Statement of Lennart Båge, President of IFAD to the Arab League Summit

Excellencies, Colleagues and Friends
Ladies and Gentlemen

It is my great pleasure to be among you today to discuss Arab Food Security and Agricultural Policies.  I would like to thank the Government of Kuwait for hosting this summit and inviting IFAD to participate.

Kuwait is a key partner for IFAD in boosting food production and tackling rural poverty.  Indeed, a distinguished Kuwaiti national, Fawzi Al-Sultan, was the third President of IFAD and my immediate predecessor. In response to last year's spiralling food prices, Kuwait created the Decent Life Fund.  With an initial capital of US$100 million, the Fund will provide essential support for food production and food security among the region's developing countries. IFAD stands ready to work with Kuwait in developing and implementing food production programmes under this initiative.

IFAD also has a long-term strategic cooperation with the League of Arab States. In June 1993, IFAD and the League signed a framework agreement focused on shared development goals. Through this agreement, IFAD and the League's Secretariat have cooperated on agricultural and rural development, nutrition and related research in the Arab States.

Background on the recent food price crisis and current trends
The backdrop to this Summit is last year's food price crisis and subsequent financial crisis.  Although food prices have come down significantly since the peaks of mid-2008, they are still substantially higher than in previous years. They are also much more volatile.

Poor people, who spend up to 70 per cent of their income on food purchases, are the most vulnerable.  According to the FAO, there are an additional four million undernourished people in the Arab world as a consequence of the recent food price shock. The hardest hit are typically the urban poor, the rural landless and the small farmers who are net food buyers.

Climate change only increases volatility and uncertainty. For a region that is mostly rain fed, the consequences of climate change on agricultural production in the Arab region are challenging indeed. But while agricultural production is being threatened by climate change, food demand in the region is growing as a result of continued high population growth -- projected at 1.7 per cent annually compared with 1.1 per cent worldwide. 

Globally, food production must double between now and 2050 if the world is to be able to feed its growing numbers. Re-engaging in the agricultural sector, with particular attention to energy efficiency, water scarcity and the environment, will be key, not least in light of the challenges of climate change. Agricultural productivity must be increased.

The 2008 food price crisis provides both the incentive and the basis for planning greater food security in the Arab region in the future. We have entered a new era of having to produce more with less.  Urbanization, desertification and land degradation are limiting the scope to expand land area for cultivation. Water resources for agriculture are also limited and face competing demand from other sectors.

Poverty is primarily a rural issue.  In the developing countries of the Arab region between 60 and 70 per cent of poor people live in rural areas. About one-third of the total rural population in the region is estimated to be poor, compared to 18 per cent of the urban population. Since most rural people depend on agriculture for their livelihoods, investing in smallholder farming will be fundamental to  reducing poverty in the Arab world.  Increasing agricultural production and reducing poverty go hand in hand.   That is why agriculture must move up the global development agenda – a point well made in the Comprehensive Framework for Action, which the UN Secretary General's High Level Task Force on the food security crisis produced last year.

About IFAD:

The past
IFAD's mandate is to help poor rural people to increase their productivity, incomes and food security, to overcome poverty.

Over the 30-plus years since its founding, IFAD has invested close to US$1.4 billion in the low income countries of the Arab region. This makes it the second largest multilateral funder to agricultural and rural development in the region, after the World Bank.  IFAD's investments have also generated another US$1.4 billion in co-financing and US$2 billion in government contributions, resulting in a total investment to date of over US$4.8 billion.   What this has achieved is an increase in both the production and the incomes of over 22 million direct beneficiaries.  This, in turn, has helped boost the local economies, contributing to the development of small enterprises and generating additional employment opportunities. 

Examples of successful IFAD interventions in the region include our programme in the Sudan, reaching approximately 1.6 million people and providing increased asset ownership, improved food security and increased farm and off-farm incomes. In Morocco, we have supported programmes to rehabilitate degraded rangelands, establishing over 70 rangeland associations to ensure resources are sustainably managed. And in Yemen, following the food prices crisis of last year, we have funded seed distribution, fertilizer packages, small farm equipment, and village savings and credit associations – to boost agricultural production in the 2008 and 2009 cropping seasons.

The present
According to the Chinese proverb, "A crisis is an opportunity riding the dangerous wind".  In the face of recent crises, now is the time to be bold. Now is time to be innovative.  Now is the time to redraw international, regional and national strategies better adapted to today's challenges.

I suggest that there are five key areas for addressing food security in LAS countries:

  • Agricultural productivity
  • Water productivity and water savings
  • Desertification and land degradation
  • Rural infrastructure and rural services
  • Youth

First: agricultural productivity.  Most agriculture in LAS countries is rain fed.  Productivity is low. Average wheat yields, for example, are below the world average and in some cases are less than half global levels. But investment in agricultural research can turn this around.

IFAD works with regional research centres, such as the International Center for Agricultural Research in Dry Areas and the Arab Centre for the Study of Arid Zones and Dry Lands, including in the Syrian Arab Republic, Jordan and Egypt, to develop drought and heat resistant higher-yielding varieties.  Indeed, some 170 IFAD programmes worth nearly US$100 million in grants have supported applied research, knowledge transfer, training and capacity-building in the LAS countries. We are also working on developing partnerships: public-private partnerships, especially in technology transfer and adoption; and multi-country partnerships for research, which can be more cost-effective than operating at the national level.

Second: water productivity and water savings.  The Arab region faces severe and increasing water scarcity.  Total renewable water resources in the Near East and North Africa region are less than one per cent of the world's total, while the region represents five per cent of the global population. The main consumer of water is irrigation, absorbing 86 per cent of water use. 

Better agricultural water demand management is essential.  This can be achieved by investing in more efficient irrigation systems (such as drip irrigation), providing price incentives to reduce water consumption, switching to crops that use less water or that have a higher return per drop of water used, increasing the amount of harvested rainwater, and improving soil and water conservation techniques.  IFAD-funded projects in Egypt, Jordan, Lebanon, Morocco, and Tunisia have invested heavily in these types of activities. We have also worked with the International Center for Biosaline Agriculture (ICBA) to develop technologies to use brackish and saline water for agriculture, and are exploring further collaboration with them in the agricultural water sector.

Third: desertification and land degradation. There is limited scope to expand arable land in the LAS countries, and climate change is further limiting what little scope there is.  For example, an estimated 70 per cent of Near East and North Africa rangeland is now considered at serious risk of degradation, with consequences for livestock feeding.

IFAD hosts the Global Mechanism of the U.N. Convention to Combat Desertification. Together we are addressing land degradation and poverty-related issues, particularly in Jordan, Lebanon, Morocco and Tunisia.

We are also collaborating with the Global Environment Facility to undertake a number of projects for soil and water conservation, re-vegetation of the badia and mountainous areas, monitoring of natural resource use, and strengthening of national capacities for sustainable land management. Over the course of the last three years, this collaboration has led to the mobilisation of approximately US$112 million.

Fourth: rural infrastructure and rural services.  Access to roads, ICT, financial services, marketing services and price information services can help improve the supply response of all farmers, large and small.  Yet many of the poorer countries in the LAS suffer from poor rural infrastructure and lack of basic services. Working in such partnership with the private sector, which is the main supplier of these services, IFAD is investing in this sector to generate income-boosting opportunities for poor rural people. 

Finally - youth.  Unemployment rates in the region are high, particularly among young people.  Engaging youth in the agricultural and agro-processing and trading sectors provides a win-win solution, especially in high-value commodity supply chains which are more labour intensive. In Egypt, for example, an IFAD-fund project has provided access to financial services to a large number of educated youth, thus enabling them to undertake microenterprises, as well as  marketing and trading activities.

These are five areas that I consider key.  But there is another topic that is relevant, which has received heightened media attention recently.  There is growing demand for large-scale farmland in developing countries, which is seen as a means of improving domestic food security in other countries.  This offers important opportunities for investors and local communities alike.  Full collaboration between private sector investors, rural communities and governments will ensure that the benefits are shared, and that the development needs of local communities are protected.

IFAD is promoting a range of partnerships between investors, small-scale producers and indigenous communities. In Mozambique and Tanzania, for example, IFAD is supporting several pilot projects which will establish community-investor partnerships for commercialized agriculture and livestock production, while recognising the land and water rights of the local communities. IFAD is also supporting a pilot initiative in Ghana in which the investor is financing infrastructure and production inputs while the farmers are providing assured supplies on agreed market-related prices.

The future
Next month IFAD will conclude its 8th Replenishment, covering the three years from 2010 to 2012.  IFAD Member States have agreed on a target of US$1.2 billion in new contributions for a program of work of US$3 billion.  This represents an unprecedented 67 percent increase over IFAD's 7th Replenishment and is the largest ever in the organisation's history. It was led by the Kingdom of Saudi Arabia's five-fold increase, to US$50 million, announced in April last year.

With other sources of IFAD income, including co-financing from our partners, this will mean as much as US$7.5 billion for agriculture, poverty reduction and improved food security in the most vulnerable rural areas of the world, reaching an estimated 60 million poor rural women and men.

I should like to take this opportunity to encourage those countries in the region who have not yet been in a position to announce their exact pledge to the IFAD Replenishment, to be inspired to do so as soon as possible, so that we have a complete picture by the Governing Council in Rome next month.

Meeting this target will allow IFAD to invest US$500 million in agriculture and rural development in the Arab region over the 2010 to 2012 period.  With an anticipated additional US$500 million in co-financing from donors and governments, this would translate into a total investment worth over US$1 billion.  

Our regional conference on achieving food security in the Arab region, which takes place in Doha later this year, will allow IFAD to work together with our partners in the region on planning how best to use this US$1 billion investment.  The conference is being organised in cooperation with the Government of Qatar, the Islamic Development Bank, the Arab Authority for Agricultural Investment and Development, our partners in Rome, FAO and WFP, and other partners.  I sincerely hope that we will be able to endorse and initiate an ambitious regional programme that would pool our collective efforts and so help LAS countries achieve sustainable food security. We should be looking to build on, scale-up or replicate successful interventions in a number of areas: agricultural production and food security; rural economic development; natural resources management; policy, research and institutional development. 

The conference will draw on the outcomes of this summit, and help provide an action-plan to transform today's aspirations into tomorrow's reality.  Our work with the World Bank and FAO on the joint paper "Three Pillars for Arab Food Security", prepared for this Summit, will also help develop a longer-term agenda for action.

Over the course of IFAD's history, the LAS has provided vision and leadership. Thanks to your commitment – not least the Kingdom of Saudi Arabia's record-breaking contribution to IFAD's 8th Replenishment – IFAD is today a strong and active organisation in the Arab region.  As we face the challenges of tomorrow, I look forward to deepening our partnership.

Kuwait, 17-18 January 2009