Mr. Chairman,

The Millennium Development Goals (MDGs) have helped to reinforce efforts to achieve development and poverty reduction and have provided a metric for monitoring progress.   Against this backdrop of agreed priorities and targets, new challenges continue to emerge that must be recognized, understood, and integrated into ongoing global efforts.  This means that achieving the MDGs has become more complex than when they were first adopted.  Looking toward 2015 and beyond, we must adapt our approaches to take into account these new challenges. 

The World Bank’s new President addressed these complexities when he recently outlined his vision for strategic directions for the World Bank Group. Mr. Zoellick proposes that the World Bank Group take as its goal the creation of an “inclusive, sustainable globalization.”  To realize this goal, the rapidly unfolding processes of global economic growth, integration, and technological change will need to expand to benefit those that today are excluded and dispossessed.  Where these processes risk adverse impacts on the environment, new approaches will be needed to ensure that development is sustainable and maintains the natural resource base. 

In outlining his vision of the Bank’s strategic themes, Mr. Zoellick has highlighted the crucial role of agricultural development.  IFAD welcomes this.  As the just-released 2008 World Development Report (WDR), Agriculture for Development, highlights, GDP growth generated by agriculture is four times more effective in reducing poverty than growth generated by other sectors.  At the same time, the report documents the underinvestment in agricultural development by donors over the past twenty years.  In 1979, 18 percent of official development assistance (ODA) was spent on the sector.  By 2004, that percentage had declined to 3.5 percent.  This finding is echoed in the recent report on World Bank assistance to African agriculture issued by the Bank’s Independent Evaluation Group.  A central finding of that study is that the agriculture sector has been neglected by governments and bilateral and multilateral institutions.

Today, stalled international trade talks and rising food prices combined with growing attention to biofuel crops, are prompting greater global attention to agriculture.  The WDR provides a very useful guide for refocusing developing country and development action and resources toward this vital sector.  It also provides compelling evidence for the crucial role of agriculture in spurring economic growth, shows that investment in agriculture can and does work, and – of particular interest to IFAD – recognizes smallholder farming as a proven way of organizing production and reducing poverty. 

A number of governments in Africa and elsewhere are increasing their spending on agricultural development.  External development partners should follow suit.  In particular, funding for agricultural and rural development should figure prominently in the fulfilment of recent pledges of increased aid for Africa.   

Indeed, the broad developmental contribution of agriculture is also relevant to several of the other strategic themes that Mr. Zoellick has raised.   For example, assistance to states coming out of conflict or seeking to avoid the breakdown of state functions needs to take into account the fact that the economies of nearly all of these states are predominantly agricultural.  In these cases, establishing a stable and growing economic foundation for stronger governance and renewed growth requires investment in the rural and agricultural sectors of the economy.

Agriculture’s role in climate change – both positive and negative – is also coming into sharper focus.  The global community must recognize that those who are and will continue to be most affected – poor farmers in developing countries – are those who, because of their traditional exclusion from the development process, are least equipped to adapt to the effects of climate change.   They are, at the same time, the least responsible for the shifting climate patterns that are undermining their livelihoods.  Thus, it is only just that the international community should help them to adapt to the new conditions that have been largely created by others.  

At the same time, these farmers – 1.5 billion of the world’s population who manage vast areas of the world’s surface -- can be part of the solution to the challenge of how to mitigate climate change.  IFAD believes that by finding imaginative ways to pay poor farmers for the environmental services that they provide, such as afforestation and drylands management, the vicious cycle of exclusion and environmental damage can be transformed into a virtuous cycle of strengthened livelihoods and better natural resource management. 

The issue of scaling up official aid flows, which the Development Committee is considering, can therefore not be considered apart from the critical question of the allocation of ODA, and particularly the often underestimated role of agriculture in development.  It is essential that increased ODA translates into increased investment in agriculture and rural development.  It is also essential that the scaling up of assistance for smallholder farmers be done on the basis of more effective solutions to the particular challenges that they face.  This requires a search for innovation and the developing and testing of innovative methodologies, institutional arrangements or technologies.  This focus on innovation is increasingly central to IFAD’s operations.  When innovations are tested and found to be effective, they require systematic scaling up through integration in broader policies and programs.  We will be looking to expand on our current collaboration with the World Bank and others, to create strong links by which such innovative approaches can be taken to a wider scale.

We know that agriculture is the key to poverty reduction and growth.  As the experience of China, India, and many others has shown, we know that investment in agriculture works.  And we are becoming increasingly aware of the contribution that the world’s 1.5 billion small scale – and mostly poor – farmers can make to feeding a growing world population while protecting our environment. IFAD looks forward to strengthening our collaboration with the World Bank and other partners to help them to so.

Thank you.

21 October 2007