President and Members of La Via Campesina, the world’s largest International Peasant movement,
Ladies and Gentlemen,
I am honoured to address this conference on behalf of FAO Director-General José Graziano da Silva. Recognizing the work La Via Campesina has done to defend food sovereignty based on sustainable and agroecological peasant agriculture, I want to talk about what it will take to achieve one of our mutual goals: Eliminating global hunger. It’s going to take a lot more capital investment in agriculture to make the sector successful enough to bring an end to hunger and poverty. As well as forming partnership with likeminded grassroots organization and movement.
Now, you might think that means more government investment or private sector foreign direct assistance. Well, you wouldn’t be completely wrong, but I want to focus on the investments that small farmers like most of you make. After all, farmers are by far the largest investors in agriculture, investing four times more than government investments in the sector.
So, what can we do to encourage farmers to invest even more in their own farms? One thing we can do is to create a favourable investment climate for them; one that involves a lot more than just the people who grow our food. Agriculture is not just about farmers. We all eat what our farmers produce. Agriculture is about communities: small farmers in rural areas, traders, transport workers, green-grocers and shop-keepers. It is about local-level and national governments and global trade in food products. So, greater investment in agriculture will need to be spread over many areas of the sector.
Why is it important to increase investment in agriculture? Let’s start with the target set by the Millennium Development Goal number 1, or MDG 1 as we call in UN-speak. The goal of MDG 1 is to reduce the proportion of hungry people in the world by half between 1990 and 2015. Today, we have solid evidence that the countries most likely to meet MDG 1 are the very same countries that increased their investment in agriculture enough to significantly raise the ratio of capital to labour. The countries that have made insufficient progress toward the goal have actually seen a decline in their capital-labour ratio. So, we know that more and better investment in agriculture is needed to feed a growing population and to eradicate hunger. This is a major reason to increase investment in agriculture.
Broadly speaking, low-income countries have low levels of agricultural capital per worker –things like tractors, ploughs and other farm equipment -- and correspondingly low levels of agricultural productivity per worker. For countries in this situation, increasing agricultural productivity requires targeted investment in agriculture aimed at boosting capital to labour ratios.
But, is this happening? In some cases it is, but in some cases it is not. In South Asia, the capital-labour ratio has been declining. This is not because there has been no investment in agriculture. Actually, agricultural capital on average grew at about 1.5 percent annually. But, here’s the problem: the number of people employed in agriculture increased even more. Because South Asia is faced with a high incidence of hunger, boosting agriculture productivity is crucial to accelerating hunger reduction.
Some of the reasons for stagnating on-farm investment are basic and clear, but they are often ignored. Unless governments ensure a favourable climate for agricultural investment, farmers will not invest adequately. There are several factors that increase the cost and risks of investing in agriculture. Some examples are poor governance, high levels of corruption, insecure property rights, arbitrary trade rules, failure to provide adequate infrastructure and public services in rural areas. All these issues undermine the incentive for farmers to invest in agriculture.
But, we can encourage farmers to invest in their farms by strengthening producer organizations to achieve economies of scale when it comes to accessing markets and managing risk. Social cash transfers can help farmers withstand economic shocks and support their efforts to build and retain capital assets.
Large-scale agricultural investment by foreign corporations and sovereign investors is a recent and potentially promising development. While the magnitude of investment is so far small at the global level, the impact can be significant at the local and national levels. They offer opportunities such as employment and technology transfer. But, there are also risks. For instance, the rights and interests of local farmers must be respected.
Another type of investment that has shown consistently high returns in all contexts is investment in agricultural research and development, or R and D. This confirmed by the results we see this in China, India, and Thailand. Investing in key public goods such as agricultural research, rural roads and education have shown solid benefits in these countries, both in terms of agricultural growth and poverty reduction.
In South East Asia, more than half of the population live in the rural areas. Of the economically active rural population about 45 percent work in agriculture. Rural woman are significantly involved in agriculture as a whole. But despite the fact that women are major players in agriculture, their efforts to contribute to agriculture production, economic growth and well being of their families, communities and countries are often severely limited.
Increasingly, international development discussion have recognized that women have a crucial role in agriculture, acknowledging the major contribution that rural women provide in achieving household food security and overall well being. The important role of women in farming is gaining recognition worldwide supported by consistent research that show women play a fundamental role in efforts to eradicate extreme hunger and poverty.
Gender equality is a central component of FAO mandate to achieve food security by raising level of nutrition, improving agricultural productivity and improving the lives of rural population. We can only achieve these goal by working together and toward gender equality by supporting the diverse roles of women and grassroots organization in agriculture and rural development.
I want to leave you with some good news and a considerable challenge. The good news is that agricultural R&D expenditures are generally increasing in Asia and the Pacific as a share of GDP, although South Asia apart from India is an important exception. The challenge is to increase the amount of those expenditures and to make sure the research is conducted on crops and techniques relevant for smallholders. Today they amount to less than the 1 percent of GDP recommended for developing countries by experts. So going forward, our challenge will be to at least match the 2.4 percent of GDP that high income countries devote to agricultural R&D. If we keep in mind that investment in research and development offers the highest possible rate of return, then the challenge is well worth meeting, especially if we keep in mind that the end result will be a more equitable and prosperous society throughout the food production chain.