Market Access Crucial for the Poor

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Market Access Crucial for the Poor

Press release number: IFAD 13/03

Rome, 20 February 2003….For many of the world’s poor, lack of access to markets is a problem that greatly contributes to their poverty, Edward Heinemann of the International Fund for Agricultural Development (IFAD) told a roundtable at the UN specialized agency’s 25th anniversary session of its Governing Council.

Improving the access of rural poor people to local, national and international markets is fundamental for enhancing food security and increasing rural incomes, said Mr Heinemann.

He said that many countries had closed down their state marketing operations under structural adjustment reforms, but that the private sector had been slow to fill the gap. This point was emphasized by a number of other speakers. Poorer farmers therefore face “a new and uncertain environment”, said Mr. Heinemann. Their physical access to markets may also be difficult, due for example to lack of roads, and they may lack information, skills and organization.

“The most important market for the poor to access is their own local market,” said Martin Khor of the Malaysia-based group of non-governmental organizations, Third World Network. Like other speakers, Mr Khor said that artificially cheap food is being sold in developing countries as a result of the subsidies that western countries are paying their farmers. These subsidies are leading to over-production and to the “dumping” of surpluses in developing countries. The food is exported to developing countries below the cost of production. Farmers in developing countries often can’t compete with these imports and are therefore priced out of their local markets.

Mr Khor said IFAD could have an important role to play in encouraging a reassessment of the role of the state and the private sector in the marketing of agricultural produce.

Many of the poorest developing countries were heavily dependent on the sale of non-fuel primary commodities on international markets, said Charles Gore of the UN Conference on Trade and Development (UNCTAD). He said the price of these commodities has fallen, in real terms, by 50% since 1981.

“We need reliable, renumerative markets for our produce,” said Charles Keenja, Tanzania’s Minister for agriculture and food security. He also stressed the importance of setting up small farmers’ organizations through which they can work cooperatively.

Agricultural extension services, the private sector and markets had to be brought together, said Jake Walter of Mozambique. Lucia Gonzalez of Chile stressed the importance of regular supplies of produce to markets, as these could help to put farmers on a firmer footing.

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 628 projects in 115 recipient countries and in the West Bank and Gaza for a total commitment of approximately USD 7.9 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.