Enabling poor rural people
to overcome poverty



Distinguished guests,
Ladies and gentlemen,

Thank you for your warm welcome. 

It is indeed a pleasure to be here at Chatham House, among such a distinguished audience, to launch IFAD’s 2011 Rural Poverty Report.

The sunny image captured on the cover of our report show farmers Lionie Marceline, her husband Jean Doris, and their two children in Madagascar, where they are harvesting rice grown using techniques that increase yields while using less irrigation water and fewer seeds. The picture depicts the hope, energy and vibrancy that IFAD wants to see in all rural communities across the globe.

The report, which we are unveiling here today, lays out evidence of how agricultural development has lifted millions of people out of extreme poverty over the last decade.

Despite this progress, extreme poverty continues to be a massive problem, affecting some 1.4 billion men, women and children.

Imagine that you are one of them. Chances are, you would be living in the rural area of a developing country because, despite growing urbanization, this is where 70 per cent of the world’s poorest people still live.

Chances are, you would be living in a village connected, if you were lucky, to other villages by dirt roads, with no electricity and no easy access to clean water.

If you were like Williams Novoa Lizardo in Peru, you might be considering migrating to a city to find work after losing hope of making a living at home.

The experiences of Williams Lizardo and Lionie Marceline are just two of the human stories to be found in our 2011 Rural Poverty Report. The report is the result of two years of extensive collaboration among experts– both within IFAD and outside. It includes input from policy makers, researchers, NGOs, producer organizations and the private sector, as well as contributions from poor rural people themselves.

Overview

The 2011 Rural Poverty Report is the most comprehensive and up-to-date assessment of the state of rural poverty.

It examines the vulnerabilities of poor rural women and people and the many risks they face from resources degradation, climate change, markets, or even the behaviours of states and governments.

It shows how rural development can provide for greater food and economic security in the future. And it offers concrete suggestions for policies and actions by governments and development practitioners – from sustainable intensification of agriculture to the empowerment of rural producers through more robust organizations –to create an environment in which poor people in rural areas can move from poverty to prosperity and contribute to national and global food security.

What sets the 2011 Rural Poverty Report apart from other reports on global development and poverty is that it doesn’t just analyze the numbers. No, it goes beyond the statistics, telling the stories of poor rural people − sharing their challenges, hopes and aspirations − allowing the voices of smallholder producers across the globe to be heard.

Key messages

The Report contains key messages that are particularly relevant for this international conference on food security. The report tells us that… 

….Rural areas are changing rapidly

It shows a complex and rapidly evolving landscape, with cause for confidence alongside concern; and with optimism intertwined with emerging threats.

Some parts of the world, particularly East Asia, have seen a dramatic and sustained improvement in raising incomes and reducing poverty. 

But two regions continue to be plagued by grinding poverty. These are Sub-Saharan Africa, which is the only region in the world where the number of people living in extreme rural poverty is still on the rise;

And the South Asian subcontinent, which is home to half the world’s extremely poor people.

Two major threats to food security and rural poverty reduction

The report points to two significant threats to food security and rural poverty reduction that have emerged in recent years: these threats come from food price volatility and climate change.

When global food prices doubled between 2006 and 2008, the surge sent shockwaves throughout the world, dealing the greatest blow to low-income food-deficit countries. For the first time in history the number of hungry people passed the 1 billion mark. For many poor farmers, the impact was especially harsh.

Environmental stress and climate change are also significantly jeopardizing food security and poverty reduction efforts.

Across the developing world, a range of natural resource related issues – such as water shortages, declining soil fertility, salinisation of irrigated lands, deforestation, erosion and desertification – threaten the very sustainability of agricultural production. Poor smallholder farmers are often unwitting contributors to this environmental degradation as well as being the principal victims.

Climate change is a risk multiplier – its impacts will be greatest in areas that already face environmental stress.

One major change for the better

The report also highlights one significant change that offers hope of a better future for poor rural people: this change is the renewed focus of the international community on agricultural development as a means of improving food security and reducing poverty.

With the world’s population set to reach 9 billion by 2050, there is a growing appreciation of the need to secure our food supply. In order to meet projected demand, global agricultural production will need to rise 70 per cent by 2050. This is already starting to create new markets and new economic opportunities in rural areas.

Historically, agriculture has driven economic performance in many countries, generating growth that has been shown to be at least twice as effective in reducing poverty as growth in other sectors. Investment in agricultural and rural development is therefore vital to food security and sustainable economic development.

The L’Aquila Food Security Initiative, the Global Agriculture and Food Security Programme, the revamped Committee on Food Security,  NEPAD’s Comprehensive Africa Agriculture Development Programme (CAADP), promise to strengthen global food production and security.

In addition, new players from the private sector and civil society have moved into agricultural development, including the Gates Foundation, Syngenta, Yara and others. Emerging economies, such as China and Brazil, are also becoming important players in rural development.

The conundrum of hungry farmers when there is rising demand for food

So, when we look at the state of rural poverty today, we’re faced with a conundrum: Demand exists for more food. And yet the people who could produce it – the smallholder farmers, the labourers and the others who depend on the land –  are unable to feed themselves or earn a living.

Ladies and gentlemen, we must ask ourselves: In the next decade, how do we allocate our resources to meet the desperate need for effective action?

How do we create a hopeful future for young people, like Williams Lizardo, in rural areas?

Our report outlines four steps to eliminate poverty and hunger.

These are to:

  • Help rural people better manage the risks they face.
  • Sustainably increase agricultural production.
  • Facilitate equitable access to new and changing marketplaces by viewing smallholder farmers first and foremost as businesses.
  • Encourage the growth of non-farm rural jobs.

The first step is managing risk

For a farmer living on $1.25 a day, the ability to take a risk – on planting a new, higher yielding seed, on specializing rather than diversifying – is a luxury. But it is a luxury that is essential for economic growth.

Poor people have fewer tools at their disposal to manage risk, so they cannot take advantage of opportunities that could help them improve their incomes.

Smallholder farmers have always been vulnerable to risk. Today, these risks have been compounded by less secure access to land, increasing pressure on common property resources, climate change and food price volatility.

We need to find ways of reducing risk and giving poor rural people access to the tools they need to deal with it.

Doing this will make it easier for more rural people to be more entrepreneurial, creating the conditions for a vibrant rural sector. 

The second step is ensuring that the world’s 500 million smallholder farms are able to realise their potential as small-scale businesses

Food tastes and agricultural markets are changing. In recent years, we have seen rapid growth in the reach of supermarkets, locally and globally, and the development of modern consolidated value chains for agricultural products. Smallholder farmers must weigh the value of new and potentially profitable marketplaces against higher entry costs and risks of marginalization. 

Smallholder farmers do not compete on equitable terms in local, regional or global markets. They must have opportunities to be entrepreneurs, rather than bystanders, in the new markets that are evolving.

Much can be done to help poor rural people realize their business potential. This includes reducing risk and transaction costs along value chains, supporting rural producers’ organizations, expanding financial services into rural areas and ensuring that small farmers have access to the infrastructure, the utilities and information. Investing in good governance is another key ingredient.

The third step is to increase agricultural production sustainably

Increased food production is going to have to come without significantly expanding the amount of land dedicated to agriculture. Cutting down forests and woodlands to create more land for farming is not a viable option.

Increases in production will have to come from higher productivity.

There is particularly strong potential to get higher yields from existing land in Sub-Saharan Africa, where only 6 per cent of the land is irrigated, only 10 kilograms per hectare of fertilizer is used on farm land, and farmers’ average yields are only 20 percent of the potential.

But whether in Africa, Latin America or Asia, we will need to do increase yields in an environmentally sustainable way that does not pollute, diminish the land over time or contribute to greenhouse gas emissions.

In other words, we must have sustainable intensification.

This means complementing conventional approaches to increasing productivity with a much stronger focus on soil and water management and overall farm production systems.

There is no blueprint for sustainable intensification. The best practices will be determined by the local context. The challenge is to develop policies and institutions that can make it happen on a massive scale.

The fourth step is to encourage the growth of non-farm jobs in rural areas

There is no question that agriculture is and will continue to be the key economic driver in rural areas.  Agricultural success is a route out of poverty for millions.

Today, around 80 per cent of rural people are involved in farming to some degree.  In virtually all rural societies, women are the primary caregivers, but they also perform a large part (and often most) of the agricultural work and produce the bulk of the developing world’s food crops.

In order to meet the growing needs of a hungry world, agriculture must be a viable and rewarding lifestyle for the large number of people who choose it.  But increasingly, it will be one of many choices, not the only choice.  This is not a threat to agriculture, but rather a chance to develop a more modern, diversified economy. If we succeed in creating more profitable farms, we will also succeed in creating associated non-farm enterprises.

Conclusion

I have often said that speeches don’t feed people – action does.

Today, the world is listening as never before. Active listening must be followed up by action.

The challenge now is for governments to follow through on their promises and for players in all areas of rural development to take action. Developing countries must be the drivers of rural development. Where countries have shown the commitment, development agencies and others should support their efforts.

IFAD is meeting the challenge by working closely with partners to scale up our support to rural development on the ground. We are also championing a new and more dynamic vision of rural development.

We know that smallholder agriculture can spur economic growth in developing countries and lift millions out of poverty, but only if it is market-oriented, profitable and environmentally sustainable.

A future for young people in rural areas

And as we look at today’s rural poverty report, we must also look to the future, and that means focusing on the young people who live and work in rural areas. Give them the skills and confidence they need to run profitable farms or start businesses, and they hold the potential to become the community leaders of tomorrow. Ignore them, and they will have little option but to leave their homes and families to search for work in the cities.

At the start of this speech I told you about Williams Novoa Lizardo, a young man in rural Peru who has no hope and no prospects of work in the countryside where he lives. Williams is not alone. Millions of young people in the rural areas of developing countries face a similar plight.

Before I close, I would like you to imagine a world in which Williams and the millions like him become economic migrants, leaving the rural areas of developing countries depopulated and the cities even more crowded than they are today.

Now, I would like you to imagine a world in which Williams has the prospect of employment near his home and is able to envision a future with a comfortable home, a family, and enough money for his needs.

A world that offers hope and prosperity for Williams and the millions of young men and women like him is a world that is better for all of us.

Thank you very much

Chatham House, London, 6 December 2010