Food and Agriculture Organization (FAO)



Jacques Diouf
Director-General of Food and Agriculture Organization of the United Nations

at the International Conference on Financing for Development

Monterrey, Mexico
18th March 2002

Your Excellency, Chairperson of the Conference, 
Ladies and Gentlemen,

It is a great honour and a pleasure for me to address the plenary of this most important event on behalf of the Food and Agriculture Organization of the United Nations. FAO, together with the other Rome-based agencies, IFAD and WFP, has actively participated in the preparatory process leading to this Conference. The success of our organizations in achieving the twin goals of agricultural and rural development and of hunger reduction, critically depends on the volume and allocation of development resources. The outcome of the International Conference on Financing for Development is therefore critical both for our agencies and for the countries we are trying to assist.

My message to you today may be simply stated:

We must increase agricultural productivity in developing countries, especially amongst small farmers, in order to bring about a massive and sustainable reduction in poverty and hunger.
At the same time we must take direct steps to eliminate hunger to enable people to respond to employment opportunities and allow livelihood improvement through rural development.
Achieving these aims will contribute to significant improvements in both individual and global well-being.
It is therefore in the interests of all countries to take up the fight against hunger as a basis for the necessary progress in health and education to ensure economic and social development.

Your Excellency, the Chairperson,
Ladies and Gentlemen,

It is true that in the last three decades the lives of millions of people have been transformed from abject poverty, disease and hunger to lives with dignity, health and decent nutrition. But it is also true that one-fifth of the earth's population still live in extreme poverty, and that close to 800 million people today are chronically deprived of the most basic and unalienable right: the right to adequate and nutritious food.

In an unprecedented succession of conferences and summits during the 1990s, the international community pledged to drastically reduce ill health, illiteracy, gender inequality, infant and child mortality, lack of water and sanitation. At the World Food Summit, held in Rome in 1996, the nations of the world committed themselves to the goal of halving the number of undernourished people to 400 million by 2015. The millennium Summit also endorsed this goal.

Hunger is conventionally thought of as a result of poverty. But it is also a major cause of poverty. The hungry are trapped in a vicious circle: lacking the energy to work and produce, and susceptible to disease, they are condemned to be poor and consequently hungry. We know now, and the paper jointly prepared by FAO, IFAD and WFP amply demonstrates, that the economic growth and social development of whole societies has been severely compromised because of widespread hunger. If developing countries with a high rate of undernourishment had increased food intake over the past 30 years to an adequate level, their gross domestic product would have risen by as much as 45 percent. Reducing hunger is therefore a fundamental pre-requisite for poverty reduction. And, as such, it is productive investment that makes good economic sense.

But we are far from being on track. To meet the World Food Summit target, a rate of reduction of 22 million per annum is needed. However, the actual annual rate of hunger reduction worldwide, has been a mere 6 million people. With such a trend, the pledge made at the World Food Summit will not be fulfilled because of an insufficient mobilisation of resources. Decisions to be taken at this conference concerning not only mobilisation of development resources, but also their priority application in the fight against hunger and poverty, are therefore critical.

In the search for priorities and effective allocation of resources for eradicating poverty, one has to bear in mind that poverty is predominantly rural. Three-quarters of the poor people in developing countries live in rural areas. The small farmers producing on the edge of subsistence, landless people trying to sell their labour, the myriad of rural non-farm activities and small enterprises, all depend directly or indirectly on the agricultural sector for their survival. It is therefore in the rural areas that the battle against extreme poverty will be won or lost.

We fully understand that this Conference does not deal with sectoral issues. But agriculture in most developing countries is not just another sector. In addition to being the basis of the poor peoples' livelihoods, agriculture is their economic backbone. Overall
growth, expansion of exports and increased employment can only be achieved through development of the agricultural sector.

It is in the self-interest of both developing and developed countries to reduce hunger. Countries with well-nourished people and more prosperous economies are better trading partners; they are less likely to be involved in conflict and better equipped to deal with natural disasters; their citizens are under less pressure to leave their homes and to emigrate to higherincome countries. Increased investment in agriculture and rural development is a proven means of reducing hunger. Very few countries have embarked on a sustainable path of economic development without first developing their agricultural sector and rural areas.

However, it seems like the simple message on the role of agriculture is somehow lost. Resource mobilisation for agriculture and rural development has declined significantly in recent years. Official development assistance for agriculture has declined by close to
50 percent in the 1990s. Trends in multilateral financing have also failed to reflect the vital importance of agriculture and the rural sector. For example, in 1990 the World Bank's lending for agriculture represented 18 percent of its total lending. At the time of the World Food Summit in 1996, it stood at 10 percent. In 2000, it was 9 percent of total lending. Lending to agriculture and rural development from other regional development banks also declined in the 1990s. The share of lending for agriculture in the Asian development Bank declined from 31 % in 1990 through 14 percent in 1996 to 9 percent in 1999. Fortunately, the African development Bank, which had 21 lending for agriculture in 1990, but had seen a decline to 13 percent in 1996, brought the share back to 27 percent in 1999. The end result of in ODA and lending is an alarmingly low labour productivity in agriculture, in countries in which productivity increases are mostly needed, and a consequent perpetuation of poverty and hunger.

We welcome the calls in the outcome document for substantial increases in Official Development Assistance for rural development and food security. But, to make sure that the pledge will be adhered to, we have to think beyond current modalities for resource
mobilisation and find new ways to address their shortcomings. A smooth operation of the process of globalisation means increasing the competitiveness of developing countries, especially the poorest ones, in world and domestic markets. New and innovative mechanisms are needed to finance the closing of the infrastructural divide between rich and poor countries and improve the latter's competitiveness.

Our task is daunting. We all know that there are no easy answers, no shortcuts to development. The poor and hungry people of the world cannot wait for the fruits of economic growth to trickle down to them. Our steps must be targeted, concrete, determined and swift. We must improve access to food for those most in need by allowing them "to fish instead of receiving fish", so that they can participate in economic life and the development process. We must crucially reverse the alarming decline in resource allocation for agriculture and the rural economy. This dual strategy is the core of my message to you today.

Let us make sure that this Conference goes beyond declarations and commitments, and paves the road to concrete action towards a reduction of hunger and poverty.

Thank you.

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