Excellencies, Ladies and Gentlemen, it is an honour to be here today at this historic first meeting of the Agriculture Ministers of the G8.

Before I begin, I wish to extend my heartfelt sympathy to the people of Italy, and in particular the people of L’Aquila, so many of whom are now bereaved and homeless in the wake of the devastating earthquake of April 6.

The key role of agriculture and rural communities
I have been asked this afternoon to talk about how agriculture can help developing countries recover from the current economic crisis. But as we all know, agriculture is not an emergency intervention to be turned to in times of need. It is the key to food security and a fundamental engine of economic growth and wealth generation. It should always be at the heart of the international agenda and requires consistent investment and commitment over time. Without agriculture resuming its rightful place as the backbone of economic development of any country, we will not get over the food crisis.

Smallholder agriculture in particular is key to sustainable growth and equitable wealth generation in the developing world.

The vast majority of today’s developed countries grew out of strong agricultural foundations, where surplus production generated wealth and prosperity. This is what is happening today in Viet Nam and it is the path that India and China took not so long ago. Developing countries cannot leapfrog this stage of development. Nor should they.

Strong agricultural sectors and rural communities that are productive and resilient are key not only to food security, but also to political security on the streets and in the fields. Put simply, without food security, the world is not secure.

Historically, thriving rural communities have provided social stability – village life is like an insurance policy. And again today, in the current economic crisis, migrants in many countries are returning to their rural communities having lost their jobs and their homes in the cities or overseas.

Falling remittances
This re-migration is what journalists like to call a double whammy for poor rural people: returning migrants mean more mouths to feed, and they also mean less money in the form of remittances. Remittances are a vital – but fragile – lifeline for rural communities around the world. And in several countries, they also provide a significant share of GDP.

A landmark IFAD study estimated that over US$100 billion  flowed to rural areas in the form of remittances in 2006 – roughly the equivalent of total global aid that year. Today these flows are being strangled by the global financial crisis. The latest World Bank estimates show that total remittances slowed sharply in the second half of the year and are expected to fall further in 2009.

 

Rural finance
The financial crisis is global but it is not new in the rural areas of the developing world, where only about 1 in 10 people have access to the financial services such as savings, credit and insurance.

Protecting and increasing the access of poor rural people to financial services is all the more important as the global financial crisis bites and as remittances shrink. IFAD is playing its part to address this – some 60 per cent of our ongoing programmes and projects around the world promote rural financial services and institutions.

In Armenia, for example, IFAD is one of a team of organizations supporting the Agricultural Cooperative Bank of Armenia. Since it was set up in 1996, ACBA has grown from a purely agricultural cooperative bank to a commercial bank offering universal banking services to the entire country.

In Ghana, a successful IFAD-supported project has helped give over 2.7 million poor rural people access to financial services. And a new programme approved last December will build on this success, broadening financial services to some 5 million rural Ghanaians.

Next week I shall invite the IFAD board to endorse the new IFAD Rural Finance Policy to ensure that we continue to deliver the right support in the right places.

Donor commitments
At Gleneagles in 2005 G8 leaders made important commitments to significantly increase aid, and to double aid for Africa. And at Hokkaido last July, the G8 leaders pledged to reverse the decline in aid to agriculture – from around 20 per cent of all aid in the 1980s to 3 per cent in 2006. Some progress has been made to implement these pledges, but more is needed.

I welcome President Obama’s call to the US Congress to double financial aid for development in poor countries to US$1 billion next year.

And I am heartened by the European Union pledge of €1 billion over 3 years to get agriculture back on its feet.

IFAD replenishment
A few months after the Hokkaido summit, the 165 member states of IFAD agreed our largest replenishment ever – US$1.2billion. This record replenishment was an unprecedented 67 per cent increase over the previous one, and was a strong vote of confidence in IFAD’s ability and experience in the fight against rural poverty.

Over the next five years, through US$3.7 billion in funding to agricultural programmes and projects, IFAD will be able to help about 70 million poor smallholder farmers to increase their productivity and incomes. Since we started work over 30 years ago, we have reached some 340 million poor rural people.

The role of developing countries
Governments of developing countries themselves must also play their part. All national governments in Africa and other developing regions need to invest more – in many cases much more – in agriculture.

My message to the developing world is: first put your own house in order. National governments have economic, political and social problems, but they must clearly show the international community that they will support their farmers to increase productivity and give them access to local markets so they can become economically viable.

Closing remarks
Poverty and hunger are inhuman and cannot be tolerated. The only way to eliminate them both is to empower rural communities to take responsibility for their own growth and development. I welcome the leadership on this issue provided by Secretary General Ban Ki-moon. I am proud to be a member of the Task Force on agriculture and food security that he leads, and that produced the Comprehensive Framework for Action last year. This outlined how the international system could respond to the global food crisis and contribute to longer-term food security.

G8 nations must give their full support to the Comprehensive Framework for Action. It clearly outlines what needs to be done. In short:

• we must provide food for the hungry so they can eat today
• we must invest more in smallholder farmers so that they can produce more and feed themselves, their families and the world tomorrow.

At IFAD, we focus on small holder agriculture and make long-term investments in human dignity. We champion international efforts to enable poor rural people to improve the quality of their lives, and at the same time we advocate for greater investment in small holder agriculture and rural development. The issues we face call for more than just understanding, though, they require passion, compassion and, above all, action. Declarations don’t feed people, actions do.

I have already mentioned G8 government commitments in Hokkaido. Meeting these commitments is all the more important now, as the financial crisis exacerbates the food crisis, in order to boost investment in smallholder agriculture. As agriculture ministers, you understand that better than most and I hope that you will make your voices heard through your communiqué and in your respective capitals in the run up to the G8 summit. The world will be listening for new pledges at Maddalena – but first we will be straining to hear about the progress on those already made.

The world cannot stand by as the food and financial crises condemn millions of people to poverty and hunger.

Cison di Valmarino, Treviso - 19 April 2009