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Statement by IFAD President at OFID Ministerial Council meeting

Lugar: Vienna, Austria

31 mayo 2009

Your Excellencies,

I am delighted to be here among you this morning representing IFAD, an institution whose very existence owes so much to the vision and leadership of OPEC countries.

I feel very much at home among this important IFAD constituency and I should like to thank the Council, and Chairman Seyyed Shams Al-Din Hosseini, for giving me the opportunity to address this annual OPEC Fund Ministerial Council meeting.

I would also like to thank my dear friend Mr Suleiman J. Al-Herbish, Director General of OFID, whom I had the pleasure of meeting in Riyadh last month. Mr Al-Herbish has been a friend and an ardent supporter of IFAD.  He addressed our Governing Council on several occasions and chaired a year ago a round table discussion on the occasion of IFAD's 30th anniversary.

Reaffirming IFAD's relationship with OPEC

Today is a particularly special moment for me and IFAD because it is the first time since 1984 that a president of IFAD has addressed the OFID Ministerial Council. The event signifies a reaffirmation of the bonds between our two organizations.

Indeed, deepening IFAD's relations with OPEC nations will be one of the priorities of my presidency of IFAD. In this regard, I am delighted to report that I was warmly welcomed and had very productive meetings during my first trip to the Gulf region last month.

On that occasion, I was heartened by the desire of officials in Saudi Arabia and Qatar to strengthen relations between IFAD and the bilateral and regional multilateral financial institutions of Gulf countries.

It is my intention to visit other OPEC countries in the near future to strengthen relations with IFAD.

In this spirit, I am pleased to announce that the Government of Qatar and IFAD will jointly sponsor a training workshop in September and a Regional Food Security Workshop in November this year. 

Our common history

Your Excellencies,

It is useful to step back and recall that OFID and IFAD were established in 1976 and 1977 respectively. They have now worked together for some three decades to achieve their common goal of enabling poor people throughout the world, and especially in rural areas, to secure a better life.

With nearly US$420 million in co-financing, OFID is the third largest co-financier of IFAD-sponsored programmes and projects in all developing regions of the world.

IFAD shares with OFID and OPEC member states a determination to achieve the Millennium Development Goals -- particularly the first goal of halving the proportion of people living in extreme poverty and hunger.

The need for a new global partnership for food security

Your Excellencies,

Today, our partnership is more important and vital than ever, as we jointly seek to improve global food security.

Last year, as you will all recall, the entire world was shocked by the unexpected global food crisis. World prices of basic food staples – such as wheat and rice -- nearly doubled pushing essential food crops out of the reach of the poor.

And with governments of exporting countries limiting exports to ensure domestic food supply, the availability of food crops on the global markets itself was threatened.

 Hundreds of millions of poor people around the world were pushed deeper into poverty. The situation has become worse this year with developing countries now beginning to face the brunt of the unprecedented global financial and economic crises. Various estimates indicate that there are now close to 1 billion people living in extreme poverty and becoming more vulnerable to hunger each day.

We must all acknowledge that an underlying cause of last year's food crisis was the significant decline of government support to the agricultural sector over the last two decades. A similar trend has been observed in the share of foreign assistance going to agriculture, falling from around 20 per cent of all aid in the 1980s to less than 5 per cent in 2007.

 Today we face an even starker situation as many developing countries are being forced to reduce government expenditures – including support to agriculture – in response to the immense fiscal pressure brought about by the global economic crisis.

The combined food and economic crises of the last two years have made clear the urgent need for fresh initiatives if a worsening of the food security crisis is to be averted. It is in this spirit that I called for a new global partnership to protect core investments in agriculture at the meeting of the G8 Ministers of Finance in Lecce this past weekend.

I believe such a global partnership should have three main objectives.

First, it should help developing countries improve food production by supporting smallholder agriculture. There are between 450 and 500 million smallholder farms worldwide. They support over 2 billion people and in Africa and Asia, they farm about 80 per cent of the farmland.

Clearly, smallholder farmers must be an integral part of any solution to improve agricultural production and ensure food security. IFAD's experience has shown that with the right support, they can double or triple their production. Often neglected is the fact that investment in smallholder agriculture is also the most sustainable safety net against poverty and social turmoil.

Second, the new partnership should foster a mutually beneficial relationship between land-poor and land-rich countries. In the last two years we have witnessed land- poor countries wishing to enhance their food security by investing in large commercial farms in land-rich countries to grow food crops for their domestic markets.

Although some have called such investments ‘land grabs' I believe that properly handled large foreign investments in food crops could lead to a ‘win-win' outcome for all concerned.

Such investments have the potential of supporting broader agricultural development as they can mobilize resources for investments in roads, irrigation, technology and training. If done the right way, land deals can also improve the lives of poor rural women and men by creating jobs and improving market access.

In this regard, I should add that IFAD is supporting a pilot initiative along these lines in Ghana.  Its lessons could serve as a model, which could be replicated and scaled up in other countries.

Third, such a partnership must give special attention to the sustainable use of scarce natural resources. Extreme water scarcity, climate change, desertification and land degradation are adversely affecting the agricultural potential of many countries, with a disproportionate impact in a number of OPEC countries.

There are, however, a number of mitigating measures that can be taken as IFAD's experience has shown. In Jordan, for example, we have supported the government's effort at soil and water conservation activities in the southern part of the country. The project has helped poor rural people adapt to erratic rainfall, and improve their incomes and nutrition.

Looking ahead: IFAD/OFID cooperation in improving global food security

Your Excellencies,

The experience of IFAD, with the strong support of OFID and other partners, has shown the immense potential of agriculture in developing countries. In particular, our experience has shown that smallholders can dramatically improve their productivity if provided the required support.

Resource constraints have, however, meant that we have not been able to scale-up our support by replicating successful programs and strategies to the extent that we would have liked.

In the light of the global food security challenges, it is therefore our hope that a new push will be made by OECD and OPEC countries to address this challenge. In this regard, we very much welcome the renewed interest that many Arab funds and the Islamic Development Bank are giving to agriculture programs.

IFAD, as a joint undertaking of OPEC, OECD, and developing countries is ready to support new global initiatives to enhance food security, by making available its extensive experience and expertise.

In this regard we are gratified that the 8th replenishment of IFAD resulted in an unprecedented 67 per cent increase. This has been made possible by the generous pledges of many of our OPEC partners and will enable us to support millions of poor smallholder farmers to increase their productivity and incomes.

I would especially like to acknowledge the leadership role that the Kingdom of Saudi Arabia took by announcing a $50 million contribution, representing a five-fold increase.

Other OPEC member countries also announced generous contributions including $15 million from Nigeria, $10 million from Algeria and $5 million from Indonesia. I would like to take this opportunity to express to your respective governments our deep appreciation for this generous support.

We are confident that other OPEC countries that have yet to announce their pledges to IFAD will soon do so. Indeed, it is my fervent hope that such actions will result in OPEC countries assuming once again a role in the affairs of IFAD similar to the one they had at its establishment.


Your Excellencies,

Let me conclude by stressing that poverty and hunger are inhumane and should not be tolerated. When an earlier global food crisis erupted in the 1970s the leadership of OPEC took a decisive step to confront it by helping establish IFAD.

The willingness of OPEC countries to provide about 40 per cent of the initial funding was a turning point in its establishment. And your continued support throughout the last three decades has made it possible for us to support agriculture and small holder farmers throughout the world.

It is our hope that a major global food security initiative will be launched this year and that OPEC countries will play a major role in any such endeavour. IFAD, on its part, stands ready to support such an initiative.

I am confident that with your continued generosity, our strong partnership, and with a renewed global commitment, we will indeed reduce human poverty and eradicate the scourge of hunger.

I thank you for your kind attention.

16 June 2009, Vienna, Austria