By Lennart Båge, President of the International Fund for Agricultural Development (IFAD), published in Kehitys-Utveckling Three quarters of the world’s one billion poorest people live in rural areas in developing countries and depend on agriculture to survive. Yet agriculture remains neglected and underfinanced. As a result, in many parts of the developing world, poverty in rural areas is increasing. Small farmers are often forced by poverty to leave their land to seek work in cities, where they can end up under-employed and living in crowded slums, losing their dignity instead of finding the financial security they need. These "economic refugees” are also migrating to other countries in search of a better life. Fighting poverty today means that we must first transform the lives and livelihoods of poor rural people and enable them to thrive in their own communities. We need a renaissance in agriculture in developing countries to do this. We know that agriculture is a way out of poverty. It not only provides food for people, it is a foundation for economic growth. Agriculture has the power to transform economies. We saw this in Europe a century ago, and more recently in Asia. Studies show that investments in agriculture are two and a half times more effective in raising people out of poverty than investments in any other sector. Investing in agriculture is also a way to diminish forced migration. As small farmers earn more money, they stimulate local economies by spending more on equipment, goods and services, as well as on non-farm goods. Estimates by the International Food Policy Research Institute (IFPRI) show gains that range from an additional US$0.60 in non-agricultural income in Niger for every US$1 increase in farm income, to gains of US$1.88 in non-farm income for every US$1 in agricultural income in Burkina Faso. There is a very real desire around the world to end poverty. World leaders made a strong commitment at the Millennium Summit in 2000 to halve the proportion of people living in extreme poverty by 2015. Globally, we are on track to achieve this target, but in many regions of the world we are not. Recent data from the World Bank show that the number of people living in extreme poverty fell from 1.25 billion in 1990 to 986 million in 2004. It should be noted that one country – China – accounted for almost all of the improvement. Excluding China, the number of people living in extreme poverty declined modestly from 873 million in 1990 to 857 million in 2004. In sub-Saharan Africa and parts of Latin America and the Caribbean, the number of people living in extreme poverty actually increased in the same period. Unfortunately, resources are missing where they are most needed. The challenges are most pressing in sub-Saharan Africa, where there has been little progress in reducing the number of people living in extreme poverty. Agriculture plays a central role in the region’s economy, accounting for 30 per cent of GDP, 40 per cent of exports and as much as 70 per cent of employment. Yet overall investments have been grossly inadequate in essential areas such as land and water management, small-scale irrigation, research, technology, extension, market access and provision of fertilizer and pest control. More investment by national governments is needed in these areas. Over the past two decades, increases in government spending on agriculture in East and South Asia have been clearly linked to rapid progress towards achieving the first MDG. Conversely, in sub-Saharan Africa, where we are not achieving the first MDG and extreme poverty remains high, the level of public expenditure for agriculture declined during the 1990s, and although improving, remains low overall. National investment should be reinforced by development aid, but investment alone is not sufficient. We need to combine increased resources with national leadership and policies that address the specific obstacles faced by poor rural people. Governments often overlook poor farmers and their communities when preparing their national development plans and programmes. To reduce poverty, rural poor people must be at the centre of a revitalized approach to agriculture and rural development that enables them to gain greater access to economic and productive assets. These assets include land, water and other natural resources, technology, agricultural and financial services, markets, and policy processes. Another way to improve the effectiveness of investment – sustainably – is to support the collective efforts of poor rural people. Experience at IFAD shows that rural communities and economies can be revitalized when the needs and priorities of poor rural people are addressed. At IFAD we focus on poor and marginalized rural people: small farmers, landless people, nomadic pastoralists and artisinal fishers, with a special effort to support ethnic minorities, indigenous peoples and women. During 30 years of working with poor rural people and their organizations, we have learned that, to enable people to overcome poverty, we must ensure that they have access to the skills and organization they need to take advantage of economic opportunities. With strong organizations, farmers are more competitive and better able to meet market demand. They also have a stronger voice and are better able to influence the policies and decisions that affect their lives and often perpetuate poverty. Precisely because they focus on empowerment, IFAD programmes make a real difference in the lives of poor rural people. Last year, I visited Ghana with the heads of our sister UN agencies, World Food Programme (WFP) and the Food and Agriculture Organization (FAO). We met Alimatou Mahama, who lives in the north of the country. A strong woman, proud and full of confidence, Alimatou took advantage of the training, veterinary services and microcredit provided through an IFAD project, to raise goats. This was an opportunity previously denied to women in her village. Now she is able to send her children to school, buy food, clothes and medicines for her children. The project closed in 1995, but Alimatou and other women in her community continue to carry on their activities, and in 2007 they are still thriving. There is no single blueprint for reducing poverty. Today’s rapidly changing global economy and political environment place a premium on innovation. We need new answers to both new and old problems. Innovations that prove to be efficient must be shared and replicated more systematically. When I think about the power of innovation, I think about Muhammad Yunus. Thirty-three years ago, Yunus loaned $27, in total, to 42 poor rural people. Six years later, IFAD invested $3.4 million in what, by then, had grown into a small institution providing microfinance services. The institution was the Grameen Bank. Last year, Yunus and the Grameen Bank were awarded the Nobel Peace Prize for their efforts to create economic and social development from below. Today, over one hundred million poor families benefit from the global microfinance movement. IFAD is a major financial supporter, providing over $200 million annually. This is just one example of how an innovative project, when scaled-up, can change the lives of millions of poor people. By thinking creatively and making agriculture and rural development a central part of national policies and investment, public and private, we can achieve a renaissance in agriculture in developing countries. Then we stand a chance of reaching the Millennium Development Goals and eradicating the scourges of extreme poverty and hunger that continue to blight the lives of so many people. June 2007 Published in in Kehitys-Utveckling, a quarterly development magazine published by the Development Policy Information Unit of the Ministry for Foreign Affairs of Finland |
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