Press release number: IFAD 20/02

Monterrey, Mexico, 18 March 2002 - The International Conference on Financing for Development (FfD) cannot spur broad-based economic development unless it leads to increased funding to fight world hunger and rural poverty, three UN food and agricultural agencies warned at a news conference today.

The UN Food and Agricultural Organization (FAO), the International Fund for Agricultural Development (IFAD), and the World Food Programme (WFP) charge: ''Without increased, targeted funding to fight world poverty and hunger, the most basic of obstacles to human and economic potential will remain. Moreover, hunger and poverty will not be halved by 2015, as agreed by world leaders at the Millennium Summit in 2000. Progress towards these goals has been proceeding well below the rates needed for success.''

In a joint report prepared for FfD, FAO, IFAD, and WFP outline a twin track strategy for achieving substantial reductions in hunger and poverty through:

• Promoting agricultural and rural development mainly through productivity increases, especially among smallholder farmers, to achieve broad-based economic growth, increased food availability and sustained poverty reduction, and
• Improving food consumption to raise the productivity and productive potential of those who are weakened by hunger, and allow them to take advantage of the opportunities offered by development.

Widespread hunger and malnutrition in a world of plentiful food implies that extreme poverty is the root cause of undernourishment. At the same time, hunger and malnutrition are major causes of poverty.

Of the 1.2 billion people living in extreme poverty on less than $1 a day, 75 percent live in rural areas and make their livings primarily through agriculture. And, 780 million people in the developing world still live in hunger. Yet, over the last 15 years, aid to agriculture and rural development has declined by nearly half. The UN agencies urge FfD to reverse this downward trend in development finance. This will enable limited aid resources to more effectively foster an inclusive and equitable global economy - the overall aim of FfD. The agencies warn: ''Those suffering from hunger and malnutrition are caught in a vicious circle: inadequate food intake and poor nutritional status, cause susceptibility to illness, low productivity and continuing poverty. Evidence shows clearly that in societies where hunger is widespread, overall growth, an essential element in sustainable poverty reduction, is severely compromised.

FAO Director-General Jacques Diouf says, ''A hungry person is not able to work at his or her full potential. If some 40 percent of a country's population is under-fed, the economy as a whole lacks the energy needed for growth.''

''Even more alarming,'' warns Dr. Diouf, ''a hungry person is an angry person easily swayed by charges that the global economic system is not working and should be trashed in favor of something radically different.''

The agencies charge: ''Between 1975 and 1999, countries that managed to reduce the prevalence of hunger invested substantially more in agriculture than those where undernourishment remains widespread. It is worrying that capital formation per agricultural worker has remained stagnant or declined in countries where more than 20 percent of the population is undernourished and where agriculture is essential for poverty reduction and food security.''

''There is a disconnect - in fact, a fundamental inconsistency - in where aid goes and the fact that poverty is found overwhelmingly in rural areas,'' says Lennart Båge, President of IFAD. ''Aid must be targeted to enable the rural poor to build better lives for themselves and their families through linking them with productive assets, markets, and institutions. Access to technology is also important to increase their productivity.''

Development opportunities may exist, but poor families often cannot take advantage of them. Direct access to food, including food aid where needed, plays a special role here, which is why the UN agencies are calling for the establishment of food assistance programmes and food-based safety nets directly targeted to poor households to improve their nutritional status and help them in their longer term food security.

WFP's Executive Director, Catherine Bertini, says: ''We have to remember that the hungry poor need our help today. Ideally, long-term economic development will help them move out of poverty in the future, but there are tens of millions of parents who wake up to the same question every morning: How will I feed my children today? We need to help them. If these families are malnourished, they will only fall further behind. Food aid can simultaneously meet their nutritional needs today and give them new opportunities for tomorrow. School feeding programs, for example, have increased enrollments, especially of girls, by up to 300 percent in developing countries. What better way is there to promote development, than to invest in the health and education of the world's children?''

Noting that the responsibility for escaping from hunger and poverty rests first with individuals, their families, communities and governments, the agencies caution that the proportion of public expenditure which developing countries devote to agriculture and rural development is far from adequate, ''especially in countries where food deprivation is highest.''

''The agencies conclude: 'We firmly believe that it is fundamentally wrong to consider development assistance as an act of charity. Eradicating extreme poverty and hunger is more than just a moral imperative - it is in the self interest of the international community, with a high pay-off in peace, political stability, overall development, and prosperity.'''

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IFAD is a specialized agency of the United Nations with the specific mandate of combating hunger and poverty in the most disadvantaged regions of the world. Since 1978 IFAD has financed 603 projects in 115 recipient countries and in the West Bank and Gaza for a total commitment of approximately USD 7.3 billion in loans and grants. Through these projects, about 250 million rural people have had a chance to move out of poverty. IFAD makes the greater part of its resources available to low-income countries on very favorable terms, with up to 40 years for repayment and including a grace period of up to ten years and a service charge of 0.75% per year.