IFAD Asset Request Portlet

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Statement by President Lennart Båge

ECOSOC High Level Ministerial Segment

Geneva, 1 July 2003

Mr. President,
Delegates, Colleagues and Friends

It is a great pleasure for me to be here today and to participate in this debate on promoting an integrated approach to rural development.

I would like to congratulate the President of ECOSOC, His Excellency Gert Rosenthal for holding this important event.

Agriculture and rural development have been neglected for far too long and I am pleased to see that this trend is now reversing.

Twenty-five years ago, when my organization, IFAD (the International Fund for Agricultural Development) was established, the looming global food deficit was the mobilizing force for action. Today, when we have a daily global food production of 2,800 calories per person, and even subsidies to some OECD farmers not to produce, the challenge is a different one. What is now calling us to act is the fact that despite an abundance of food, poverty and hunger are rampant. The call to us today is about human dignity and equity, about poverty being fought with new opportunities for a better life.

The first prerequisite is a global consensus of the task ahead. The first element of such a consensus is put in place by the Millennium Summit and its Declaration with its key goal of halving hunger and poverty by the year 2015. The Millennium Development Goals are now the recognized legitimate framework for action.

The second element is yet to be put in place. As has been stated repeatedly, the majority of poor are rural. So, if we are to reach the Millennium Development Goals, we must make an impact on rural poverty. In most poor countries, agriculture is the main economic sector; the largest employer and job creator, and the biggest export earner. When we look at the history of the 19th century if we come from Europe or the US – or the 20th century if we come from Japan or the miracle economies in South East Asia – or China in the last 20 years – we see that reforms in the agricultural sector have been the foundation for overall economic development and poverty reduction. It has been the often-dramatic progress in agriculture, translated into productivity increases that has generated increased production, income, savings, investments and demand for goods and services to create the virtuous circle of development. This is particularly important for poor, institutionally weak developing countries, where broad based agricultural development brings welfare gains and equity to large sections of the population – in a way that single-source commodities such as oil or diamonds not always manage to achieve.

Now what is lacking? Well, still the realisation of the centrality of agriculture for development by most aid donors and many governments. We have to re-establish in the general debate on development the fundamental knowledge that poor countries must increase productivity in small farmer agriculture to be able to fight hunger and poverty and to develop. But it is not enough that governments and aid donors re-engage. Small farmers actually constitute the core of the private sector in many developing countries. They constitute the future producers and consumers of the modern world. Investments in this development is not just charity, it is enlightened self-interest.

Every dollar of increase in agricultural production generates more than two dollars for the national economy, according to the most recent studies. Despite the obvious relevance to overall development and poverty reduction of investments in rural and agricultural development, the share of overseas development assistance that goes to agriculture and the rural sector has been steadily falling, not rising. In fact, it has declined by nearly half since 1988. Today, only 8 percent of developed countries’ total overseas development assistance goes to agriculture. This has to change if we are to reach the MDG of halving world poverty by 2015.

Today we have the benefit of decades of experience of what works and what doesn’t. IFAD has engaged in more than 600 projects and programmes with a total value of over USD 20 billion, reaching some estimated 200 million rural poor. Based on this experience, key factors for rural development are:

Firstly, secure access to assets, in particular to land and water. If you don’t own or use the land securely, how can you plan or get credit. Water scarcity is the fastest growing problem in large parts of the developing world. Water stress and land degradation go hand in hand and we need to vigorously address the causes of desertification and land-degradation and strengthen our resolve to implement the Convention to Combat Desertification.

Secondly, markets, to buy and sell. The world is rapidly moving beyond subsistence farming and we have to make it possible for poor women and men to have greater and more efficient and equitable access to markets – locally, nationally, regionally and globally. Much progress on removing obstacles is needed on all levels. Even for the small remote woman farmer, what happens in the Doha Round is of great importance for the possibility for her to sell at the local market.

Thirdly, access to finance, access to opportunities to save and borrow and not be at the mercy of the village money-lender. Micro-finance is one proven successful approach. Villages need locally owned savings and loans associations to harness the development potential of rapidly growing remittances, now twice the size of ODA.

Fourthly, access to technology and research that responds to their problems.

And Fifthly, access to accountable and non-corrupt institutions. The poor need effective political representation, more bargaining power and organizations that represent their interests. Institutions and organizations for, of, and by the poor. They must be allowed to be the actors, the subjects and not the objects of charity. We know that poor people seize every opportunity to get a better life for hemselves and their families. Our role is to provide such an opportunity.

All this is compounded by the challenge of HIV/AIDS, in particular in parts of Africa where a generation of farmers is disappearing. HIV/AIDS is now more a rural than urban problem and 7 million active farmers and farm workers have already died. Its impact on agriculture is devastating. Teenage headed households are increasing and the number of orphans is daunting. The role played by rural women must be especially recognized. Their social, economic and political marginalization, while being the prime actors in agriculture, must be addressed.

For us to address these needs, we need to argue for greater attention by developing country governments for the centrality of agriculture for national development. The OECD countries have to reverse the declining trend in ODA funding for agriculture. We are now starting to see examples of this. Canada has just announced a plan to increase five-fold its spending on agricultural development in developing countries. USAID is also reversing the declining trend. European countries are revising their policies. G8 is taking an interest. I welcome the G8 declaration from Evian where G8 countries “undertook to work towards reversing the decline of ODA to agriculture. It is a good beginning. More must follow. After 15 years, agriculture is coming back on the development agenda. This meeting confirms this hopeful trend. It has to be sustained and I welcome that ECOSOC will hold us to account by reviewing progress in 2005.

To conclude, I believe that the High-level Segment will be a milestone if it results in:

Firstly a greater understanding of the role and significance of agriculture and rural development for poverty reduction;

Secondly a strengthened commitment to increasing funding for agriculture and rural development;

Thirdly the establishment of a mechanism to hold us to account by monitoring and reporting progress on implementation of our commitments.

Thank you.