Excellencies,
Colleagues,
Ladies and Gentlemen

Thank you, Chairperson for your helpful introduction.

In the context of the panel discussion today, I would like to take this opportunity to concentrate my remarks to briefly addressing the four questions set out in the concept note, and to explain both why and how smallholder farming is the best way of ensuring global food security.

Crises context

Let me begin by saying that every human being has at heart the desire to survive and prosper. Yet, more than 1 billion people go to bed hungry every day with little to no hope of seeing a better day when the sun rises.

Before we go further, let us put this in context.

We know that international food prices have come down from their historic peaks of a year ago, but they remain high. Indeed, in more than three quarters of developing countries around the world, domestic prices are higher than a year ago.

Impact of crisis

Countries dependent on food imports were shaken by the crisis, which not only made food availability an issue, but also food affordability. As we know, there were riots in more than 40 countries, including the fall of the government in Haiti. The food price crisis provided a stark demonstration – if one was needed – that food security is an integral part of overall security, at both national and global levels.

Meanwhile, the weak market linkages led to the lack of transmission of the record high prices to the farm gate, which meant little to no benefits to the poor rural producers. Moreover, their access to affordable inputs was limited, their available technology was weak, the necessary infrastructure and institutions were lacking and some policy responses (such as price controls and tariff reductions) actually reduced incentives. As a result, poor farmers in developing countries were not able to seize the opportunity presented by the high prices to invest and raise their production and productivity.  

Instead, far from being able to profit from the high prices, poor rural people were actually hit hard.  Recent estimates indicate that, as a result of the food and global economic crises of the last two years, more than 100 million people joined the ranks of the hungry.

This is unacceptable. Hunger and poverty are inhuman and should never be tolerated.

Need for rural development

It’s a fact that the majority of hungry people in the world live in rural areas of developing countries and depend either directly or indirectly on agriculture for their livelihoods. This is likely to be the case for years to come. 

Five hundred million smallholder farms worldwide currently support around two billion people, or one third of the world’s population. They farm 80 per cent of the farmland in Asia and Africa. They produce 80 per cent of the food consumed in the developing world and they feed one third of the global population.

There is a consensus that economic growth in developing countries is dependent upon agricultural growth and that the growth of economic opportunities to poor rural people is fundamental in poverty reduction. The majority of the poor are smallholder farmers most of whom depend on low-yield, rainfed agriculture for their livelihoods, which is further threatened by climate change. Increasing smallholder productivity is therefore essential not only to secure the food and nutrition needs of these farmers, but also of the millions of people who depend on them.

Among these farmers, rural women in particular need to be able to fulfil their potential are they are increasingly the farmers of the developing world, performing the vast majority of agricultural work and producing between 60 and 80 per cent of food crops.

The question is “how” do we enable smallholder farmers – both women and men – to fulfil their potential? The second question of today’s panel is relevant here: How to provide support to farmers in least developed countries so that they face a level playing field?

Let me make two suggestions in this regard:

• First: investment. While the food crisis of 2007/2008 was exacerbated by short-term developments, such as crop failures in major cereal producing countries, it was fundamentally a reflection of the failure of world supply to keep pace with growing demand. So while the demand for cereals rose 2 to 3 per cent per annum, failure to maintain investment levels in agriculture meant that growth in agricultural productivity in developing countries declined from 3 per cent per annum in the 1970s to 1-2 per cent in the 1990s.
  
  The food price crisis has made it clear that the world can ill afford to under-invest in agriculture. Food security requires consistent sustained investment in agriculture. It cannot be turned on and off like a tap.  The commitment made by the international community at the G8 L’Aquila summit is a step in the right direction – but much more is needed.
• Second: research is fundamental to raise smallholder productivity and production levels. Speaking as a former scientist and researcher myself, I can say that research – in particular pro-poor agricultural research, science and technology – is the driver of technological change.

As mentioned earlier, agricultural growth drives economic growth and development. Every dollar earned by farmers can raise incomes by up to US$2.60 while a 1 percent increase in crop yields can reduce the number of people living on less than US$1 a day by 6.25 million. Pro-poor research providing low-cost and sustainable technical solutions would undoubtedly improve the situation of smallholder farmers.

This is particularly true given the increasing volatility of today’s world environment. A population projected to grow from 6.8 billion to 9.1 billion in 2050 will require higher levels of food production than we are currently achieving. Indeed, it is estimated that global food production will need to increase by 70 per cent, and production in developing countries will need to double.

But our capacity to reach those higher levels of production will be constrained by the growing impact of climate change. That is why we need urgently to research and develop new, higher yielding crops with greater resistance to drought, flooding and salinity, amongst other climatic phenomena.

If we do not urgently invest in such agricultural research, climate change is likely to exacerbate global food security and dramatically increase the number of people facing hunger and malnutrition. As I said before – this is not acceptable.

While it is clear that we need to increase food production, this is not enough to avert future food crises. Food security requires distribution mechanisms that enable equal access to food for all people. Farmers need to be linked to markets – not necessarily international markets, but to vibrant and competitive local markets.

This leads me back to the first question of today’s panel: How to increase access of developing country farmers to national, regional and international markets?

Investment in local infrastructure is key. This means investment in irrigation, communications and transport, to enable smallholder farmers to take advantage of higher prices. It means investment in the “last mile” rural roads, to ensure that what is produced by poor rural people can actually be brought to market and fetch a good price.

We also need to respond to smallholder farmers’ needs for rural financial services, markets and linkages along the entire value chain.

In other words, creating a dynamic smallholder agricultural sector requires that governments in developing countries take a value chain approach to investing in agriculture.  This entails building institutions all along the value chain from research, to dissemination of new technologies, to production, processing, marketing and rural finance.  With the market and private sector increasingly driving agriculture, there is also a need to build effective private-public partnerships.

Only this way will smallholder farmers be able to buy the improved seeds and fertilizers, gain more control over when and where to sell their produce and so profit from their increased productivity.

I should like now to move on to the third question of today’s panel: Can mechanisms be developed for smallholders to benefit from the carbon credit offset system?

Let me cite some facts related to climate change:

• In Sub-Saharan Africa, arid and semi-arid areas are projected to increase by 60-90 million hectares.
• In Southern Africa, yields from rainfed agriculture could be reduced by up to 50 percent between 2000 and 2020.
• In Africa alone, between 75 and 250 million people will be exposed to water stress by 2020.
• The loss of stability in production and decline in food production due to climate change - under a worst case scenario – would put additional 63 million people at risk of hunger by 2020.
• The number of additional people at risk of hunger could reach 600 million by 2080, as a direct result of climate change.

Smallholder farmers have a critical role to play in combating the impact of climate change. They have the potential to provide a wide range of environmental services that contribute to carbon sequestration and limit carbon emissions. These include planting and maintaining forests, engaging in agro-forestry activities, managing rangelands and rice lands, as well as watershed protection that limits deforestation and soil erosion.

In order to fulfil this potential, however, rural women and men need the resources to cope with the challenge of climate change. They must be part of the multi-billion dollar carbon markets. And they must be recompensed for their role in maintaining the multi-trillion dollar environmental and ecosystem services upon which all economies depend directly or indirectly.

A key challenge in the current carbon market system is ensuring that poor rural people receive benefits from carbon trading. Important to achieving this will be the underlying agreement with the local communities, the land tenure issues and agreeing on a “right” price for carbon.

Let me now turn to the fourth question of today’s panel: What international mechanisms and national policies need to be in place to assure countries of food imports in times of crises?

As restated by Alain de Janvry at the FAO High Level Forum recently held, there is a need to develop a new development paradigm following the Washington Consensus. Rural poverty cannot be reduced through transfers from other sectors but should put farmers in developing countries at the centre of income generation activities boosting agricultural incomes.

In other words, global food insecurity is not a matter of short term responses to be tackled by food aid alone, but by helping developing countries increase their food production. For the reasons I’ve already given, this means increased production by smallholder farmers.

While smallholder farmers need to increase their production to enhance national food security, governments have to create the environment to enable them to do so. Developing country governments must create the political will and the right policy environment for development.

I believe that the answer to the availability and affordability of food – and therefore to sustainable global development – lies with the national governments of developing countries and with the poor rural people themselves.

We need national and sub-regional development strategies promoting food security. These must be based on the development of smallholder farming and must be context specific. They need to be developed and unequivocally owned by national governments. And they need the systematic involvement of the primary interest groups – such as organisations of smallholder farmers – that need to be at the centre of the policy reform and the investment processes. The era of top down approaches is no longer part of today’s development policies, which need to be developed and proposed by the very people that need to transform and implement the policies into sustainable development processes at grassroots levels.

This is what drove the economic development of countries like Viet Nam, where almost 80 per cent of the country's poor people depend on agriculture for their livelihood. Agricultural growth has underpinned Viet Nam’s economic growth, cutting poverty from nearly 60 per cent in the early 1990s to less than 20 per cent today. And Viet Nam has enjoyed growth with equity: smallholder farmers are both key actors and beneficiaries.

The same is true of China, where the number of people living in extreme poverty in 1990 was 33 per cent, had reached 10 per cent by 2004 and is projected to be 2 per cent in 2015.

In Indonesia, output price stability, input subsidies together with increases in productivity closely linked to the Green Revolution technologies, were behind the reduction of the incidence of absolute poverty from 40 per cent of the population in 1976 to a share of just 12 per cent in 1996.

And more recently, in Malawi, during the period 2005-2008, a ‘smart’ subsidy investment of about US$258 million in around two million farm households contributed to incremental maize production and to a reduction – within two years – of the poverty headcount ratio from 50 to 40 per cent. 

Conclusion

Ladies and gentlemen,

Smallholder farming and rural development hold the key to global food security. But if smallholder farmers are to fulfil their global potential, we need measures, policies and accompanying investments at global, regional and national levels. Only then will smallholder farmers in developing countries be able to contribute effectively to global food security. Only then will we be able to reverse the trend on poverty and hunger and achieve the international goals to which we have repeatedly committed.

I thank you for your attention.

18 November, FAO, Rome, Italy