Smallholder farming key to help Latin American economies recover from global crisis, UN rural poverty agency says

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Smallholder farming key to help Latin American economies recover from global crisis, UN rural poverty agency says

IFAD President in Brazil


The President of Brazil, Luis Inácio "Lula" da Silva, receives the President of IFAD, Kanayo F. Nwanze

Rome, 15 June 2009— The President of the International Fund for Agricultural Development (IFAD), Kanayo F. Nwanze, will travel to Brazil from 17 to 21 June for a first-hand look at progress in rural development in the country and learn about the challenges ahead.

During his visit to the country, Nwanze will meet Paulo Bernardo Silva, Minister for Planning Budget and Management who is also IFAD Governor, and Guilherme Cassel, Minister of Agrarian Development. Nwanze will also visit communities in an IFAD co-funded project in the semi-arid north-east Ceará State of Brazil.

In Brasilia Nwanze will hold meetings with the Brazilian Agricultural Research Corporation (EMBRAPA), Brazil's National Company of Food Supply (CONAB), and the Brazilian National Council for Food Security and Nutrition (CONSEA), as well as officials of IFAD-supported programmes and projects in the country.

The President of IFAD will also meet members of the Commission of Family Farming of the MERCOSUR (REAF). This IFAD-funded initiative was created five years ago to ensure poor smallholders' associations would be consulted and involved in policy making and to institutionalise rural development on the MERCOSUR policy agenda.

Financial crisis: measures needed

"The financial crisis demands short-term measures, accompanied by a long-term vision, to protect vulnerable rural households," stated Nwanze prior to his departure for Brazil.

Urgent measures should include increased investment in agriculture right across the production cycle, that is, infrastructure, technical assistance and rural financial services and the strengthening of capacities, within each country, for reducing rural poverty and promoting effective government institutions.

Coping with the recession will also require greater private sector involvement in agricultural services, such as finance and marketing, and the development of public-private partnerships. In addition, support for agricultural research must be maintained to allow new and improved technologies to be developed and shared, to the benefit of smallholder farmers.

Smallholder farmers, key partners for boosting national economies, form the majority of the 4 million farms in Brazil which are very small.

Production on many of these farms is at a subsistence level. However these small farms make a fundamental contribution to the economy and food security. Family agriculture, as is known in Brazil, accounts for about 70 per cent of the country's food production and a significant share of food exports. Yet they are still among the poorest people in the region because of lack of access to productive resources.

"There is immense untapped potential in the rural people who live in the mountains, valleys, hills and plains of Latin America and the Caribbean," said Nwanze. 

"But family farmers need inputs (fertilisers, seeds, agricultural equipment) financial resources, access to local and international markets and know-how."

National governments, donors, international organisations, civil society groups and farmers' organizations must help provide those essentials, as "farmers in the region not only have the capacity to grow themselves out of the current recession, but also can contribute significantly to the recovery of their national economies," Nwanze noted.

Impact of the crisis in Latin America and the Caribbean region

Though national economic performances will vary, an overall downturn in regional GDP is expected; a drop of 1.5 per cent in 2009, following gains of 5.5 per cent and 4.3 per cent for the past two years. Commodity exporters are being hit by the decline in the terms of trade. Weaker revenues are leading to increased pressure on government budgets.

While the region as a whole is still on track to meet the first Millennium Development Goal targets (MDG1) – that is halving the proportion of people living in extreme poverty and hunger by 2015 - some countries are likely to fall short, as the global financial crisis risks undoing the progress they have made in poverty reduction. The situation is particularly critical in rural areas, where more than half the people are poor.

Notes to Editors

IFAD operations in Brazil - key data

Since IFAD began its operations in Brazil in 1980 it has provided US$141.7 million in loans for 6 programmes and projects, including a new project to help develop rural family enterprises in the north-east region, which is expected to start activities in the coming months. Two other projects are under design, in the states of Piaui and Paraíba and could be operational early next year. The new projects would bring total IFAD investments in Brazil to US$187 million.

The President of IFAD will visit the Sustainable Development Project for Agrarian Reform Settlements in the Semi-Arid North-East of Brazil.

Press release No.: IFAD/31/09

The International Fund for Agricultural Development (IFAD) works with poor rural people to enable them to grow and sell more food, increase their incomes, and determine the direction of their own lives. Since 1978, IFAD has invested over US$11 billion in grants and low-interest loans to developing countries, empowering some 340 million people to break out of poverty. IFAD is an international financial institution and a specialized UN agency based in Rome – the UN's food and agricultural hub. It is a unique partnership of 165 members from the Organization of the Petroleum Exporting Countries (OPEC), other developing countries and the Organisation for Economic Co-operation and Development (OECD).