Statement by Gilbert F. Houngbo, President of IFAD, at the Seeds & Chips Global Food Innovation Summit
Session: Farmers of the future - Accelerating innovation to feed the world
Location: Milan, Italy
07 May 2018
Your Royal Highness Princess Viktoria de Bourbon de Parme,
Your Excellency, Deputy Prime Minister of the Netherlands and Minister of Agriculture, Nature and Food Quality, Ms Carola Schouten;
Ladies and Gentlemen,
I am very pleased to have this opportunity to address you at the Seed and Chips Global Food Innovation Summit.
This Summit, bringing together diverse stakeholders, is important because the task of finding the right solutions to create sustainable food systems has to be shared by all of us.
Over the next 15 years food demand in developing countries is expected to increase by 25 per cent, with growth of 55 per cent expected in sub-Saharan Africa. Smallholder farmers can play a major role in meeting this demand and contributing to food security, and also take advantage of expanding markets to improve their livelihoods.
But they can’t achieve this without investment, an enabling environment, sound policies and strong partnerships. This will require coordinated support from government, development institutions, the private sector and others.
My organization, the International Fund for Agricultural Development, IFAD, targets its investments to the poorest communities in the poorest countries. Since 1978, we have provided US$19.7 billion in low-interest loans and grants to projects that have reached about 474 million people.
We know that poverty and hunger are concentrated in rural areas. We invest in projects that help smallholders acquire the resources, skills and technology they need to improve productivity, connect to modern value chains, escape from subsistence agriculture and become commercially viable.
There are 500 million small farms, growing up to 80 per cent of the food produced in sub-Saharan Africa and parts of Asia. Smallholder farms produce some of the world’s major market-traded agricultural commodities and provide more than 70% of the food calories to people living in Asia and sub-Saharan Africa.
If we want a world in which extreme poverty and hunger are eliminated—the aim of Sustainable Development Goals 1 and 2—then we need to invest in an inclusive and sustainable rural transformation.
Innovation will be essential, because, like all of us, smallholders face a world that is rapidly changing. Farming in the 21st century will mean connecting to modern value chains and meeting quality standards, accessing information technology, taking advantage of new seeds and diversifying production, and coping with the effects of climate change.
Innovation has always played a central role for IFAD, from promoting water-use efficiency and sustainable land management, to biogas and solar energy, to remote sensing for weather-indexed insurance, to the use of IT to connect with markets and financial services.
Projects we support have taken a holistic approach, looking at more than just increased production. A rural transformation is needed, encompassing greater productivity and greater resilience, economic growth and social empowerment and community development.
IFAD’s Adaptation for Smallholder Agriculture Programme (ASAP), started in 2012, has furthered this holistic approach. Over the past six years, IFAD has invested approximately $300 million of ASPA funds in 42 projects in 41 countries spanning all regions, focusing on building climate resilient agriculture systems.
Innovation is also key to engaging youth.
Young people are not looking to inherit the farming systems of their parents. We need them to be the driving force and the beneficiaries of a new kind of rural economy and society.
Therefore, investment strategies are required that support innovation, taking a holistic approach to fostering entrepreneurship, building capacity, and providing access to inputs, markets, finance and basic services.
In Uganda, the Project for Financial Inclusion in Rural Areas aims to bring 750,000 youths, women and men into Savings and Credit Cooperatives and Community Savings and Credit Groups. Packages for youth include credit combined with financial literacy training, business development services and mobile money products.
In Mali, a project is developing entrepreneurship among migration-prone young people. It begins providing training and education at age 14 to create alternatives to migration. The project also uses a crowd-funding platform to attract investment from the Malian diaspora in young people’s businesses.
Innovation can also be locally grown, blending indigenous knowledge and modern technology. Smallholder farmers and indigenous peoples have knowledge that can contribute to solving many of today’s challenges. In India, through the Andhra Pradesh Tribal Development Project, modern techniques and tribal knowledge have been brought together to develop innovative non-timber forest products.
We also need to recognize that small farms are businesses. They face the same demands, risks and opportunities as the rest of the private sector.
IFAD works with smallholder farmers and their organizations to increase their access to markets, technology, training and knowledge so that they can participate in value chains and improve their livelihoods.
Farmer organizations are crucial, because they make it possible for thousands of small farmers to aggregate their produce so they can work with private sector operators and access markets. They increase farmers’ bargaining power and their ability to influence the policies that affect their lives. And they can act as a conduit for access to new technology, knowledge and training.
Clearly, much more remains to be done, and successful approaches need to be scaled up. This Summit provides a platform not just to talk innovation, but to think and interact innovatively in this unique setting.
IFAD is continuously looking at how innovation can be used to solve the bottleneck created by inadequate access to finance. Working with partners, we are establishing an impact investment fund that will enable access to needed capital for smallholder farmers and rural small and medium enterprises. This Agricultural Business Capital fund(ABC) will provide direct financing for rural enterprises (SMEs) with a priority focus on supporting rural youth. The ABC Fund will also have a Technical Assistance Facility to help them build skills and learn entrepreneurship.
Ladies and gentlemen,
Smallholder agriculture can be a driver of economic growth as well as food and nutrition security. Development efforts must provide not just relief but opportunity, so that smallholders and other rural people can find a productive path out of poverty and build their own future.
We have seen how countries can harness the engine of agriculture to strengthen rural economies and create more jobs all along the value chain.
We are especially fortunate in being joined by some farmers at this Summit, and I look forward to hearing their thoughts and experiences about how we can further our collaboration.