It is my very great pleasure to be here today at ANU. Your global reputation as a leader in research and teaching is well justified, and IFAD has enjoyed a long and, I believe, mutually beneficial relationship with the university over the years.

I would like to particularly thank Professor Lawrence Cram for inviting me to speak and Professor Raghbendra Jha, who will be taking the floor later, as well as the staff at the Australia South Asia Research Centre who have done so much to make this visit possible.

I am looking forward to a lively and informed discussion today. Australia has strong technical institutions and policy analysis in agriculture and rural development. And I know there are many in the audience today who are well versed in these areas, as well as in areas where we face challenges in development – such as the management of fresh water resources.

For those of you not familiar with the International Fund for Agricultural Development, let me quickly introduce my institution. IFAD is one of the three Rome-based United Nations agencies. IFAD is distinct in its focus, which is, and has always been, the poor people who live in the rural areas of developing countries.

IFAD is also unique in that it is  both a United Nations specialized agency and an International Financial Institution.   

Partnership has always been at the heart of IFAD’s business model. All of the projects we support are actually implemented by government and national institutions. We work in collaboration and we work as a facilitator, helping to build a broad response to the key issues facing smallholders and poor rural people, and mobilizing co-financing for rural development programmes.

Since 1978, IFAD has invested more than 12.5 billion dollars in grants and low interest loans to developing countries. The projects we support are designed to empower poor rural people to lift themselves out of subsistence and into the marketplace. To date, we have reached more than 370 million people.

The state of rural poverty today
While we are proud of IFAD’s successes, extreme poverty and hunger continue to plague humanity. Some 1.4 billion men, women and children are still struggling to survive on one dollar and 25 cents a day. Despite growing urbanization, entrenched poverty remains very much a rural problem. Today, around 70 per cent of the world’s poorest people still live in the rural areas of developing countries. Most of these people depend on agriculture for their livelihoods.

The two regions worst affected by rural poverty and hunger are sub-Saharan Africa – which is the only region where the absolute number of extremely poor people is still rising – and the South Asian subcontinent, which is home to about 500 million – or half the world’s – extremely poor people.

At a time when budgets are tight, when governments need to think carefully about how they spend their money at home, never mind abroad, you may ask why rural development should be a priority.

The answer is that relatively small investments in rural development today will reap much larger savings in terms of economic, social and political benefits tomorrow.

The development of rural areas is central to eliminating hunger and poverty, to mitigating climate change, to achieving widespread economic security and social stability, and to promoting peace. And it is, of course, at the heart of efforts to ensure long-term food security.

Historically, agriculture has driven economic performance ― from 18th century England to Brazil, China and Viet Nam today. Many studies have shown that growth generated by agriculture is at least twice as effective in reducing poverty as growth in other sectors.

Let’s look at some statistics. The share of aid to agriculture started to decline from the mid-1980s and reached a low of 5.5 per cent during 2003 to 2005. The World Bank’s lending to agriculture also fell from a high of 30 per cent in the 1980s to 7 per cent in mid-2000.

This low level of investment was one of the contributing factors to the global food security crisis of 2007 and 2008. Consequently, in 2009, the number of hungry people in the world hit an all-time high of more than 1 billion.

Since this crisis, however, there has been renewed commitment by OECD countries and international financing institutions to agriculture. This is a promising sign. We must learn from the mistakes of the past and maintain our commitment to investing in developing country agriculture.

Food prices are once again at worrying levels, prompting concern about food security. In many parts of the world, people hold governments accountable for ensuring that food is affordable. The desire for food security at the household level is an element of many of the movements for political change. This is a fact, and it is a particularly urgent and pressing reality in developing countries.

We must reverse the neglect that has plagued agricultural development for more than 25 years.

IFAD’s Rural Poverty Report
In 2009, we set out to document the current state of rural poverty, working with policy makers, researchers, NGOs, producer organizations, the private sector, and poor rural people themselves. The result is IFAD’s 2011 Rural Poverty Report.

The report is a comprehensive and up-to-date assessment of the challenges and solutions to eradicating rural poverty in the developing world.

It examines the vulnerabilities of poor rural people and the many risks they face. It shows how rural development can provide greater food security and greater economic security in the future. And it offers concrete suggestions for policies and actions to empower poor rural people to move from poverty to prosperity, and to contribute to achieving these goals.

The Rural Poverty Report 2011 does more than just analyse the numbers. It allows poor rural people to tell their own stories in their own words – sharing their challenges, their hopes and their aspirations. IFAD has long believed that development can only be effective if it is ‘bottom up’, involving participants as partners in the design and implementation of projects.

You have just seen a film about the story of Séraphine and her daughter Maria in rural Madagascar.

It is important to hear the voices of Séraphine and Maria because all too often, the individuals get lost in the numbers – 1.4 billion living in poverty; nearly one billion going hungry every day; two billion living and working on small farms. It is easy to forget that each number represents a person.

When we talk about poverty reduction and food security, we are not talking about theoretical concepts. We are talking about real people in real situations of hardship who need real solutions now.

The situation that Séraphine faces is typical of many millions of farmers in the developing world. And the fact that she is a woman is also increasingly typical. When we think of farmers in popular culture, we tend to think of burly men. But women make up 43 per cent of the agricultural labour force in developing countries, on average. In East and Southeast Asia, and in sub-Saharan Africa, this rises to almost 50 per cent.

Often  women who farm also have extra chores such as gathering firewood, collecting water, washing clothing and tending to children and the elderly. As a result, they frequently work 16 hours a day – far longer than most men. At the same time, in comparison to men, women in rural societies have limited land tenure, access to credit and equipment, as well as fewer market opportunities than men.

IFAD has long recognized that there will be no substantial progress in poverty reduction and food security unless we address the limits that are imposed on women.

The Rural Poverty Report offers a snapshot of a complex and rapidly evolving rural landscape that offers genuine cause for optimism intertwined with significant emerging threats for poor rural people like Séraphine.

The new threats come from volatile food prices, erratic agricultural markets, growing insecurity of access to land, the degradation of natural resources upon which rural people depend, and the worsening effects of climate change.

The opportunities come from the profound changes that are taking place in agricultural markets.  With a world population set to grow to 7 billion by the end of this year and to 9.1 billion by 2050, there are – simply stated – more mouths to feed.  And the growth in urban societies means that there is growing demand for high value food.

As a result, it is estimated that global food production will need to increase 70 per cent by 2050 to meet demand. In the developing world, production will need to almost double.

This is already starting to create new markets and new economic opportunities in rural areas. In addition, markets themselves are extending their reach and becoming better organized.

The report outlines four steps to eliminate poverty and hunger.

• 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 too often an unaffordable luxury.

Poor people have fewer tools to manage risk.  As a result, they cannot take advantage of opportunities that could help them improve their incomes.

As I mentioned earlier, today, the challenges that smallholder farmers have always faced are compounded by a number of factors – from the worsening effects of climate change to volatile agricultural markets.

Giving poor rural people access to the tools they need to respond to these challenges and to be able to take risks will provide more opportunities for them to be entrepreneurial, creating the conditions necessary for a vibrant rural sector. 

• The second step is ensuring that the world’s 500 million smallholder farms have equitable access to new and changing marketplaces by treating them first and foremost as 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 have opportunities to be entrepreneurs in the new, evolving markets, or they risk becoming marginalized. But, at present, their prospects of making higher profits from new marketplaces are often offset by high entry costs.

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

• The third step is to increase agricultural production sustainably.

Increased food production must 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.

This means that higher productivity will be necessary.

There is particularly strong potential to improve productivity in Sub-Saharan Africa, where the average yield is just 20 per cent of the potential.

But whether in Africa, Asia or Latin America, we will need to do increase yields in an environmentally sustainable way.  We can’t afford to pollute, diminish the land 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 universal method for sustainable intensification. Best practices will be determined by the local context. The challenge is to develop policies and institutions that can aggregate these local approaches to a massive scale.

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

We recognize that growth in rural areas will not necessarily depend on farming alone and that many other types of activities which are part of the value chain can contribute to making rural communities vibrant, creating even greater opportunities for those in rural and urban areas.

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. In order for agricultural development efforts to be effective, they must recognize and redress the obstacles women face in many developing societies.

But increasingly, a life in agriculture will be one of many choices for rural people.  This is not a threat to agriculture, but rather a chance to develop a more modern, diversified rural economy.

The role of IFAD

For more than 30 years, IFAD has focused exclusively on reducing poverty in the rural areas of developing countries, even during times when donors and governments had turned their attention to other areas. As a result, we have an unbroken record of working with and advocating for smallholders.

IFAD has reformed in recent years to respond to the changing global development assistance architecture and the changing needs of our membership. We have strengthened our operating model by adopting country programme approaches; we have strengthened our country engagement through the introduction of policy instruments such as the Performance-based Allocation System, and expansion of our presence on the ground and the adoption of direct supervision modalities.

We have strengthened our targeting and knowledge management processes to ensure that we continue to be an innovative institution, able to respond to the ever-changing needs of our target group.

We have strengthened our business processes to ensure that our resources are better targeted to the country level, where our work is.

And we have strengthened our quality assurance and support services to ensure that we achieve sustainable results.

Independent assessments note that our project outreach is increasing and that our results on the ground are strong and improving. And there are tangible improvements in the quality and development impact of our work. Our latest figures indicate that the number of poor people benefiting from IFAD-supported projects – which reached 36 million people in 2010 – is rising significantly, and women constitute almost half.

Conclusion
Before I start taking questions from the floor, I would like to leave you with one final thought.  We are here today at a university that prides itself on equipping Australia’s young people with the skills they need to improve their lives and contribute to their nation’s future.

In the discourse on rural development, we must not overlook the next generation who live and work in rural areas. If you have a chance to look through a copy of the Rural Poverty Report, you will find an interview with Williams Novoa Lizardo who may be forced to look for employment in the city because there are no opportunities for him in his rural home.

It is essential that we create vibrant rural economies where young people see a future for themselves. These economies will need to offer a range of economic activities so that smallholders and other poor rural people are able to significantly improve their standard of living, and so that young people can see a future for themselves in rural areas.

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

Thank you very much.

5 April 2011, Canberra, Australia