Statement of the President of IFAD to the 31st session of IFADs Governing Council in Rome, 13 February 2008
By Lennart Båge
Four weeks ago in Viet Nam I saw the impressive results of rapid development. In my first visit, 25 years ago, abject poverty and hunger defined the lives of most rural people.
Agricultural growth has underpinned Viet Nams economic growth, cutting poverty from nearly 60 per cent in the early 1990s to less than 20 per cent today. And Viet Nam has enjoyed growth with equity: smallholder farmers are both key actors and beneficiaries.
But 22 million people in the Mekong and Red River Deltas today face the effects of climate change – more devastating typhoons, floods, salt water intrusion, rising temperatures and rising sea levels.
Similar problems to those that Viet Nam faces are faced across the developing world. Tackling poverty and hunger, climate change, rising food and energy prices. And achieving the Millennium Development Goals – these are todays imperatives.
30th Anniversary
This year IFAD is thirty years old. The mid-1970s were also a time of rapidly rising food and energy prices, with fears of food shortages combined with a concern that, in a world of plenty, millions were still going hungry. This concern turned to outrage, and outrage to action.
One concrete action was the foundation of IFAD, born of a unique partnership between developed nations, OPEC, and other developing countries. Our founding members wanted an organisation that could help poor farmers increase their productivity, incomes and food security.
Today
Thirty years later, those who predicted that food production could not keep pace with a growing population have been proved wrong. In 2008 the world is feeding almost twice as many people from virtually the same amount of land.
We have also seen tremendous progress towards reducing poverty and hunger in many parts of the world.
In China, for example, the number of people living in extreme poverty in 1990 was 33 per cent, had reached 10 per cent by 2004 and is projected to be 2 per cent in 2015. Chinas progress is exceptional, but in much of Asia and Latin America too poverty has been falling.
And in Africa, after a setback in the 1990s, the proportion of those living in extreme poverty has also, finally, begun to fall – although the actual numbers continue to increase. Indeed, some countries in sub-Saharan Africa, notably Ghana, will reach the MDGs ahead of time.
Still we live in a world where almost one billion people live in conditions of extreme poverty, where hunger persists, inequality is rising, and where more than two billion people live on less than two uS dollar (ca. 10 DKR) per day.
Agriculture is key
If we are to make faster progress, especially in those regions where we are not on track to meet the MDGs, we must refocus on agriculture, and in particular smallholder agriculture. I base this belief on four facts:
Fact 1: Despite urbanisation, the majority of the worlds poorest people live in rural areas and will continue to do so for decades to come.
Fact 2: The vast majority of poor rural people depend on agriculture for their livelihoods.
Fact 3: Investment in agriculture has been shown again and again to have a powerful impact on poverty reduction. Growth in agriculture has driven wider economic growth throughout history – from 18th century England, to 19th century Japan to 20th century India.
And growth in agriculture really delivers. According to the World Development Report last year, GDP growth generated by agriculture is up to 4 times more effective in reducing poverty than growth in other sectors.
Fact 4: Government spending on agriculture in most poor countries was in sharp decline until recent years. And development aid for agriculture has not so much fallen as plummeted. From 18 per cent of all aid in 1979 to 3,5 per cent in 2004, and a pitiful 2,9 per cent in 2006.
Given this, governments and donor agencies have promised more attention to agriculture. But promises do not put Tortillas, Ugali, Matoke or – in this the International Year of the Potato – potatoes on the table.
Thanks to your support, IFAD has stood against this trend. IFAD-supported programmes have reached well over 300 million rural people across Africa, Asia and Latin America, helping them to obtain access to land, water, finance, markets and technology.
We have increased our programme of work by on average 10 per cent a year for the last five years and this will continue this year and next. Nearly half of IFAD funding goes to Africa, placing us among the top three multilateral institutions there.
As a result of our Action Plan, we are enhancing the efficiency of our delivery, the effectiveness of our targeting and the sustainability of the benefits.
IFAD: results and impact
Throughout our thirty years we have stayed true to our founding principles: to see the world from the perspective of those whom we seek to help and empower – poor farmers in Mozambique, nomadic herders in Syria, forest dwellers in Nepal, indigenous peoples in Peru, and fisherfolk in Bangladesh.
And to ensure that the programmes are driven by the poor people themselves.
Across all groups of rural poor people, women are often the most disadvantaged, with less access to land, income, technologies and knowledge. Yet they are at the centre of the rural economy, often producing the bulk of the food crops, especially in Africa.
Empowering women has long been a priority for IFAD, embodied in virtually every IFAD project, and it is a strong legacy from my predecessors.
Indigenous people and ethnic minorities are among the poorest peoples in the world. Worldwide, they account for 5 per cent of the global population, and yet they represent 15 per cent of the worlds poor. They often live in remote upland areas and are often the stewards of biodiversity (vogtere af den biologiske mangfoldighed).
With our focus on poverty, IFAD has long recognised the importance of supporting these communities. Today, in response to the requests of member governments, we devote more than 30 per cent of our programmes in Latin America and Asia in support of these communities.
A great step forward was taken last September with the adoption by the UN General Assembly of the Declarationon the Rights of Indigenous People. And IFADs partnership with the UN Permanent Forum on Indigenous Issues is a key component of our engagement with representatives of indigenous peoples.
Micro-finance is an area where IFAD has played a pioneering role, starting with our support to the Grameen Bank in 1980. Currently about two-thirds of IFAD-supported programmes have a rural finance component, focussing on credit, savings, insurance and remittances.
A single project in Maharashtra in India with IFAD investment of 40 million dollar has attracted co-financing of nearly 170 million dollar, reaching over one million households, or more than six million people.
In more than 40 countries, remittances (penge, der sendes tilbage fra vandrearbejdere) represent over 10 per cent of GDP and approximately a third goes to rural families, dwarfing any other inflow of resources.
According to a recent IFAD study, remittances were worth 300 billion dollar in 2006, directly reaching more than 10 per cent of the population of the developing world. That is why IFAD is working to build rural financial systems through which remittances can become a development resource.
More than half of IFAD projects are water-related, from smallholder irrigation and water management projects in Guatemala, to watering points for livestock in Sudan, as well as access to water for domestic use in China and Mauritania.
IFAD has supported, often through the CGIAR system, agricultural research into the specific crops of importance to poor rural farmers.
Agricultural research, which so successfully drove the first Green Revolution in Asia, has been shown to deliver rates of return in excess of 40 per cent. A special focus in the coming years will be research into drought, pest and salinity resistant crop varieties.
IFAD-funded work on the two major African cassava pests, the Mealy Bug and the Green Mite, and on improved virus-resistant varieties, including the triploid cultivar, has dramatically increased productivity, promoting nutritional security for 200 million poor people in the entire cassava belt.
Combined with IFAD support for post-harvest processing, this has underpinned the cassava revolution. Many African countries have become self-sufficient and Nigeria is now the largest cassava producer in the world.
IFAD has also supported the development of NERICA, a new rice variety that combines the hardiness of local African rice species with the high productivity of Asian rice.
There are currently about 200.000 hectares of Upland NERICA grown by over 100.000 farmers in 27 countries across Sub-Saharan Africa. Our current focus on scaling up its use offers both opportunities and challenges. I hope these can be addressed at TICAD IV in Japan later this year.
Through the Farmers Forum, IFAD has brought together farmers and rural producers organisations to share ideas and experiences, and make the voice of the poor farmers heard.
This year in Rome there are over 70 global, regional and national organisations representing hundreds of millions of farmers from all parts of the world. Thanks to this partnership, representatives of farmers organisations now participate in the development of most of the country strategies, programmes and projects funded by IFAD, making them better and more sustainable.
In Paraguay last May, I had the chance to meet smallholder farmers. A group of 641 farmers had been able, with IFAD support, to invest in cold storage and meet the necessary phyto-sanitary standards for domestic and export markets.
They now supply the central market of Asuncion with fruit and horticultural produce, and export to Buenos Aires and Montevideo. Last year they sold on average over 2.000 dollar per farmer.
Last April, I visited several districts in south-western Orissa, among the most deprived in India. Three quarters of the local population of 1,4 million live below the poverty line. Fifty per cent belong to tribal groups. Illiteracy rates among women are as high as 90 per cent.
An IFAD-supported programme, co-financed by (British) DfID and WFP, has enabled nearly 7.000 tribal women and men to take possession of land titles (skøder) for the first time. As a result of this, they have been able to abandon slash and burn practices, working their newly-owned land in more productive and environmentally sound ways, and send their children to school.
IFAD reform – The Action Plan
Two years ago the governing bodies of IFAD endorsed the Action Plan to Improve IFADs Development Effectiveness. Over these two years, I am proud to report that we have delivered on our commitment on time and on budget.
In 2007 we started implementing the organisations strategic priorities as outlined in our new Strategic Framework (2007-2010). We built tools and organisational processes to improve IFADs country- and project-level operations.
The quality of project design is being strengthened through new guidelines, a new quality enhancement system, and a new arms-length quality assurance system.
To deliver on IFADs mandate we have a new policy on targeting, and strategies on innovation and on knowledge management. We are implementing our new policy on supervision and by the end of 2007 we had taken on over half of the IFAD project portfolio for direct supervision.
We have mainstreamed our country presence. And IFADs human and financial resources are being aligned with the organisations objectives.
We developed a new Corporate Planning and Performance Management System to measure and report results. It provides the basis for planning and budgeting, through the annual Results-based Programme of Work and Budget.
The Report on IFADs Development Effectiveness – presented for the first time last year – shows that our performance in key areas such as effectiveness, efficiency and sustainability is rising.
Although the challenge now is to sustain and deepen reform, we are beginning to see clear results.
I am delighted that in this 30th anniversary year IFAD will move into a new permanent headquarters. I invite you all to the inauguration, planned for July this year.
IFADs role in the international architecture
Working in partnership is critical to the effectiveness of our activities. Our key partners are, of course, the developing countries themselves – our member governments, the rural poor people and their organisations.
We work closely with our sister agencies in Rome, the FAO and WFP, as well as with the other UN agencies on policy issues, operations and business practices. We are also deeply engaged with them in the One UN pilot initiatives. I myself have witnessed in Viet Nam, where we share an office with FAO, the benefits of this initiative.
IFAD is also an International Financial Institution, and as such we have very close partnerships with other financial institutions. The presence here today of Donald Kaberuka, President of the African Development Bank and Dr Ngozi Okonjo-Iweala, Managing Director of the World Bank, symbolises the strength of our partnership.
We have worked together with the World Bank in projects from Bolivia to Cameroon, Egypt and Indonesia, and our recent collaboration in the World Development Report brings us to a new stage in this long-standing partnership.
We are also deepening our long-standing partnership with the African Development Bank, starting with a joint evaluation that will help us collaborate more effectively to address the challenges facing agriculture in Africa.
In Africa, NEPAD and the Comprehensive African Agricultural Development Programme, CAADP, provide a framework for all our efforts.
Let me also mention two other key partners in Africa, the OPEC Fund for International Development, with whom we work in 21 countries in Africa, as well as in other parts of the world, and the Belgian Survival Fund, a unique partnership between a multilateral institution and a bilateral agency.
But the international architecture is changing with the emergence of foundations and large developmental NGOs some with resources comparable to international institutions.
Particularly interesting is the initiative AGRA, the Alliance for a Green Revolution in Africa, chaired by the former Secretary General Kofi Annan. This is a new partner for IFAD in our work to ensure that Africa can achieve its own Green Revolution. Our collaboration with these emerging actors will add a further dimension to IFADs work.
All of us have an imperative to work under the leadership of our member governments in a harmonised way. This is the Paris Agenda. And IFAD will contribute actively in taking forward this agenda at the important meeting in Accra in September.
New challenges
Climate change is at the centre of a web of new challenges.
A disastrous combination of rising temperatures, climate variability, uncertain growing seasons, decreased water availability, new pests and diseases, and decreasing biodiversity has the potential to reverse recent progress in reducing poverty in many parts of the world.
Africa is projected to fare worst, with at least 75 million people there at risk of increased water stress.
But it will not be just an African problem. All regions will be affected. Hundreds of millions of smallholder farmers, herders and other poor rural groups live in marginal areas, at serious risk from degradation and desertification.
We can expect future climate change to put close to 50 million extra people at risk of hunger by 2020. Those least responsible for the problem will be those first and hardest hit.
Put simply, the price of development just went up. Substantial and additional money will be needed to help poor countries adapt to climate change and make our investments “climate-proof”.
Closely linked with climate change are two other trends of growing importance – food prices and biofuels.
Food prices have risen dramatically in recent years as a growing population is demanding more food and a more varied diet. Over the past three years, the price of wheat and rice has doubled while the price of corn is up by 50 per cent.
Higher food prices and the potential of bio-fuels represent a two-edged sword for rural poor people, creating opportunities as well as challenges. Rising food prices could make smallholder agriculture more productive and economically viable, even as they pose risks to those who are net buyers of food.
Bio-fuels, especially second generation bio-fuels that can be grown on marginal lands, could offer smallholder farmers significant new income sources. These two trends are making “the rural space” more attractive for investments.
IFAD has 30 years of experience in supporting smallholder farmers to organize themselves, access financial and technological services, promote small-scale irrigation and engage on fair terms with commercial banks, traders and agro-processors.
We also have a wealth of experience helping poor rural people manage their environmental vulnerability. The agreement to house in IFAD the Global Mechanism of the United Nations Convention to Combat Desertification, or UNCCD, was based on this experience and has further reinforced our efforts to combat land degradation.
The Fund is therefore well placed to help translate these new opportunities into higher productivity and incomes for millions of smallholder farmers. Two elements – improving the effectiveness of public service delivery and attracting greater private sector investment into the “rural space” – will be decisive in whether the rural poor are able to confront effectively the changes that are challenging their lives.
Poor rural people are often powerless but they are not irrelevant. How they manage their land matters to us all. Whether or not they store or release carbon will depend on the opportunities they have and the incentives they are offered. We can help them to become part of the solution – helping to feed the world and store the carbon.
Conclusion
2007 was a landmark year. It was a year in which food prices rose to record highs, climate change dominated headlines and in which the world rediscovered the importance of agriculture.
On Friday (15 Feb.) we will launch the discussions on the 8th replenishment of IFADs resources, which will set the course for IFAD in the run-up to 2015. We will outline our programme for the years ahead to the replenishment consultation.
Thanks not least to our Action Plan, IFAD is the right institution at the right time and in the right condition to make a much bigger contribution. We will do this by working with our partners.
And I congratulate both the African Development Bank and the World Bank for their recent significant increases in contributions of up to 50 per cent in their latest replenishment. I hope that we can secure a commitment for at least a comparable increase in our resources to finance our programmes in the 8th replenishment period.
The challenges are huge. The clock is ticking. As UN Secretary-General Ban Ki-moon said in his New Year message: “Let 2008 be the year of the bottom billion”.
So today I call upon the international community to invest in smallholder farmers to help them to address the triple scourge (svøbe) of poverty, climate change and rising food prices. Their lives – and our common future – depend on it.
Se også www.ifad.org
