Small UN agency, with big impact on famine, faces hard times

A long struggle over funding is threatening the life of a small agency that many say is making a large contribution to meeting Africa's food crisis. The agency, the International Fund for Agricultural Development (IFAD), an arm of the United Nations, helps developing countries to expand agricultural production, primarily through aid to small farmers.

IFAD officially ran out of funds to begin new projects in April, following two years of negotiations among donors to find an acceptable funding arrangement. Negotiators are expected to meet again later this summer. Many say if the impasse over funding is not resolved then, the agency could be headed for extinction.

The funding dispute, between Western contributors and OPEC (Organization of Petroleum Exporting Countries) contributors, leaves the future of the agency in doubt -- just when many people in public and private development agencies have come to recognize the importance of the agency's chief clients, Africa's small independent farmers.

The key to IFAD's success has been providing easy credit, enabling small landholders in Africa's poorest countries to buy the fertilizers and livestock needed to increase farm output, experts say.

Since its creation in 1977, IFAD has won plaudits from across the political spectrum. Many conservatives note it has helped eliminate government monopolies and agricultural pricing systems, which have discriminated against small farmers in many developing countries.

The result has been higher food production and farm income -- keys to Africa's future food self-sufficiency.

But the future of IFAD is now in question. Four years ago, the agency's 32 Western and OPEC-member nations agreed to split costs on a 58-to-42 percent basis. But due to falling oil prices and the effects of the Iran-Iraq war, the OPEC countries now want to contribute 40 percent. Even though the other Western members have agreed to make up the small difference ($12 million spread over three years), the United States says it won't contribute any more to IFAD unless OPEC agrees to maintain its current 42 percent funding share.

US officials say there's more than money involved.

``It's not a question of money, it's a question of principle,'' says a source close to the negotiations. Officials say that unless OPEC commits itself to 42 percent, the Western countries could end up paying most of IFAD's bills. They say conceding the point could set a bad precedent not only for IFAD, but also for future negotiations on other multilateral agencies like the World Bank.

While these officials agree IFAD is worth saving, they say it's the burden-sharing arrangement that makes the agency unique. IFAD is the only multilateral development agency that draws substantially on OPEC resources. Without cost-sharing, they say, the Western contribution could be funneled just as effectively through traditional channels, such as the World Bank.

``If OPEC could eradicate the burden-sharing arrangement, they could eventually become minor participants,'' another official says. ``If that's the case, there's no need for IFAD. If it weren't for the burden-sharing, IFAD wouldn't have been created in the first place.''

But supporters -- including a bipartisan group of 150 congressmen and senators who last month urged the administration to continue its support for the embattled agency -- say that by refusing to compromise the US is being penny-wise and pound-foolish.

``Famines will recur unless small farmers are encouraged to be more productive, and IFAD's the only agency that starts with the small farmer,'' says John Tucker, a policy analyst for Bread for the World, a Washington-based citizens' movement.

Mr. Tucker says it costs $400 to send 1 ton of food to Africa during a famine emergency. It costs only half that, through IFAD projects, to enable farmers to grow the same amount each year indefinitely.

``The collapse of IFAD would leave a major void,'' says Larry Minear of Lutheran World Relief, a private international development agency. ``The focus on small farmers positions IFAD to make a contribution no other agency -- multilateral or bilateral -- can make.''