Achieving food security in a world of uncertainty: risks, challenges and opportunities for smallholders

Esteemed Colleagues and Friends,

Good afternoon, and thank you all for being here today. I am pleased to see some familiar faces and am happy to meet others and to know that the circle of IFAD’s friends in Washington is widening. 

Together we represent a variety of institutions, but I know that as international development leaders, you are all as concerned as I am about rural poverty, food security, climate change and the social and political implications of instability. These are not just “key issues” or “priority areas”; they are facts, realities that determine millions of people’s lives every day.

In recent months we have seen graphic demonstration of the social and political cost of poverty and precarious food security. Many believe that the current food price spike was a contributing factor to the revolutions that are currently taking place across the Middle East and parts of Africa. This is a sobering reminder that when people can’t afford to eat because they can’t make a decent living, they become desperate.

We all remember the riots that took place when food and other commodities prices spiked in 2008, causing widespread panic around the world. The current food price increase has pushed an estimated 44 million people into poverty.

We all know that the food price crisis did not happen overnight. It was the result – in part -- of nearly three decades of declining support for agriculture, both nationally and internationally.

Ample reason for desperation. But luckily, there is also substantial cause for hope.

Since the food price crisis, there has been renewed commitment to agriculture by OECD countries and international financing institutions, as well as increased funding from emerging economies and domestic resource mobilization in developing countries. This is a very promising sign.

Another positive development is that the United States has revitalized its leadership in this area. The Feed the Future Initiative provides a sound framework for concerted and comprehensive action. On May 6th, Secretary of State Hillary Clinton addressed the UN agencies in Rome and called for making food security a cause of our time. We heartily welcome this renewed commitment by the United States. 

These are reasons for optimism. At the International Fund for Agricultural Development, our optimism is reinforced by the fact that the current global response incorporates important insights that were missing from previous agricultural development agendas.

One of these insights is also one of the most important lessons we have learned in over 30 years of work, namely, the pivotal role of smallholders to food security and economic growth.

We have also learned that development efforts are most effective when poor rural people act as partners in development, not just subjects of programmes. And we have seen, time and again, that women play an essential role in rural areas as producers, managers, and agents of change.

Last, but very important, is our awareness that even for the poorest of smallholders, agriculture is a business. Even subsistence farmers focused on survival have a business model. Their bottom line is food in their stomachs. We want to help them increase their productivity so that they can make the leap out of subsistence, with enough for their table and a surplus to bring to market.

So, although this is a time for optimism, it is also a precarious moment, and even one of danger. Food price shocks push millions of people into poverty.  The world is changing rapidly, and does not wait years for us to adjust our models. Optimism has to be tempered by an awareness of the scope of the challenges, whether feeding a burgeoning population or helping smallholders cope with potentially devastating effects of climate change. It is not solely about raising resources or rethinking the models of the past; what we need is to innovate in step with a changing present and take action — now — to ensure a better future.

Ladies and Gentlemen,

I am proposing to you today that we work together to take three steps: that we lift our sights, reset our foundations, and raise our game.

These three steps are critical if we are going to make progress in our fight to defeat rural poverty and achieve food security.

First, let us reset our foundations.
What do I mean by this? I mean that we must maintain the renewed focus on developing country agriculture while adapting our approach to reflect new realities and new challenges. 

Conventional approaches will need to be complemented with overall improved farm production systems. The local context will have to determine the best practices, while we also try to support the development of policies and institutions that can make it happen on a massive scale. This is no easy task.

In this context, we must not lose sight of the imperative to help smallholders who struggle to feed their families manage risks These risks are on the rise from price shocks, climate change, and market forces that favor large producers. 

Poor farmers often can’t afford to risk planting a different kind of crop, trying out new and more environmentally sustainable methods of farming, or seek new markets for their produce. For poor people, taking risks can seem like a luxury. Failure in their business model means hunger. But making such improvements is an essential step for economic growth and for increasing global food production.

We — IFAD and other development partners — need to be there to help the smallholder make that step by reducing risk and giving poor rural people access to the tools they need to deal with it, and by creating the conditions necessary for a vibrant rural sector. 

Second, let us lift our sights.
It is time to recognize as entrepreneurs the world’s 1.5 billion people who depend on small farms who need to reach their potential as small-scale business people.

The challenges are enormous. Food tastes and agricultural markets are changing, and modern value chains for agricultural products are becoming more common. The world’s population is expected to reach 7 billion this year, and 9 billion by 2050. To meet growing demand, global food production will need to rise 70 per cent in less than 40 years. Production in developing countries will need to almost double, but it must be done in a sustainable manner.

But the potential of smallholders is also enormous. If smallholders and other poor rural people have opportunities to be entrepreneurs in new and evolving markets, rural situations can be transformed. And although agriculture will remain central to rural life, it will need to be just one of many paths that poor rural people can take to overcome poverty. By supporting a more modern, diversified economy, we can ensure that people who choose farming and those who choose non-farm enterprises to make their living will be equally successful.

To succeed, it is imperative that we extend our reach to more of those currently excluded or underserved by essential services, information, and markets. We have to make scaling up a primary focus of our approach.

We also need to mobilize new resources and encourage responsible private sector investment in agriculture.  

We believe that an especially important source of financing may be remittances.  At IFAD, we are looking for ways to support migrant workers who send 325 billion dollars in remittances home to developing nations every year. These remittances provide food, clothing and shelter for millions of families around the world.

How can we help migrants leverage their hard-earned funds and their dedication to their home communities so that the impact is even greater?

An answer can be found in the new Diaspora Investment in Agriculture initiative, being launched by the U.S. Department of State and IFAD, together with other governments, collaborating institutions, and local partners on the ground.

The initiative will work with migrants who wish to invest in agricultural projects in their home communities. It will focus on post-conflict countries and fragile states.  And it will work with the collective diaspora of those countries of almost 20 million people, to help identify opportunities and models for sustainable investment.

My third and last point is for us to raise our game.
By that I mean that development cooperation needs to have a more forward-thinking orientation. A reversal of the declining trend in aid to agriculture is certainly needed. But this is about more than a change of heart; we need a change of outlook and practice. Aid to developing country agriculture is an investment in the future – in global food security and global economic growth.

While we need increased investment, we also need to recognize that programmes of the past did not fall short only because they were too small. We also need to change our operations and work with greater effectiveness, efficiency, and accountability. To feed the world of 9 billion people in 2050 we need to invest now with forward-thinking strategies that are anticipatory, not reactive.

Ladies and Gentlemen,

I would like to tell you a bit about what IFAD is doing to build vibrant rural economies that offer decent jobs and real opportunities. This is especially important if rural areas are going to retain their young people, who are essential to the future of these communities, both economically and socially. We have to build economies in which rural young people can see a future for themselves.

The projects we support are helping to create the conditions smallholders and other poor rural people need to become entrepreneurs in the new, evolving markets. It takes a lot more than just recognizing that agriculture—even small-scale, smallholder agriculture — is a business, or dubbing people “entrepreneurs.”

For them to really be successful in a changing and modernized economy, we need to advocate for reduced transaction costs, support rural producers’ organizations and expand financial services into rural areas.

We are also working to ensure that small farmers have access to infrastructure, utilities and information, including information and communication technologies.

And, of course, we are also promoting good governance.

We are proud of our achievements but we are continually working on ‘raising our game.’

I am glad to say that over the years, the catalytic role of IFAD has dramatically increased.

Consider that for every dollar contributed to the Eighth Replenishment of IFAD’s Resources, we mobilized another six dollars from our partners for rural development programmes. Increasingly, our national and international development partners are investing their own resources, through cofinancing, in IFAD-supported programmes.  

One of IFAD’s major objectives at the country level is to scale up successful approaches to sustainable smallholder development with national and international partners.

Scaling up takes successful innovations beyond the pilot phase and magnifies the impact of solutions that work. We have made it a key institutional goal at IFAD. In 2010, we became the first development agency to sponsor an institutional scaling up audit, which was carried out by the Brookings Institution. The audit showed positive results. Our activities supported in the highlands of Peru are a good example. Eight loans since 1980 have provided over $115 million to support smallholder farmers. The last five loans have scaled up innovative approaches, reaching about 30 per cent of the roughly 5,000 poor communities in Peru’s highlands.

Colleagues,

Turning from the past, let us look at another outcome, another model, another possible future.

I mentioned earlier that we have focused particularly on the situation of rural women. For example, there’s Elysée Nkundabagenzi of Rwanda. In her community, where people were extremely poor and malnourished, she and her neighbours received small loans, goats and cows, and training in establishing kitchen gardens. Elysée now produces enough vegetables and milk for her family’s needs, with extra to sell at market and boost her income. She can send her children to school and buy health insurance. And she has abandoned her grass hut to build a new house.

During my travels around the world, I have met dozens of people like Elsyee whose lives have been turned around with a little bit of support. And through IFAD-supported projects, lives of entire communities have been transformed.These are individual success stories, but the point about scaling up is that it can be replicated on a vast scale.

Friends,

Our actions today will determine whether the world we leave for our grandchildren is one that yields enough food to sustain its population. Will the generation of 2050 be faced with global food shortages because we failed to act today with sufficient ambition and urgency?

At IFAD, we know that we need to do more. We all need to do more.

To do that, let us work together to reset our foundations, lift our sights, and raise our game.

Thank you.

Washington D.C., 17 May 2011