IFAD 04/08

Climate change, rocketing food prices and expansion of biofuels top the list of pivotal development issues for discussion, focus of speech to European Parliament

Rome, Brussels, 31 March 2008 – The implications of pressing new development challenges are at the centre of talks taking place in Brussels tomorrow between Belgian officials and the President of IFAD, Lennart Båge.

Båge will meet with Belgian Government officials to discuss innovative ways to tackle hunger and poverty in a rapidly changing world. He will also deliver a speech at the European Parliament from 4.30 to 5.30 pm on how IFAD can strengthen its ties with the European Union to combat urgent new development challenges that include rising food prices, climate change and the expansion of biofuels.

“Climate change is at the centre of a web of new challenges that are making it more difficult for the world’s poorest people to escape from poverty and hunger,” said Båge. “Put simply, the price of development just went up. Substantial and additional money will be needed to help poor countries adapt to climate change.”

Nearly one billion people live in extreme poverty and hunger. Most live in rural areas of developing countries and depend on agriculture to survive. Hundreds of millions of smallholder farmers and other poor rural groups live in marginal areas, which are at risk from degradation and desertification as a result of climate change.

“We can expect future climate change to put almost 50 million extra people at risk of hunger by 2020,” said Båge. “Those least responsible for the problem will be hit first, and hardest.”

“Africa is projected to fare worst, with at least 75 million people there facing increasing water shortages and lack of good quality water,” he said.

Closely linked with climate change are two other trends of growing importance – rising food prices and expansion of biofuels. The increased demand for biofuels has sparked concerns that poor rural people living in marginal areas may lose their lands, as larger more influential interests seek additional land for fuel production. Many of the world’s poorest people are already feeling the pinch from soaring food prices, which have sparked riots in numerous countries, including Burkina Faso, Cameroon and Mozambique.

“Security may very well prove to be a serious issue in the not-too-distant future,” said Båge.

Belgium and IFAD have a long and successful history of collaboration in developing countries, especially in Africa.

Since 1984, they have co-managed the Belgian Survival Fund (BSF), a partnership to combat hunger and malnutrition in Africa, with a focus on the most vulnerable countries. To date, the BSF has issued 58 grants financing 42 programmes and projects to: boost household food and nutrition; improve health and sanitation; increase access to rural finance; mitigate the effects of crisis; and empower communities.

Belgium has contributed US$180 million to IFAD-supported programmes and projects, including those that fall under the Belgian Survival Fund. It also provided more than US$47 million to IFAD’s Special Programme for sub-Saharan Africa.

Nearly 50 per cent of IFAD funding goes to Africa, placing IFAD among the top three multilateral institutions there. The New Partnership for Africa’s Development (NEPAD) and the Comprehensive African Agricultural Development Programme (CAADP) provide a framework for all IFAD’s efforts on the continent.

IFAD is deepening its long-standing partnership with the African Development Bank and has partnered with the Alliance for a Green Revolution in Africa, chaired by the former United Nations Secretary-General, Kofi Annan, to ensure that Africa can achieve its own Green Revolution.

IFAD has also supported agricultural research into specific crops of importance to poor rural farmers, often through the Consultative Group on International Agricultural Research (CGIAR). Agricultural research, which so successfully drove the first Green Revolution in Asia, has been shown to deliver rates of return in excess of 40 per cent. 

“The first Green Revolution showed us that it’s not enough to focus only on productivity,” said Båge. “We also have to create the conditions that make agriculture sustainable.

This is a priority for IFAD, for Belgium and for the European Union as a whole.”

Båge added that higher food prices and the potential of biofuels represent both challenges and opportunities. After decades of falling prices, the recent rises in food prices could bring significant benefits to smallholder farmers, making smallholder agriculture more economically viable. Biofuels, especially second-generation biofuels that can be grown on marginal land, could offer smallholder farmers significant new income sources.

“These two trends are making the ‘rural space’ more attractive for investments,” he said.

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IFAD was created 30 years ago to tackle rural poverty, a key consequence of the droughts and famines of the early 1970s. Since 1978, IFAD has invested more than US$10 billion in low-interest loans and grants that have helped over 300 million very poor rural women and men increase their incomes and provide for their families.
IFAD is an international financial institution and a specialized United Nations agency. It is a global partnership of OECD, OPEC and other developing countries. Today, IFAD supports more than 200 programmes and projects in 84 developing countries.