food and Agriculture 2023 found that the global quantified hidden costs of agrifood systems amount to USD 10 trillion or more, with the dominant quantified hidden costs arising from dietary patterns that increase the risk of diseases and may lead to lower labour productivity.
Governments in many countries find it difficult to execute the budgets they have funded. Some of the financing available may not be utilized in the most cost-effective, equitable and environmentally sustainable manner.
The 2022 edition of this report showed that repurposing some of the worldwide support to food and agriculture, which accounted for almost USD 630 billion per year, on average over the period from 2013 to 2018, can result in making a healthy diet less costly and more affordable, globally and particularly in MICs.
A study developed for six sub-Saharan African countries shows that the opportunity of achieving higher agrifood output, creating thousands of off-farm jobs in rural areas and allowing millions of people to get out of poverty and afford a healthy diet will be lost unless these countries’ governments optimize the way in which they allocate their budget across the agriculture and livestock sectors.
What is needed to catalyse scalable financing to fill the gap?
Scaling up financing flows to food security and nutrition
Sixty-three percent of the low- and middle-income countries analysed (119 in total) have limited or moderate ability to access financing, while the minority (37 percent) have high ability to access financing. The prevalence of undernourishment (PoU) is, on average, much higher in countries with limited ability to access financing (23.1 percent) compared to countries with moderate (10.4 percent) and high (6.9 percent) ability to access financing. A similar trend is observed for stunting in children below five years of age, although the stunting average of countries with limited and moderate access to financing is much closer (23.9 and 20.9 percent, respectively).
On the other hand, 74 percent of all countries analysed are affected by one or multiple major drivers, and 66 percent of these countries have limited or moderate ability to access financing (most of them limited, 42 percent). The high proportion of countries affected by at least one major driver builds the case for mainstreaming food security and nutrition objectives across other sector financing where the priorities do not always include meeting SDG Targets 2.1 and 2.2.
However, in most cases, countries that are the most in need, in terms of both hunger and food insecurity levels, as well as in terms of how they are affected by the major drivers, are facing structural limitations to increase financing for food security and nutrition options. Even if, formally speaking, all countries have access to most of the existing options for financing, their ability to access financing is driven by levels of perceived financial risk and the associated costs. The obvious risk aversion of all financial stakeholders, especially private, commerce-oriented ones, renders their engagement practically impossible in the most financially risky countries.
Therefore, countries with limited ability to access financing may rely only on grants or low- to no-interest loans from international development flows (e.g. ODA), as other financial instruments may not be available – or, more precisely, financial stakeholders may not be interested due to the country’s high financial risk profile.
Mobilizing domestic tax revenues is more feasible in countries with moderate ability to access financing. The potential expansion of tax revenues has income as a strong determinant (the higher the GDP per capita, the higher the tax potential), in addition to other factors such as the composition and formalization of national economies, and institutional and governance mechanisms.
As financial risk decreases, more financing flows are available for countries. Countries with a high ability to access financing will tap into equity investments, commercial rate loans and bonds from private financing flows such as company investments, banking systems and capital markets, with many fewer de-risking activities needed from donors or the public sector.
Innovative financing approaches and tools to bridge the financing gap for SDG Targets 2.1 and 2.2
While grants and low- or no-interest loans are certainly among the most traditional concessional finance instruments, they can be designed in more innovative ways to collaborate with de-risking initiatives to increase private financing flows, as part of blended finance strategies. Grants and/or loans, jointly implemented with technical assistance, can be leveraged to address the main limitations for accessing private financing flows – poor bankability and lack of operational readiness to access finance – often faced by food security and nutrition initiatives.
Blended finance is a de-risking tool for private investors, used when there is a high perception of risk by private investors, thereby channelling financial resources that can take on more risk and a longer horizon on return for their investment. Especially when there is a substantial development benefit, actors such as governments and donors can use blended finance as a vehicle to channel the needed financing flows to achieve that outcome. The objective is that, over time, the risk perception will diminish due to the initial support of the more risk-tolerant capital, and that commercial finance can then replace the grants or concessional financing which played a crucial and catalytic role in the initial stage.
Green, social, sustainability and sustainability-linked bonds are debt instruments that can be issued by governments, multilateral development banks (MDBs), commercial banks and local corporates; they are linked with development goals, and can be especially relevant for targeting financing for countries that are affected by some of the major drivers of food insecurity and malnutrition, such as climate extremes and/or economic downturns.
Even if, through the innovative instruments described above, financing for food security and nutrition could be scaled up, within countries there are population groups that have historically faced important constraints in accessing financial services.
Increasing women’s access to financial services would contribute not only to women’s social and economic empowerment, but also to improving the overall livelihoods of their households and communities, including food security and nutrition outcomes. From a macro perspective, women’s inclusion would bring overall positive economic growth effects, which could increase the country’s resilience to economic slowdowns and downturns.
Despite the wide recognition that Indigenous Peoples are indispensable partners for reaching the targets of the Paris Agreement, the Global Biodiversity Framework and the 2030 Agenda, the corresponding funding strategies do not necessarily reflect their crucial role. The lack of access to financial services can also diminish the potential contribution of smallholder farmers and small and medium agrifood enterprises to achieving food security and improving nutrition, for instance, by limiting their capacities to offer safe and nutritious foods. Despite their vital role in agrifood systems, they are often underserved, as investors are hesitant to finance local market producers in local currencies, preferring to avoid the risks associated with exchange rates and serve more export-oriented producers instead.
How to achieve better alignment with and synergies in different sources of financing
The current financing architecture for food security and nutrition is highly fragmented: The lack of consensus about what should be financed and the different objectives among stakeholders have led to a proliferation of actors that often step outside their mandates instead of collaborating with each other. This results in many small, uncoordinated aid activities, driven principally by bilateral donors.
Increased coordination between large, medium and small stakeholders should be encouraged, as sometimes large donors do not coordinate with or co-finance activities led by other minor actors, since there are no incentives to do so. In addition, there is a crucial need for donors and philanthropic foundations to align their spending priorities with countries’ priorities: Since the current architecture is extremely dominated by HICs and large development agencies, the priorities of recipient countries and communities are not always considered.
Certainly, this increased coordination would require stronger and more solid national governments, which, however, face several challenges. Political economy issues and unpredictable government decision-making can affect the capacity of alignment between the sources of financing flows and a country’s priorities and create a perception of higher risk for private investors. The absorptive capacity and technical efficiency of expenditure are important, but good governance and strong national institutions are also necessary.
Finally, lack of data, transparency and accountability is another key characteristic of the current financial landscape, and it actually increases the perception of financial risk. Making financial data more reliable and widely available can reinforce the “investment case” for food security and nutrition interventions, as is already happening in areas such as regenerative agriculture.
Even before making structural changes in the financing architecture for food security and nutrition, one essential initial step for scaling up financing for food security and nutrition is to make the objective of meeting SDG Targets 2.1 and 2.2 a priority in the international policy agenda. Adopting a food security and nutrition lens, considering its intersectoral nature and highlighting the short- and long-term returns of investing in areas such as nutrition are essential conditions for a successful reform of the financing architecture for food security and nutrition.
The term “food security and nutrition” has been used to emphasize the achievement of the four dimensions of food security and its tight link with the achievement of nutrition security, as well as the need to adopt complementary actions to achieve food security and nutrition. Nevertheless, it might be the case to recognize the overall objective of achieving “food and nutrition security” as a single indivisible policy goal.
One essential step for effective coordination is putting national and local actors and their priorities in the “driver’s seat”. However, this is not always a straightforward task, considering power and capability imbalances among actors, lack of donor coordination at the global level that does not adequately support coordination efforts at national levels, and the data gap that might make it difficult to build the case for shifting donors’ priorities, among other challenges.
In addition to enhancing coordination, financial stakeholders should take steps towards improving their role for scaling up financing for food security and nutrition. Development partners such as donors, including international financial institutions, multilateral development banks and development finance institutions, should take the lead in de-risking activities, for instance, increasing the allocation of ODA oriented to mobilizing private investments, through blended finance or other financial instruments.
An open question is the inclusion of the private sector in improved food security and nutrition financing architecture. Private actors must incorporate health, environmental and social risks into their financial decision-making, to shift financing flows from potentially harmful investments to others that work towards the achievement of health, environmental and social outcomes.
National governments can further mobilize domestic tax revenues, increase priority sector expenditures on food security and nutrition and consider repurposing policy support. Countries that already have a higher ability to access financing must enact stronger controls on tax havens and money laundering, which often allow tax evasion from countries with limited access to financing.
Finally, filling the information gap will require bold steps from the international community; otherwise, the likelihood of achieving development goals cannot be realistically estimated and projected.
The way forward
While global levels of hunger and food insecurity have essentially not changed for two years, there has been encouraging progress in many subregions of the world. With respect to nutrition, the rising trends in adult obesity and anaemia among women aged 15 to 49 years are worrying, yet in many countries, fewer children are affected by stunting and wasting, increasing their chances of achieving their full potential for growth and development. This is the potential we need to harness: the potential for positive change and the full realization of the right to adequate food and a standard of living that guarantees the dignity, health and well-being of all people, especially future generations.
A serious problem is the lack of a common definition or standard for measuring financing for food security and nutrition. It is hard – if not impossible – to manage what cannot be adequately measured. In the case of financing for food security and nutrition, it is not possible to adequately assess the existing levels and gaps, let alone monitor progress or setbacks in financing efforts to meet SDG Targets 2.1 and 2.2.
This report has taken an important step forward by advancing a definition of financing for food security and nutrition together with detailed guidance to implement it. This is a very important step; yet, the report has starkly shown that the current structure and availability of financial data impede the application of the newly proposed definition and its protocols to the public and private financing flows globally available for food security and nutrition. In other words, due to serious data constraints, it is not possible to arrive at the global measurement of the financing for food security and nutrition that is currently available and of the financing gap that must be bridged to support efforts towards meeting SDG Targets 2.1 and 2.2. Addressing this gap must be a top priority, and this report sends a strong and urgent call for global and national actions to address this problem as part of the SDG global agenda for action.
Ending hunger, food insecurity and all forms of malnutrition is also unnecessarily in competition with many other development objectives. Considering the complex and multisectoral nature of food security and nutrition, the financing landscape must shift from a siloed approach towards a more holistic perspective, in which financial stakeholders can streamline food security and nutrition objectives into broader financing flows and investments.
It is hoped that this report’s calls to action will inform the sustainable development and financing discussions at the Summit of the Future in September 2024 and all the upcoming SDG global discussions, including the political processes of the Fourth International Conference on Financing for Development in 2025. A world without hunger, food insecurity and malnutrition is a world worth saving, and a world worth financing and investing in.
