Excellencies, Colleagues, Ladies and Gentlemen,

Introduction

It is a pleasure and an honour to be here with you today. This is my first visit to Azerbaijan and to the historic city of Baku since I was elected President of IFAD. I am extremely thankful to Dr Ahmed Mohamed Ali and to the Islamic Development Bank, for organizing this high-level forum and for giving me the occasion to address this distinguished gathering.

 This is also the first time that I have participated in an Annual Meeting of the Bank. My presence here today is an indication of the importance that both organizations attach to our enduring partnership.

IFAD and IsDB are key partners

As you know, IFAD is a key partner for this group. IsDB member states, and the Arab OPEC states in particular, played a decisive role in the establishment of IFAD over 30 years ago. Since then, collectively and individually, you have continued to give staunch support to our work. Collectively, member states of the Organization of the Islamic Conference have contributed more than 20 per cent of IFAD’s resources, with the Gulf countries offering the largest share.

IFAD’s growth into a mature development agencyand international financial institution owes much to the support of key members represented here. Indeed, IFAD is amanifestation of the will of OPEC and OECD countries to work together to eradicate povertyand boost agricultural productivity indeveloping countries.

IFAD is also the only organization of its kind in which OPEC and other developing countries hold a majority of the votes. Three of my predecessors came from key donor countries, namely the Kingdom of Saudi Arabia, Kuwait and Algeria. Under their able leadership, IFAD’spriorities as an international organization characterized by north-south andsouth-south partnerships were shaped.

A significant proportion of our beneficiaries are poor rural women and men living in your countries. More than 40 per cent of the programmes and projects we support have been in the Bank’s member states.

We also express our partnership in joint support to other institutions, particularly those with a focus on water, which is a critical issue for a great many of the countries represented here today. Together, IFAD and the Bank have supported ground-breaking research in this area by institutions such as the International Center for Agricultural Research in Dry Areas, the Arab Center for the Studies of Arid Zones and Drylands, the Arab Organization for Agricultural Development and the International Center for Biosaline Agriculture.

IFAD/IsDB cofinancing

Not only do IFAD and the Bank share a common purpose, we are also committed to finding new ways to strengthen our productive partnership.

Last year in Rome, on the eve of the World Summit on Food Security, our two organizations reached a landmark cofinancing agreement worth US$1.5 billion. We agreed to join hands in financing 26 priority programmes and projects in many of our neediest member states.

We moved ahead swiftly to translate this commitment into action on the ground, and signed the framework agreement at the Jeddah Economic Forum in February this year.

At the end of today’s symposium, we will be taking steps to initial the first country agreements – for one project in Yemen. This is the first project to be co-financed under the new framework agreement. And I am delighted to be here in Baku to co-sign them. We are currently working with the Bank in other countries, including Sierra Leone and Mali, and I look forward to co-signing similar agreements in the coming few months.

Food security

When I received the invitation to come and take part in this meeting, I was truly heartened to see that you had chosen food security as your theme. You could not have chosen otherwise! Food security is the number one challenge facing humanity today and it will remain so for the foreseeable future.

As you all know, global food security was thrust back to the top of the international agenda when the food crisis erupted in 2007 and 2008. Although the financial crisis may have overtaken the headlines, the food crisis has not gone away. The number of hungry people in the world is now at a record high of over 1 billion, and food prices are set to remain volatile.

I was extremely concerned when I read the Issues Paper prepared for this symposium to see that hunger is a serious problem in more than half of your member states, with 12 countries ranked as ‘extremely alarming’ or ‘alarming’ according to the Global Hunger Index.

Agriculture and food security

Sometimes people need a crisis to shock them into rethinking their priorities. The food price crisis certainly forced the world to put agriculture back where it belongs, at the top of national, regional and global agendas. Our task now is to work together to make sure that it stays there and that the result is concerted, effective action that makes a real difference to the lives of the poor and hungry.

We must ensure that the commitments and promises made at the height of the crisis are fulfilled and honoured. All our efforts must be focused on this. We share a common duty to the children, women and men who go to bed hungry every night.

The potential of smallholder farmers

Three-quarters of the world’s poor people live in rural areas. And the vast majority depend either directly or indirectly on agriculture for their livelihoods. There are about 500 million smallholder farms across the globe, and they support about 2 billion people. In some of your countries, agriculture is the main source of income for 70 per cent of the rural population.

In spite of their poverty, poor rural people – in particular poor rural women – produce the daily food of two billion people, or one third of humanity. And they farm about 80 per cent of the farmland.  Imagine, then, how many they could feed with the right support? At IFAD we have seen that – with that support – smallholder farmers can double or triple their production.

In other words, smallholder farmers have the potential not only to feed themselves, their own communities, and their fellow countrymen and women, but also to contribute to wider food security beyond their national borders.

Indeed, smallholder farmers are often extremely efficient producers per hectare, and can contribute substantially to a country’s economic growth and food security. Look at what was achieved in Viet Nam. Viet Nam transformed itself from a food-deficit country to the second-largest rice exporter in the world by investing in and developing its smallholder farming sector. As a result, poverty rates fell from 58 per cent in 1979 to 15 per cent today.

So, what I am saying to you is, yes, today the millions of poor rural people in developing countries are the victims of the food security problem. But, with our support, tomorrow, they have the potential to be the solution to it.

Agriculture and economic growth

As you all know, agriculture plays a vital role not only in food security, but also in economic growth. And GDP growth generated by agriculture has been shown to be at least twice as effective in reducing poverty as growth in other sectors.

Economic growth in rural areas both fuels and is fuelled by growth in the agricultural sector. Both must be underpinned by functional infrastructure – including roads, energy supplies and markets.

A vibrant rural sector generates local demand for locally-produced products and services.  In turn, this can spur sustainable off-farm employment growth in services, agro-processing and small-scale manufacturing. This is crucial for rural employment. Without local jobs, young people will be driven away from rural areas in search of work in the cities. And then who will feed the world in 2020 or in 2030?

IFAD is unique in its exclusive focus on rural poverty. We are a major source of funding in the rural sector of many low-income countries. And in some countries, particularly in sub-Saharan Africa, we are the most significant source of multilateral support for agricultural and rural development.

Investment in agriculture

To boost agricultural productivity, strengthen food security and create dynamic rural economies, ramping up investment in agriculture is crucial.

The FAO estimates that average net investment in agriculture will need to reach US$83 billion a year, if the world is to meet its food needs by 2050. This would be a 50 per cent increase over today’s investment levels.

As you know, members of the African Union have committed to increase their investment in agriculture to 10 per cent of national budgets. This is a worthy target that I would encourage other countries to emulate. Some African countries – including some of your members – have already reached the 10 per cent mark and should be loudly congratulated for having done so.

I am delighted to see that the Bank has established an agriculture and rural development department – a clear indication of your long-term support for this crucial sector. The Gulf financial institutions have also begun to rally in support of strengthening investment in agriculture. But there is more to be done.

Overseas farm investments

Investment in agriculture can come in many forms. For example, over the last two years, we have seen land-poor countries strengthening their people’s food security by investing in large commercial farms in land-rich countries, to grow food crops for their domestic markets.

Concerns have been rightly voiced about the impact of these deals on the poor people who live and depend on the land that is being invested in.

Indeed, it is critically important that investments in the agricultural sector should respect the rights of existing users of land, water and other resources. They should protect and improve livelihoods at the household and community level. And they should not harm the environment.

A new report commissioned by IFAD and our partners, shows how agricultural investments in developing nations can be structured in ways that are viable alternatives to large-scale land acquisitions. More inclusive business models can bring benefits to smallholder farmers and protect their land rights, while also ensuring profitable returns for companies.

In this way, when properly handled, such large investments – including resources tapped from sovereign funds – can lead to “win-win” outcomes for both parties. They can support broader agricultural development, by mobilizing resources for much-needed investments. And they can improve the lives of poor rural women and men by creating jobs, improving technologies and productivity, and improving market access.

What should our priorities be?

So, to return briefly to the subject of today’s debate: what should our priorities be, as partners with a renewed commitment to joint action on food security?

We must make agriculture more productive – and we must do this in the face of climate change and of water scarcity, which is such a serious limitation in many of your member states. To do this, we must ensure that new technologies are available to poor rural women and men, and not just to larger, richer farmers. Most importantly, we must ramp up investment in agriculture at every level.

We must work to ensure that smallholder farmers are treated as entrepreneurs – empowering them to be competitive and providing the infrastructure and the value chains that connect them to markets. For farming is a business, whatever its size or scale. IFAD is ready to work with you to enable smallholders to make their farms profitable businesses that provide food and jobs and fuel the local economy.

We must invest in young rural women and men – for they are the farmers of tomorrow. We must fund vocational training in agriculture and off-farm activities and we must create opportunities for apprenticeships. And we must support basic literacy training, especially for poor young rural women who have so often not been able to complete their educations.

And last but not least, we must build partnerships between the public and the private sectors. The private sector has a pivotal role to play in rural development throughout the developing world. But public-private partnerships must be backed up with the right policies and support for rural communities, so that poor rural people can increase food production, improve their lives and contribute to greater food security for all.

Today, we have a truly historic opportunity – or should I say a duty? – to reduce poverty very substantially and indeed, to achieve the eradication of mass poverty in our lifetimes. Members of the Islamic Development Bank have an important role to play to realize the potential of a more prosperous, equitable and just world – a world where human dignity rather that widespread poverty is the defining characteristic.

For our part at IFAD, we look forward to intensifying our strategic partnership with the Bank and its Member States to achieve this noble goal, one which humanity has sought since the beginning of civilization, and one which has been reaffirmed in the teachings of humankind’s greatest minds.

In that spirit, I am grateful to be here and to have the opportunity to discuss these profound issues with the honourable Governors and guests represented in this distinguished forum.   

I thank you for your kind attention.

23 June 2010, Baku, Azerbaijan