Mr Chairman,
Excellencies,
Distinguished Governors,
Guests,
Ladies and Gentlemen   

Welcome to Rome and to IFAD.  Let me join the Chairman of the Council in extending my own warm welcome to all of you.

I am delighted that so many of you were also able to participate in yesterday’s official inauguration of IFAD’s new Headquarters. A concrete sign of the renewal of IFAD.

The food and financial crises of 2008 have been followed by what is emerging as a once-in-a-lifetime global economic crisis.  Even before this crisis, almost one in six already lived in hunger and poverty. That number is now rising. Another 100 million people have been added over the last year. This reverses a previous downward trend. It must be a wake up call to all of us.      

The food crisis has transformed food security into a strategic issue of key importance to government leaders. For the first time in decades, world leaders at the Rome High Level Conference in June last year, were talking about smallholder farmers and their needs. Last Saturday, I was invited to introduce the topic of food security to the G7 finance ministers meeting here in Rome. Stronger policy attention and resources are now being given to strengthening food security. There may now be a real opportunity to address global food security and chronic hunger and poverty. This is an opportunity that we must seize.  But the starting point must be a shared understanding about the underlying causes of the food crisis and the most effective ways to overcome them. 

The stark fact is that long-term supply is not keeping pace with demand.  Global demand for food is projected to increase by 50 per cent by 2030, and double by 2050.  At the same time, agricultural productivity which grew at 4 to 5 per cent in the 1970s and early 1980s, has fallen to 1-2 per cent today. 

In India, productivity growth in the areas of the green revolution has gone down to zero or even less in some areas. Last April, when I joined Prime Minister Manmohan Singh in opening the first Global Agro-Industries Forum in New Delhi, the Prime Minister, in a landmark speech, said that the Indian Green Revolution had run its course.  A second Green Revolution was urgently needed.

The mismatch between rising demand for food and a slow increase in supply has resulted in a downward trend in grain reserves.  In fact, global use of grains has exceeded production for seven of the last nine years.  Against this background, bad weather in any major producing area, or other temporary factors, will easily lead to a spike in food prices.  With climate change increasing the frequency of droughts and floods we can expect a much greater volatility in food prices over the next decade.

With limited potential to increase the amount of land available for cultivation, most of the increased production will have to come from higher productivity per hectare of existing farmland.  In fact, according to the global agricultural research group CGIAR, annual productivity increase has to go back up to 3-5 per cent.  This will not happen on auto-pilot.  This requires increased political attention and much greater investment in the whole agricultural value chain from research to on-farm investments, rural infrastructure, rural financial services, agro-processing and the development of efficient, competitive markets for food both within countries and at the regional and global level. 

In the world today, there are close to 500 million smallholder farms, with families over 2 billion people – one-third of humanity. In Africa and Asia they farm 80 per cent of the total farmland. Globally, smallholder families constitute the vast majority of the poor, living on less than 1 or 2 dollars per day. At the same time they are an important part of the global food production potential. 

When China, during the period 1991 to 2001, doubled its cereal yields based on agriculture, with an average plot size of less than 0.2 hectares, it also raised around 400 million people out of poverty.  China followed India’s green revolution, and in recent years Vietnam has become a major agricultural exporter of, for example, rice and coffee, all smallholder-based.  In Africa we have seen successes of the same kind in Malawi and Ghana.

But most smallholder farms have very low productivity, in Africa only around one ton per hectare for the staples of rice and maize. They don’t have access to modern, highly-productive seed varieties or fertilizers, and they depend on unreliable rains.  Many studies and projects, including those supported by IFAD, have demonstrated, time and again, that these farmers can easily double or triple their yields to 3-4 tons or even more per hectare, if they get access to the right seeds, fertilizers and irrigation and the financing to buy them. 

The effect of this kind of investment is visible in an IFAD-funded project in the rice fields of Benin. A year ago, Brigitte Addassin was struggling to live on less than US$2 a day. But with IFAD support, Brigitte switched to growing NERICA rice, a cross between African and Asian varieties, which matures quickly, is more pest resistant and requires less water. As a result, and with improved irrigation and fertilizer, Brigitte was able to increase her harvest from 1.5 tons of rice to an extraordinary 6.5 tons.

There is also big potential in the all too often forgotten local crops, such as sorghum, millet, yams and cassava. So improving yields is far from impossible, but it will require a step increase in investment in agriculture.

The Comprehensive Framework for Action (CFA) prepared by the High-Level Task Force on Food Security, established by the Secretary General last year and bringing together the UN and the Bretton Woods institutions, has estimated that an additional US$12 to 20 billion per year is needed to bring about the required increase in productivity of smallholder farmers. 

The €1 billion from the European Commission as well as the €1 billion over five years pledged by Prime Minister Zapatero in Madrid last month, serve both as examples and inspirations to the wider world. But much more is needed.

Official Development Assistance has an important role to play in this.  Thirty years ago, support to agriculture represented about 18 per cent of total ODA.  Today, it is roughly 3 per cent.  This has to change and the CFA called for at least 10 per cent of ODA for agriculture. 

Such an increase combined with a significant increase in domestic public investment, as has been pledged by the countries in Africa in the Maputo Declaration to reach 10 per cent, will help to create the conditions for increasing productivity, production and incomes. It could also create the conditions for attracting much needed increased private investments into agriculture.

In many poor countries, especially in Sub-Saharan Africa, agriculture generates a third of the GDP, 40 per cent of exports and up to 70 per cent of employment.  A more dynamic agriculture will lift the whole economy as we have seen in India, China, Vietnam, Malawi, and Ghana.

Investing in farmers will also give a major thrust to reducing poverty and help achieve the Millennium Development Goal to reduce poverty by half by 2015. The World Bank has estimated that a 1 per cent increase in agricultural GDP reduces poverty by 4 times as much as a percentage increase in non-agricultural GDP.

Let me sum up the big picture in five points:

• We need to grow 50 per cent more food by 2030 – 100 per cent more by 2050
• Area expansion is only a small part of the solution
• Increased agricultural productivity, more tons per hectare is key. We have to go from today’s 1-2 per cent a year to 3-5 per cent
• Political and financial re-engagement in boosting agriculture is necessary
• 500 million smallholder farmers can and must be part of the solution.

Mr Chairman,

More immediately, by boosting smallholder production over the next two or three years through the supply of inputs and other investments, we can promote social and economic stability and help restore the economic growth path that is now under severe threat because of the rapidly worsening global financial and economic crisis.

In 2006 and 2007, a subsidy of about US$90 million to around two million farm households in Malawi for seeds and fertilizer, or about US$50 per farm, yielded an additional harvest worth up to US$160 million. This shows that success is possible where conditions are right and resources available.

Mr Chairman,

Although adaptation to the effects of climate change is urgently needed sound agricultural practices can also do much to contribute to climate change mitigation.  Farmers can contribute to carbon sequestration and limit carbon emissions, through planting and maintaining forests, managing rangelands and rice lands, as well as watershed protection that limits deforestation and soil erosion. Financial incentives for climate change mitigation must also include smallholder farmers.

Promoting sustainable natural resource management by poor rural people is part IFAD’s core business. Indeed, IFAD houses the Global Mechanism of the United Nations Convention to Combat Desertification.

Mr Chairman,

We need to listen to and work very closely with poor rural people themselves. They know their needs and priorities better than anyone else. When they come together in farmers’ and producers’ organizations, they add strength to their aspirations. For IFAD they are vital partners. In many parts of the world the communities of indigenous peoples are articulating their development needs and IFAD has become a trusted partner. It is a great challenge and responsibility for IFAD to develop further the work with indigenous peoples. A special priority for IFAD is women farmers. They produce over half of the developing world’s food supplies; in sub-Saharan Africa the figure is even higher. Without the daily, dawn-to-dusk struggle of rural women, food would indeed be short. When they are fully heard and genuinely part of development programmes, success rates go up!

Mr Chairman,

Over the last seven years IFAD’s Programme of Work has grown on average by nearly 10 per cent a year, financing better seeds, more micro-finance, more roads, self-help groups, training, extension, irrigation, strengthened institutions and much other vital support to rural communities.

In doing so, we have significantly improved the quality and impact of IFAD funded programmes. I am happy to say that the assessments made by IFAD’s independent office of evaluation show an improving trend in effectiveness, sustainability, innovation and poverty impact. We are on track to reach the targets set in IFAD’s Action Plan. In fact all but one has been reached ahead of time. However, there is no letting up of the commitment to further improvement.

Over the last few years, IFAD has profoundly reformed as an institution.

• We have developed results-based country strategies and programmes
• We have expanded our country level presence
• We have increased significantly our direct supervision of projects and programmes
• We have improved our targeting, knowledge management and innovation capacity
• We have achieved administrative efficiencies and reduced transaction costs
• And we have introduced serious human resources reform as well as a culture change based on core values.
• The 2008 UN Global Staff Survey, completed by some 15 000 staff from 34 UN organizations, showed IFAD ranking second overall.

We are, to sum up, a results-driven values-based organization. And we are committed to continuous change and reform.

During my eight years as President, I have seen how IFAD’s key asset is its staff. I cannot pay enough tribute to their professionalism, their commitment and their dedication in often the most difficult of circumstances. Now when we add a growing number of country office staff I would like to recognize their crucial role in the new IFAD that is taking shape. They need our support and recognition more than anyone.

In recognition of our relevance and our growing development effectiveness, you, the member states of IFAD, agreed in December last year on a new Replenishment of IFAD’s resources. It represents an unprecedented 67 per cent increase over IFAD’s last replenishment, making it the largest in our history. The confidence shown in IFAD is reflected by six countries so far having more than doubled their pledges. Saudi Arabia led the way with its early announcement of a five-fold increase. And 20 countries have pledged increases of over 50 per cent. I urge those that have yet to pledge to do so, if at all possible, at this Governing Council.

Over the next four years IFAD will provide about US$3.7 billion to support agricultural projects and programmes with a total investment cost, including co-financing, of up to US$8.5 billion. We expect these programmes to help about 70 million poor women and men on smallholder farms, to increase their productivity, production and incomes.

Thanks to you, our Members, IFAD is stronger today than we were eight years ago, when I first addressed the Governing Council. In many developing countries, IFAD is one of the largest sources of financing for agriculture and rural development. Little of what we achieve, however, could be done without the close collaboration of our partners: FAO and WFP here in Rome; the wider UN system; the World Bank and the regional development banks, the OPEC Fund for International Development, the Global Environmental Facility, the CGIAR system and many other multilateral and bilateral partners.

Key among our partners are the developing countries themselves – you, the member governments, the rural poor and their organizations, the increasingly important farmer and producer organizations.

IFAD is an active partner in the international system. We are committed to working under the leadership of our member governments in a harmonized way – consistent with the Paris Declaration and the Accra Agenda for Action. The 2008 Survey on Monitoring the Paris Declaration showed IFAD performing stronger than the UN or other IFIs on most indicators. IFAD is playing an active role in the One UN initiative, working closely with UN Country Teams and locating our country presence in our partner agencies. I would like to pay a special tribute to the consistent support from WFP and FAO in this process.

We are delighted to have been able to contribute to the work of the Secretary General’s High Level Task Force on the Global Food Security Crisis. I am pleased that we will house the Rome hub of the Secretariat of the Task Force. We also look forward to playing our part in the proposed Global Partnership on agriculture and food security

As we enter a new era for IFAD under a new President, I want to recognize the importance of your strong, strategic governance of this organization.

You the IFAD member states, through the Executive Board, set our agenda. You provide our direction, through policies and strategies. And you follow up through rigorous monitoring and evaluation. You underpin and reinforce our core values. And you ensure that IFAD remains at the cutting edge of development effectiveness.

I would like to take this – my last – opportunity to thank you, the members, for the support you have given this institution and me personally over the eight years I have been President. I am confident that you will continue to provide the same strong support to my successor. 

I thank you for the trust you have shown in me; the belief you have shown in IFAD; your willingness to support reform and your readiness to provide the resources needed to allow IFAD to grow and develop, to realize its potential.

I am proud to have been your partner in this development.

And I want to thank you for being such wonderful hosts when I have visited so many of you, and for giving me the personal opportunity to witness, far into the most remote areas, first hand, the difference we make. From a women’s self-help group deep into the tribal areas of Chattisgarh in India to a family farm cooperative outside Asuncion in Paraguay. From the village level irrigation and local cattle dip by Lake Victoria in Tanzania to the upland farmer in China. From the microfinance programme in the Maya Indian community on the Yucatan peninsula to the savings and loan association by the Senegal River in eastern Senegal. From the irrigated new lands of Egypt to the arid fields outside Aleppo, Syria. From the densely populated rice growing areas of Java, Indonesia to the fisherfolk outside Beira, Mozambique.  

I have met individuals, families, communities, farmer organizations – all deeply anchored in their cultures, identities and livelihoods joined together in a global village of hope. Our joint responsibility is to enlarge this global village to reach all those hungry and poor living in destitution and despair, to help them realise the dreams that we all share as human beings.

Thank you.

Rome, 18 February 2009