Cover Image
close this bookTowards Creating a Poverty-Free World (UNESCO, 1995, 12 p.)
View the document(introduction...)
View the documentHunger is not Caused by Shortage of Food
View the documentResearch Agenda Narrowly Defined
View the documentNo Social Vision in our Research Institutions
View the documentScientists Prefer to Speak in their Own Language
View the documentBusy with Projects and Budgets
View the documentRaising Basic Questions with FAO
View the documentTwo Areas where FAO Has Failed
View the documentCredit As a Human Right
View the documentAgricultural Credit system Just About Collapsed
View the documentState-Owned Agencies Hardly serve the Farmer
View the documentAn Alternative Vision of the World
View the documentPoverty Can Be Put in Museums

(introduction...)

MUHAMMAD YUNUS
GRAMEEN BANK

Address presented at the Annual Meeting of the U.S. Committee for world Food Day

WASHINGTON D.C. JANUARY 25,1995

Hunger is not Caused by Shortage of Food

There are two issues in the world which a get prompt response from all nations, at all times. They are: war and hunger. Fear of war is universal. People hate them more than anything else.

But both have remained real threats all through history, defying all good wishes and good logic. War is not the subject we are going to discuss here. Nations get involved with it while professing total commitment to peace. No nation or community wants to get involved with hunger, but they find themselves living with it. More human beings get aroused and activated by seeing a picture of a hungry person than by any other picture. Hunger is an issue which unites all human beings. But it still persists. More than a billion people on this planet go partly hungry everyday. Projections tell us that the number is increasing and will continue to increase.

We are told that the world produces more food today than is needed to feed all the people in it - thanks to the agricultural scientists. But why is it then that so many millions cannot have enough to eat? Where are we going wrong?

Everybody agrees that hunger today is not caused by shortage of food. it is caused by the lack of purchasing power of the people. Poverty is the root cause of hunger. As long as poverty continues to exist, there is no way the world can make itself free from hunger. This, however, does not mean that in a poverty-free world there will not be hunger. There may still be hunger, but it will be a chronic case. It will be caused by temporary breakdown of production and/or distribution system of food.

All food-related organizations paid more attention to food production than to facilitating food availability. It came from our fear that the population is increasing faster than the increase in food production. We single-mindedly wanted to beat that. In the process we have organized everything to achieve the production goal and discarded all other dimensions of food from our thinking.

Research Agenda Narrowly Defined

As a member of the IRRI board I tried to bring back these dimensions. I don’t think I earned many friends by doing that. I wanted to impress on the board that IRRI is a research institution to study rice as “Food” not as a “crop”. A crop-researcher can carry on his research on a crop in any direction and continue it without any limit. A researcher will continue to find research more and more “interesting” as he proceeds. But a food-researcher studies crops within a given socio-economic framework, looking for answers to the questions faced/raised by the society. “Being interested” is no guide for him to embark on a research project. For him research has to be meaningful in the socio-economic context.

The world has recognized without hesitation the contribution made by agricultural scientists in pushing the frontier of agricultural production. A large number of international and national agricultural research institutions have participated in this frantic effort. But their successes in the production side of food have not been matched on the demand side. A crop scientist can say, “Sorry, that’s not part of my assignment,” but a food scientist cannot say that, Similarly a food research institute cannot shrug off its responsibilities for this failure.

One of my suspicions is that by defining the agenda of the international and national research institutions too narrowly we have missed the chance of removing hunger from the world.

Let me explain how my suspicions came about.

No Social Vision in our Research Institutions

Agricultural Research Institutions are staffed with topnotch scientists of the world who understand their area of specialization like the palm of their hand. But they do not have the slightest idea about the people in poverty, hunger, and the social and economic systems in which they live. Every scientist does not have to be expert on all of these, but the research institution itself must have a built-in capability to set the social context of the total research program and keep tight watch on the progress of the research to see if it is getting derailed along the way. Unfortunately we have not taken adequate care in putting the social vision firmly in command in our agricultural research institutions.

As a punishment, the world continues to suffer from hunger.

Scientists Prefer to Speak in their Own Language

Scientists have their own language which is different from the language of the people. The entire network of research institutions and scientists who work there have formed themselves into a single tribe (with sub-tribal villages, local chieftains and their hierarchy) with their tribal language and culture. They refuse to speak any other language.

When I questioned this, I was told scientists needed their seclusion to concentrate on their research; but communication with the ultimate user of their research is very much. in their mind. Communication works this way - national research institutions learn from the elite international research institutions. National Institutions in their turn pass on this knowledge to another group called extension agents. Finally extension agents bring the “knowledge” to the farmer.

I am told that it is not a strictly one-way communication as I have described. The national system interacts with farmers directly and through many other agencies and national and international systems also interact between them.

But given the tribal culture as it is, my guess is the relationship is more one-way than two-way. This is particularly so because the national system is totally under the control of the government and its bureaucracy.

Research institutions must be “bi-lingual” if they intend to address the hunger question directly and squarely. Research scientists should take time to get away from their tribal homelands and live in field stations to work with farmers to see how much sense their research is making at the user’s end. Probably one tiny adjustment in their recommended procedure would have made people’s lives so much easier; one tiny change of direction of their research would have brought so much benefit to the people. They would never know these if they had not come to work with them. Sometimes how one conceives of a research project, or how one applies a research becomes a more important drama than the drama of the research itself.

Busy with Projects and Budgets

Management of research institutions are most of the time busy with the preparation and modification of projects, their budgets, utilization reports and attending donor meetings. Their full time job is to keep the donors happy to keep the money flowing in. The only occasion they ask themselves the question, “What are we doing with this money?” is when the donors ask them the same question. Obviously when donors ask a question you answer it differently. Your answer it defensively. Your answer, by necessity, comes out in a strongly positive way. Management does not get a chance to do some soul-searching for its own sake.

Each research institution must ask itself the following questions, each year:

a) What is our contribution in removing hunger from the world?
b) Can this be done in a more efficient and cost-effective way?

Raising Basic Questions with FAO

FAO is the most important organization for food and agriculture is the Food and Agricultural Organization of the United Nations (FAO). It has done many wonderfull things to attract the world attention on the issue of hunger. But they could have done even more.

FAO is the specific world organization which has been set up to guide the nations of the world to achieve food security at the national level and at the household level. This is the world organization which has been mandated to remove hunger from the world. True, the percent of the world’s population that is hungry is down, but the numbers are up.

As long as hunger exists on this planet, we’ll have no other recourse but to turn our eyes to FAO. The bigger the number of hungry people gets around the world, the stronger becomes the case for rethinking FAO’s effectiveness. If there is no significant change at the hunger front, the world may feel well-advised to design a new FAO which will give a better account of itself in reducing the number of hungry people each year. Hunger is one issue about which nobody is ready to be fed with assurances and smooth talk.

Two Areas where FAO Has Failed

In two very specific areas I see FAO has failed to provide guidance to the world. Both are vital areas. One is its failure to relate its work to ending poverty and the other is providing a credit system for farmers that works.

Despite repeated acknowledgement that the root cause of hunger is poverty, FAO has not taken up a strategy to remove poverty from the world. This is particularly unfortunate at this time when nobody can say that removing poverty from the world is an impossible task. The Grameen Bank has demonstrated conclusively that even the poorest are creditworthy and that the poor can move out of poverty by their own efforts if an appropriate supportive institution is available to them.

Credit As a Human Right

Credit offers a poor person an opportunity to convert his/her energy and creativity into income-generating activities. Credit plays such an important role in creating self-employment for the poor that I have been arguing that credit should be recognized as a basic human right. By insisting on collateral the financial institutions have created a caste system in the financial world. The poor became the “untouchables” in this world.

Grameen dared to challenge the banking dictum regarding the poor. It began in Bangladesh in 1976 by lending US$ 30 to 42 poor villagers. It worked. It continued to expand to other villages. Along the way it became a formal bank owned by the poor, serving the poor. Today Grameen lends to 2 million poor borrowers, 94 per cent of whom are women. They are also the shareholders of the Bank. The Bank’s activities are spread over 35,000 villages of Bangladesh which has a total of 68,000 villages. During 1994 Grameen lent out US$ 385 million in tiny loans averaging US$ 100.

It is a long way from the US$ 30 loan in 1976. Grameen’s recovery rate is over 98 percent.

Grameen borrowers are not only good at paying back their loans. They have improved their nutritional status, access to food, sanitation, health, pure drinking water and housing. Hardcore poor families are gradually crossing over the poverty line with their own economic efforts.

Programs patterned after Grameen are springing up throughout the world, in Asia, Africa, latin America, North America and Europe. They all show the same result.

From Grameen Experiences we are fully convinced that every human being is endowed with enormous capacity to contribute to the economy and the society. By one’s own effort one can pull himself/herself out of poverty. Elimination of poverty is a doable proposition. It is now a question of how seriously we want it gone. When do we want the world to be totally free from poverty?

Shouldn’t FAO take the lead in organizing the nations to get into action on to the path to eliminate poverty from the world? As the global focal point it is the responsibility of the FAO to create consensus on setting a date to remove hunger and poverty. FAO should take advantage of such opportunities as the World Summit for Social Development to lead the world to make a firm commitment to a strategy for poverty alleviation.

FAO should take upon itself the duty of monitoring the hunger and poverty situation in the world and remind all the nations and the world Bank, which has the responsibility to organize the world economy to reduce poverty, about the connections between hunger and poverty and call attention to where the world stands with respect to the number of poor in each successive year.

Agricultural Credit system Just About Collapsed

I have emphasized the role of credit in poverty alleviation. Economists all along have been putting emphasis on credit in facilitating agricultural production. As a result a new category of a specialized bank called the “agricultural bank was born. Because of the low coverage by agricultural banks, agricultural cooperatives came into focus to become a conduit for agricultural credit disbursement. Land banks, rural banks were also created to meet the credit needs of the farmers.

The experience of agricultural/rural credit is extremely depressing throughout the world. In Bangladesh the recovery rate on agricultural credit extended through the banking system is less than 20 percent. It is worse for credit handled by agricultural cooperatives. Most third World countries have similar experience or worse. Agricultural banking and cooperatives have virtually collapsed in these countries. This is not happy news for poverty alleviation.

Even this agricultural credit is not available to most of the farmers. The smaller the farmer, the less is the chance to get any loan.

Looking at Grameen experience anybody can say there is no reason why it should be this way. The only way we can explain the present collapse of agricultural credit Institutions is that nobody is seriously interested in designing and running a financially sound, efficient credit program for the farmers. FAO, the organization which is responsible for world agriculture, appears strangely indifferent about the whole collapse. FAO’s coolness gives the impression that things are happening exactly the way they were supposed to be happening.

I am convinced that with only a little effort an excellent agricultural credit program can be run on a commercial basis. If Grameen were invited to design and run an agricultural credit program, I am sure Grameen could come up with a sustainable program. What is going on in the name of agricultural credit today is simply criminal.

State-Owned Agencies Hardly serve the Farmer

Agriculture is one sector which remained under private ownership even under strict communist rules. More often examples of a market economy are chosen from agriculture than from other sectors. But unfortunately all the national agencies and institutions which have been created with the financial and technical support of the promoters of free enterprise belong to the state-management system. Parastatal institutions proliferate in the agricultural sector. You look at any aspect of agriculture there is at least one government agency taking care of it. Almost each major crop has a development agency, a marketing agency, a research institution. Then there are agencies for seed production, marketing, agencies for development of irrigation, operating irrigation equipment, an agency for import of inputs, equipment, supplies, an agency for extension, promotion, communication, etc.; and of course, a whole string of powerful research institutions, training Institutions, etc.

Most often these government-run institutions are major stumbling blocks creating barriers for people. In the name of farmers, they promote their own professional and personal interests.

Each one of these agencies can be converted into profitmaking commercial enterprises while serving the cause of agriculture much better. If we convert them into commercial enterprises they will be dynamic, pro-people organizations, changing from the present bureaucratic, anti-people organizations.

If it is politically difficult to transform them into commercial enterprises, the other option is to create or encourage creation of a new set of organizations on a commercial basis so that competition can push the existing state-run agencies in the right direction.

An Alternative Vision of the World

The engine of the capitalist system is supposed to be fueled by “greed” to keep the system moving. I feel that this is a wrong assumption which has led the world to a self-fulfilling prophesy. We must envision a world which has not only greedy people, but also people with strong feelings for their fellow human beings. In this new vision of the capitalist world, instead of one motivating factor - “Greed” - to keep it in motion, we can introduce social consciousness or social dreams as another motivating factor. Both types of people can be in the same market place, using the same tools and concepts of capitalism but pursuing completely different goals.

An individual citizen or a group of citizens can organize an enterprise motivated completely or partially by social dreams. Grameen Bank itself is an example of social-consciousness-driven (SCD) enterprise. There can be SCD enterprises for profit and also not-for-profit. NGO’s organized on commercial basis will be examples of SCD enterprises.

All state-run agencies can be converted into SCD enterprises. In some cases where income from the enterprise may not meet the total expenditure of the enterprise because of the very nature of the work done (such as research institutions, training institutes) government may enter into contracts with them and make annual payments for rendering special services to the society.

Wherever the greed-based private investor is not moving forward on its own, or behaving against the interest of the people, new SCD enterprises can be created.

FAO, multilateral and bilateral donor agencies now can gradually move away from suporting the creation of state-run agencies to SCD run enterprises. NGOs can be encouraged, enterprising persons with social-consciousness can be motivated to create SCD commercial organizations. FAO may particularly support SCD organizations aimed at poverty alleviation, empowerment of the poor women, organizing people to protect environment, replacing chemical fertilizer by bio-fertilizer, replacing insecticides, recycling “Waste” to become environment-friendly inputs for production.

The world has enormous potential to feed people, but only if we use our resources in the right way. Can anyone really certify that what we are doing now is the right way?

FAO and the member nations can achieve the objectives of removing hunger and poverty from the world in a much more effective way by working through civil organizations, NGOs and SCD enterprises instead of trying to achieve these through creating government agencies and para-statals. At present NGOs are associated with many of the activities of the UN organizations. But this association comes mostly as after-thoughts or to serve decorative functions. This partnership can be much more substantive than what has been explored so far.

Grameen has created several SCD enterprises. Two of them are particularly relevant in this discussion. One is the Grameen Agricultural Foundation, other one is Grameen Fisheries Foundation. We see exciting possibilities of increasing agricultural production and income, enhancing the capacity of the soil, undertaking integrated farming through commercial intervention. All actors here play their roles on capitalist principles while Grameen Foundations are trying to achieve some social goals along with commercial success.

Poverty Can Be Put in Museums

Hunger can be turned into a matter of the distant past. Poverty can be placed in museums. Maybe our great grandchildren will go to museums to see what poverty was. They will feel sorry for us and our forefather because we did not know how easy it was to overcome poverty. Or they’ll feel angry at their ancestors for letting so many people suffer through so much misery for so many centuries for nothing.

There is no excuse left for us to let millions of people suffer the misery of poverty today. We must get our act together and set a date to create a poverty-free world. I see the year 2025 as a feasible date if we get into action right now.

World Food Day should never degenerate into an annual celebration of empty rhetoric. It can be a very important day devoted to reviewing global progress towards creating a poverty-free world, once we have made the decision.

Let’s make the decision and keep the date!

Thank you.