Mr. Chairman,
Mr. President,
Distinguished Governors,
Delegates,
Ladies & Gentlemen

It is really an excellent opportunity to work with International Fund for Agricultural Development (IFAD) which was founded in 1977 on the basis of the realization that the causes of food insecurity and famine were not so much related to failures in food production, but to structural problems related to poverty. IFAD’s cherished mission to ‘enable poor rural people to overcome poverty’ is still relevant to India and many countries of the World.

India's relationship with IFAD is unique since we are not only the largest borrowers of IFAD's fund but also the largest contributor among the developing countries. India and IFAD share common objectives - poverty alleviation with a focus on the rural poor, empowerment of rural women and tribal development through capacity and institution building, natural resources management and micro-finance.

This session of Governing Council is taking place in an atmosphere which is far more hopeful than it was a year ago or so, when the financial and economic crisis had just begun. The crisis has not only been enormous in scale but has generated an extraordinary response from most major economies. While the optimism is justified, we must realize that the economic crisis has not yet run its full course. The crisis continues and though the acute phase may be over, its adverse impacts are going to linger on for many years to come. While the first order effects were limited to the financial sector and many developing countries remained relatively unscathed, the second order effects on the remaining sector of the economy have had damaging consequences. The loss in industrial production, remittances, trade and consequently, economic growth, has pushed over 90 million people into poverty as per the World Bank’s estimates. It must be remembered that this estimate has been constantly rising and we are not sure that we have reached the upper limit. In the seven years before the crisis, the GDP of the developing countries grew at an average of 6.5 per cent per year. Of course, experience varies across countries. Countries in Asia have generally fared much better. As per present indications, the economy of India may grow at the rate of 7.5 per cent during the current financial year 2009-10. Countries in sub-Saharan Africa and in many other regions have been very badly hit.

While Governments of developing countries are trying to battle the crisis through stimulus packages and other relief measures, they face fiscal constraints in maintaining their investments in education, health and infrastructure. The fight against poverty, illiteracy and disease has suffered a serious setback and the timely achievement of Millennium Development Goals (MDGs) has been jeopardized. As major economies unwind their stimulus packages and bring budgets back into balance, this would reduce stimulus driven growth impulses. It is likely that we will experience a weak recovery which is unevenly distributed, with a continuing severe impact on the poor and marginalized. This is the right opportunity for the Multilateral Development Banks (MDBs) like IFAD to fulfill its mandated role and step in to fill as much of the gap as possible.

We are especially happy that the President of IFAD, found time to come to India in November 2009 and get a first hand experience of the implementation of the IFAD's programme. His deep and intimate knowledge of the rural realities of our country will definitely give a new direction and fillip to the ongoing programmes in India. On behalf of my country, I take this opportunity to thank him for the visit.

The distinguished members of the Evaluation Committee of IFAD also travelled to India and participated in the India Country Programme Evaluation from 7-11 December 2009 and visited Pune for the IFAD-supported "Tejaswini: Rural Women's Empowerment Programme" and Mumbai for meeting officials of National Bank for Agriculture & Rural Development (NABARD) and Sir Ratan Tata Trust. It is heartening to know that the overall portfolio performance of India has been ranked highest till date in IFAD's history. Our endeavor would be to further improve our performance in partnership with IFAD and come up with a more robust framework for the next Country Strategic Opportunities Programme (COSOP).

We expect IFAD to expand its involvement in both the farm and non-farm sectors of the rural economy, with the creation of sustainable livelihoods as the primary goal. IFAD projects in India are seen not merely as a source of funding but also as a laboratory for innovative ideas aimed at helping people overcome poverty. There have been many successful stories of empowerment and capacity development via self help groups and in the natural resource management areas. IFAD’s innovations need to be scaled up in state, national and other donor projects.

Government of India has been advocating one or two big projects requiring sizeable funding (US $ 75-100 million), instead of small projects with restricted coverage. This would ensure that the impact of IFAD projects would be on wider area which would help in proving that the projects are sustainable and not merely successful as ‘Islands of Excellence’ due to the restricted coverage of small projects. We are happy to note that IFAD has recognized and accepted the sound reasoning behind this thought.

India has pledged to contribute an amount of US $ 25.0 million to the 8th Replenishment of the IFAD’s resources and has paid US $ 9 million in December 2009 as the first installment of the 8th Replenishment. The second and third installment of US $ 8 million each will be paid in FY 2010-11 and 2011-12 respectively.

Considering the experience gained while handling projects being financed by various other multilateral agencies like World Bank and Asian Development Bank, there is a need for capacity and expertise enhancement of IFAD’s local India based staff for guiding the project authorities while implementing the projects. Recently, IFAD has moved a proposal for establishing of a Country Office in India. The Government of India has welcomed this initiative and we are eagerly looking forward to establishment of IFAD’s Country Office in India.  

We welcome the High Level Panel discussions titled “From summit resolutions to farmers’ fields: Climate change, food security and smallholder agriculture” in this session of the Governing Council. The subject is very relevant and topical and would indeed help all stakeholders to better understand the dimension of the problem and discuss possible solution.

Some of the most important impacts of global climate change will be felt among the populations, predominantly in developing countries, referred to as “subsistence” or “smallholder” farmers. Their vulnerability to climate change comes both from being predominantly located in the tropics, and from various socioeconomic, demographic, and policy trends limiting their capacity to adapt to change.

IFAD projects in India have addressed some of the most marginalized communities, the most difficult and remote geographical areas. Although small in size, the impact of IFAD projects is significant and they are expected to provide models in our development planning at national and state levels.

On behalf of the Government of India, I would like to congratulate the President of IFAD for his dynamic leadership and compliment the senior management team and all the staff members for the excellent work carried out in the past. While assuring our full cooperation and support to IFAD, we urge IFAD to continue their endeavour in helping poor people of the developing countries to fight poverty, hunger and illiteracy. We are looking forward to a new and meaningful relationship and heightened degree of cooperation between IFAD and India in the coming years.

Thank you Chairman.

18 February 2010