How much would it cost to end world hunger?

There are a number of ways to estimate, very approximately, how much money would be needed — along with at least several other measures — to end world hunger. But the first point I should make is that money alone cannot end hunger.

Suppose we give every hungry person money to buy food. That approach would be very expensive, but it also would not work. As proven by the calculations in my book, Hunger Math, the world agricultural system does not produce sufficient dietary fat to feed 7 billion persons. So if you went out and bought enough food to give to the current one billion hungry, you would be, in effect, depriving a different billion persons of food. There is only so much food in the world. And given that much food is wasted and much is misused to make fuel or livestock feed, you cannot simply buy food for the hungry. On a large scale, that approach would fail miserably and perhaps only make matters worse.

The money that would be spent on world hunger should not, for the most part, be spent buying and distributing food. In the case of famine or other severe acute need: YES!! By all means, we should spend money buying and distributing food! But according to the World Food Programme, only about 8% of undernourished persons in the world are in a state of famine (not enough food to survive), and the other 92% are in a state of hunger (enough food to survive, but not enough for good health). The best approach to benefit money-foodmost of the hungry would be to spend money effecting the changes that are needed to produce more food, to produce more fat and protein, and to distribute that food equitably.

Now to the heart of the question: how much money, per year, would be needed to eventually end world hunger — after some number of years of expenditures and efforts worldwide? Note well that the amount of money discussed here will not end world hunger in one year. It is the yearly cost, roughly estimated, for a multi-year set of endeavors. Also, the amount stated here is in addition to the current amounts of money spend by governments, non-profits, and various NGOs (non-governmental organizations).

Let’s begin our calculations with a miscalculation. How much does a one-year diet for an average adult cost? The USDA has some detailed estimates, for each month in each year, at four different levels of food budgeting, for men, women, and children, in various age ranges, and for families. Let’s use the family of four as an example, and the “thrifty plan”, which is the least costly food budget in this analysis. The cost is $145.70 per week, U.S. average for December, 2012. The average cost per person, then, is $36.425 a week. For adult males on the thrifty plan, the value is $42.00 per week, and for adult women it is $37.40 per week.

So the cost per person per year, using the lowest figure ($36.425), is $1,894.10. If we multiply that cost by one billion persons, the value is 1.9 trillion dollars per year. But as I said, this example is a “miscalculation”, for several reasons. First, we will not end world hunger by purchasing food and giving it away. You can see why from the above cost example. Second, the hungry already have some food. In terms of kcal/person-year, they have 65.5% of the food that they need (as I determined in my book). But even 34.5% of 1.9 trillion dollars is too much money. Third, any true solution to hunger must be economically and agriculturally sustainable. We must help the hungriest nations to be able to produce their own food. The money that we put into world hunger should be aimed mainly at development and the increased production of food — especially in places closest to where the undernourished of the world live.

Commodity Prices

But just to get a sense for the size of the problem, let’s see how much money it would take to provide the one billion hungry with all of the additional dietary fat that they need: 22.4 million metric tonnes of fat (see the end of chapter 1 in Hunger Math). Canola oil is the dietary fat source with the best balance of omega-6 and omega-3 fat, and it is one of the top oil crops in the world. The commodity price in Nov. 2012 was a few cents shy of $1200.00 per metric tonne (MT). The cost for 22.4 million MT of canola oil would be $26.88 billion US dollars.

Well, that is much better than 1.9 trillion dollars. But it is also only the commodity price. Distribution to all the hungry, in every far-flung corner of the world, would be very expensive, if not impossible.

There is a point to these two calculations, though (in case you were wondering). It is much more cost effective to consider the needs of the hungry in terms of macronutrients, than in terms of a whole diet. If the hungry have some work, so that they can buy some food, or, even better, if they have some land so that they can grow some food, their needs are greatly reduced and the cost of helping them is similarly reduced. A program to help undernourished persons grow a large backyard garden, as a source of vitamins, minerals, fiber, and some additional protein, would reduce the burden on the effort to end world hunger immensely. If a population has land to grow a staple crop along with a garden, the need for additional dietary fat would be practically our only remaining concern.

Therefore, we might estimate, very approximately, the money needed to end world hunger as a function of the commodity price of canola oil (and/or other oil seeds). It is not that we would buy oil on the commodities market and give it away or sell it. But rather the commodity price can be taken as an estimation of the cost to produce that amount of oil. So if the world agricultural system were to produce the 22.4 million MT of dietary fat needed by the one billion hungry of the world (in addition to the fat already in their meager diet), the cost in terms of labor, inputs, the amortized cost of capital equipment, etc. would be about $27 billion US dollars. And even if the cost of labor is not paid in money, but in food from the harvest, the figure of $27 billion USD still works as an estimate of the value of labor plus other costs.

However that estimation only concerns dietary fat. Some additional protein and carbs would be needed. Since every world staple crop provides plenty of carbs and some protein, we can estimate the money needed to meet the unmet needs of the hungry for protein and carbs by calculating the cost of growing sufficient amounts of a staple crop.

As chapter one in Hunger Math concludes, we can state the nutritional shortfall of the hungry in terms of the weight of each macronutrient. (One metric tonne is 1000 kilograms.) For one billion persons per year, the values are:
22.4 million MT from fat
19.9 million MT from protein
18.1 million MT from carbs

If we estimate the value of the crops needed to meet the protein and carb shortfalls stated above, based on the commodity value of a protein crop and a carb crop, we can estimate the money needed to actually produce those crops. (We are not actually buying any commodity, though.)

Soybeans (mature, dried) are 36.5% protein. And 20 million MT of protein divided by 0.365 gives us 54.8 million MT of soybeans. The commodities cost (Nov. 2012) was about $533.00 in US dollars per MT. So the cost would be $29.2 billion dollars. Peanuts are much more expensive on the commodities market, at just under $2000.00 USD per MT. However, it was not so many year ago (2002) that the price was about $700.00 per MT for peanuts. The commodity price gives us only a rough estimate of the cost to produce a crop. And that cost might be different in the developing world.

The problem with soybeans or peanuts as a source of protein is that these crops do not also contain much carbs. So let’s suppose that we obtain our 18.1 million MT of carbs from a different source, such as rice. Long grain white rice is nearly 80% carbs (79.95%). So to obtain 18.1 million MT of carbs, we only need 22.64 million MT of milled white rice. The cost of 23 million MT of white rice (Nov. 2012) as a commodity was about $591.00 per MT. So our 23 million MT costs about $13.6 billion dollars.

The commodity price cost estimate for all three macronutrients (in the amounts that we need) totals about $70 billion US dollars. Now that figure, I caution you, is merely one way to make a very rough estimate of the cost of producing the needed macronutrients. But it does give us a ballpark figure.

How would we use that $70 billion dollars per year? We cannot simply buy food and distribute it. The world agricultural system must produce more food, especially more fat and protein. And it would be ideal if that food were produced closer to those who need the food, and, in many cases, even be grown by the people who need the food.

And again, I want to stress that the $70 billion dollars per year is not an actual amount of money spent by any set of organizations or persons. Some of that value is in the form of labor by persons who grow food for their own use. They are not paid to grow their own food. But they do expend time and effort, which has a value. And they produce food which also has a value.

So if a set of government and non-governmental organizations were to address world hunger effectively, they would not need to increase their funding by $70 billion dollars per year. Some portion of that cost is found in labor by subsistence farmers, or by share-croppers who are paid with a share of the crop. (On the other hand, all organizations act with a rather substantial degree of inefficiency, so they might need to spend more money than theory would suggest.)

FAO Estimate

Are there any other estimates of the cost to end world hunger? In 2008, the Director-General of the FAO gave a speech in which he stated that the world only needs 30 billion dollars a year to eradicate the scourge of hunger. The following excerpt is from a news report on the FAO website:

3 June 2008, Rome – Noting that the time for talk was over and that action was urgently needed, FAO Director-General Jacques Diouf today appealed to world leaders for US$30 billion a year to re-launch agriculture and avert future threats of conflicts over food.

In an impassioned speech at the opening of the Rome Summit called to de-fuse the current world food crisis, Dr Diouf noted that in 2006 the world spent US$1 200 billion on arms while food wasted in a single country could cost US$100 billion and excess consumption by the world’s obese amounted to US$20 billion.

“Against that backdrop, how can we explain to people of good sense and good faith that it was not possible to find US$30 billion a year to enable 862 million hungry people to enjoy the most fundamental of human rights: the right to food and thus the right to life?” Dr Diouf asked. (FAO Newsroom, The world only needs 30 billion dollars a year to eradicate the scourge of hunger)

The $30 billion dollars suggested by the Director-General of the FAO is in addition to the cost of existing efforts. Did Dr. Diouf get the 30 billion that he requested? No; unfortunately, he did not. But he makes a good point about how the wealthy nations spend their money. Whether it would take $30 billion or $70 billion (per year) or more to end world hunger, the amount is a small sum compared to the amounts of money spent on things of lesser value, things not worth nearly as much as ending world hunger. And if that is not enough to bring a tear to your eye or a grimace to your face, consider also that the developed nations as a group, or even the U.S. alone, could easily raise $30 to 70 billion dollars without batting an eye.

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