President Lennart Båge of the International Fund Agricultural Development (IFAD);
Rt. Honourable G. Verhostadt, Prime Minister of the Kingdom of Belgium;
Members of the Governing Council;
Distinguished Ladies and Gentlemen,

IFAD was, apparently, set up in 1978 as a partnership between the developing and developed Nations with the specific mission to help “eradicate rural poverty and hunger”. At that time, I was busy fighting the Amin dictatorship in Uganda and I was not informed of the phenomenon of setting up IFAD. When I came into Government in 1986, I was informed about the IFAD activities by Mr. Jazairy, the Algerian Director-General of IFAD at that time. IFAD has done tremendous work in Uganda. Up to-date since 1981, IFAD has spent $132.28 million. This money has funded the following activities: agricultural reconstruction; agricultural development, South West Region agricultural rehabilitation; cotton sub-sector development; vegetable oil development; district development support; area-based agricultural modernization; NAADS; rural financial services. These have been implemented in the districts of Kasese, Hoima, Kalangala, Masindi, etc.

No doubt IFAD has made similar efforts in other parts of the World. Nevertheless, rural and urban poverty still afflict 18.9% (nearly 1.2 billion people)¹ of the people in the World. In the case of Uganda, people living below the poverty line have declined from 56% (in 1986) to 38% (now). The figures would have been even better if it was not for the Sudan orchestrated terrorism in Northern Uganda. I am not, however, surprised by the contradiction: IFAD’s and other players’ well-intentioned efforts on the one hand and the continued mass poverty of the intended beneficiaries on the other hand.

This is because of the un-integrated approach to the problems of rural poverty and agricultural production. IFAD’s mandate is to eliminate hunger, famine and poverty. In order to eliminate these three, basing yourself on agriculture you must restructure traditional subsistence agriculture into modern commercialized agriculture.

In my opinion, there are only four reasons that can lead somebody to engage in agriculture:

• subsistence farming;
• commercial farming;
• subsistence-commercial farming; and
• farming as a hobby – a leisure activity of the rich

I cannot think of any other category of farming outside these four.

Although Uganda has benefited from IFAD’s loans, I have not had time to find your stand on these four modes of agriculture. Sometimes, there is talk of “food security”. What does this mean? Does it mean having enough food to putting the stomach? How about the cash needs of the family vis-à-vis: health, education, clothing, housing, leisure, etc.? How will these be met if you only concentrate on food production? Sometimes, there is talk of “selling the surplus”. Will the “surplus” bring in enough money to balance the household income with expenditure?

If, on the other hand, we are talking about commercial agricultural production or a hybrid of commercial and subsistence, then, concomitantly, we must also talk of (apart from rural infrastructure such as roads, health units, etc.) agro-industrial processing and access to internal, regional and international markets for the products of our programmes.

Do we have those linkages clearly in front of us – production, storage, transportation, processing by adding value instead of selling our products in a raw-material form and finally marketing within the home country, in the region or internationally? In my opinion, it is the failure to put in place this vertical linkage of the necessary stages that is the most prominent cause of the perpetuation of hunger, starvation and poverty. The most strategic stimulus factor is the market. When somebody buys what you produce, he is assisting you to banish hunger, famine and poverty forever. All the other factors are link factors: storage, transport and processing. If we produce maize but nobody buys it, we may, in the short run, feed ourselves. However, without incomes the family members may have to shift to the towns to look for jobs. Since subsistence farming is based on family labour, it will mean food insecurity instead of food security.

If we focus on the three elements: production, processing and marketing, we shall kill so many birds with one stone – employment, food security, foreign exchange, tax revenue and, as a consequence of all this, social transformation. I always like to give the example of cotton. There are seven stages of handling the cotton crop: growing the cotton, ginning the cotton, weaving it into fabric, printing colours, tailoring the garments and using the cotton seeds to produce cooking oil, vegetable oil for soap manufacture, animal feed as well as using the cotton linters to make gunpowder. During most of the last Century, Africa has been exporting cotton at stage two: ginned cotton. According to the present day prices, this will earn the country US $1 per kilogram. However, if you spin, the value goes up three times; if you weave, six times; and if you tailor into garments, ten times. Therefore, when we export lint cotton – unprocessed cotton – we, in effect, donate about US $10 in every kilogram to the outside world. Therefore, Africans are the biggest “donors” in the World. We do not only “donate” money but we also “donate” jobs (spinning, weaving, etc.). How, then, can we end hunger, famine and poverty if we do not process and market what we produce?

Uganda is always a big producer of many agricultural crops: bananas – 10 million metric tons; coffee – 4 million bags; tea – 36 million kilograms; beef – 500,000 cattle slaughtered per annum; milk – 1.3 billion litres, etc. Until recently many of these were not being processed with the exception of tea and sugar. We are now on the verge of achieving breakthroughs in a number of areas. All the same, on account of our previous efforts, Uganda’s society and economy are beginning to change. The figures are showing that currently (2005) industry is 19% of GDP, services is 42%. This means that, for the first time, a bigger portion of GDP is comprised of industry and services. The figures are also showing that 74% of Uganda’s households are dependent on agriculture. This means that another 26% are no longer dependent on agriculture. This is a big change from about 5% in 1986.

While recognizing that many factors are a prerequisite to progress, we need to realize that elimination of hunger, famine and poverty = production, processing in order to add value and marketing. All other aspects are important (e.g. research, irrigation, storage, transport, etc.). However, the master factors are: production, processing and marketing.

Finally, I would like to point out that it is not correct to dichotomize the issues of hunger, famine and poverty into rural and urban aspects. Correct handling dictates that the country side interacts with urban areas. The country side produces raw-materials, the urban areas turn them into finished products. The urban areas produce or import agricultural inputs for use by the countryside. If the countryside intensifies agricultural production by using improved seeds, fertilizers, improved agro-practices, without the urban areas converting them into processed goods, with a long shelf life, much of the effort will be wasted in the form of post-harvest losses. Of the 10 million metric tons of bananas produced in Uganda, 40% rots after harvest. At last our scientists have now found a way of converting bananas into flour and starch. This problem (of wastage) will be solved.

IFAD has done a commendable job to increase production in the rural areas. We need to broaden their mandate to enable them to assist in processing and marketing processes. This is the way to end hunger, famine and poverty.

I salute IFAD.

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1/ Source: World development indicators 2004