New report finds World Bank policies punish world's poorest countries
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The World Bank is failing in its duty to tackle poverty by pushing an agricultural model that benefits big agribusiness at the expense of the world's poorest, according to a shocking new report by CAFOD.
The study: Sowing the seeds of poverty: how the World Bank harms poor farmers finds that poor countries are being forced to subsidise patented seeds and fertilisers at great expense, often provided by agribusiness giants.
Not only has this approach done little to tackle poverty, it effectively transfers public funds from poorer nations into the pockets of big business, draining resources while locking smallholder farmers into a package of unaffordable and environmentally destructive seeds and chemical fertilisers.
Several African countries have spent hundreds of millions of dollars a year on agricultural subsidies that often do not reach the poorest farmers. At some points this has taken up 50% of agricultural budgets in Malawi, Zambia and Ethiopia.
CAFOD reviewed internal World Bank documents which revealed that the Bank was aware of significant problems with the model of pushing expensive seeds and fertilisers, yet continued with this approach regardless.
The World Bank pursues its 'one-size fits all' approach through its policy and funding instruments, which require subsidy programmes and new seed certification laws before World Bank loans will be provided to the country. The World Bank has admitted that without low-income countries introducing the subsidies, which drain public budgets, farmers could not afford the seeds or fertilisers.
The seed certification laws have essentially made it illegal in countries such as Kenya, Sierra Leone and Liberia for local communities to continue their centuries-old system of saving, growing, exchanging and selling their own seeds, meaning they are locked into buying expensive seeds from big companies. As a result, the genetic diversity of seeds has been undermined, reducing farmers' ability to cope with climate change.
The impact has been disastrous in Africa, given the majority (80%) of farmers in Africa rely on their traditional system of exchanging seeds and sharing their own seeds. The World Bank's approach, which is not working, is ignoring the reality of the people living in poverty in the countries it is claiming to help.
Dr Ruth Segal, the report's co-author and CAFOD's policy lead for food systems said: "For centuries, farmers have shared seeds and cultivated them so they can adapt to local environmental conditions and grow food that benefits their communities. But this age-old approach is systematically being destroyed by the World Bank for one that benefits big businesses, rather than tackling hunger.
"Farmers should not be criminalised for growing and sharing seeds. It's what they've done for generations, and it works. Criminalising them does nothing to tackle world hunger. It just removes farmer choice, and leaves them at the mercy of big business."
This approach is also having an adverse impact on the climate and environment. The chemical inputs the World Bank is promoting are produced using fossil fuels. They can also damage the soil and contaminate the water farmers need to grow food, the research found.
Shockingly, the World Bank acknowledges this problem, with Bank staff stating in a 2022 review that: "Over-use or misapplication of mineral fertilizer contributes to environmental problems including nitrate and phosphate water contamination … and increased greenhouse gas emissions." But this approach continues to be promoted by the Bank.
CAFOD's report calls for the World Bank to support farmers to move toward agroecological production, which enables food to be produced sustainably and builds resilience to climate change.
The report also shows that the World Bank is measuring "success" almost exclusively on the private sector's ability to sell seeds and fertilisers, ignoring measures based on poverty reduction or increased food security for poor farmers. This is despite poverty reduction being declared the World Bank's main priority.
For example, the World Bank congratulated itself in a 2014 report for 100% of certified seed in Burkina Faso, Zambia and Ghana being supplied by the private sector. Yet according to FAO STAT, the number of people facing hunger actually rose in those countries, from (2014/16 compared to 2018/20):
7.6 million to 9.7 million in Burkina Faso (27% increase)
8.1 million to 10.8 million in Zambia (33% increase)
10.7 million to 11.6 million in Ghana (8% increase)
This means the World Bank has often failed to assess the impact of its financing in addressing food insecurity.
The World Bank is publicly funded, with the UK alone giving the Bank over a billion pounds a year. CAFOD is calling on the government to use its substantial shareholding to change the Bank's lending policies, which are currently geared to sustaining the profits of multinationals rather than alleviating poverty and food shortages.
Highlighting the failures of the World Bank, Dario Kenner, CAFOD's lead analyst on sustainable economic development and co-author of the report, said: "The World Bank is funded by taxpayer money. Its purpose is to tackle poverty and reduce food insecurity. Yet, reading its staff documents, it seems the main thing they care about is making it easier for giant corporations to sell expensive seeds and fertilisers.
"It cannot be right for the World Bank to continue to use public money to pursue policies its own analysis shows are not working. It's time for the UK government to wake up and urge the Bank to reform its harmful approach to tackling hunger."
Other highlights in the report include:
Bayer, Corteva, BASF and Chem China/Syngenta controlling over 50% of the global commercial seed market. The World Bank had previously said a market is no longer competitive when only four firms control more than 40% of it, yet the Bank is pushing policies that concentrate the seed and fertiliser market further in the hands of these firms.
The World Bank has systematically overlooked support to the wide range of local food and farming systems that are essential to tackling poverty and the climate crisis.
Small-scale farms are also highly efficient, producing around 35% of global food production on 12% of the land.
Women farmers are particularly disadvantaged by the World Bank's approach, because they have less access to finance to buy seeds in commercial markets.
There are no guarantees that using the hybrid seeds and chemical inputs package will be successful in the short term, and in the long term they can have devastating impacts as soil quality is degraded.
CAFOD is calling on the World Bank to:
- Immediately stop supporting narrow, restrictive seeds laws.
- End its biased support for expensive seeds and fertilisers, which do not guarantee reductions in poverty, hunger or vulnerability to external shocks.
- Promote more environment-friendly models of agricultural production by investing in smallholder farmers
- Measure what matters - not increased private sector activity, but social indicators such as reduction in levels of poverty, hunger and malnutrition.
LINKS
Report: The study: Sowing the seeds of poverty: how the World Bank harms poor farmers
Internal World Bank documents: https://documents1.worldbank.org/curated/en/832331468037141012/pdf/598430PGD0P1221OFFICIAL0USE0ONLY191.pdf
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