Distinguished Parliamentarians,
Ladies and Gentlemen,

It is my great pleasure to be here today to discuss IFAD’s role in achieving global food security and combatting rural poverty.

Germany has been a valued partner for IFAD from our earliest days, with a well-deserved reputation for effective and far-reaching agricultural development.

I am looking forward to our discussion, but first I would like to take a few minutes to talk about the state of agriculture today, and to give you an overview of IFAD.

Agriculture today

Since the mid-1980s, there has been a precipitous decline in investment in agriculture, both in terms of development assistance and from national governments in developing countries themselves.

This near-abandonment of agriculture contributed to the global food security crises of 2007 and 2008, and is a factor in food price volatility and the unacceptable levels of hunger in the world today, including the horrific images we are seeing in the Horn of Africa.

Hunger and social unrest go hand-in-hand. Many of the current movements for political change were spurred by food shortages and rising costs.

Role of smallholders in food security

Global food supply will need to increase 70 per cent by 2050 to feed a projected 9 billion people.

We believe much of this increase can and should come from smallholders in developing countries. Market-oriented, profitable and environmentally sustainable smallholder agriculture not only contributes to food security, it can spur economic growth in developing countries and lift millions out of poverty.

Why?

There are around 500 million small farms in the developing world. They account for 97 per cent of agricultural holdings and support around 2 billion people.

These are the producers who feed up to 80 per cent of the population in much of Asia, Sub-Saharan Africa, and elsewhere. Many are women. Most are poor.

An estimated 70 per cent of the world’s 1.4 billion poorest people live in the rural areas of developing countries.

IFAD

The International Fund for Agricultural Development, or IFAD, has always focused on the poor people who live in the rural areas of developing countries. IFAD is unique in being both a United Nations agency and an International Financial Institution.

Our unwavering focus on agricultural development for nearly 35-years gives us a strong advantage when working with and advocating for smallholders.

[As a result of our consistent focus and work in developing countries around the world, we have accumulated experience and knowledge of what works, and how to tailor projects to the specific conditions of each country.]

Since 1978, we have invested more than US$13 billion in low-interest loans and grants to support programmes and projects that have enabled approximately 400 million poor rural people to grow and sell more food, increase their incomes, improve their food security and determine the direction of their own lives.

Partnership has always been central to IFAD’s business model. We work closely with developing country governments, poor rural people’s organizations, NGOs, and research institutions. Each of the projects we support is implemented by government and national institutions.

In recent years, we have expanded our partnerships with the private sector. We see responsible private-sector engagement as an essential element in optimising economic opportunities in rural areas.

Let me give you some examples.  When I was in Guatemala I met Pedro Tun. Mr Tun is a smallholder farmer and president of a producers’ association. With the backing of an IFAD-supported project they were able to buy irrigation equipment, build a new storage facility and work with private-sector partners to bring their produce to new markets. Today, they sell to some of the biggest retailers in the world, including Walmart of the U.S.

In Egypt, an IFAD-supported project on land that was reclaimed from the desert has enabled farmers to export  fresh vegetables and fruits to the United States and Europe – including peanuts to Germany.  Heinz has a contract to buy tomatoes from about 300 of the project farms.

Time does not permit me to tell you about Jane, a 35 year-old Kenyan goat and chicken farmer or a young woman I met recently in Ethiopia whose milk cattle business has paid for the university education for two of her daughters.

In all of the IFAD-supported programmes I have visited, I have been impressed by the desire and the ability of people to transform their own lives.

IFAD’s work helps transform the rural landscape by creating  vibrant rural economies that can contribute to global food security. Rural economies that offer a range of income-generating options for people to choose from. Rural economies where young people see an attractive future for themselves. 

They are the farmers of tomorrow.

Our vision at IFAD is simple:  Farming of any scale is an economic activity, a business. And businesses need clear links along the value chain – from production to processing, marketing, and consumption.  Facilitating these links is IFAD’s business.

Change and reform

To be effective in the field we also need to be a strong institution at home. IFAD has a robust Change and Reform Agenda, enabling us to be increasingly efficient, effective and agile in our work.

In the past two and a half years, we have bolstered our organizational structure and improved the alignment of our human and financial resources.

Specific measures include:  creating a Financial Operations Department; adopting a results-based budgeting system that directly links expenditures to results; and launching a strategic workforce plan to ensure optimal deployment of staff.

Given that poor rural people are particularly vulnerable to the impact of climate change, we established an Environment and Climate Division and are developing a Smallholder Adaptation Programme that will integrate climate finance into IFAD-supported investments.

We have also been steadily expanding our country presence through a growing number of country offices that are enabling us to carry out our work more effectively and efficiently.

All of these measures are allowing us to consistently deliver results. This is not simply our judgement. It is also the judgement of IFAD’s Independent Office of Evaluation, and of third parties such as the OECD/DAC, the Multilateral Organisation Performance Assessment Network (MOPAN) and DFID of the UK. Recent reviews have praised IFAD for being a strong, results-focused organization.

Replenishment

IFAD, as an international financial institution, mobilises its resources through a replenishment cycle.  During our Eighth replenishment, a 67 per cent increase in membership contributions allowed us to bring in a US$3 billion programme of work over three years. Germany was among the top six donors, pledging US$70 million.

The work we have been doing to make IFAD an effective leverage instrument for members is paying off. For every dollar contributed to our Eighth replenishment, IFAD mobilized another six dollars from our partners for rural development programmes.

This year, as we negotiate for the Ninth replenishment, more is needed. We hope that Germany will remain one of IFAD’s top partners in development.

The demand for food will only grow in the coming years.  And if we act now, we can create the conditions for the 2 billion women and men who live and work on the world’s 500 million small farms to meet this demand. 

But there is more at stake.  For agriculture and rural development is not only about food security. It is a pathway to wealth creation and economic growth.

It is the provider of employment, which keeps young people from migrating to cities and abroad.

It is the basis for social cohesion. It is the foundation for political stability and the precursor for global peace and security.

Thank you.

Berlin, Germany, 28 September 2011