Distinguished Guests,
Esteemed Colleagues,
Ladies and Gentlemen,

It is my great pleasure to be here today to discuss achieving global food security and the role of the private sector.

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.

Investment in agriculture has dropped precipitously since the mid-1980s. This reflects a significant decline in development assistance. The Netherlands stands out as being one of the few nations to have surpassed the United Nations target of 0.7 per cent of Gross National Income for ODA.

The decline also reflects a sharp reduction in investment from developing country governments 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.

Poverty and hunger can be dehumanising. They are not only a humanitarian issue. They are also a peace and security issue.  Hunger and social unrest go hand-in-hand. Many of the current movements for political change were triggered by food shortages and rising costs.

As we consider how to improve food security today, we must bear in mind that a growing population will demand more food. Just last week, the world welcomed its 7 billionth citizen. The global food supply will need to increase 70 per cent by 2050 to meet demand from more than 9 billion people.

Our food security efforts must not just be about short-term fixes, but about long-term solutions.

At IFAD, we believe that the best way to ensure food security, for the short-term, the medium-term and the long-term, is by investing in smallholders in developing countries.

Why do we believe this?

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.

So, obviously, a global food security agenda can not ignore their role.

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

The question therefore is: How do we make smallholder agriculture market-oriented, profitable and environmentally sustainable so that it not only contributes to food security but also can spur economic growth in developing countries and lift millions out of poverty?

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 at the community level 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.

The Netherlands and IFAD share a vision of a world without poverty and hunger which goes back to our earliest days, when the Netherlands was a founding member.

The Netherlands has been a generous partner in development, both in its contributions to IFAD and in its more general Official Development Assistance.

This is laudable, especially now that the global   financial and economic crisis is hitting national budgets.

In light of this, it is even more important for the Netherlands, and indeed everyone, to get the most from their development dollars. The best way to do this is by working in partnership.

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. And we have seen the benefits of working with the private sector in our value-chain approach.

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 Wal-Mart of the U.S.

 In Egypt, an IFAD-supported project on land that was reclaimed from the desert has helped farmers to establish contracts with private exporters. As a result, their incomes have risen. These small farmers are now exporting fresh vegetables and fruits to the United States and Europe – including peanuts to Switzerland and Germany.  Heinz has a contract to buy tomatoes for processing from about 300 of the project farms.

There are many other examples, from cocoa farmers in Sao Tomé and Principe who are now supplying chocolate makers such as Kaoka in France and CaféDirect in the UK, to an organics project in the Pacific where small farmers are supplying organic virgin coconut oil to the Body Shop in the United Kingdom, allowing more children to attend school and funding a way of life that incorporates health, ecology, fairness and care.

Rural development transforms the  landscape by creating vibrant economies that can contribute to global food security. Rural economies that offer a range of income-generating options for people to choose from.

Creating more modern, diversified rural economies generates demand for locally produced goods and services, and also spurs non-farm employment in services, agro-processing and small-scale manufacturing.

When farmers are recognized as small entrepreneurs and have better incentives and an enabling environment, they are able to invest more effectively in their farms and in non-farm enterprises.

In all of the programmes and rural communities I have visited, I have been impressed by the desire, the commitment and the ability of people to transform their own lives. The entrepreneurial spirit is strong.

As we create the conditions for food security for the future, we must place a special emphasis on women and young people.  In virtually all rural societies, women are the primary caregivers. But they are also, increasingly, the farmers and the agricultural workers.

Unfortunately, they are also usually the most disadvantaged members of rural societies, without rights to the land they work or power to hold onto the profits of their labour.

It is estimated production on women’s farms could increase by 20 to 30 per cent, just by giving women the same access as men to agricultural resources.

We must also look to the needs of young people.

Today, young people are leaving rural areas in ever greater numbers. Options for employment, on or off farm, are limited. Incomes are low. And living conditions can be grim, with no electricity and no easy access to clean water. Often, unpaved, dirt roads are the only link from one village to the next.

We will need the young people of today to be the farmers of tomorrow to help meet demand from a growing population. We can stem the exodus to cities, and abroad, by creating rural economies that offer a range of employment options so that young people can build good lives and see an attractive future for themselves.

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. 

So, first and foremost, there must be a change in mind-set. Poor rural people are not just waiting for government and donor hand-outs. We must see them as small entrepreneurs involved in economic activities. Give them the financial, social and organisational opportunities and they can transform their lives and their communities.

And I have seen it happen all over the developing world.

• With Jane, a 35-year old goat farmer in Nyeri, Kenya

• With Moussa, the cassava seed producer in Western Ghana

• Gibrenet, in Awassa, Ehtiopia, the livestock and milk producer

• Maria Elisa Santos in Izacoba, Quatemala, head of a women’s vegetable producer association

• And South Gansu in Western China where local populations have transformed a dry and rugged mountain landscape into a rich agricultural community using terracing, rainwater capture and biogas production 

And most recently in Togo, Burkina Faso and Senegal, in the harsh Sahelian environment, women, men and children engaged in small agricultural activities that make it possible to feed their families, buy medication, send their children to school and rebuild new homes.

Building bridges between farmers and consumers is IFAD’s business. And we have a track record – facilitating farmers groups, associations and cooperatives; helping them to establish their own local institutional governance structures, empowering them and linking them in partnership with the private sector has an essential role to play in strengthening these links.  

Private-sector involvement, ranging from large companies to small famers and their organizations, is critical in allowing agriculture to contribute most effectively to food and nutrition security.

In recognition of this, IFAD recently developed a strategy to deepen its engagement with the private sector.

To be an effective partner, IFAD has a robust Change and Reform Agenda, enabling us to be increasingly efficient, effective and agile in our work.

We have bolstered our organizational structure and improved the alignment of our human and financial resources.

Given that poor rural people are particularly vulnerable to the impact of climate change, we have 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. The more we delegate and direct resources to the field, the more value we get from your investment.

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.

The work we have been doing to make IFAD an effective leverage instrument for members is paying off. For every dollar contributed to IFAD during our Eighth replenishment of resources, we mobilized another six dollars from our partners for rural development programmes. For our partners, such as the Netherlands, this means that their individual contributions have a greater impact in ensuring food security and reducing poverty.

As we continue to make improvements at IFAD, we are also encouraging our developing country partners to put their own political and economic houses in order. They must continue to deepen the foundations of democracy and ensure the political stability that is essential for economic growth.

Change cannot be imposed from the outside. But when it is cultivated from within, then every tree and every plant will be able to root itself in its own soil and flourish.

The demand for food will only grow in the coming years.  By acting now, and establishing strong partnerships with the private sector to benefit smallholders, 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.

The result will not only be greater food security, but also wealth creation and economic growth. It has been estimated that GDP growth generated by agriculture is at least twice as effective in reducing poverty as growth in other sectors. And experience repeatedly shows – in China, Ghana, Viet Nam and elsewhere – that smallholders can lead agricultural growth.   

Ladies and Gentlemen,

We must continue to work together, in true partnership, each of us doing our bit to eliminate poverty and hunger.

Smallholder agriculture is part of the solution as we look toward achieving global food security and eradicating poverty and hunger.

Let us never forget that agricultural and rural development is not just about food security.  It is the pathway to wealth creation and economic growth.

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

Thank you.

The Hague, Netherlands, 8 November 2011