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Statement by Gilbert F. Houngbo, President, IFAD, at the International Seminar: How can climate-smart agriculture and rural development foster resilience?

Location: Press Room, Fredsgatan 6, Stockholm, Sweden

Your Excellency, State Secretary Modéer,

Distinguished panel members,

Ladies and gentlemen,

It is a great honor for us, all my colleagues and myself, to be here today so I would like to thank Ulrika Modéer, State Secretary to the minister for International Development Cooperation, for her warm welcome to Stockholm and for her leadership in organizing today’s event.

My thanks go also to the Ministry for Foreign Affairs and the Swedish International Agricultural Network Initiative (SIANI).

Sweden, a founding member of IFAD, has been collaborating closely with the Fund for almost 40 years in pursuit of our shared goal to eliminate rural poverty around the world.

As some of you know, despite huge progress in recent decades, there are still 767 million people living in extreme poverty – i.e. below US$1.90 a day. And four out of five live in rural areas.

Most of these children, women and men depend upon rain-fed agriculture for their lives and livelihoods. They grow crops, raise animals, catch fish, tend forests, provide services to farmers, or work in food processing.

Climate change is one of the biggest risks they face.  Unless we tackle it now, collectively, it will undermine the wellbeing of farmers and push another 100 million people into poverty by 2030.

Rising average temperatures around the world are disrupting weather systems. They reduce rainfall in some areas, and increase it in others. Climate change also brings more extreme weather, more often. It is a grave and worsening threat to food production by many of the world’s poorest people. Every one degree rise reduces cereal yields by about five per cent – and by 2012, temperatures had risen almost one degree since 1880.

The consequences of climate change cannot be overstated, especially against a backdrop of population growth, as is the case in much of Africa and Asia.

The combination of more people and disrupted food supply is potentially catastrophic.

It is not just farmers who are at risk. It is entire nations. The world’s 500 million small farms provide up to 80 per cent of the food produced in many developing countries, in Africa and Asia.

If food production fails, they face a stark choice: they can migrate, they can compete with neighboring communities to access food, or they can risk starvation.

Of course, few people really want to leave their homes, family, friends, culture and heritage to trek hundreds or thousands of kilometers. What they really want is to be able to adapt to climate change, improve their food security and enhance their quality of life and the prospects for their family, their children and grandchildren.

But this requires resilience.

When people are resilient, they are able to bounce back from crisis, from a flood or a drought, from conflicts, job losses, or the breakdown of local institutions. Yet according to the United Nations Office for Disaster Risk Reduction, natural disasters have already adversely affected millions of people since 2000 and cost the global economy more than US$2.5 trillion.

It is in this context that my organization, IFAD, is working to foster climate-resilient agriculture and ensure rural people everywhere have an adequate, nutritionallysound diet – with a special focus on women and other disadvantaged groups.

Women are 43 per cent of the agricultural workforce, worldwide. Unfortunately, they are too often among the most disadvantaged members of their societies.

Even when given equivalent resources, women farmers in sub-Saharan Africa are held back by hidden constraints and inequalities. We know that, if women were to be provided equal access to productive resources, the World Bank estimates 150 million people could be lifted out of poverty. Women farmers in Malawi, for instance, are 25 per cent less productive on average than men.

Successful rural development requires a special focus on women farmers to overcome loss of potential growth.

IFAD’s mandate, as many of you know, is to mobilize funding and knowledge to eradicate rural poverty and hunger and ensure sustainable agriculture.

Climate change is increasing the cost of achieving the Sustainable Development Goals by 10 to 15 per cent.

Africa alone is already facing climate change adaptation costs of US$7 billion to US$15 billion per year by 2020.

Yet current financial flows for adaptation are only US$1 billion to US$2 billion a year.

To optimize our contribution to achieving the 2030 Agenda, we will also need more projects, or bigger projects, or both. That is why, in our current funding round, we are seeking an increase in resources that would allow us to raise our programme of loans and grants by 24 – 40 per cent.

Sadly, in some areas, climate change is likely to be so severe that it may be impossible to invent adequate solutions.

But we have seen time and time again that development initiatives can help smallholders successfully adapt to climate change and even mitigate its impact in much of the world.

Climate change adaptation methods – such as mixed crop and livestock production – can increase agricultural productivity while diversifying risks. It is not just a matter of fighting against climate change; it is also making the economic case in terms of increasing productivity and income. 

And such small interventions can be scaled up to reach more people by governments working with development partners and the private sector.

Mitigation is equally important because globally, about a quarter of greenhouse gas emissions are generated by agriculture and forestry.  In the decade to 2011 they increased 14 per cent to 5.3 billion tons of CO2 equivalent a year.

What does this look like on the ground? In Kyrgyzstan, herders are working to improve rangeland management, and rehabilitate degraded pastures. These deliver big greenhouse gas mitigation benefits and a net emissions reduction, across the programme, of 8.6 million tons of CO2 equivalent over 20 years.

Meantime new milk collection, cooling and processing facilities are helping Kyrgyzstan farmers increase their incomes. And infrastructure is being upgraded to ensure that homes, water supplies and roads are less vulnerable to storm damage.

In Ethiopia, new irrigation schemes are protecting smallholders from the impact of erratic rainfall.  The programme -- which is cofinanced by the Government of Ethiopia and the project participants themselves -- aims to increase productivity, incomes and resilience - and to create 15,000 jobs, especially for women, young people and other vulnerable groups.

These projects all fall under IFAD’s Adaptation of Smallholder Agriculture, or ASAP, Programme. ASAP funnels climate change funding to farmers, while simultaneously helping countries achieve their GHG reduction commitments. Total funds committed now top US$300 million.

Sweden is a key partner in IFAD’s climate adaptation effort. Over decades, Sweden has contributed US$400 million  to funding IFAD’s work, 5 per cent of the total. Sweden is an originating partner for ASAP, and has provided SEK 30 million (US$4.7m) to help cover the extra cost for IFAD programmes of adaptation to climate change. 

ASAP is designed to carry out a systematic risk analysis, innovate to boost production capacity and then scale up sustainable production and GHG mitigation. By 2020, ASAP aims to avoid or sequestrate 80 million tons of CO2 equivalent every year.

A joint study of 13 IFAD ASAP projects by the CGIAR, FAO and IFAD found that they could provide mitigation co-benefits of up to 30 million tons of CO2, 38 per cent of our target. By 2015, we had 43 projects under design or implementation.

IFAD is also involved in the Platform for Agricultural Risk Management, which is working with national governments to assess risks, and with local stakeholders to identify solutions, test them and implement them.

For example, in Senegal, PARM worked with the World Bank to identify animal diseases and bushfires as major risks arising from climate change. Now the partners are working with local people on solutions that will be integrated into national policies. This is contributing to a national culture of holistic climate risk management.

In addition, research has an important role to play in helping smallholders and supporting climate-smart agriculture. For example, salinity-resistant forage plants, developed by the International Center for Biosaline Agriculture (ICBA), are helping farmers in many arid and semi-arid nations.

Ladies and gentlemen,

Permit me to discuss two other risk management techniques that can not only enhance the resilience of smallholders, but also contribute to better food security.

The first is storage. In Africa, an estimated 20 to 40 per cent of production is lost simply because poor farmers cannot safely store what they are unable to sell immediately after harvest.

But warehouse credit schemes enable smallholders to store their produce in a modern warehouse that preserves its quality. As a result, farmers can wait until prices are higher before selling their produce. They also have a stock of food for emergencies. And the stored produce functions as collateral, so that smallholders can borrow working capital from local and rural financial institutions.

The warehouse receipt system has been used successfully for years in Tanzania and has now been scaled up in Burkina Faso, Ethiopia, Mauritania and Sudan.

The second risk management technique is index insurance.

Insurance is standard for farmers and other businesses in developed economies, but rarely available to smallholders in developing countries.

Insurance fosters resilience by allowing farmers to invest in their businesses, knowing there is a safety net should disaster strike.

For example. in Senegal, index insurance covers individuals through the 4R Rural Resilience initiative of the World Food Programme, and at the next level provides payouts for farmers’ organizations in the event of adverse weather incidents.

Protection even extends to governments. Twenty-six countries have got together to create  insurance coverage for drought response costs via a pool set up by African Risk Capacity, established by the African Union. To date four countries – Niger, Malawi and Mauritania and Senegal -- have received payouts totaling over US$34 million.

When recurring droughts and floods triggered harvest deficits in Senegal in 2014 and 2015, Senegal received US$16.5 million from African Risk Capacity to provide assistance to almost one million food insecure people and to purchase 15,000 tons of cattle feed, which was sold at subsidized prices to livestock farmers.  Meantime, via the Green Climate Fund, IFAD is working to scale-up index insurance availability throughout the region.

Ladies and gentlemen,

Global environmental problems, such as the impact of climate change, do not respect borders. Addressing this reality requires global action in support of small family farmers. And helping smallholder farmers adapt to climate change can also slow global warming – benefiting us all.

And let us not forget: investing in the resilience of small family famers is investing in the resilience of food systems, the resilience of communities, and the strength and stability of nations.

Thank you.