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Africa Fertilizer Summit

Location:

Abuja, 9-13 June 2006

Heads of State Session
Statement by Lennart Båge, IFAD President

  • Your Excellency, Olusegun Obasanjo, President of Nigeria
  • Your Excellency, Denis Sassou-Nguesso, President of Congo and Chairman of the African Union
  • Your Excellencies, Heads of State and Government,
  • Your Excellency, Joachim Chissano, former President of Mozambique
  • Your Excellency, Alpha Omar Konare, Chairman of the African Union Commission
  • Your Excellencies, Heads of the Regional Economic Communities
  • Honourable Ministers
  • Distinguished delegates,
  • Ladies and Gentlemen.

I would like to start by paying tribute to His Excellency Olusegun Obasanjo and to the Federal Government of Nigeria for having hosted, and to the African Union and NEPAD for having organized, this immensely important Summit.  For me, it is a privilege and a pleasure to be able to participate, and I am delighted to have the opportunity to address you.

Almost two years ago, Kofi Annan, the Secretary General of the United Nations made his call for a Uniquely African Green Revolution. What did he mean? He talked of a Green Revolution, because it is clear that nothing less than a revolution is needed to pull the hundreds of millions of African farmers and their families out of the grinding poverty that they endure. 

He spoke of a uniquely African Green Revolution because today, at the beginning of the 21st century, Africa faces a very special – and an extraordinarily complex – set of problems. The challenges are profoundly different to those that confronted Asia 40 years ago, at the dawn of its Green Revolution; and this means that while there are lessons that can be learned from that continent, its experience cannot be replicated wholesale.  Africa’s Green Revolution must be built by Africans to respond to the problems facing the continent today, and it must rely on Africa’s knowledge, Africa’s experience, and above all, the skills and energy of Africa’s people.

Mr Chairman,
There is a view expressed that no progress is being made in Africa; that the continent is caught in a poverty trap from which there is no escape. This is not a view I share. I believe that much is changing and important progress is being made.   

  • After the difficult years following structural adjustment, we are seeing the emergence of a new rural private sector. Agro-dealers are starting to provide farmers with inputs, traders are buying produce, and agro-processors and exporters are contracting small farmers to produce crops for them. 
  • New technologies are spreading: NERICA rice in West Africa, and high yielding varieties of maize in East Africa, are making an enormous difference to the lives of millions of farmers. In Nigeria, the so-called cassava revolution has transformed this country into the largest cassava producer in the world; while in parts of Kenya we are seeing specialized small-scale dairy farmers producing primarily not for consumption but for sale in the market.
  • Above all however, we are seeing enormous changes in policies and institutions. Today, your governments are absolutely serious about rural poverty reduction. The African Union and NEPAD, PRSPs, and the 2003 Maputo Declaration are all, in their different ways, testimony to this new commitment.
  • Your governments are also providing the space for other institutions to emerge. In most countries today a vibrant NGO sector is delivering a whole range of services to smallholder farmers. And civil society organizations – above all farmers’ organizations – are starting to play a key role, not just in delivering services, but also in making their voices heard in national and regional fora for policy dialogue.

I do not want to strike a note of complacency because, of course, there is a huge amount still to be done.  And it must be done urgently. But let us build the things that are to be done on the things that have been done already.

Mr Chairman,
A critical element of the African Green Revolution must be to resolve the problem of low and declining soil fertility across the continent. An important part of the response to this problem is to increase the use of fertilizers – both chemical and organic. For IFAD, as I am sure for many of us here, the summit is serving as an important reminder of the critical role that fertilizer must play in increasing crop yields and agricultural production, and reducing poverty, across the African continent. 

A number of speakers have already spoken about the importance of fertilizers.  I am not going to do so.  I want to talk about the people who use that fertilizer as one small piece in the jigsaw puzzle that is their farming system; the hundreds of millions of poor rural people who are trying to ensure that they grow enough to feed themselves and their families, and to have a small surplus to meet their cash needs. For me, the African Green Revolution is about enabling these people to overcome poverty and, above all, it is about achieving the first Millennium Development Goal: halving the proportion of people living in extreme poverty and hunger. 

I believe that if we want to increase fertilizer use in Africa, our starting point must be to understand why it is that the continent’s farmers currently use less than one-tenth of what they use in Asia. And we have to work to create the conditions that will enable farmers’ demand for fertilizer to grow.

The answers to this problem are, of course, complex. They encompass a wide range of issues from land tenure to production technologies, to soil and water conservation issues and, perhaps above all, to marketing and financial incentives for investment. All must be tackled through a country’s agricultural policy framework. But let me focus now on three specific areas.

The first is improving farmers’ physical access to fertilizers. This has been discussed a lot in the past few days, and we know that in recent years there have been many positive experiences in building up agro-input dealer networks across rural Africa.  We know too that much more needs to be done to expand those networks and bring more farmers into them. It’s a job we must all work on together: governments, fertilizer suppliers, NGOs and international development agencies alike.

The second area we have to work on is improving farmers’ financial access to fertilizers – enabling farmers to pay for them. We have seen that where farmers have contracts to produce crops for the market, they are often able to get fertilizers on credit from their buyers and it can be an arrangement that works well for both parties. 

However, we also know that other sources of credit for small farmers are extremely limited: in most countries the development banks that used to provide loans for fertilizer have been wound up; there are few countries where the commercial banks are interested in lending directly to small farmers; and the microfinance institutions that have grown up in the past decade rarely lend for agricultural production activities. So there is a real problem of financial access. 

It’s a problem that can be resolved, in part, by bringing the fertilizer to the farmer, so that she doesn’t have to spend money going to buy it and bring it home; and by making fertilizers available in small packages, no bigger and barely more costly than a pack of sugar or ugali. But, this doesn’t entirely resolve the situation, particularly for the poorest farmers.

IFAD believes that subsidies can play an important role in enabling poor farmers to access fertilizers. But we know that, by and large, fertilizer subsidies don’t have a good track record in Africa. So if we are to use them, then those subsidies need to be very smart. They need to be effectively targeted, so that they benefit those poor farmers who are least able to afford to buy fertilizers, yet still able to use them productively. They need to work in such a way that they stimulate, rather than undermine, private sector market development. And there needs to be a clear exit plan, so that they do not become an unsustainable burden for the governments providing them. 

Physical access and financial access are both central, of course; but on their own they do not solve the problem. For us, there is a third, crucial issue: that of farmer organization

Small farmers are in a weak position. In the worst cases, they are isolated, they lack knowledge and information, and they are easily exploited. Their position must be strengthened. For IFAD the starting point is this: empowering small farmers to develop their own skills and confidence and to establish their own organizations.

The benefits are clear. Working through enterprise groups or associations, farmers can better access and better negotiate with fertilizer suppliers. Once the associations get a legal personality, then they are more likely to be able to access credit. At the same time, getting organized also helps small farmers use fertilizers effectively.  Working in groups, farmers can conduct their own field trials.  They come to understand how and why fertilizer affects their crops, and they can find out themselves which fertilizers they need, in what quantities, and when they are best applied. 

Let me summarize this discussion.  Increasing fertilizer use in Africa is crucial both for eradicating rural poverty and increasing agricultural production. Small farmers are at the heart of achieving both objectives. With the right sort of support they can overcome their own poverty, and at the same time they can contribute to national and continent-wide objectives for increasing agricultural production.

Mr Chairman,
IFAD has spent the past 30 years working in Africa to reduce rural poverty.  When much of the development community abandoned the agricultural sector, we remained engaged.  Today, we are one of the principal external financiers of agricultural development in Africa and over the first decade of this new millennium we will have doubled our funding to Africa.  Across the region, we are working to assist governments and their national partners develop and implement their policies and their programmes for reducing rural poverty and enhancing the performance of the agricultural sector.

This is your Green Revolution however, and the events of the past four days have shown how much will there is across Africa to solve the continent’s problems and to solve them now; in a way that is inclusive, forward-looking and businesslike. The proposals for solving Africa’s fertilizer crisis represent an important part of that African Green Revolution. IFAD looks forward to working with many of you to achieve this vision.

Thank you very much.