By Lennart Båge, President of the International Fund for Agricultural Development (IFAD)

What does MERCOSUR, the world's fourth largest trading block, have to do with the plight of poor rural people — small farmers, landless workers, herders, fisherfolk and indigenous peoples?

A lot.

Economic development and advances in technology are creating an ever-richer world for many. But millions of poor people in developing countries are at risk of being left behind and further marginalized.

Poor rural people remain poor because they lack the basic assets to overcome poverty, such as access to markets and to the information and political power they need to advocate on their own behalf and take advantage of opportunities.

Agriculture is one of the leading economic sectors in most MERCOSUR countries. It provides income and employment for millions of farmers and livestock herders. However, many of the poorest and most vulnerable people are not benefiting from global market opportunities.

Eroding soils, damaged watersheds, lack of access to markets and unequal distribution of land are just some of the constraints undermining livelihoods and health. Rural development policies must be institutionalized in MERCOSUR's agenda, so that poor rural people can benefit — and poverty and hunger in the South Cone can be eradicated.

Indeed, the heads of state of 10 MERCOSUR countries recognized this at the summit in Cordoba, Argentina, in July 2006. They pledged to cooperate to cut poverty by boosting trade and creating jobs under the MERCOSUR banner.

This week, many representatives of farmers' organizations, small cooperatives and rural financial institutions are in Asunción, Paraguay, for the MERCOSUR specialized meeting on small-scale agriculture. They will contribute ideas and perspectives on the lives and livelihoods of poor rural people to discussions about MERCOSUR's priorities and future directions.

It is important that their ideas are taken into account in decision-making by government Ministers, trade officials, business leaders, NGO representatives and others attending the meeting.

During 30 years of working with poor rural people and their organizations, IFAD has learned that, to enable people to overcome poverty, we must ensure that they have access to the skills and organization they need to take advantage of economic opportunities. They must also have the capacity to negotiate and influence the policies and decisions that affect their lives.

With its strong focus on the social dimension of MERCOSUR, the Asunción meeting testifies to a long and fruitful collaboration between IFAD and the MERCOSUR member countries. Since 2000, IFAD has worked with MERCOSUR on a programme to create and consolidate space for policy dialogue within the common market. The aim is to ensure that poor farmers benefit from regional integration. IFAD is working to help consolidate a sub-regional rural development strategy within the framework of MERCOSUR. It is crucial that we ensure poor rural people have a voice in this process and, in particular, participate in the development and implementation of rules and regulations that affect their livelihoods and their access to new and existing markets. 

IFAD has invested almost US$300 million in rural and agricultural development programmes in the four founding MERCOSUR countries alone. In Argentina, we have enabled small farmers in the poorest provinces of the country to increase productivity and diversify their sources of income, through better access to financial services, technical assistance and training. In Brazil, our focus is on the semi-arid northeast, where IFAD-funded initiatives provide vital technical and financial support to destitute farmers. IFAD also supports Brazil's agrarian reform process by providing basic technical and financial services to newly-created communities of small farmers. In Paraguay, we support the government's efforts to combat widespread poverty in the Parana River basin. We assist cooperatives of small farmers to diversify production and break their traditional dependency on the highly-subsidized national cotton industry. And in Uruguay, we are working with the government to promote mesas de desarrollo rural, rural development forums which enable poor rural people and their organizations to have a direct say in setting priorities for the territory. National and local governments, project participants, and other donors and partners have contributed almost US$500 million to these initiatives.

Rural development and poverty reduction strategies — on which MERCOSUR's success depends — must be a permanent part of the South Cone‘s development agenda. This means ensuring that poor farmers are able to influence policies and practices. The involvement of their representatives in the Asunción meeting will help to strengthen and solidify MERCOSUR's role as a crucial catalyst of South America's economic, social and political integration and a lifeline for poor rural people. IFAD is proud to support it.

Published in Buenos Aires Herald

IFAD is an international financial institution and a specialized United Nations agency dedicated to eradicating poverty and hunger in rural areas of developing countries. Through low-interest loans and grants, IFAD develops and finances programmes and projects that enable poor rural people to overcome poverty themselves. Since starting operations in 1978, IFAD has supported hundreds of millions of poor rural people and their organizations. Over the next three years, we plan to invest US$2 billion in about 100 new programmes and projects. When co-financing is taken into account, the total investment is US$4 billion. This will allow us to reach another 50 million poor rural people. IFAD works closely with the international development community, especially other United Nations agencies and international financial institutions, to increase the effectiveness of global development efforts.