Excellencies,
Distinguished colleagues,
Ladies and gentlemen

Introduction

First, please let me thank the Long-term Investors Club for inviting me to participate in the concluding session of this 2nd international conference, here in Rome.

I’m deeply honoured to join such a distinguished line up of panelists.

And I should also like to thank our Chair for this session, Mario Monti.

Context: a growing population, with growing needs, facing growing challenges

The focus of this Conference – and of the LTIC – is the importance of having a long-term perspective.

This is particularly true as we deal with the effects of the recent food, fuel and financial crises.

It is also true as we deal with the effects of climate change.

And it is true as we deal with the effects of a growing global population, estimated to increase by nearly 50 per cent by 2050.

Having enough food to meet the growing needs of 9 billion people in less than two generations will require food production to double in developing countries. Yet global warming is undermining the productivity of much of our agricultural land, because of droughts, floods, soil erosion, over-grazing, etc.

Investment and agriculture

To meet the challenge and ensure food security for all, we need to produce more from less.

So we need to invest in agriculture.

We need to invest in better, more resilient, more productive seeds; better, more effective fertilizers; better, more efficient irrigation systems.

In other words, better inputs for better outputs.

If we do not, then we’ll pay for our oversight later with soaring food prices, more global economic turmoil, more political instability.

An investment in developing country agriculture is an investment in global food security and global economic growth

While the food, fuel and financial crisis hit both developed and developing countries, it was the 1.4 billion people in the world who survive on US$1.25 a day who were – and remain – the most vulnerable.

And while developed countries are already focusing on recovery, the poor and most vulnerable have seen alarming reversals in their small gains, particularly when it comes to Millennium Development Goal 1 – the eradication of extreme poverty and hunger.

More than one billion people – or a sixth of humanity – suffer from hunger.

But investment in agriculture – in particular developing country agriculture – can turn this around.

GDP growth generated by agriculture is more than twice as effective in reducing poverty as growth in other sectors.

In other words, an investment in developing country agriculture is an investment in global food security and global economic growth.

Seizing the opportunity: a global partnership for sustainable investment

What is required is a genuine global partnership between developed and developing countries. Only that way can we hope to achieve sustainable global development.

 The global partnership needs to focus on three areas:

• First, ensuring commitment from OECD countries. 
• Second, ensuring commitment from developing country governments.
• And third, changing our mindset and seeing development as an investment in global stability and our future.

First: official development assistance

It is essential that developed countries honour the pledges they made at Gleneagles, Hokkaido and L’Aquila. 

But declarations and statements do not feed hungry people – action is needed.

ODA needs to return to the levels we saw in the late 1970s, when the share of ODA allocated to agriculture stood at 18 per cent.

Second: developing country commitments

Developing countries, for their part, need also to step up to the plate.

Agricultural spending to total government spending by developing countries since 1979 declined by a third in Africa and by as much as two thirds in Asia and Latin America.

This needs to be reversed.

For example, African countries’ investment in agriculture must meet the Maputo target of at least 10 per cent of GDP. While a few countries have already achieved this – and should be congratulated for doing so – unfortunately many have yet to come close^1/ . 

And developing country governments need to implement supportive policies, to encourage greater external investment by ensuring returns and the right policy environment for these investments.

Third: changing our mindset – development as an investment

As a multilateral institution, and as an IFI, at IFAD we know that we need to move beyond poverty management and social protection to wealth creation and rural empowerment.  We want others to see that smallholder farming is a business – a business to invest in and an investment with returns.

We need integrated development.  This means investing in infrastructure, in health, in education and financial services.

It also means investing in young people – the agricultural entrepreneurs of tomorrow.

It is crucial that we invest in young rural people today, giving them the skills and confidence that they need to run profitable farms, start businesses and become the community leaders of tomorrow.

It means investing in rural institutions and structures, building capacities and skills.

And it also means investing in women.  In most developing countries women produce between 60 and 80 per cent of the food.  And studies show that when gains in income are controlled by women, they are more likely to be spent on food and children’s needs.

An investment in agriculture is therefore an investment in economic development, in rural areas, in young women and men and in food security. 

Our present context and aid policy perspectives

The current crisis, and the need to react to market tensions, is imposing an important challenge to our Governments in terms of expenditure control.

Against this context, – those of us in the field of development cooperation could be facing a reduction of traditional ODA flows.

As we embark on the road to our own replenishment, we already know that the business-as-usual approach to resource mobilization will no longer work. The demand for our services has increased as the global economic situation has pushed more people into poverty, and both donor and borrowing countries continue to face severe fiscal challenges.

The need for our support is growing at the same time as the constraints that limit the possibilities of our donor countries to increase their contributions. This means that we need to start exploring alternative sources of funding, including foundations, the private sector and innovative financial mechanisms.

And here is where it is useful to engage in a dialogue with those of you present here today.

Conclusion

Smart, long-term investments in agriculture will reap worthwhile dividends for developing and developed countries alike.  The end result being poverty eradication and food security for all.

In spite of the pressure on government revenues and private sector capital as a result of the ongoing financial woes, economic development and poverty eradication represent a long-term – and sustainable – investment in all of our futures.

We can accelerate progress in achieving a world without poverty and hunger, not only because it is the right thing to do, but also because it makes financial sense.

It’s about time we recognized that.

Thank you.

17 June 2010, Rome, Italy

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1/  Only 8 countries – Burkina Faso, Ethiopia, Mali, Malawi, Ghana, Niger, Senegal and Zimbabwe – reached or surpassed 10%. 16 other countries (including Nigeria) reached expenditure shares between 5% and 10 %, while 14 countries devoted less than 5% of their total budgets to the sector