Efforts to accurately measure and define poverty in Canada have been hindered by inconsistent and poor quality data, resulting in a confusing picture that is often further distorted by politicians and activists, according to a report from the Fraser Institute.

In Lincoln County, where some families just can't make ends meet, students take home food for the weekend

Monday, April 21, 2008
LORI TOBIAS
The Oregonian

LINCOLN CITY -- At 2:40 on a Friday afternoon, a voice echoes down the halls of Oceanlake Elementary School. "Just your friendly reminder, it's backpack Friday."

In moments, a half dozen first- and second-graders crowd into Karen Dummer's office, each eagerly grabbing a backpack.

"Hey, someone help me with this," calls a slight boy with crooked teeth and a crew cut. "It's heavy."

A tall, skinny girl with long brown hair gives the boy an assist, then turns to Dummer and with sincerity beyond her seven years, says, "Thank you for letting me have a backpack."

Then the students troop out, happy with the knowledge that this weekend they will not go hungry.

But plenty of other children will.

The central Oregon coast is known for all kinds of pretty scenes -- crashing waves and sandy beaches, towering lighthouses and arcing bridges. But in this vacation haven flush with luxury condos, oceanfront mansions and chic second homes, there's another picture many people don't see -- poverty, hungry kids and homeless families, and the working poor who never quite manage to make ends meet.

Lincoln County has one of the highest rates of poverty -- 19.1 percent -- in Oregon, according to the U.S. Census. Twenty-eight percent of children younger than 18 live in poverty, and 6 percent -- Oregon's highest -- of the student population is homeless.

At Oceanlake Elementary, about three-quarters of students are poor enough to qualify for free or reduced-price lunches.

Dummer sees the signs every day: The kids who were always first in the lunch line, the ones who eagerly asked their classmates, "If you're not going to eat that, can I?" And daily reports from teachers about students with headaches, irritable moods and little to no attention spans.

"It used to be there were only a few of those kids in your class and you could fill their needs," says Micky Willoughby, who has taught at Oceanlake for 24 years. "Now, there are so many kids, you can't do it. Our community has gone from low income to poverty stricken."

The situation seemed hopeless until Dummer read in a Weekly Reader story of an Arkansas nurse who started a backpack program. In February 2007, Dummer and health assistant Pat Robertson started their own program.

The first week, there were five packs. Now, every Friday, as many as 75 students from three Lincoln City schools take home a backpack filled with about $14 worth of food, including a loaf of bread, peanut butter and jelly, macaroni and cheese, juice, fruit and tins of tuna or other canned meat. The backpacks and food are donated or purchased with donations, all gathered, sorted, stored and packed by volunteers.

"The community has been wonderful. Absolutely astounding," says Dummer. Wages don't keep up

Poverty on the coast is not new, but it is getting worse, says Tom Cope, resource development officer with the Corvallis-based Community Services Consortium. In short, says Cope, most of the low-wage jobs that dominate employment on the coast can't begin to keep up with the rising cost of living.

"There are a lot of service industry jobs," he says. "They don't pay well, and they are seasonal."

A family of three earning less than $17,600 a year is considered to be living in poverty, according to the federal government. By that standard, that family should spend about $440 a month in rent under guidelines that say housing costs should equate to about 30 percent of a family's income.

But basic rents in Lincoln County start near $800 a month, says Barbara Dougherty, director of the Lincoln Commission on Children and Families.

"We have many working families who cannot afford to be in a house," Dougherty says. "They are doubled in apartments or couch surfing or living in very compromised situations."

The Lincoln City schools are the only ones in the county sending home backpacks, but other communities try to help in other ways.

Sixteen years ago, Senitila McKinley, Lincoln County School District homeless advocate, founded the Seashore Family Literacy project. It has since grown into the Community Learning Center, which offers a range of services to the poor.

On a Saturday morning in April, the center's parking lot in Waldport is filled to overflowing. Inside, about 50 people line up for a free breakfast of pancakes, eggs and sausage. In a back room, men and women search through shelves of neatly stacked used clothing and shoes.

At a cafeteria table, Nanette Froehlich savors the hot breakfast. Her son, Baron, 12, sits quietly trying to pretend he is not there. "He's embarrassed," Froehlich explains.

The two live in a travel trailer at Beverly Beach State Park, dependent largely upon the kindness of strangers to get by.

"I stopped working in October 2006 when I started getting really sick," says Froehlich, who says she has cancer of the uterus. "I always paid my taxes, Social Security, everything, and no one will help me."

Moments later, volunteers file through the community center doors carrying boxes of food donated by local grocers. The breakfast guests gather around, helping themselves to packages of meat near expiration dates, overripe fruit and vegetables and boxes of rice, cereal and pasta. The food is gone in minutes.

Ninety minutes after the breakfast began, the crowd filters out into the parking lot.

"Do you have enough gas to make it home?" McKinley calls to Froehlich.

"I hope so," Froehlich answers. "Probably not."

McKinley reaches into her own car, shuffles a few things and emerges with several folded bills. "Here," she says, handing them to Froehlich. "I just happened to have this in my car. It's your lucky day."

Global food shortages have taken everyone by surprise. What is to be done?




SAMAKE BAKARY sells rice from wooden basins at Abobote market in the northern suburbs of Abidjan in Côte d'Ivoire. He points to a bowl of broken Thai rice which, at 400 CFA francs (roughly $1) per kilogram, is the most popular variety. On a good day he used to sell 150 kilos. Now he is lucky to sell half that. “People ask the price and go away without buying anything,” he complains. In early April they went away and rioted: two days of violence persuaded the government to postpone planned elections.

“World agriculture has entered a new, unsustainable and politically risky period,” says Joachim von Braun, the head of the International Food Policy Research Institute (IFPRI) in Washington, DC. To prove it, food riots have erupted in countries all along the equator. In Haiti, protesters chanting “We're hungry” forced the prime minister to resign; 24 people were killed in riots in Cameroon; Egypt's president ordered the army to start baking bread; the Philippines made hoarding rice punishable by life imprisonment. “It's an explosive situation and threatens political stability,” worries Jean-Louis Billon, president of Côte d'Ivoire's chamber of commerce.

Last year wheat prices rose 77% and rice 16% (see chart 1). These were some of the sharpest rises in food prices ever. But this year the speed of change has accelerated. Since January, rice prices have soared 141%; the price of one variety of wheat shot up 25% in a day. Some 40km outside Abidjan, Mariam Kone, who grows sweet potatoes, okra and maize but feeds her family on imported rice, laments: “Rice is very expensive, but we don't know why.”

The prices mainly reflect changes in demand—not problems of supply, such as harvest failure. The changes include the gentle upward pressure from people in China and India eating more grain and meat as they grow rich and the sudden, voracious appetites of western biofuels programmes, which convert cereals into fuel. This year the share of the maize (corn) crop going into ethanol in America has risen and the European Union is implementing its own biofuels targets. To make matters worse, more febrile behaviour seems to be influencing markets: export quotas by large grain producers, rumours of panic-buying by grain importers, money from hedge funds looking for new markets.

Such shifts have not been matched by comparable changes on the farm. This is partly because they cannot be: farmers always take a while to respond. It is also because governments have softened the impact of price rises on domestic markets, muffling the signals that would otherwise have encouraged farmers to grow more food. Of 58 countries whose reactions are tracked by the World Bank, 48 have imposed price controls, consumer subsidies, export restrictions or lower tariffs.

But the food scare of 2008, severe as it is, is only a symptom of a broader problem. The surge in food prices has ended 30 years in which food was cheap, farming was subsidised in rich countries and international food markets were wildly distorted. Eventually, no doubt, farmers will respond to higher prices by growing more and a new equilibrium will be established. If all goes well, food will be affordable again without the subsidies, dumping and distortions of the earlier period. But at the moment, agriculture has been caught in limbo. The era of cheap food is over. The transition to a new equilibrium is proving costlier, more prolonged and much more painful than anyone had expected.

“We are the canary in the mine,” says Josette Sheeran, the head of the UN's World Food Programme, the largest distributor of food aid. Usually, a food crisis is clear and localised. The harvest fails, often because of war or strife, and the burden in the affected region falls heavily on the poorest. This crisis is different. It is occurring in many countries simultaneously, the first time that has happened since the early 1970s. And it is affecting people not usually hit by famines. “For the middle classes,” says Ms Sheeran, “it means cutting out medical care. For those on $2 a day, it means cutting out meat and taking the children out of school. For those on $1 a day, it means cutting out meat and vegetables and eating only cereals. And for those on 50 cents a day, it means total disaster.” The poorest are selling their animals, tools, the tin roof over their heads—making recovery, when it comes, much harder.

Because the problem is not yet reflected in national statistics, its scale is hard to judge. The effect on the poor will depend on whether they are net buyers of food or net sellers (see article); for some net buyers, the price rises may be enough to turn them into sellers. But by almost any measure, the human suffering is likely to be vast. In El Salvador the poor are eating only half as much food as they were a year ago. Afghans are now spending half their income on food, up from a tenth in 2006.

On a conservative estimate, food-price rises may reduce the spending power of the urban poor and country people who buy their own food by 20% (in some regions, prices are rising by far more). Just over 1 billion people live on $1 a day, the benchmark of absolute poverty; 1.5 billion live on $1 to $2 a day. Bob Zoellick, the president of the World Bank, reckons that food inflation could push at least 100m people into poverty, wiping out all the gains the poorest billion have made during almost a decade of economic growth.

In the short run, humanitarian aid, social-protection programmes and trade policies will determine how well the world copes with these problems. But in the medium term the question is different: where does the world get more food from? If the extra supplies come mainly from large farmers in America, Europe and other big producers, then the new equilibrium may end up looking much like the old one, with world food depending on a small number of suppliers and—possibly—trade distortions and food dumping. So far, farmers in rich countries have indeed responded. America's winter wheat plantings are up 4% and the spring-sown area is likely to rise more. The Food and Agriculture Organisation forecasts that the wheat harvest in the European Union will rise 13%.

Ideally, a big part of the supply response would come from the world's 450m smallholders in developing countries, people who farm just a few acres. There are three reasons why this would be desirable. First, it would reduce poverty: three-quarters of those making do on $1 a day live in the countryside and depend on the health of smallholder farming. Next, it might help the environment: those smallholders manage a disproportionate share of the world's water and vegetation cover, so raising their productivity on existing land would be environmentally friendlier than cutting down the rainforest. And it should be efficient: in terms of returns on investment, it would be easier to boost grain yields in Africa from two tonnes per hectare to four than it would be to raise yields in Europe from eight tonnes to ten. The opportunities are greater and the law of diminishing returns has not set in.

Unfortunately, no smallholder bonanza is yet happening. In parts of east Africa, farmers are cutting back on the area planted, mostly because they cannot afford fertilisers (driven by oil, fertiliser prices have soared, too). This reaction is not universal. India is forecasting a record cereal harvest; South African planting is up 8% this year. Still, some anecdotal evidence, plus the general increase in food prices, suggests that smallholders are not responding enough. “In a perfect world,” says a recent IFPRI report, “the response to higher prices is higher output. In the real world, however, this isn't always the case.” Farming in emerging markets is riddled with market failures and does not react to price signals as other businesses do.

This is true to a certain extent of farming in general. If you own a toy factory, or an oilfield, and the price of toys or oil rises, you run the factory night and day, or turn the taps full on. But it always takes a season to grow more food, which is why farm prices everywhere tend to be “sticky”: a 10% increase in prices leads to a 1% increase in output. But the food crisis of 2008 suggests farm prices in developing countries may be stickier than that.

The quickest way to increase your crop is to plant more. But in the short run there is only a limited amount of fallow land easily available. (The substantial unused acreage in Brazil and Russia will take a decade or so to get ready.) For some crops—notably rice in East Asia—the amount of good, productive land is actually falling, buried under the concrete of expanding cities. In other words, food increases now need to come mainly from higher yields.

Yields cannot be switched on and off like a tap. Spreading extra fertiliser or buying new machinery helps. But higher yields also need better irrigation and fancier seeds. The time lag between dreaming up a new seed and growing it commercially in the field is ten to 15 years, says Bob Zeigler of the International Rice Research Institute (IRRI) in the Philippines. Even if a farmer wanted to plant something more productive this year, and could afford to, he could not—unless research work had been going on for years.

It has not. Most agricultural research in developing countries is financed by governments. In the 1980s, governments started to reduce green-revolutionary spending, either out of complacency (believing the problem of food had been licked), or because they preferred to involve the private sector. But many of the private firms brought in to replace state researchers turned out to be rent-seeking monopolists. And in the 1980s and 1990s huge farm surpluses from the rich world were being dumped on markets, depressing prices and returns on investment. Spending on farming as a share of total public spending in developing countries fell by half between 1980 and 2004.

This decline has had a slow, inevitable impact. Creating a new seed is a bit like designing a flu vaccine: you need to keep updating it, or pests and disease will negate its effectiveness. When the rice variety IR8 was introduced in 1966, it produced almost ten tonnes per hectare; now it yields barely seven. In developing countries between the 1960s and 1980s, yields of the main cereal crops increased by 3-6% a year. Now annual growth is down to 1-2%, below the increase in demand (see chart 2). “We're paying the price for 15 years of neglect,” says Mr Zeigler.

Alterations in the structure of farming have exacerbated the effects of underinvestment. Farming is just one part of a food chain that stretches from fertiliser and seed companies at one end to supermarkets at the other. In the past, the end of the chain nearest consumers was less important. Food policy meant improving links between farmers and suppliers. The Green Revolution of the 1960s, for example, provided new seeds and subsidised fertilisers. Malawi is doing something similar now. But over the past decade, the other end of the chain has come to matter more. The main reason why Kenyan and Ethiopian farmers planted less this year was not just that fertilisers were expensive, but that farmers could not get credit to finance purchases. Supermarkets are also more important to farmers than they used to be, accounting for half or more of food sales, even in many developing countries.

In theory, the growing importance of traders and supermarkets ought to make farmers more responsive to changes in prices and consumer tastes. In some places, that is the case. But supermarkets need uniform quality, minimum large quantities and high standards of hygiene, which the average smallholder in a poor country is ill equipped to provide. So traders and supermarkets may benefit commercial farmers more than smallholders.

To make matters worse, smallholdings are fragmenting in many countries. Because of population growth and the loss of farmland, the average farm size in China and Bangladesh has fallen from about 1.5 hectares in the 1970s to barely 0.5 hectares now; in Ethiopia and Malawi, it fell from 1.2 hectares to 0.8 in the 1990s. By and large, the smaller the farm, the greater the burden of the cost of doing business with big retailers. Smaller smallholders are also at a disadvantage in getting loans, new seeds and other innovations on which higher yields depend.

Reuters

A burden to afford

Such bottlenecks and market failures make it harder for smallholders to respond to higher prices, even without the multiple distortions that governments also introduce into world food markets. They mean the transition to a new equilibrium will be prolonged and painful. But they do not mean it will not happen. Lennart Båge, the head of the International Fund for Agricultural Development, a UN agency in Rome, argues that if farmers can keep the higher prices, they will overcome the problems that beset them. As he points out, India feeds 17% of the world's people on less than 5% of the world's water and 3% of its farmland—and, along with China, is seeing its cereal crop rise this year. Similar success stories are cropping up, in patches.

Despite East Africa's problems, Ethiopia this week opened its own commodity exchange, a rare thing on the continent, in an attempt to improve the markets that connect farmers and traders. The spread of mobile phones also relays market information more widely. In landlocked Malawi, it costs almost as much to ship maize to and from world markets as it does to grow it locally, so Malawian farmers have found it hard to export their surplus even with prices high. But partly because of the political disaster of Zimbabwe, regional markets are now springing up out of nowhere in southern Africa—and Malawi's farmers are selling there.

Moreover, technological improvements are still pushing through the neglected soil. Mr Zeigler reckons IRRI has enough tinkerings in the pipeline to increase yields by one or two tonnes a hectare. And if European countries relax their hostility to genetically modified organisms, crop scientists could do things—such as redesigning photosynthesis in plants—which could boost yields 50% or more.

Between November 2007 and February 2008, rice exports from Thailand (the world's biggest exporter) were running at 1m tonnes a month—an unprecedented bonanza. But for even for producers and traders, the blessing was mixed. Some farmers sold their crop before prices soared. Millers tried to keep supplies back, waiting for higher prices. The government capped exports below last year's levels. The secretary-general of the Thai rice exporters' association told IRRI that “We don't know where the 2007 harvest is.” Vichai Sriprasert, a big exporter, describes the Thai rice market using language that, elsewhere, is literally true. “This is a crucial time,” he says. “It will tell the story of who will survive and who will not survive.”

By ANDREW MARTIN

The idea of turning farms into fuel plants seemed, for a time, like one of the answers to high global oil prices and supply worries. That strategy seemed to reach a high point last year when Congress mandated a fivefold increase in the use of biofuels.

But now a reaction is building against policies in the United States and Europe to promote ethanol and similar fuels, with political leaders from poor countries contending that these fuels are driving up food prices and starving poor people. Biofuels are fast becoming a new flash point in global diplomacy, putting pressure on Western politicians to reconsider their policies, even as they argue that biofuels are only one factor in the seemingly inexorable rise in food prices.

In some countries, the higher prices are leading to riots, political instability and growing worries about feeding the poorest people. Food riots contributed to the dismissal of Haiti’s prime minister last week, and leaders in some other countries are nervously trying to calm anxious consumers.

At a weekend conference in Washington, finance ministers and central bankers of seven leading industrial nations called for urgent action to deal with the price spikes, and several of them demanded a reconsideration of biofuel policies adopted recently in the West.

Many specialists in food policy consider government mandates for biofuels to be ill advised, agreeing that the diversion of crops like corn into fuel production has contributed to the higher prices. But other factors have played big roles, including droughts that have limited output and rapid global economic growth that has created higher demand for food.

That growth, much faster over the last four years than the historical norm, is lifting millions of people out of destitution and giving them access to better diets. But farmers are having trouble keeping up with the surge in demand.

While there is agreement that the growth of biofuels has contributed to higher food prices, the amount is disputed.

Work by the International Food Policy Research Institute in Washington suggests that biofuel production accounts for a quarter to a third of the recent increase in global commodity prices. The Food and Agriculture Organization of the United Nations predicted late last year that biofuel production, assuming that current mandates continue, would increase food costs by 10 to 15 percent.

Ethanol supporters maintain that any increase caused by biofuels is relatively small and that energy costs and soaring demand for meat in developing countries have had a greater impact. “There’s no question that they are a factor, but they are really a smaller factor than other things that are driving up prices,” said Ron Litterer, an Iowa farmer who is president of the National Corn Growers Association.

He said biofuels were an “easy culprit to blame” because their popularity had grown so rapidly in the last two or three years.

Senator Charles E. Grassley, Republican of Iowa, called the recent criticism of ethanol by foreign officials “a big joke.” He questioned why they were not also blaming a drought in Australia that reduced the wheat crop and the growing demand for meat in China and India.

“You make ethanol out of corn,” he said. “I bet if I set a bushel of corn in front of any of those delegates, not one of them would eat it.”

The senator’s comments reflect a political reality in Washington that despite the criticism from abroad, support for ethanol remains solid.

Representative Jim McGovern, Democrat of Massachusetts, said he had come to realize that Congress made a mistake in backing biofuels, not anticipating the impact on food costs. He said Congress needed to reconsider its policy, though he acknowledged that would be difficult.

“If there was a secret vote, there is a pretty large number of people who would like to reassess what we are doing,” he said.

According to the World Bank, global food prices have increased by 83 percent in the last three years. Rice, a staple food for nearly half the world’s population, has been a particular focus of concern in recent weeks, with spiraling prices prompting several countries to impose drastic limits on exports as they try to protect domestic consumers.

While grocery prices in the United States increased about 5 percent over all in the last year, some essential items like eggs and milk have jumped far more. The federal government is expected to release new data on domestic food prices Wednesday, with notable increases expected.

On Monday, President Bush ordered that $200 million in emergency food aid be made available to “meet unanticipated food aid needs in Africa and elsewhere,” a White House statement said.

His spokeswoman, Dana M. Perino, said the president had urged officials to look for additional ways to help poor nations combat food insecurity and to come up with a long-term plan “that helps take care of the world’s poor and hungry.”

Skeptics have long questioned the value of diverting food crops for fuel, and the grocery and live- stock industries vehemently opposed an energy bill last fall, arguing it was driving up costs.

A fifth of the nation’s corn crop is now used to brew ethanol for motor fuel, and as farmers have planted more corn, they have cut acreage of other crops, particularly soybeans. That, in turn, has contributed to a global shortfall of cooking oil.

Spreading global dissatisfaction in recent months has intensified the food-versus-fuel debate. Last Friday, a European environment advisory panel urged the European Union to suspend its goal of having 10 percent of transportation fuel made from biofuels by 2020. Europe’s well-meaning rush to biofuels, the scientists concluded, had created a variety of harmful ripple effects, including deforestation in Southeast Asia and higher prices for grain.

Even if biofuels are not the primary reason for the increase in food costs, some experts say it is one area where a reversal of government policy could help take pressure off food prices.

C. Ford Runge, an economist at the University of Minnesota, said it is “extremely difficult to disentangle” the effect of biofuels on food costs. Nevertheless, he said there was little that could be done to mitigate the effect of droughts and the growing appetite for protein in developing countries.

“Ethanol is the one thing we can do something about,” he said. “It’s about the only lever we have to pull, but none of the politicians have the courage to pull the lever.”

But August Schumacher, a former under secretary of agriculture who is a consultant for the Kellogg Foundation, said the criticism of biofuels might be misdirected. Development agencies like the World Bank and many governments did little to support agricultural development in the last two decades, he said.

He noted that many of the upheavals over food prices abroad have concerned rice and wheat, neither of which is used as a biofuel. For both those crops, global demand has soared at the same time that droughts suppressed the output from farms.

Elisabeth Rosenthal and Steven R. Weisman contributed reporting.

By Christopher Swann and Guillermo Parra-Bernal

April 13 (Bloomberg) -- Finance ministers from around the world warned that surging food costs threaten to reverse progress on poverty reduction and backed World Bank calls for more funds to fight hunger.

Soaring food prices and seizure in credit markets topped the agenda at this weekend's meeting of the International Monetary Fund and World Bank. Policy makers gathering in Washington said the rising threat of hunger demanded a global response and sought to fill the $500 million gap identified by the United Nations World Food Program.

``We need a common effort to attenuate the immediate undersupply due to rising prices,'' German Economy Minister Heidemarie Wieczorek-Zeul said. ``For every percentage increase in food prices, an additional 16 million people are threatened with hunger.''

As officials from rich nations discussed ways to improve the oversight of securities firms amid the credit squeeze, their counterparts from developing nations warned that political unrest may follow if the food scarcity and expenses worsen. Global food prices surged 57 percent last month from a year earlier, according to the UN, and the World Bank warns civil disturbances may be triggered in 33 countries.

In the past five years, as the global economy accelerated, the number of people living on $1 or less a day has declined by 150 million, according to the World Bank. Those gains may be reversed unless rich countries step up their donations, officials said.

Social Unrest

``The issue of the food prices is one of the most urgent and immediate problems faced by Africa,'' said Benedicte Christensen, acting director of the IMF's Africa department.

Governments from Guatemala to the Philippines to Indonesia are seeking to combat food inflation and avoid social unrest by curbing exports or lifting import duties on basic food staples such as rice. Brazil called for an end to farm subsidies in developed countries that create price distortions and leave millions of agricultural producers out of work in poorer nations.

``We join the appeal for a rapid emergency response sufficient to bridge the food supply gap,'' Brazilian Finance Minister Guido Mantega said. ``The world's agricultural trading system is stuck in the past.''

Riots related to a surge in food prices led to the fall of Haitian Prime Minister Jacques Edouard Alexis yesterday. Alexis, an ally of President Rene Preval, was voted out of office by the country's senate, after lawmakers cited his lack of ``leadership'' and solutions to ease food shortages, according to Efe newswire of Spain.

$10 Million in Aid

World Bank President Robert Zoellick said that the fall of the government in Haiti ``underscores the importance of quick international action.'' The bank pledged $10 million to Haiti for feeding programs.

The World Bank estimates that a doubling of food prices in the past three years could push 100 million people into deeper poverty. IMF Managing Director Dominique Strauss-Kahn warned that if food inflation kept accelerating at its current rate, hundreds of thousands of people will starve.

``The political stability in a lot of countries is at stake,'' Strauss-Kahn said today. ``Already some governments are suffering from critics on the streets even though the governments are not responsible for higher food prices.''

Consumer-price inflation in poor or so-called developing countries will accelerate this year to 7.4 percent, compared with a January forecast of 6.4 percent, the IMF said this week. Food prices will probably remain comparatively high until at least 2015, the World Bank said in a separate report.

Expanding Trade

Some finance chiefs said trade liberalization could help bring down food prices in the long-run. U.K. Chancellor of the Exchequer Alistair Darling called for a renewed effort to pass the struggling Doha Round of trade talks.

``We should redouble our efforts for a WTO trade deal that provides greater access by poor countries to developed-country markets and cuts distortion subsidies in rich countries,'' U.K. officials led by Darling, said in a statement.

Germany's Wieczorek-Zeul said that fully opening markets in rich countries to imports would lead to ``greater food security in developing countries by making it more worthwhile for them to cultivate agricultural produce.''

U.S. Treasury Secretary Henry Paulson said developing economies had a responsibility to address the crisis, too. He urged them to ``resist the temptation'' of capping or subsidizing food prices because such policies are ``generally not effective.''

Unintended Consequences

Rice, the staple food for half the world, has surged 96 percent in the past year, reaching a record $21.60 per 100 pounds on April 8. That's forced China, Egypt, Vietnam and India, which export more than a third of the world's rice, to curb shipments of the grain. Argentina and Russia have also sought to discourage food exports in a bid to boost domestic supplies.

Such measures ``tend to create fiscal burdens and economic distortions while often providing aid to higher-income consumers or commercial interests other than the intended beneficiaries,'' Paulson said.

Several ministers said the rise in food prices was related to increased production of biofuels. ``In a world where there is hunger and poverty, there is no justification for diverting food crops to biofuels,'' Indian Finance Minister Palaniappan Chidambaram said.

Saudi Arabian Finance Minister Ibrahim Al-Assaf, without directly naming the U.S. government's support for the corn-based ethanol industry, called on countries to ``withdraw subsidies for the production of commercially unviable biofuels.''

To contact the reporters on this story: Christopher Swann in Washington at cswann1@bloomberg.net

World Bank:
Rocketing Food Prices Have Put Fight Against Poverty Back 7 Years

By Heather Stewart and Larry Elliott
guardian.co.uk
Thursday April 10 2008

Rocketing global food prices are causing acute problems of hunger in poor countries and have put back the fight against poverty by seven years, the World Bank said today.

Robert Zoellick, the Bank's president, said that while consumers in rich countries were worried about the cost of filling the fuel tanks in their cars, people in poor countries were "struggling to fill their stomachs. And it's getting more and more difficult every day."

Zoellick said the price of wheat has risen by 120% in the past year, more than doubling the cost of a loaf of bread. Rice prices were up by 75%.

"In Bangladesh a two kilogram bag of rice now consumes almost half of the daily income of a poor family. With little margin for survival, rising prices too often means fewer meals."

Poor people in Yemen, he said, were now spending more than a quarter of their income on bread.

"This is not just about meals foregone today, or about increasing social unrest, it is about lost learning potential for children and adults in the future, stunted intellectual and physical growth. Even more, we estimate that the effect of this food crisis on poverty reduction worldwide is in the order of seven lost years."

The Bank's analysis chimes with research from the International Monetary Fund showing that Africa will be the hardest hit continent from rising food prices. More than 20 African countries will see their trade balance worsen by more than 1% of GDP as a result of having to pay more for food.

Zoellick said this weekend's meetings of the World Bank and the IMF had to do more than simply identify the scale of the crisis.

"This is about recognising a growing emergency, acting, and seizing opportunity too. The world can do this. We can do this. We can have a new deal for global food policy."

Zoellick called on rich countries to provide $500m (£250m) to meet emergency food needs identified by the United Nations, stressed the need for an expansion in safety-net programmes for the poor, and said there was a need to boost long-term financial support to boost production.

"We must make agriculture a priority", he said.

guardian.co.uk © Guardian News and Media Limited 2008

(Savannah program provides a day of hard insights to policymakers trying to help the poor.)

SAVANNAH, Ga. - As a state child welfare worker, Vicky Darley sees people every day who cannot pay their bills and struggle to hold their families together. But she did not really understand what they go through until she walked in the shoes of Emily Epperman.

As part of an innovative program to give policymakers firsthand knowledge of what it is like to be poor, Darley is among more than 2,500 people in Georgia who have participated in a simulation program called "Step Up Savannah."

For one day, a bank president, a school principal and even the mayor have put their titles aside and played roles such as an unemployed spouse with a baby on the way, an elderly man on a fixed income -- or in Darley's case, the fictitious Epperman, a single mother with two unruly teenagers.

22 percent in poverty

Savannah is a tourist city known for its Southern charm and easygoing lifestyles -- traits that often mask the fact that 22 percent of its residents live in poverty and nearly 35 percent of households earn less than $20,000 a year.

During a time when fears are mounting that the country is heading into a recession, experts said, times will only get worse for the 36.5 million Americans who live in poverty.

"We are in the South, the poorest region in the country," said Mayor Otis Johnson, who made poverty a priority when he took office in 2004. "There is a history of lack of opportunity, discrimination and certain economic factors that all come together to make certain segments of the population live in persistent poverty."

In an auditorium transformed into a small town with a bank, a grocery store, a school and other government offices, state employees such as Darley recently were forced to work their way through the red tape that real people often encounter.

She would have to figure out a way to pay for transportation, buy groceries, pay for child care and pay her rent until she found a job, something in very limited supply.

"It was so frustrating," said Darley, who provides temporary assistance to needy families in Savannah. "I tried to follow the rules but I ended up using money my daughter had gotten selling drugs to pay my rent. I couldn't even get help from [the Department of Child and Family Services], and that's where I work."

Such scenarios are being played out in real life every day in Savannah and across America, according to Johnson.

The key, the mayor said, is to get the business community involved in addressing the problem. But first, he said, they have to understand it. That means bringing the public and private sectors together.

"Many of our business leaders have gone through the simulation exercise, and many in that group were just blaming the victims," Johnson said. "Now that they see how tough it is to maneuver through this maze that poor people have to maneuver through, they are more sensitive to it."

According to Daniel Dodd, project director for Step Up, the goal is to reduce poverty by 60 percent by 2010 in Chatham County census tracts where the rate is highest. But the program is as much about changing attitudes about poverty as reducing it. The program is provided by the Missouri Association for Community Action, but agencies tailor it to fit their communities.

"We are not going to eradicate poverty but we can reduce it," Dodd said. Some progress has been made in generating new jobs, he said, although much of that is due to efforts by the city.

Step Up is the result of a collaboration of business, government, educational and non-profit agencies in Chatham County that came together in 2003 to address the city's persistent poverty.

The city's economic growth had been hindered by a high poverty rate that had spanned 30 years, officials said.

"There have been a lot of misconceptions that poor people are lazy or not smart enough. It's a cultural thing," Dodd said. "But as more people come here, it gets harder to hide these problems. Crime will spill out."

Another component of the program is job training. The payoff for businesses, Dodd said, is that they will have a more educated and better-prepared work force, which makes Savannah attractive to new industry.

Stephanie Gray, 38, a divorced mother of four, was able to turn her life around after participating in the program in 2006. Gray fell behind in her rent and was nearly homeless after her husband left her. Then she was diagnosed with congestive heart failure, which left her disabled.

Like many Americans, Gray, a cosmetologist, was living paycheck to paycheck. When she could no longer work, her life took a downward spiral.

"I felt like my life was pretty much at an end," said Gray. "I stayed depressed a lot. It was a big emotional roller coaster. I was about to lose it."

When ends don't meet

Step Up partnered her with Debbie Lane, a Savannah businesswoman, whom Gray credits with helping her get on the right track. They worked out a budget to pay off her $8,000 debt, helped her clear up credit issues and helped the family settle into an apartment. Now, Gray is in the process of purchasing a home.

"You get to do the legwork yourself, but Step Up provides a network to help you. They connected me to the right place to get a loan and make it happen," said Gray.

According to Sheldon Danziger, co-director of the National Poverty Center at the Gerald R. Ford School of Public Policy at the University of Michigan, poverty has not been a high priority in the United States for 25 years.

As President Bush and Congress work to provide rebates to citizens in hopes of jump-starting the sluggish economy, jobs will be essential to helping the poor through a recession, according to Danziger.

"It is an old sound bite but it is often true, the last hired are the first fired," said Danziger. "Basically, earnings are the most important source of family income for just about everybody except the elderly."

- - -

When ends don't meet

In a simulation presented by Step Up Savannah, here's one fictitious family's plight:

*Emily Epperman, 31, was recently deserted by the father of her two children, Ellen, 15, and Ed, 14. She worked as a salesclerk until her first pregnancy.

*Family rents a three-room apartment in a low-income neighborhood. Husband left Emily with $10 in cash and nothing in the bank. Family relies on public transportation.

*Income: None. Must apply for food stamps and temporary assistance from the Department of Children and Family Services.

*Monthly Expenses: Rent $275, Gas and electric $180, Telephone $18, Clothing $25, Food $75, Miscellaneous $25, Loan payments $120.

Source: Missouri Association for Community Action

Neva Makgetla
Johannesburg

EVERY budget day, whole forests expire so that we can read the detail on changes in the tax codes. Yet only about a quarter of all employed people earn enough to pay income tax.

In contrast, government spending affects everyone. A review of long-term trends points to important shifts, though they rarely form part of the annual budget frenzy. For one thing, spending on government services has grown rapidly -- about 14% a year since 2003. For another, spending patterns point to lingering contradictions, with the government's commitment to a developmental state focused on creating a more dynamic and inclusive economy.

Rapid growth in government services largely reflects a cut in debt payments. The state spent 10% of the budget on interest payments last year, compared with 25% a decade ago. That is a saving of about R50bn on this year's budget -- most of which would have gone to the relatively small group that can afford to invest in government bonds.

The decline in debt costs is largely due to lower interest rates, combined with reductions in government debt. In 1997, the prime interest rate was 19%. By 2005, it had fallen to 10,5%, and today is about 14,5%.

A more relaxed fiscal policy from 2000 plus economic growth also permitted rising expenditure. In 1997, government spending accounted for 28% of gross domestic product . It fell to 26% in 2000, then climbed back to 29% last year. With more rapid economic growth, that increase added another R50bn to total spending.

While state spending has grown rapidly, it remains low relative to social and economic needs. Since 1994, the government has had to extend services to all while seeking to ensure a more inclusive economy and maintain economic infrastructure. It's no wonder services are often stretched , funding for maintenance remains inadequate, and important but less urgent areas fall behind.

Social security now absorbs 18% of government expenditure, compared with 12% a decade ago. About 20% of households depend primarily on social grants, twice as many as a decade ago. But most households get only the child grant, which at R200 a month is not enough to lift a household out of poverty. Only the old-age and disability pensions, at R870 a month, approach the poverty line.

Government spending on transport, energy and water also surged in the past few years, rising from 6% of the budget in 2000 to almost 10% today. In the past four years, spending in these areas climbed almost 20% a year, reflecting the renewed commitment to government investment.

In contrast, the share of spending on education has dropped steadily over the past decade, from 27% to 21%. Education budgets grew in real terms by about 3% a year between 1997 and 2003, then accelerated to 10% a year. The relatively slow increase in spending hit hardest at tertiary education, with a 25% drop in expenditure per student over the past decade. But very low levels of spending on African schools until 1994 mean that they still face backlogs.

Another area of slow growth was incentives for manufacturing, mining and construction, which last year absorbed just R3,5bn, less than 1% of the budget. In real terms, spending was lower than in 1997. Tax subsidies, especially incentives for the vehicle sector, were worth far more than the on-budget incentives.

This year's budget is expected to more than double spending in this area., in line with the renewed commitment to industrial policy.

Spending on policing, prisons and the courts dropped from 12,5% in 1997 to 11,5% last year , although in real terms these budgets doubled compared to 1997. These figures exclude spending on metro police.

In short, the growth in government spending has ensured improvements in almost every government service. But the backlogs left by apartheid, combined with unusually high unemployment , mean the government faces competing demands. The challenge is to balance spending on direct poverty relief against the longer-term need to invest in transforming the economy to provide more sustainable opportunities for historically marginalised economies.

Makgetla is sector strategies co-ordinator in the Presidency.

WASHINGTON, Jan 23 (Reuters) - U2 lead singer and activist Bono visited the Pentagon to discuss Africa and the fight against global poverty with U.S. Defense Secretary Robert Gates, representatives of the two men said on Wednesday.

Among the topics at the 20-minute meeting on Tuesday afternoon were U.S. plans to set up a new U.S. military command for Africa, Pentagon press secretary Geoff Morrell said.

"I think this was a chance for two people who care about the problems facing the continent of Africa to talk about their shared interest in solving those problems," Morrell said of the meeting that was not publicized in advance.

A spokeswoman for DATA, the group co-founded by Bono to fight poverty and AIDS in Africa, said the singer had been in Washington to meet members of budget committees in Congress.

"He also met with Secretary Gates to discuss global poverty and the connection between fighting poverty and peace and stability," Kathy McKiernan said.

Bono has met frequently with world leaders to push for spending on foreign aid and debt relief. But this was his first meeting with Gates, a former director of the CIA who replaced Donald Rumsfeld at the Pentagon in December 2006. (Reporting by Andrew Gray; editing by David Wiessler)

Richard Curtis is a wonderful writer and director of movies like "Love Actually", "Four Weddings and a Funeral" and the creator of the hilarious "Mr. Bean." What you may not know is that he is a man on a mission to end poverty and hunger. On this interview with HBO, Curtis talks about what he is personally doing to fight poverty. He also talks about his movie "Girl in the Café" that he wrote to help raise awareness of poverty.

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HBO: Richard, tell us how this all came about.

Richard Curtis: What happened is my life took a strange turn, which is that I decided about eighteen months ago that I'd stop writing and sort of dedicate my time to a bit of almost activist politics. Because there was this G8 Conference happening in the U.K. in July of this year, when it seemed there was a genuine opportunity of a historic breakthrough for the poor.

Traditionally, I work for a charity for six months out of every two years. And I thought, well maybe instead of fundraising I should do some consciousness-raising. And since there was actually a plan on the table for how to halve extreme poverty by 2015, I wanted to see whether anything I could do might make that more likely.

And one of the things that I then thought of was, look, I've got this film which is meant to be a movie-movie. But the way to get to lots of people quickly and inject something into the bloodstream is to do it on the television. And I went through the normal tortures of whether or not it was good enough or right enough. And finally, we made it. So that's the sort of genesis of how it started.

HBO: The relationship between the two main characters has such a gentle, understated humor and poignancy. How much of that was in the script, and how much did the actors bring to it?

Richard Curtis: I think that you can never underestimate in any artistic endeavor how complicated the chemistry is. You know, why is it that when the one member of a band who never wrote a note leaves the band, the band collapses? Even though nobody knew they were key to it? It's a strange thing.

With this film, it could have turned out a lot of ways. I had the idea that I definitely wanted Bill Nighy, who I had just worked with in "Love, Actually" to star in it. And that gave it a certain quality-allowed me to be very sure that the leading character would be able to be funny as well as being tragic. That's a tricky combination.

I then got very lucky and managed to get the services of David Yates, who'd just done these two extraordinary things on British TV called "State of Play" and "Sex Traffic." And he added a whole sort of sensibility of patience and sort of documentary realism.

And then when we got together, we then started to try and find the girl. And it was very hard, because there was a possibility that the girl in the film would either appear to be slightly mad or very Left-wing or you know, a bit obsessed or obsessive.

And that we found one girl who could do it. And she had these extraordinary qualities of sort of patience and every-woman-ness, and ordinary-ness and simplicity. So, it's the same old muddle of influences, which lead to the finished product.

HBO: The love story seems linked in many ways to the epiphanies the characters experience while at the G8 conference, and the way those epiphanies change their lives and draw them closer. How did that evolve for you?

Richard Curtis: Every film has its challenges, and this film was exceptionally tricky, the end effect of which is probably more passionate about the politics than it is about the romance. You know, the last film I did, -"Love, Actually," I had to try and tie nine stories together. And that was in some ways a huge challenge. So every film is a wrestle.

And I suppose what I was wrestling with here is when two people get involved with both their own jobs, which a lot of us have in our lives... how you interact with the job that the person you love does. But also with big public emotions with great core passions of concern... what that does to a relationship is quite a complicated thing.

And as such it was great for me. Because the movie's about the two things I'm most passionate about, which is love - otherwise, I wouldn't have so obsessively written all these romantic movies, and sort of poverty-stricken injustice, because I've run a charity for twenty years, and it's a large bee in my bonnet.

HBO: Can you talk a little about "Comic Relief" and the work you do through that organization and how it relates to this film.

Richard Curtis:Well I saw - like so many people did - the "Live Aid" concert twenty years ago. And it did have a profound effect on me - the sense that while I was having such a good time, other people's lives were so hard. And I happened by odd circumstance to go to Africa and to Ethiopia at that time. Not really intending to do much, but to learn a bit. And I learned the lesson there that you don't have to be sort of sentimental about the epic nature of other people suffering. The best thing you can do is just try and do something to alleviate it.

I remember very well how practical all the doctors and nurses I saw at work there were. So I came back and did the one thing I could practically do, which was contact friends of mine in comedy and we started doing something called "Red Nose Day," which happens every two years here in the U.K., which is a seven-hour telethon, six hours of which is the best comedy we can possibly produce, and then one hour of which is films from Africa... and also films about causes of social injustice in the U.K.: disability, homelessness, things like that.

And I've done ten of those. Ten fundraising events. We've raised three hundred and fifty million dollars, so that's about five million pounds. It's about five hundred, six hundred million dollars.

I just suddenly thought, Wait a minute. There is a political dimension to this. Bob Geldof once said to me that he made more money over tea with the President of France than he did in the year and a half he spent on "Band Aid" and "Live Aid." Because all President Mitterrand did was alter some tariff or some tax and suddenly there was two hundred million dollars there.

So what I decided to do, twenty years after "Live Aid" and after ten "Red Nose Days" was to just see whether or not one could have an effect on these men at the G8.

So I suppose the point of this film, apart from I hope making a good film, is that I would love to feel that people who see the film might think, I'm just an ordinary person like the girl in the film. Is there anything I can do?' And just at this particular moment, there is something that people can do. You go on our website at ONE.org and send a message to politicians in America that this is a subject of concern.

The eight men who turn up at the G8 in Gleneagles will know for damn sure that a billion people passionately want change. They have the power to deliver that change. Someone will do that change, and why not now?

HBO: Do you feel it's possible to reach the millenium development goals by 2015?

Richard Curtis: Well, there are huge reasons we need to. The main reason for doing it is basic simple humanity. You cannot have fifty thousand people dying a day from avoidable poverty, which none of us would notice, it wouldn't alter the texture of our lives one jot. It wouldn't be like closing down the transport system. It wouldn't make any difference to us. And yet it would save a continent.

The actual broader issue, which I think will eventually come into play, and just hasn't come into play quite as powerfully now as it will eventually which are the two massive issues of trade and security. Africa will be an increasingly unsafe continent if it stays this poor. It will be prey to all sorts of extremism.

Wouldn't you be extreme if you saw your family dying around you? If twenty percent of your population was dying of AIDS, wouldn't you be cross?

And secondly, the trade issue in Africa, which is an enormous market for the world. And to have sort of a fifth of humanity out of the game is madness as well. So I think in the long-term it'll happen. We just have to try and make it happen before an extra billion lives are lost.

(Click on the left image to read more about the movie. We hope that you will rent it and watch it. It is quite well done.)

This was an article in the TIME magazine from 2005 that was voted one of their top 100 stories of all time. Even years later, the story is relevant today as it was back then. We hope this story will stir your heart anew to keep fighting to end poverty. Together we can change the world!

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THE END OF POVERTY By JEFFREY D. SACHS (Sunday, Mar. 06, 2005)

We can banish extreme poverty in our generation--yet 8 million people die each year because they are too poor to survive. The trag edy is that with a little help, they could even thrive. In a bold new book, Jeffrey D. Sachs shows how we can make it happen
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It is still midmorning in Malawi when we arrive at a small village, Nthandire, about an hour outside of Lilongwe, the capital. We have come over dirt roads, passing women and children walking barefoot with water jugs, wood for fuel, and other bundles. The midmorning temperature is sweltering. In this subsistence maize-growing region of a poor, landlocked country in southern Africa, families cling to life on an unforgiving terrain. This year has been a lot more difficult than usual because the rains have failed. The crops are withering in the fields that we pass.

If the village were filled with able-bodied men, who could have built rainwater-collecting units on rooftops and in the fields, the situation would not be so dire. But as we arrive in the village, we see no able-bodied young men at all. In fact, older women and dozens of children greet us, but there is not a young man or woman in sight. Where, we ask, are the workers? Out in the fields? The aid worker who has led us to the village shakes his head sadly and says no. Nearly all are dead. The village has been devastated by AIDS.

The presence of death in Nthandire has been overwhelming in recent years. The grandmothers whom we meet are guardians for their orphaned grandchildren. The margin of survival is extraordinarily narrow; sometimes it closes entirely. One woman we meet in front of her mud hut has 15 orphaned grandchildren. Her small farm plot, a little more than an acre in all, would be too small to feed her family even if the rains had been plentiful. The soil nutrients have been depleted so significantly in this part of Malawi that crop yields reach only about a half-ton per acre, about one-third of normal. This year, because of the drought, she will get almost nothing. She reaches into her apron and pulls out a handful of semi-rotten, bug-infested millet, which will be the basis for the gruel she will prepare for the meal that evening. It will be the one meal the children have that day.

I ask her about the health of the children. She points to a child of about 4 and says that the girl contracted malaria the week before. The woman had carried her grandchild on her back for the six miles to the local hospital. When they got there, there was no quinine, the antimalarial medicine, available that day. With the child in high fever, the two were sent home and told to return the next day. In a small miracle, when they returned after another six-mile trek, the quinine had come in, and the child responded to treatment and survived. It was a close call though. More than 1 million African children, and perhaps as many as 3 million, succumb to malaria each year.

As we proceed through the village, I stoop down to ask one of the young girls her name and age. She looks about 7 or 8 but is actually 12, stunted from years of undernutrition. When I ask her what her dreams are for her own life, she says that she wants to be a teacher and that she is prepared to study and work hard to achieve that. I know that her chances of surviving to go on to secondary school and a teachers college are slim under the circumstances.

The plight of Malawi has been rightly described by Carol Bellamy, head of UNICEF, as the perfect storm of human deprivation, one that brings together climatic disaster, impoverishment, the AIDS pandemic and the long-standing burdens of malaria, schistosomiasis and other diseases. In the face of this horrific maelstrom, the world community has so far displayed a fair bit of hand-wringing and even some high-minded rhetoric, but precious little action. It is no good to lecture the dying that they should have done better with their lot in life. Rather it is our task to help them onto the ladder of development, to give them at least a foothold on the bottom rung, from which they can then proceed to climb on their own.

This is a story about ending poverty in our time. It is not a forecast. I am not predicting what will happen, only explaining what can happen. Currently, more than 8 million people around the world die each year because they are too poor to stay alive. Every morning our newspapers could report, "More than 20,000 people perished yesterday of extreme poverty." How? The poor die in hospital wards that lack drugs, in villages that lack antimalarial bed nets, in houses that lack safe drinking water. They die namelessly, without public comment. Sadly, such stories rarely get written.

Since Sept. 11, 2001, the U.S. has launched a war on terrorism, but it has neglected the deeper causes of global instability. The nearly $500 billion that the U.S. will spend this year on the military will never buy lasting peace if the U.S. continues to spend only one-thirtieth of that, around $16 billion, to address the plight of the poorest of the poor, whose societies are destabilized by extreme poverty. The $16 billion represents 0.15% of U.S. income, just 15¢ on every $100 of our national income. The share devoted to helping the poor has declined for decades and is a tiny fraction of what the U.S. has repeatedly promised, and failed, to give.

Yet our generation, in the U.S. and abroad, can choose to end extreme poverty by the year 2025. To do it, we need to adopt a new method, which I call "clinical economics," to underscore the similarities between good development economics and good clinical medicine. In the past quarter-century, the development economics imposed by rich countries on the poorest countries has been too much like medicine in the 18th century, when doctors used leeches to draw blood from their patients, often killing them in the process. Development economics needs an overhaul in order to be much more like modern medicine, a profession of rigor, insight and practicality. The sources of poverty are multidimensional. So are the solutions. In my view, clean water, productive soils and a functioning health-care system are just as relevant to development as foreign exchange rates. The task of ending extreme poverty is a collective one--for you as well as for me. The end of poverty will require a global network of cooperation among people who have never met and who do not necessarily trust one another.

One part of the puzzle is relatively easy. Most people in the world, with a little bit of prodding, would accept the fact that schools, clinics, roads, electricity, ports, soil nutrients, clean water and sanitation are the basic necessities not only for a life of dignity and health but also to make an economy work. They would also accept the fact that the poor may need help to meet their basic needs. But they might be skeptical that the world could pull off any effective way to give that help. If the poor are poor because they are lazy or their governments are corrupt, how could global cooperation help?

Fortunately, these common beliefs are misconceptions--only a small part of the explanation of why the poor are poor. In all corners of the world, the poor face structural challenges that keep them from getting even their first foot on the ladder of development. Most societies with the right ingredients--good harbors, close contacts with the rich world, favorable climates, adequate energy sources and freedom from epidemic disease--have escaped extreme poverty. The world's remaining challenge is not mainly to overcome laziness and corruption, but rather to take on the solvable problems of geographic isolation, disease and natural hazards, and to do so with new arrangements of political responsibility that can get the job done. We need plans, systems, mutual accountability and financing mechanisms. But even before we have all of that apparatus in place--what I call the economic plumbing--we must first understand more concretely what such a strategy means to the people who can be helped.

Nearly half the 6 billion people in the world are poor. As a matter of definition, there are three degrees of poverty: extreme (or absolute) poverty, moderate poverty and relative poverty. Extreme poverty, defined by the World Bank as getting by on an income of less than $1 a day, means that households cannot meet basic needs for survival. They are chronically hungry, unable to get health care, lack safe drinking water and sanitation, cannot afford education for their children and perhaps lack rudimentary shelter--a roof to keep rain out of the hut--and basic articles of clothing, like shoes. We can describe extreme poverty as "the poverty that kills." Unlike moderate or relative poverty, extreme poverty now exists only in developing countries. Moderate poverty, defined as living on $1 to $2 a day, refers to conditions in which basic needs are met, but just barely. Being in relative poverty, defined by a household income level below a given proportion of the national average, means lacking things that the middle class now takes for granted.

The total number of people living in extreme poverty, the World Bank estimates, is 1.1 billion, down from 1.5 billion in 1981. While that is progress, much of the one-sixth of humanity in extreme poverty suffers the ravages of AIDS, drought, isolation and civil wars, and is thereby trapped in a vicious cycle of deprivation and death. Moreover, while the economic boom in East Asia has helped reduce the proportion of the extreme poor in that region from 58% in 1981 to 15% in 2001, and in South Asia from 52% to 31%, the situation is deeply entrenched in Africa, where almost half of the continent's population lives in extreme poverty--a proportion that has actually grown worse over the past two decades as the rest of the world has grown more prosperous.

A few centuries ago, vast divides in wealth and poverty around the world did not exist. Just about everybody was poor, with the exception of a very small minority of rulers and large landowners. Life was as difficult in much of Europe as it was in India or China. Your great-great-grandparents were, with very few exceptions, poor and living on a farm. The onset of the Industrial Revolution, supported by a rise in agricultural productivity, unleashed an explosive period of modern economic growth. Both population and per-capita income came unstuck, rising at rates never before imagined. The global population rose more than sixfold in just two centuries, while the world's average per-capita income rose even faster, increasing around ninefold between 1820 and 2000. In today's rich countries, the economic growth was even more astounding. The U.S. per-capita income increased almost 25-fold during this period. In beholding that success, many people embrace faulty social theories of those differences. When a society is economically dominant, it is easy for its members to assume that such dominance reflects a deeper superiority--whether religious, racial, genetic, ethnic, cultural or institutional--rather than an accident of timing or geography.

Such theories justified brutal forms of exploitation of the poor during colonial rule, and they persist even today among those who lack an understanding of what happened and is still happening in the Third World. In fact, the failure of the Third World to grow as rapidly as the First World is the result of a complex mix of factors, some geographical, some historical and some political. Imperial rule often left the conquered regions bereft of education, health care, indigenous political leadership and adequate physical infrastructure. Often, newly independent countries in the post--World War II period made disastrous political choices, such as socialist economic models or a drive for self-sufficiency behind inefficient trade barriers. But perhaps most pertinent today, many regions that got left furthest behind have faced special obstacles and hardships: diseases such as malaria, drought-prone climates in locations not suitable for irrigation, extreme isolation in mountains and landlocked regions, an absence of energy resources such as coal, gas and oil, and other liabilities that have kept these areas outside of the mainstream of global economic growth. Countries ranging from Bolivia to Malawi to Afghanistan face challenges almost unknown in the rich world, challenges that are at first harrowing to contemplate, but on second thought encouraging in the sense that they also lend themselves to practical solutions.

In the past quarter-century, when poor countries have pleaded with the rich world for help, they have been sent to the world money doctor, the International Monetary Fund. For a quarter-century, and changing only very recently, the main IMF prescription has been budgetary belt-tightening for patients much too poor to own belts. IMF-led austerity has frequently resulted in riots, coups and the collapse of public services. Finally, however, that approach is beginning to change.

It has taken me 20 years to understand what good development economics should be, and I am still learning. In my role as director of the U.N. Millennium Project, which has the goal of helping to cut the world's extreme poverty in half by 2015, I spent several eye-opening days with colleagues last July in a group of eight Kenyan villages known as the Sauri sublocation in the Siaya district of Nyanza province. We visited farms, clinics, hospitals and schools. We found a region beset by hunger, AIDS and malaria. The situation is grim, but salvageable.

More than 200 members of the community came to meet with us one afternoon. Hungry, thin and ill, they stayed for 3 1/2 hours, speaking with dignity, eloquence and clarity about their predicament. They are impoverished, but they are capable and resourceful. Though struggling to survive, they are not dispirited but are determined to improve their situation. They know well how they could get back to high ground.

The meeting took place on the grounds of a school called the Bar Sauri Primary School, where headmistress Anne Marcelline Omolo shepherds hundreds of schoolchildren through primary education and the travails of daily life. Despite disease, orphanhood and hunger, all 33 of last year's eighth-grade class passed the Kenyan national secondary-school exams. On a Sunday last July, we saw why. On their "day off" from school, this year's class of eighth-graders sat at their desks from 6:30 a.m. until 6 p.m. preparing months in advance for this year's national examinations in November. Unfortunately, many who will pass the exams will be unable to take a position in a secondary school because of lack of money for tuition, uniforms and supplies. Nonetheless, to boost the fortitude of the eighth-graders during the critical examination year, the community provides them with a midday meal, cooked with wood and water the students bring from home. Alas, the community is currently unable to provide midday meals for the younger children, who must fend for themselves.

When our village meeting got under way, I canvassed the group and got very perceptive accounts of the grim situation. Only two of the 200 farmers at the meeting reported using fertilizer at present. Around 25% are using improved fallows with nitrogen-fixing trees, a scientific farming approach developed and introduced into Sauri by the World Agroforestry Center. With this novel technique, villagers grow trees that naturally return nitrogen to the soil by converting it from the atmosphere, thus dramatically improving yields. The new method could be used throughout the village if more money were available for planting the trees alongside their maize crops.

The rest of the community is farming on tiny plots, sometimes no more than one-quarter of an acre, with soils that are so depleted of nutrients and organic matter that even if the rains are good, the households still go hungry. If the rains fail, the households face the risk of death from severe undernutrition. Stunting, meaning low height for one's age, is widespread, a sign of pervasive and chronic undernutrition of the children.

The real shocker came with my follow-up question. How many farmers had used fertilizers in the past? Every hand in the room went up. Farmer after farmer described how the price of fertilizer was now out of reach, and how their current impoverishment left them unable to purchase what they had used in the past.

As the afternoon unfolded, the gravity of the community's predicament became more apparent. I asked how many households were home to one or more orphaned children left behind by the AIDS pandemic. Virtually every hand in the room shot up. I asked how many households were receiving remittances from family members living in Nairobi and other cities. The response was that the only things coming back from the cities were coffins and orphans, not remittances.

I asked how many households had somebody currently suffering from malaria. Around three-fourths of the hands shot up. How many use antimalarial bed nets? Two out of 200 hands went up. How many knew about bed nets? All hands. And how many would like to use bed nets? All hands remained up. The problem, many of the women explained, is that they cannot afford the bed nets, which sell for a few dollars per net, and are too expensive even when partially subsidized by international donor agencies.

A few years back, Sauri's residents cooked with locally collected wood, but the decline in the number of trees has left the area bereft of sufficient fuel. Villagers said that they now buy pieces of fuel wood in Yala or Muhanda, a bundle of seven sticks costing around 30¢. Not only are seven sticks barely enough to cook one meal, but for a lack of 30¢, many villagers had in fact reverted to cooking with cow dung or to eating uncooked meals.

The dying village's isolation is stunning. There are no cars or trucks owned or used within Sauri, and only a handful of villagers said they had ridden in any kind of motorized transport during the past year. Around half of the individuals at the meeting said that they had never made a phone call in their entire lives.

This village could be rescued, but not by itself. Survival depends on addressing a series of specific challenges, all of which can be met with known, proven, reliable and appropriate technologies and interventions. (Thanks to a grant from the Lenfest Foundation in the U.S., the Earth Institute at Columbia University will put some novel ideas to work in Sauri.) Sauri's villages, and impoverished villages like them all over the world, can be set on a path of development at a cost that is tiny for the world but too high for the villages themselves and for the Kenyan government on its own. African safari guides speak of the Big Five animals to watch for on the savannah. The world should speak of the Big Five development interventions that would spell the difference between life and death for the savannah's people. Sauri's Big Five are:

BOOSTING AGRICULTURE With fertilizers, cover crops, irrigation and improved seeds, Sauri's farmers could triple their food yields and quickly end chronic hunger. Grain could be protected in locally made storage bins using leaves from the improved fallow species tephrosia, which has insecticide properties.

IMPROVING BASIC HEALTH A village clinic with one doctor and nurse for the 5,000 residents would provide free antimalarial bed nets, effective antimalarial medicines and treatments for HIV/ AIDS opportunistic infections.

INVESTING IN EDUCATION Meals for all the children at the primary school could improve the health of the kids, the quality of education and the attendance at school. Expanded vocational training for the students could teach them the skills of modern farming, computer literacy, basic infrastructure maintenance and carpentry. The village is ready and eager to be empowered by increased information and technical knowledge.

BRINGING POWER Electricity could be made available to the villages either via a power line or an off-grid diesel generator. The electricity would power lights and perhaps a computer for the school; pumps for safe well water; power for milling grain, refrigeration and other needs. The villagers emphasized that the students would like to study after sunset but cannot do so without electric lighting.

PROVIDING CLEAN WATER AND SANITATION With enough water points and latrines for the safety of the entire village, women and children would save countless hours of toil each day fetching water. The water could be provided through a combination of protected springs, rainwater harvesting and other basic technologies.

The irony is that the cost of these services for Sauri's 5,000 residents would be very low. My Earth Institute colleagues and I estimated that the combined cost of these improvements, even including the cost of treatment for AIDS, would total only $70 per person per year, or around $350,000 for all of Sauri. The benefits would be astounding. Sooner rather than later, these investments would repay themselves not only in lives saved, children educated and communities preserved, but also in direct commercial returns to the villages and the chance for self-sustaining economic growth.

The international donor community should be thinking round-the-clock of one question: How can the Big Five interventions be done on a larger scale in rural areas similar to Sauri? With a population of some 33 million people, of whom two-thirds are in rural areas, Kenya would need annual investments on the order of $1.5 billion for its Sauris, with donors filling most of that financing gap, since the national government is already stretched beyond its means. Instead, donor support for investment in rural Kenya is perhaps $100 million, or a mere one-fifteenth of what is needed. And Kenya's debt service to the rich world is several hundred million dollars per year. Kenya's budget is still being drained by the international community, not bolstered by it. This is all the more remarkable since Kenya is a new and fragile democracy that should be receiving considerable help.

The outside world has pat answers concerning extremely impoverished countries, especially those in Africa. Everything comes back, again and again, to corruption and misrule. Western officials argue that Africa simply needs to behave itself better, to allow market forces to operate without interference by corrupt rulers. Yet the critics of African governance have it wrong. Politics simply can't explain Africa's prolonged economic crisis. The claim that Africa's corruption is the basic source of the problem does not withstand serious scrutiny. During the past decade I witnessed how relatively well-governed countries in Africa, such as Ghana, Malawi, Mali and Senegal, failed to prosper, whereas societies in Asia perceived to have extensive corruption, such as Bangladesh, Indonesia and Pakistan, enjoyed rapid economic growth.

What is the explanation? Every situation of extreme poverty around the world contains some of its own unique causes, which need to be diagnosed just as a doctor would a patient. For example, Africa is burdened with malaria like no other part of the world, simply because it is unlucky in providing the perfect conditions for that disease: high temperatures, plenty of breeding sites and particular species of malaria-transmitting mosquitoes that prefer to bite humans rather than cattle.

Another myth is that the developed world already gives plenty of aid to the world's poor. Former U.S. Secretary of the Treasury Paul O'Neill expressed a common frustration when he remarked about aid for Africa: "We've spent trillions of dollars on these problems and we have damn near nothing to show for it." O'Neill was no foe of foreign aid. Indeed, he wanted to fix the system so that more U.S. aid could be justified. But he was wrong to believe that vast flows of aid to Africa had been squandered. President Bush said in a press conference in April 2004 that as "the greatest power on the face of the earth, we have an obligation to help the spread of freedom. We have an obligation to feed the hungry." Yet how does the U.S. fulfill its obligation? U.S. aid to farmers in poor countries to help them grow more food runs at around $200 million per year, far less than $1 per person per year for the hundreds of millions of people living in subsistence farm households.

From the world as a whole, the amount of aid per African per year is really very small, just $30 per sub-Saharan African in 2002. Of that modest amount, almost $5 was actually for consultants from the donor countries, more than $3 was for emergency aid, about $4 went for servicing Africa's debts and $5 was for debt-relief operations. The rest, about $12, went to Africa. Since the "money down the drain" argument is heard most frequently in the U.S., it's worth looking at the same calculations for U.S. aid alone. In 2002, the U.S. gave $3 per sub-Saharan African. Taking out the parts for U.S. consultants and technical cooperation, food and other emergency aid, administrative costs and debt relief, the aid per African came to the grand total of perhaps 6¢.

The U.S. has promised repeatedly over the decades, as a signatory to global agreements like the Monterrey Consensus of 2002, to give a much larger proportion of its annual output, specifically up to 0.7% of GNP, to official development assistance. The U.S.'s failure to follow through has no political fallout domestically, of course, because not one in a million U.S. citizens even knows of statements like the Monterrey Consensus. But we should not underestimate the salience that it has abroad. Spin as we might in the U.S. about our generosity, the poor countries are fully aware of what we are not doing.

The costs of action are a tiny fraction of the costs of inaction. And yet we must carry out these tasks in a context of global inertia, proclivities to war and prejudice, and understandable skepticism around the world that this time can be different from the past. Here are nine steps to the goal:

COMMIT TO THE TASK. Oxfam and many other leaders in civil society have embraced the goal of Making Poverty History. The world as a whole needs now to embrace the goal.

ADOPT A PLAN OF ACTION. The U.N.'s Millennium Development Goals, approved by all of the world's governments at the start of the millennium, are the down payment on ending poverty. The MDGs set out specific targets for cutting poverty, hunger, disease and environmental degradation by 2015 and thereby laid the foundation for eliminating extreme poverty by 2025. The rich and poor countries have solemnly agreed to work toward fulfilling the MDGs. The key is to follow through.

RAISE THE VOICE OF THE POOR. Mahatma Gandhi and Martin Luther King Jr. did not wait for the rich and powerful to come to their rescue. They asserted their call to justice and made their stand in the face of official arrogance and neglect. It is time for the democracies in the poor world--Brazil, India, Nigeria, Senegal, South Africa and dozens of others--to join together to issue the call to action.

REDEEM THE U.S. ROLE IN THE WORLD. The richest and most powerful country, long the leader and inspiration in democratic ideals, is barely participating in global efforts to end poverty and protect the environment, thus undermining its own security. It's time to honor the commitment to give 0.7% of our national income to these crucial goals.

RESCUE THE IMF AND WORLD BANK. They have the experience and technical sophistication to play an important role. They have the internal motivation of a highly professional staff. Yet they have been used like debt-collection agencies for the big creditor countries. It's time to restore their role in helping all 182 of their member countries, not just the rich ones, in the pursuit of enlightened globalization.

STRENGTHEN THE U.N. It is no use blaming the U.N. for the missteps of recent years. Why are U.N. agencies less operational than they should be? Not because of "U.N. bureaucracy," though that exists, but because the powerful countries fear ceding more authority. Yet U.N. specialized agencies have a core role to play in the ending of poverty. It is time to empower the likes of the U.N. Children's Fund (UNICEF), the World Health Organization (WHO), the Food and Agricultural Organization (FAO), and many others to do the job--on the ground, country by country.

HARNESS GLOBAL SCIENCE. New technology has led directly to improved standards of living, yet science tends to follow market forces as well as to lead them. It is not surprising that the rich get richer in a continuing cycle of growth while the poorest are often left behind. A special effort should be made by the powerhouses of world science to address the unmet challenges of the poor.

PROMOTE SUSTAINABLE DEVELOPMENT. Ending extreme poverty can relieve many of the pressures on the environment. When impoverished households are more productive on their farms, for example, they face less pressure to cut down neighboring forests in search of new farmland. Still, even as extreme poverty ends, we must not fuel prosperity with a lack of concern for industrial pollution and the unchecked burning of fossil fuels.

MAKE A PERSONAL COMMITMENT. It all comes back to us. Individuals, working in unison, form and shape societies. The final myth I will debunk here is that politicians are punished by their constituents for supporting actions to help the poor. There is plenty of experience to show that the broad public will accept such measures, especially if they see that the rich within their own societies are asked to meet their fair share of the burden. Great social forces are the mere accumulation of individual actions. Let the future say of our generation that we sent forth mighty currents of hope, and that we worked together to heal the world.