The State of Food Security and Nutrition in the World 2024

To achieve Sustainable Development Goal (SDG) Targets 2.1 and 2.2 there needs to be a significant increase in financing for food security and nutrition. Chapter 2 of this report shows that there is a significant gap between progress and SDG Targets 2.1 and 2.2 to end hunger, food insecurity and all forms of malnutrition. Closing this gap requires a doubling down of efforts, using existing financing more cost effectively and adding significant new financing for food security and nutrition – but this financing must be quantified.

A wide range of estimates of the cost of achieving these targets exist (see Section 4.2). However, there is no coherent picture of the total amount of financial resources being spent on food security and nutrition, nor of the cost of achieving 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.

Although there is clarity and agreement on the definition and concept of food security and nutrition, and agreed SDG indicators to measure the levels and severity of hunger, food insecurity and all forms of malnutrition around the world, there is no equally accepted definition of financing for food security and nutrition. This is the main issue explored and addressed in this chapter.

Without a standardized definition, it will not be possible to assess adequately the existing levels and gaps in financing for food security and nutrition, nor to monitor progress or setbacks in financing efforts to achieve the goal of ending hunger, food insecurity and all forms of malnutrition. Achieving food security and ending all forms of malnutrition in the world requires a significant improvement in the quantity and quality of financing. The first step is to measure, track, monitor and analyse the different sources of financing that contribute to achieving food security and ending all forms of malnutrition, whether they be public or private, domestic or foreign, and this cannot be achieved without an adequate definition of such specific financing.

3.1 Challenges in defining and measuring financing for food security and nutrition

Currently, there is no agreed upon definition of financing for food security and nutrition. There is also no unity regarding how to measure the financing flows to food security and nutrition in any of the existing financial data sources. A clear understanding and knowledge of the level of financing for food security and nutrition is therefore absent. This absence undermines efforts to achieve food security and end all forms of malnutrition.^h

Currently, several definitions are applied, leading to stark differences in estimations of the current levels of financing for food security and nutrition. 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 flows 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.

For example, as is shown in Figure 14, depending on the definition applied, the annual average level of ODA grants between 2019-2021 ranges from USD 6.9 billion per year (according to the G7 definition) to USD 62.6 billion per year (according to the European Commission definition). Consequently, estimated levels of ODA financing for food security and nutrition vary considerably depending on the definition applied. As shall be seen in Chapter 4, the figure will change when a proper definition of financing for food security and nutrition is applied to ODA data.

FIGURE 14 Total official development assistance grants for low- and middle-income countries associated with different definitions of financing for food security and nutrition, average 2019-2021

NOTES: Updated 2021 estimates of total official development assistance grants in billions of constant 2020 USD applying the different study definitions of financing for food security and nutrition. The references for studies included in this figure are provided in the source to Table S3.1 in the Supplementary material to Chapter 3.
SOURCES: Adapted from Eber Rose, M., Laborde, D., Lefebvre, L., Olivetti, E. & Smaller, C. 2024. Towards a common definition of aid for food security and nutrition. Rome, FAO and Geneva, Switzerland, Shamba Centre for Food & Climate. https://doi.org/10.4060/cd1957en. Data are from OECD (Organisation for Economic Co-operation and Development). 2024. Development finance data. In: OECD. [Cited 9 May 2024]. https://www.oecd.org/dac/financing-sustainable-development/development-finance-data

https://doi.org/10.4060/cd1254en-fig14

For the United Nations Food Systems Summit 2021, the financing of agrifood systems transformation to achieve SDG 2 was defined as follows:

A variety of financial resources, including funds “internal” to food systems (consumer food expenditures and outlays by agrifood actors) and “external” funds (international development flows, public budgets, banking systems, and capital markets). The contributions of the different funding sources are likely to vary across different aspects of the transformation.¹

This definition roughly divides the key fiscal and financial mechanisms for investments in the transformation of food systems into six intervention areas: i) consumer expenditures on food; ii) agrifood business profits and savings; iii) fiscal measures (public expenditures and taxes); iv) international public finance (ODA and non-concessional lending by bilateral donors and multilateral development banks [MDBs]); v) bank finance; and vi) capital market finance.²

Alternatively, in a paper discussing the mobilization of additional financial resources for nutrition, nutrition finance was defined as follows:

The process of acquiring needed funds to enable access to safe, nutritious and sufficient food all year round to ensure a continued adequate nutrition status. Such funds may be required by the public and/or the private sector, on a commercial or a concessionary (i.e. below market rate) basis, for short or long-term interventions for example in human development and capacity building (e.g. education and training), research and development, infrastructure, and marketing. Thus, nutrition finance interventions may occur in a variety of sectors, including health, agriculture, manufacturing (including processing and packaging), services (including logistics and retailing), education, and information.³

Building on this definition, the same study claims that there are:

multiple types of capital providers, who can deploy funding to beneficiaries through a range of funding structures, intermediaries and financing instruments.³

More specifically, in addressing financing to achieve food security and end all forms of malnutrition in a sustainable manner while protecting livelihoods, investments are distinguished according to three areas of application: i) to support “resilient and sustainable increases in agricultural productivity and affordable healthy foods available on local markets”; ii) to ensure “uninterrupted access to nutrition and health services so that children can achieve their full economic potential”; and iii) to “protect families from shocks by putting in place risk-responsive and adaptive social safety nets linked to food and nutrition security”.⁴

Challenges in moving to a common definition of financing for food security and nutrition

The current state of financing for food security and nutrition is challenging to measure due to the lack of a unified definition of what constitutes financing for food security and the end of all forms of malnutrition. 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 flows to food security and nutrition, but also in identifying underfinanced areas, ensuring accountability of institutions, and tracking the impact of interventions financed. Moving towards a common definition and mapping of financing for food security and nutrition is not straightforward, and there are three main challenges:

1. Food security and nutrition are complex multidimensional concepts that do not neatly fit into a sector-defined financing framework.
2. Different initiatives measure financing for food security and nutrition differently, although often adopting similar language.
3. Food security and nutrition and their links are broadly understood, but this is not the case for the full scope of interventions needed to support them.

Food security and nutrition are complex multidimensional concepts that do not neatly fit into a sector-defined financing framework

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 the main determinants of food security and nutrition.

Classification systems are necessary in financial databases both to avoid the double counting of resources and to enable temporal statistical analysis across funders.^5–7 In the main ODA database – Organisation for Economic Co-operation and Development (OECD) Development Assistance Committee (DAC) – the purpose of aid is recorded using a classification system comprising two layers: sector codes subdivided into purpose codes. For example, the sector code relating to agriculture, encompassing agriculture, forestry and fishing, is 310. Each of these sectors has its own code – agriculture (311),ⁱ forestry (312) and fishing (313) – and these further disaggregate into purpose codes such as agricultural research (31182) or plant and post-harvest protection and pest control (31192). The sector and purpose codes are selected by the donor when they input ODA data into the database.⁷ For the full list of OECD DAC Creditor Reporting System (CRS) purpose codes, see Table S3.1 in the Supplementary material to Chapter 3.

Databases related to domestic public finance and private finance also have classification systems that are roughly consistent with international standards. For public budgets, these classification systems follow a common framework whereby expenditures are structured by administrative, economic, functional and geographical nomenclatures that explain how public resources are being spent: by whom, on what and where. Each of these nomenclatures carries information that would form the basis for a complete and accurate classification of data, be it a sector-based, function-based or outcome-based classification system. However, budgetary information that is publicly available is most often not disaggregated to the kind of granular level that would allow for a proper classification of domestic public finance, and this caveat is especially true for function- and outcome-based classification systems. For the private sector, a common framework is even more complicated in the absence of central record-keeping and a commonly agreed upon reporting framework. Data, where available, tend to be defined at a sectoral level. For example, foreign direct investment (FDI) data are available as flows to agriculture, forestry and fishing or to food, beverages and tobacco. Alternatively, data on credit to agriculture are available as an aggregate of agriculture, forestry and fishing, or for each subsector individually.^j

While standard classification systems are necessary for financial records, several issues arise when building from sector-based classification systems to an outcome-based classification. This outcome-based classification is crucial to define and measure the level and composition of financing for food security and nutrition.

Notwithstanding that sector-based classifications are used extensively to assess governments’ efforts in support of agriculture, they show limitations when it comes to assessing financing contributions to food security and nutrition outcomes. For example, an energy project in a rural area may improve agricultural productivity through access to electricity for irrigation and mechanized equipment, as well as facilities to store and clean food, thereby having a strong, positive impact on food security and nutrition. This may be recorded as a financial contribution to the energy sector, since financing is most often recorded based on what a given project is designed to achieve and the sector relevant to the intervention, and not on the outcomes of the project. This distinction between sector and outcome complicates the definition of the financing for food security and nutrition, as it requires making assumptions about the contribution of sector-allocated finance to food security and nutrition outcomes.⁷

Recently, new policy markers and tags have been added in some financial databases to capture the cross-sectoral and/or multipurpose nature of development policy objectives. However, there is still a lack of consistency and differences in definitions applied to formulate these objectives. For example, the OECD DAC has added an SDG policy marker to indicate which ODA grants are relevant to which SDGs, and policy markers exist for climate adaptation and mitigation, nutrition and gender, among others. However, the use of tags and markers is not fully consistent, and the process through which markers are developed either supports or inhibits stronger synergies across sectors. To date, while an OECD DAC methodology for a nutrition marker has been developed, it has not been applied consistently.

Furthermore, in light of the complex, cross-sectoral nature of achieving food security and ending all forms of malnutrition, development programmes are increasingly shifting away from strategies and portfolios that achieve single outcomes towards projects with multiple outcomes. This creates yet more tension with the coding systems common in financial databases. For instance, within the OECD DAC, there are three main ways to record a multisectoral project. First, it can be classified as a multisectoral project (i.e. purpose code 43010).⁸ Second, a documentation review can be undertaken to disaggregate the project into separate components, each recorded under different codes corresponding to the focus of that portion of the budget. Third, all the resources can be recorded based on the project’s principal component and the primary sector to which it is intended to contribute. Under this approach, a project with a 65 percent agricultural extension component and a 35 percent road development component may be entirely recorded under the agricultural extension code. Due to the variety of approaches for recording cross-sectoral projects, financing for food security and nutrition may be recorded inaccurately or differently, depending on the donor.

Similar challenges on linking sector-based coding systems to outcome-based classifications apply to domestic public budgets as well. Disaggregated data at the activity level and detailed project documentation, which are not always readily available, are needed to classify public finance by its contributions towards food security and nutrition dimensions. Within databases for private resources, there is less data availability and data disaggregation, and therefore less clarity on how multisectoral projects are coded.

Defining financing for food security and nutrition will require the identification of, and agreement on, the interventions and sectors that impact food security and nutrition, with an awareness of the complexities and inconsistencies in how projects relevant to food security and nutrition may be recorded. Furthermore, attention will have to be paid to the relative impact of a given investment. Not all the financial resources allocated to a given intervention or sector will have the same level of impact on food security and nutrition outcomes. The impact of some investments will be direct, like investments in more productive, diverse smallholder agriculture, while the impact of other investments, like investments in better rural infrastructure and electrification, may be indirect and depend a great deal on existing coverage. Similarly, not all investments in electrification will impact food security and nutrition outcomes. Therefore, not all the resources spent on electrification should be included in a definition of financing for food security and nutrition.

The complexities between food security and nutrition, as a multidimensional outcome, and binary finance coding systems significantly complicate efforts to estimate financing for food security and nutrition. Methodologies cannot rely on or be bound by the binary coding systems adopted by financing databases.

Different initiatives measure financing for food security and nutrition differently, although often adopting similar language

Each national government uses different approaches to allocate domestic public resources and different approaches to define the resources allocated to allegedly influence a particular outcome. Where publicly available, national budgets can reveal the sectors and ministries to which budgets are being allocated. However, there is no common accounting framework across governments, nor is there a common measurement of spending on food security and nutrition. Therefore, assessments of the resources allocated to financing for food security and nutrition may differ significantly between countries, depending on what they consider to be the resources relevant, either directly or indirectly, for influencing food security and positive nutrition outcomes. The lack of common accounting frameworks means that there have been no formal attempts to define an agreed upon measurement of financing for food security and nutrition for public and private financing, or that such financing has been unsuccessful or not scalable enough, whether from domestic or foreign sources.

In ODA, where perhaps there have been the greatest efforts to define financing for food security and nutrition, different groups use different measures to define relevant ODA, although often referring to them using similar language. For example, in Figure 14, observed differences in ODA levels are generally due to: i) differences in the questions being asked; and/or ii) differences in what counts as financing to support food security and nutrition. In the OECD DAC, ODA records are coded according to donor, recipient, purpose of aid, and flow type (commitment or disbursement), as well as other variables.⁷ The codes provide a standardized way of categorizing aid according to the specific sector or area of development that the ODA resources are intended to assist. While the ODA binary nomenclature establishes a common methodology to track the purpose of aid, currently, there are over ten operational definitions used to calculate the volume of ODA relevant to agriculture, food security and nutrition, each of which tracks ODA recorded under a different selection of purpose codes.

To illustrate the issue, it is useful to look at the underlying reasons for the differences in the various estimates shown in Figure 14. They all include allocations to sectors such as agriculture, forestry and fishing, and basic nutrition within the health sector. Most also include rural development as well as food assistance. Beyond these, however, there is quite a divergence on what is included. Studies by the Center for Development Research (ZEF) of the University of Bonn and FAO,⁹ and the European Commission¹⁰ both include allocations to water and sanitation, but only the European Commission study includes basic health care, which is a key determinant of nutrition (see Table S3.1 in the Supplementary material to Chapter 3 for a full comparison of the allocations and sector coding).

Some of the differences and confusion stem from different initiatives attempting to capture agriculture and/or food security and/or nutrition. Nonetheless, the majority of the considered definitions include OECD DAC codes relating to agriculture, forestry and fishing (311–313), rural development (43040), basic nutrition (12240), food assistance (52010), and emergency food assistance (72040). Beyond these, there is quite a divergence on what is included resulting in differing estimates of how much money is being spent, where it is spent, on what it is spent, and with what efficiency it is spent, hindering the subsequent analysis of trends and outcomes towards achieving SDG Targets 2.1 and 2.2 (see Figure 14 and Table S3.1 in the Supplementary material to Chapter 3 for a full comparison of definitions and coding).

Whether emergency food assistance is included in the definition of financing for food security and nutrition has a significant effect on the estimated levels of financing.⁷ For example, on average, in 2020–2021, USD 6.7 billion was recorded in ODA for emergency food assistance globally.¹¹ Considering country examples, definitions of ODA for food security and nutrition that do not include emergency food assistance show that Ethiopia receives the greatest volumes of ODA, whereas definitions including emergency food assistance show that the Syrian Arab Republic receives the greatest volumes.⁵

It is also important to recognize that political considerations play an important role in how financing for food security and nutrition is defined. All development funders – public and private, domestic and foreign – have certain priorities and targets that they want to meet. For example, in 2009, following the food price crisis, the G7 pledged to spend USD 20 billion on food security between 2009 and 2012.¹² Since it is normally the funder who decides how resources are recorded and under which sector the budgetary allocation will be made, funders may assign different codes for similar projects in order to maximize alignment with their priorities and targets.

Where public domestic resources are concerned, stakeholders have identified a broad and ongoing cultural shift towards the use of aid by senior executives for political considerations. Increasingly, the biggest driver of foreign aid investments is policy codes, especially those that align with multilateral agreements on climate and biodiversity. The process of defining financing for food security and nutrition is therefore somewhat political, as the inclusion or exclusion of a given intervention or sector will bias certain funders, creating further complications.

Food security and nutrition and their links are broadly understood, but this is not the case for the full scope of interventions needed to support them

The transformational vision of the 2030 Agenda for Sustainable Development, calling on all countries and stakeholders to work together to end hunger, food insecurity and malnutrition by 2030, was followed by the transformation of this report, renamed from The State of Food Insecurity in the World to The State of Food Security and Nutrition in the World,^k to integrate nutrition and a specific focus on the linkages between food security and nutrition. The vision has contributed to a growing recognition that a broader range of interventions is necessary to address the complex interplay of factors influencing food security and 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 full 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. A comprehensive framework of financing for food security and nutrition therefore involves moving beyond simplistic considerations of food availability and access and delving into the broader understanding of nutrition.

However, to date there have been limited efforts to include this range of interventions in comprehensive measures of financing for food security and nutrition. For example, considering the analyses presented in Figure 14, an analysis of the definitions of ODA for food security and nutrition highlights significant gaps in addressing the full scope of nutrition interventions. Only two of the definitions presented therein include ODA targeted for water and sanitation, despite the well-established evidence of the impact of safe drinking water, sanitation and hygiene (WASH) on nutrition outcomes. Furthermore, only the European Commission definition includes financing for basic health care, despite this being a main determinant of nutritional status (see Table S3.1 in the Supplementary material to Chapter 3 for the comparative analysis and data sources).

As seen above, currently most definitions of financing for food security and nutrition do not consider the broader set of interventions to address the main determinants of food security and nutrition. Importantly, the current definitions of financing do not include the financing of interventions more specifically designed to address the major drivers behind the trends in hunger, food insecurity and malnutrition which have been identified in recent 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 and unhealthy food environments, and high and persistent inequality.

No doubt, to get on track to meet SDG Targets 2.1 and 2.2, better use of existing financing and newly added financing will both be needed. At the same time, it is difficult to understand how much financing is available and the financing gap for achieving food security and addressing all forms of malnutrition in the absence of a commonly agreed upon and robust definition of financing for food security and nutrition. This definition must be theoretically underpinned by the conceptual understanding and definition of food security and nutrition, and their determinants, as well as the major drivers behind hunger, food insecurity and malnutrition.