SPEECH: 93rd Session of the ACP (African, Caribbean and Pacific Group of States) Council of Ministers, Remarks by Dr Kanayo F. Nwanze President, IFAD Brussels, ACP House 27 May 2011
Secretary-General Chambas Your Excellency Madame Dédé Ahoéfa Ekoue, President of Council Distinguished Ministers, Excellencies, Ladies and Gentlemen, It is a great honour to be with you today. I would particularly like to thank the Secretary-General for the kind invitation to be here at the occasion of the 93rd session of the ACP Council of Ministers. This gathering is an excellent example of effective partnership between members of different continents in the global South and the European Union, which represents today one of the most important aid development partners. For us at IFAD, you represent a powerful advocate on behalf of the poorest people in your countries, ensuring their interests are represented in the international arena. These are demanding times for those of us concerned with food security and hunger. Food prices once again are at worrying levels. Scientists reporting that climate change is already hurting agriculture. Economies still in the midst of financial crisis. When people can’t afford to eat because they can’t make a decent living, they become desperate. Recent events in the Middle East and North Africa region have shown the extent to which such desperation can lead to political instability. And, of course, we all remember the riots that took place when food and other commodities prices soared in 2008, causing widespread panic around the world. The current food price increase has pushed an estimated 44 million people into poverty creating once again a volatile mix. We all know that the food price crisis did not happen overnight. It was the result – in part – of nearly three decades of declining support for agriculture, both nationally and internationally. Thankfully, today there is ample cause for hope. Since the food price crisis, there has been renewed commitment to agriculture by donor countries and international financing institutions. There has also been increased funding from emerging economies. And developing countries have also mobilized resources for agriculture. This is a very promising sign. At IFAD, our optimism has been bolstered by the fact that today’s global response to food security incorporates important insights that were missing from agricultural development in the past. One of these insights is also one of the most important lessons we have learned in over 30 years of work. That is that smallholders have a pivotal role too play in food security and economic growth. There are around 500 million small farms in the world. Around 1.5 billion people depend on these farms for their livelihoods. Most of these people are poor; many are net buyers of food. We know that GDP growth generated by agriculture is more than twice as effective in reducing poverty as growth in other sectors. And experience repeatedly shows that when smallholders are given the means and the incentives to increase production, they can lead agricultural and economic growth. Excellencies, Ladies and Gentlemen, We must ask ourselves the question: Is farming a profession or is it a state of being of poor rural people in developing countries? And since we live in a world where the number of people going hungry is increasing, we must further ask: Who will feed the world in 2050, when the world’s population will reach 9 billion people? I can effectively argue that part of the solution to ensuring global food security in 2050 can be found in the rural areas of the countries present here today. About IFAD Let me take a few minutes to introduce IFAD, your institution. The International Fund for Agricultural Development – usually known as IFAD – is one of the three United Nations food agencies based in Rome. IFAD is unique in being both a UN specialized agency and an International Financial Institution. It is also distinct because it has always focused on the poor people who live in rural areas of developing countries. For more than 30 years, IFAD has been exclusively focused on agricultural and rural development. Since 1978 we have invested nearly 13 billion dollars in grants and low interest loans to developing countries. The projects we support are designed to empower poor rural people to lift themselves out of subsistence and into the marketplace. To date, we have reached more than 370 million people. As a result of our consistent focus and work in developing countries around the world – including Africa, the Caribbean and the Pacific – we have accumulated experience and knowledge of what works, and how to tailor projects to the specific conditions of each country. Something to remember: IFAD is the only IFI and UN specialized agency that dedicates 100 per cent of its resources towards the well-being and livelihoods of poor rural populations of the developing world. Partnership Partnership has always been central to IFAD’s business model. Each one of the projects we support is implemented by government and national institutions, with you as our partners, contributing to your own development. We work in collaboration in direct coordination with others. The European Union is a strong partner working with us on in the areas of agricultural research as well as the European Food Facility. Often, we work as a facilitator, helping to orchestrate a broad response to the key issues facing smallholders and poor rural people, and mobilizing co-financing for rural development programmes. For example, just a few weeks ago, we joined the U.S. Department of State, and other governments and partners to launch the new Diaspora Investment in Agriculture initiative, to help the world’s 215 million migrants, who send home 325 billion dollars in remittances every year, improve the impact of their hard-earned cash. This initiative will work with migrants who wish to invest in agricultural projects in their home communities. It will focus on post-conflict countries and fragile states. And it will work with the collective diaspora of those countries of almost 20 million people, to help identify opportunities and models for sustainable investment. Indeed, our most important partners are poor rural people themselves. IFAD has long recognised that development cannot be effective if it treats poor people as victims, in need of charity or bottomless handouts. But when poor people are seen and treated as the productive resources they are, and when they are empowered, they can be the agents of sustainable and lasting change. Lesson #1: Hunger and poverty are inhuman and must be eliminated. But let us stop romanticizing poverty to calm our social conscience. Poor rural people desire for the same things you and I wish for ourselves and for our children. At IFAD, poor rural people are involved as partners right from the start – in the design and the implementation of projects – empowering them to build better lives for themselves and their children. Farming is a business In my many years of working in agriculture and rural development, two things have become increasingly evident. The first is that farming at any scale is a business. Even subsistence farmers focused on survival have a business model. Their bottom line is food in their stomachs. They need to increase their productivity so that they can make the leap out of subsistence, with enough for their table and a surplus to bring to market. The second essential element is that businesses need clear linkages along the value chain, from production to processing, marketing and, ultimately, to consumption. Lesson #2: Farming is a business, irrespective of scale or size. Smallholders are entrepreneurs who want business opportunities. Examples from ACP Countries During my travels around the world, I have met dozens of people whose lives have been transformed by market-oriented agriculture. Last July, in Zambia, I met Esther Siakanede who took part in a smallholder irrigation scheme that helped her grow cabbages and tomatoes for the Livingstone and Kalomo markets. As a result of her higher income, Esther has been able to send her children to secondary school. She has bought four goats and a cellphone. And she has been able to expand her farm and improve her home. In all of the IFAD-supported programmes and projects I have visited, I have been amazed and impressed by the desire and the ability of people to transform their own lives when they are empowered by the right investments. At IFAD, we know there is no magic bullet, no secret formula that will eliminate poverty and hunger over night. But there are solutions that, when tailored to the realities of a specific region, or even a specific village, can transform lives. In the Pacific Islands, for example, farmers had traditionally used organic farming methods, but the farmers needed to have organic certification in order to enter the 18 billion dollar global organic market. IFAD supported two projects supporting public-private partnerships. One of these projects established organic standards for the region. The second project built the capacity of farmers to meet those organic standards. The experience of Mano Kami in Samoa is typical. Mano is a coconut farmer. Before joining the organics programme, her family earned almost nothing. To survive, they depended on remittances, sent home by relatives living abroad. But after Mano’s farm was certified as organic, she was able to earn more from her produce. Her income went up, she extended her home, and today she can afford to donate money to her church. Similarly, in the Dominican Republic, small-scale producers are cultivating high-quality organic products like coffee and cacao. By giving them access to markets, tools and training, we are ensuring they can increase incomes. And the focus on niche markets – such as organic cacao – means small farmers can compete in a smaller arena, and not worry about being knocked out by highly mechanized, highly capitalized farms. From my examples, you will note that we pay particular attention to women and support their empowerment. In virtually all rural societies, women are the primary caregivers, but they also perform a large part (and often most) of the agricultural work and produce the bulk of the developing world’s food crops. Lesson #3: Investing in poor rural women is an investment in a community and in future generations. And we also place a special emphasis on youth given that they are the ones that will have to feed the 9 billion of 2050. This means that we must invest in rural youth and the rural space – transforming it into a vibrant and competitive rural economy that is attractive to the rural youth of today – stemming the urge to migrate towards urban cities and further into the countries of the North, where a better life does not necessarily await. A rural life, where jobs are available, that is bolstered by basic services and amenities, including non-farm economic activities forms the foundation of a new rurality. Lesson #4: Tomorrow’s youth are tomorrow’s leaders and change agents. Our future is in their hands. Change and reform at IFAD Of course, to be effective in the field we also need to be a strong institution at home. IFAD has a robust Change and Reform Agenda that is allowing us to be increasingly efficient, effective and transparent in our work. We are now not simply Rome-based, but have continued to expand our country presence through 29 country offices (and growing), enabling us to carry out our work more effectively and more efficiently. In recent years, we have reconfigured our senior management and strengthened internal decision-making processes. We have strengthened our financial complex with the creation of a Financial Operations Department. Taking into account the increasing importance of the impact of climate change, we have established an Environment and Climate Division that is looking into providing greater support into adaptation programmes for smallholders. And we are undergoing a comprehensive reform of our human resources management. Lesson #5: To stay relevant, be flexible and embrace change, otherwise you will be changed. The reforms that we have undertaken inside have led to changes in how we operate with our partners. In particular, IFAD has demonstrated that it is very effective in leveraging finance, in partnership with other international institutions, governments, small farmers and increasingly the private sector. We have also been growing as an institution. In 2010, through domestic and international co-financing, for every dollar contributed to IFAD’s Eighth Replenishment of resources, IFAD mobilized another six dollars from our partners for rural development programmes. We see IFAD as a pipe through which resources flow from governments to smallholders and rural development. As the resources in the pipe increase, they gain power and momentum that comes from being combined with knowledge, with expertise and with partnerships. Lesson #6: Partnership is our modus operandi. We at IFAD were born out of partnership between the OECD and OPEC and have continued to improve upon our partnership model. In fact, our borrowing countries have in many instances contributed both to the projects that we support as well as to our own replenishment. This makes IFAD unique. And IFAD is an institution that consistently delivers results. This is not simply our judgement. It is also the judgement of IFAD’s Office of Evaluation, and of third parties such as the OECD/DAC, the MOPAN and DFID. Recent reviews have praised IFAD for being a strong, results-focused organization. Conclusion As we continue to make improvements at IFAD, we are also encouraging our developing country partners to put their own political and economic houses in order. They must continue to deepen the foundations of democracy and ensure the political stability that is essential for economic growth. We must continue to work together, in true partnership, each of us doing our bit to eliminate poverty and hunger. Smallholder agriculture is part of the solution as we look toward achieving global food security and eradicating poverty and hunger. And by achieving food security, step-by-step, in every one of our countries, we can move closer to achieving the Millennium Development Goals and, ultimately, a world without hunger or poverty. Excellencies, Agriculture and rural development is not just about food security. It is a pathway to wealth creation and economic growth. It is the basis for social cohesion. It is the provider of employment. It is the foundation for political stability and the precursor for global peace and security. Thank you.