With only six years to run before the 2015 target date for the Millennium Development Goals, global food security remains a precarious objective. The world is still reeling from the effects of last year’s spike in food prices, followed swiftly by the crushing impact of the global financial crisis and economic downturn.

As a consequence, hunger and poverty remain the scourge of developing countries. This year, FAO announced that more than 100 million people were being pushed into extreme poverty. We just learnt from the World Bank during the recently held G20 meeting in Pittsburg that, by the end of 2010, 89 million more people are expected to be living in extreme poverty, on less than US$1.25 a day, which would not have been the case without the global recession¹ .

There are times, however, when some good comes out adversity. The recent crises, devastating in their impact and extensive in their reach, have succeeded in moving food security to the top of the agenda, including at the last meeting of the Development Committee in Washington in April, the G8 meeting in L’Aquila in July, the G20 Pittsburgh meeting and the Partnering for Food Security meeting in New York in September. It is now increasingly recognised that food security has two dimensions: food aid for critical situations and sustained investment in agriculture to break the poverty cycle.

Growth in agriculture has driven wider economic advances throughout history, from Europe in past centuries to the rapidly growing economies of Asia today. It is clear that agricultural growth is fundamental to economic and social development. Indeed, agriculture can help drive global recovery from the recent economic crisis. Agriculture is a key player in the development agenda as it affects the vast majority of poor rural people who depend on it for their livelihoods.

Smallholder agriculture, in particular, holds the key to sustainable growth and equitable wealth generation in the developing world. There are about 500 million smallholder farms worldwide, which directly support over two billion people – or one third of humanity. In many developing countries, particularly in Africa and Asia, smallholder farmers – often women – produce 80 per cent of the food consumed. With the right support, they can double or triple their production. These poor rural people are an important part of the global production potential and therefore an important element in the global economic recovery.

But in order to release this potential and tackle the global problem of food insecurity in today’s context of volatile food prices, financial and economic uncertainties, and climate change, urgent investment in smallholder farming is needed. Steady progress has been made since the April meeting of the Development Committee, and there is now a growing consensus on the important role smallholder farmers can play.

Agriculture is both a cause and a victim of environmental problems and climate change. It is one of the most vulnerable sectors to climate change, a major contributor to greenhouse gases, but also the main source of income for most of the world’s 1.4 billion extremely poor people. Urgent action is needed to tackle the growing impact of climate change as it may be exacerbating the slow food production response.

In addressing the challenge of food security, global development and climate change, we therefore face three inter-related challenges:

• First, we must double food production in developing countries by 2050 to meet growing demand by ensuring support to the hundreds of million of smallholders;
• Second, we must adapt agricultural production to shifting weather patterns; and 
• Third, we must minimize agriculture’s contribution to greenhouse gas emissions while maximizing its potential to mitigate climate change.
  To meet these challenges we will need substantial new resources, new ideas, and new ways of doing business.

New finance is essential because the reality is that climate change is making development more costly. An estimated US$50 billion to $170bn per year will be needed for adaptation to climate change alone by 2030. The pledge of $20 billion at the G8 Summit in L’Aquila for food security is an important step, but we have a lot further to go.

New ideas are also essential, and in that respect, IFAD welcomes the food security initiative announced in L’Aquila and the commitment expressed by G20 leaders in Pittsburgh to address the impact of excessive price volatility in low income countries. Consistent with the G20 statement, IFAD affirms that it will coordinate its efforts with the World Bank, the African Development Bank and other regional development banks, as well as with its partners in Rome, the FAO and WFP, in order to contribute as effectively as possible to the success of the L’Aquila food security initiative.

And new ways of doing business are necessary including strategies that involve all stakeholders:   small and large-scale farmers, rural credit cooperatives, global engineering firms, carbon trading firms, fertilizer producers – to name but a few. Our new business practices should also focus on capacity building, to strengthen local institutions and governance processes, as well as organizations of smallholder farmers and poor rural producers. And we need to take forward work to develop a code of conduct on governance of natural resources, which will guarantee responsible international investment in agriculture.

Over the past 30 years, IFAD has invested US$11 billion of its own resources in low-interest loans and grants for agriculture and rural development in developing countries, and it has leveraged a further US$17 billion in co-financing.

Our investments have enabled poor rural women and men to grow and sell more food and to break out of poverty. The projects we support have helped poor rural people build their livelihoods and increase their wealth so that their families can eat better and their children can go to school – and even aspire to be the leaders of tomorrow.

The pledges we have received for our 8th replenishment, covering 2010-2012 and amounting to about US$1.1 billion so far, will allow us to expand our activities, develop our presence in the field and improve our overall effectiveness and efficiency.

There can be little doubt that, for sustained food security and global development, long-term investment in smallholder agriculture is an imperative. Thanks to the confidence and generosity of its members, IFAD has both the capacity and the expertise to help drive the international effort towards this goal.

5 October 2009, Istanbul, Turkey

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1/ World Bank: “Protecting Progress: the Challenge Facing Low Income Countries in the Global Recession” [G20, Pittsburgh, September 2009]