Statement by Gilbert F. Houngbo, President of IFAD, at the Festival della Diplomazia

Esteemed colleagues,

Ladies and gentlemen,

I would like to thank the government of Italy for highlighting sustainable development and climate change as key issues during this week’s festival of diplomacy.

Climate change is one of the biggest risks our world faces.  There is a tendency to focus on the impact of hurricanes, flooding and prolonged drought. But for millions of people, the tragedy of climate change is more frequently felt through the accumulation of small changes that collectively result in a destroyed harvest, in hunger, and lost livelihoods.

As a result of climate change, the abnormal has become the new normal.

I saw it, in Togo, when the rains came late, leaving the soil too dry and the earth as hard as iron – so that farmers were unable to put seeds into the ground.  And when the rains finally came, they were too intense, making the land unsuitable for agriculture.

These were not, technically, periods of drought or flood. Yet harvests were lost, and lives destroyed.

Rising average temperatures are disrupting weather systems around the world. 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.

A rise in temperature by just one degree reduces cereal yields by about five per cent.

The consequences of climate change cannot be over-stated, 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.

If food production fails, they face a stark choice: they can migrate, they can compete with neighboring communities for 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 – with better prospects for 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 conflict, job losses, or the breakdown of local institutions.

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 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, nutritionally-sound diet.

We focus, in particular, on women and other disadvantaged groups.

Women make up 43 per cent of the agricultural workforce, worldwide. Unfortunately, they are too often among the most disadvantaged members of their societies. As a result, their farms are often less productive.

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

As many of you know, IFAD is unique in being both an International Financial Institution and a specialized agency of the United Nations. IFAD is also the only IFI dedicated exclusively to investing in rural areas to eradicate poverty and hunger.

Climate change is increasing the costs for all development partners.

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.

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; adaptation makes economic sense because it increases both productivity and income.

Individual interventions do not need to be big, or costly.  And 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.

Sustainable agriculture can usher in a new era of economic and social development by using natural resources sustainably rather than depleting them.

What does climate-smart agriculture look like on the ground?

In Ethiopia, new irrigation schemes are protecting smallholders from the impact of erratic rainfall.  The programme -- which is co-financed 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.

In Mozambique, where regular drought was killing livestock, new multi-purpose boreholes are providing reliable access to clean water. The water is being used to fill water troughs for cattle, and for irrigation to grow vegetables. Villagers have safe drinking water, their health is better, and they no longer have to walk long distances in search of water.

Ladies and gentlemen,

Allow me to discuss two other risk management techniques that 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 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.

In Senegal, an IFAD-supported programme is providing farmers with index insurance coverage as part of a package of inputs and services to farmers' organizations.

The insurance links pay-outs to indicators that can be measured, such as rainfall or temperature, so that smallholders in developing countries can get coverage where traditional agricultural insurance is not available. ​

Protection even extends to governments.  Thirty-two countries are signatories to the African Risk Capacity, established by the African Union and supported initially by IFAD. ARC provides climate-related disaster insurance to a growing number of states - reducing costs by pooling risks.  Meantime, IFAD is working closely with its partners in Africa and other regions to scale-up access to insurance, including in China, Ethiopia, Georgia and Kenya.

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.