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Rural Livelihood Resilience, Center for Strategic and International Studies (CSIS)

Keynote Address by Alvaro Lario, President of IFAD

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My thanks to the CSIS, and to everyone who has turned up today to discuss how to make rural livelihoods more resilient.

The story you saw in the video shows how access to better technology increases livelihoods, resilience and food security – giving young people a future in farming and strengthening rural communities.

We will have time in the armchair discussion to explore various issues in depth. So now I would like to take a few minutes to set the scene.

Let me start with three questions.

Why should anyone sitting here, in Washington DC, care about the resilience and livelihoods of rural people in Africa, Asia, or even Latin America?

At a time when so many important causes are clamouring for attention and funding, how can we argue that what is happening on small farms and in remote villages in developing countries matters to the global community.

How do we connect the dots between food insecurity, conflict and national security, not only so that people understand, but so that people and governments act.

My short answer, as a member of the UN family, is that we are all of us involved in humankind, and that the future of life on earth depends on leaving no one behind.

Being less altruistic, I would say that our world is global, and what happens in the Sahel desert, the Hindu Kush, or the Amazon forest affects all of us.

Let’s unpack this a bit more.

It is a truism to say that the food we eat is as fundamental to life as the air we breathe, and that food is primarily grown in rural areas.

Today, more than 800 million people lack access to sufficient nutritious food to live productive and active lives.

That’s almost 100 million more than the populations of the United States, Canada, Mexico and Brazil combined.

Let me give you three fast facts.

First -- Most of the world’s hungriest people live in the rural areas of developing countries.

Second -- Most depends on small-scale agriculture for their lives and livelihoods.

And third -- more than 3 billion rural people rely on small farms for their food.

Today’s food crisis is not only the result of the war in Ukraine, or of the COVID pandemic, or of climate change.

It is primarily the result of long-standing weaknesses in the overall structure of food systems. And it is a result of glaring inequalities that have left too many small-scale producers in abject poverty.

Small farms tend to be very efficient. They produce one third of our food on only 11 per cent of the agricultural land. Compare this to mega farms of 200 hectares or more, which contribute only 18 per cent of food calories on more than half the world’s farmland.

But small-scale farmers are often poor. They receive just 6.5 cents of every dollar for the value of the food they produce. And most small farmers are net buyers of food.

Sustainable food systems need small farms, and they need farmers to be fairly and decently compensated for the enormous benefits they bring to all of us.

Not only are small farms efficient. They also have a lighter footprint on essential ecosystems than large farms. They are not a major source of greenhouse gas emissions. They do not depend heavily on freshwater for crops. They preserve biodiversity instead of depleting it. And they are home to a wide range of plants, insects, and pollinators. Without pollinators, humanity would survive on our planet for only four years.

A small farm is a nature preserve compared to massive industrial farms. And in many developing countries, small farms are at the heart of economies and the main producers of food.

Productive and profitable small farms work hand-in-hand with what we call MSMEs. These are micro, small and medium enterprises.  

Agri-food MSMEs provide farmers with vital inputs – like seeds and fertilizer. And they perform a variety of essential functions off the farm -- such as processing, storing and marketing food. We need these MSMEs to get food from farms to plates.

As well as helping food systems function smoothly, agri-food MSMEs are a vital source of jobs and income for rural people, and they fuel growth in the rural economy that benefits local people.

Under-investment in rural areas is neither economically nor ethically sound. As long as agriculture remains at the subsistence level, as long as the roads are unpaved, and the villages are without electricity, health clinics or clean water, rural people will continue to migrate – first to the city – and then, if they cannot find decent employment – across borders to neighbouring countries and beyond.

When poverty and hunger begin to take their toll in rural communities, it is the young men you leave first -- often to city slums, where they may fall prey to divisive rhetoric and extremism. Or where they may exchange rural poverty for urban poverty and exploitation.

We should also remember that rapid urbanization comes with its own problems. Cities have a finite carrying capacity: they cannot provide good jobs, good housing and sanitation for everyone. Urbanization does not necessarily translate into affluence. We do not need bigger cities with bigger slums.

And of course, few people really want to leave their homes, family, friends, culture and heritage to trek hundreds or thousands of miles to an unknown and often uncertain future. 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.

At IFAD, we define resilience as the ability to function in the face of shocks and stresses, and to bounce back when crisis hits. 

Everyone benefits when rural livelihoods are resilient – and when there is a more even distribution of employment, services and opportunities between rural and urban areas.

By investing in rural economies, we can create a range of opportunities for young people in so that they are not compelled to migrate.

A better, fairer and more sustainable world offers landscapes of opportunity, both rural and urban.

Climate change is another obstacle we must confront. The consequences of rising average temperatures and disrupted global weather systems cannot be over-stated, especially against a backdrop of population growth, as is the case in much of Africa and Asia.

Climate change is one of the lead drivers of food insecurity. A rise in temperature by just one degree reduces cereal yields by about five per cent. In Africa, agricultural productivity growth has slumped 34 per cent since 1961, largely as a result of climate change. This, in turn, undermines livelihoods and living wages.

As we have seen this year around the world, farmers are on the front lines of climate change.

When food production fails, farming families face a stark choice: they can migrate, they can compete with neighboring communities for food, or they can risk starvation.

What would you choose?

To confront these changes we need innovation at a scale and speed the agricultural sector has never seen before.

We need to help farmers introduce new drought-resistant varieties, new breeds of stock, and new practices that enable them to increase output despite climate change and input constraints.

Digital technologies such as mobile phones and satellites can help both to get information about what is happening on the ground, and to share solutions with farmers. They can provide financial services, and tools like insurance, so that when crops fail or crisis strikes, farmers can bounce back.

Farmers in remote areas are already using mobile phone networks to bypass fixed-line networks. The same could be done with renewable energy, such as PV panels, which have become cheap and can be installed locally, without the need for massive infrastructure spending or dependence on coal plants.

At IFAD, we promote investment in the most remote and vulnerable smallholder farmers and communities because it works.

It costs less to fix a problem that it does to respond to emergency. But the more we delay, the higher the costs. Climate adaptation in developing countries is likely to cost US$295 billion a year by 2050. The cost of climate-proofing food systems is estimated at US$ 1.3 trillion a year.

But GDP generated by agriculture is 2 to 3 times more effective in reducing poverty than growth in any other sector. And in terms of investment, every US dollar invested in agricultural development yielding US $10 worth of benefits.

This is why emergency relief – while necessary -- needs to be matched by long-term investment in resilience and improved livelihoods. After every disaster we spend a fortune just to get back to where we were. We need to invest in a more resilient future instead of lurching from crisis to crisis.

It’s not just a government job either. Smallholders need to be involved in partnerships with the private sector, specifically in partnerships that are mutually beneficial, equitable and transparent.

For example, in a project in Rwanda, tea factories established by private sector partners buy directly from the cooperatives -- and the cooperatives participate as equity shareholders in the factories. Each cooperative has around 4,000 members.

We also invest in multiple benefit solutions. In Nicaragua we’ve promoted planting trees to shade coffee and cocoa crops. These schemes sequester carbon, reduce temperatures, and enhance land productivity.

In Niger, we helped design a programme that encourages farmers to plant grasses and trees, restore watersheds, and conserve soil and water. Yields of onions, cabbage and tomatoes are up 40 per cent, rainfed millet 78 per cent and sorghum 63 per cent.

Today’s problems are complex and the challenges interconnected. Our only hope for success is to work together. IFAD has about 200 projects in 100 countries, but there is so much more to be done. We act as an assembler of development finance and bring together partners who want to invest in people, in ending poverty and hunger, in building resilience and a peaceful and more sustainable world.

I’m looking forward to taking the discussion further.

Thank you.