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AECID Conference: “Global crisis: The role of European Development Actors”

Statement by Alvaro Lario, President of IFAD

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I extend my gratitude to AECID for the kind invitation to this conference. Spain's close partnership with IFAD, for over 45 years, reflects our shared commitment to a world free from poverty and hunger.

Despite progress, the stark reality of global hunger remains concerning. In 2022, approximately 783 million people suffered from hunger, an alarming increase of 122 million people compared to 2019.

The pandemic's impact has exacerbated food insecurity around the world, hitting rural areas of developing countries - where small-scale farmers produce up to 70% of regional food - the hardest.

For instance, food insecurity affects 33% of adults in rural settings, compared to 26% in urban areas.

To eliminate hunger, we must scale up invests in rural development and local food value chains.

The scale of the global crises of the past two years has taught us that only through consensus, shared commitment and concerted action can we face global challenges.

And that requires resources. A big takeaway is that we need a lot more action, and also a lot more financing to back it up.

Simply stated, without adequate funding, the Sustainable Development Goals and the global Climate Agreements will not be reached. Food systems transformation is integral to both.

Urbanization and evolving consumer demands offer an opportunity for small-scale farmers to supply nutritious food to cities and connect to value chains and markets. Prosperous rural areas lead to thriving cities.

This requires investments to bolster local production, diversification of crops, equitable pricing mechanisms with fair prices for SSF, access to inputs like seeds of fertilizer, access to microinsurance and credit, access to land titles for women, business plans to make sure that farming is being treated as a small business and not as subsistence farming, feeder roads for transportation, storage facilities, commercialization and quality plans.

Food systems are at the heart of a nexus of issues and development goals. It’s not just about food, but the environment, coping with climate change, reducing inequality, improving nutrition, and the kind of world that the next generation will inherit.

No agency can achieve this alone.

At IFAD we have committed to do even more to assemble the finance needed to transform food systems, including through approaches such as engaging private capital. This is part of IFAD’s updated strategy for working with the private sector. Along with a focus on climate finance, and deepening our work in fragile contexts, these are the three pillars of our approach going forward.

That is why I am also heartened by the support of our European Member States and other partners in our current 13th replenishment process.

IFAD is urging its members to step up and help us face this global challenge together.

The cost of inaction is much higher than the cost of action.

The environmental damage caused by our existing food systems amounts to more than US$3 trillion annually.

The public health costs related to unhealthy diets, including obesity, are estimated at a staggering US$6 trillion. And the suffering due to undernourishment costs approximately US$1.8 trillion each year.

At the same time, while the world wastes around US$1 trillion worth of food annually,

In other words – while the cost of financing the transformation of food systems is high, the cost of not financing it is much, much higher.

The question becomes: how much would it cost to get back on track and build a better future for the planet? 

$400 billion USD are estimated to be needed in additional investment per year until 2030. That is what governments north and south, the private sector and development partners, need to mobilize to transform global food systems so they become sustainable, inclusive and resilient.

Let’s remember that investment in agriculture is two to three times more effective in poverty reduction compared to investments in other sectors.

Our goal is to assemble a $10 billion global investment to address the food crisis and tackle the root causes of hunger, namely: climate change, fragility, economic slowdowns, inequality, social exclusion and weak institutional capacities.

As Spain has assumed the EU Presidency, this is a unique opportunity for European leadership to respond to the food crisis and sustainably transform food systems.

With the right investments, political will and leadership, we can achieve a hunger-free world. IFAD stands ready to work with all and each of you in this making this a reality.

Thank you.