INTRODUCTION
Her Royal Highness, Princess Maha Chakri Sirindhorn, Excellencies, distinguished guests, ladies and gentlemen.
Allow me first to convey my gratitude to the FAO Regional Office for Asia and the Pacific for inviting me on this important occasion. I am delighted to participate in this anniversary of FAO, World Food Day. This year's theme, "Investing in Agriculture for Food Security," is very timely. Today is also the beginning of International Poverty Week. While the attention of the global development community is turning toward the problems of Africa, which is understandable, it is also true that, given the large number of poor in our region, the worldwide fight against poverty will be won or lost here in Asia.
I am particularly delighted to address this distinguished audience as a former President of ADB, the vision of which is to free Asia and the Pacific from poverty. In 1999, ADB adopted poverty reduction as its overarching goal. This was followed by ADB increasing its support to key areas including nutrition, early childhood development programs, alternative income opportunities, improving access to food markets, and addressing environmental issues in dryland, wetland, coastal and upland rural areas, which complement its assistance in agriculture and rural development for poverty reduction.
In its efforts to fight hunger and poverty in the Asia-Pacific, ADB has maintained a close partnership with FAO and the UN system as a whole. Some of our best success stories date back to the 1970s, when FAO, ADB and others formed the Consultative Group on International Agricultural Research (CGIAR). FAO was also involved in a major study by ADB in 2000 on Rural Asia, which suggested how to reduce rural poverty. Currently, ADB and FAO are closely cooperating on combating Avian Influenza, which has so severely affected poultry farmers in the region.
We all appreciate FAO's global expertise in agriculture and its valuable contribution to the welfare of mankind. ADB also possesses strong knowledge of agriculture and rural development in this region. In particular, ADB emphasizes investments to harness the potential of the rural economy for the benefit of the poor. These two organizations complement each other in their operations and strategic approach in pursuing their common vision of an Asia-Pacific free from hunger and poverty. Strong collaboration between these two organizations can maximize synergies between their combined intellectual, financial and human resources; and strengthen their global and regional presence. Recognizing these, as early as in 1968, ADB and FAO entered in an Interim Arrangements for Cooperative Action, which was converted into a Memorandum of Understanding (MOU) in 1981.
Asia and the Pacific region has seen some remarkable progress in agriculture, particularly in productivity of rice and wheat production through improved seedlings, fertilizer and irrigation. This is familiar to all of us as the Green Revolution. The Green Revolution did much to improve the livelihood and nutrition of the poor by way of increasing crop yields, incomes, employment, local demand, and lowering of food prices. But the fight against poverty and hunger in Asia and the Pacific is not over yet. As a result, today, the UN Millennium Project report on the Millennium Development Goals (MDGs), and many other reports, stress the need for a new revolution in agricultural research. New findings also highlight the importance of rural infrastructure provision, rural-urban mobility, and regional and international trade and cooperation for rural poverty reduction. Allow me to present to you a somewhat broad view on what I think we can do together to ensure food security, and reduce poverty. I will make this presentation in four parts.
At the 1996 World Food Summit and the UN Millennium Summit six years ago, world leaders committed themselves to an eight-point, time-bound, measurable international development agenda. Collectively known as the MDGs, they now represent the latest consensus on what developed and developing countries should do to meet the basic human needs and rights of every individual.
The MDGs remind us that poverty is multidimensional. Poor people sometimes suffer hunger, sometimes face lack of income, and sometimes lack access to affordable basic services. The poor are also frequently exposed to environmental degradation, and economic and natural shocks. They seldom have sufficient voice and decisionmaking power to fight for their interests.
Three poverty lines are commonly used in international discussions:
• The first one refers to those poor whose income is not sufficient to meet the basic food requirements of 2100 kcal. These severely poor are often affected by hunger. This poverty line (US$0.6 a day per capita expenditure or income per day) is often consistent with the national poverty thresholds of many of our developing countries.
• The second poverty line refers to those poor whose per capita expenditure or income is less than US$1 a day, just sufficient to meet their basic food and other needs.
• The third poverty line includes the nearpoor whose per capita expenditure or income falls below US$2 a day. The nearpoor are highly vulnerable to economic, natural, social and even political shocks or life-crises, any of which can quickly push them below the US$1 a day poverty line.
Despite progress in recent decades, Asia and the Pacific continues to be home to the bulk of the poor in the world by any of these three standards. In 2005, in Asia and the Pacific, about half a billion people are not able to meet basic food requirements of 2100 kcal; 625 million people earn below US$1 a day; and nearly 2 billion people are near-poor or earn below US$2 a day. These account for about half to two-thirds of the total number of poor in the world by the corresponding standards.
Asia and the Pacific has made the fastest and biggest poverty reduction effort ever, improving the lives of 250 million people in two decades. The proportion of people living below US$1 a day came down from 32 percent in 1990 to 19.3 percent in 2005. Starting from a higher base, rural poverty in the region declined during the last 15 years from 39 to 28 percent. While the region's performance was driven largely by China and India with their vast numbers of rural poor, major success in poverty reduction was witnessed in nearly all Asian countries with very few exceptions.
An increase in agricultural production was a key factor in strong pro-poor growth witnessed in most of the successful Asian countries. The Asian nations that grew earliest and fastest, such as China, Malaysia, the Republic of Korea and Thailand, also later witnessed rapid growth in industry and services.
The more successful countries have relied more on addressing food security issues indirectly through emphasis on rural household income and farm productivity in their strategic development approaches. Such countries implemented impressive reforms to diversify their rural economy. Perhaps the best example is Thailand; others include China and Viet Nam as well as Bangladesh, Cambodia, Lao PDR, Nepal and Sri Lanka. In India, the 10th five year plan considers diversification into higher value-added crops and upgrading irrigation infrastructure as critical for facilitating steady agricultural growth.
In many countries, agriculture may contribute a minor share to GDP. However, when forward linkages such as agro-business and marketing, and backward linkages such as seeds and fertilizers are considered, the agriculture sector comprises a major share of national growth. It is estimated, for example, that in the Philippines about 74 percent of GDP is related to agriculture. Much of this growth is generated by the private sector, which critically depends on well developed infrastructure and continuing economic stability. Both are public goods that development assistance can support in order to promote pro-poor growth.
Thus, Asia was particularly successful in reducing income poverty. Agriculture, both production of food as well as broader forward and backward linkages in the rural economy, played a major role in this success story. However, with poverty having many faces, much work still needs to be done on addressing the social and environmental issues related to poverty. Further, despite progress on several fronts, more than one-third of Asian countries may not achieve all the MDGs.
Rural poverty has many dimensions, hunger being only one of them. With increasing income, falling agricultural prices, and improving living standards, hunger defined as a lack of food has been decreasing in rural and urban Asia. However, micronutrient deficiencies, particularly among women and children, endanger health, shorten life expectancy, retard the cognitive potential of children, and reduce productivity in the region. The links between quality of diet, particularly access to essential vitamins and minerals, and health outcomes, educational achievements and economic productivity and growth have been better understood only recently. What is now frequently referred to as "hidden hunger" affects nearly 1.5 billion persons in Asia and the Pacific. This figure far exceeds the 0.5 billion figure for the poor in the region based on an energy intake of less than 2,100 kcal, which is the main basis for calculating the severe poverty line.
The most serious micronutrient problem is iron deficiency anemia (IDA). Iodine deficiency, which is manifested by swollen glands in the neck - goiter -remains the single greatest cause of preventable mental degradation. The lack of vitamins is the third major aspect of hidden hunger. Vitamin A deficiencies cause blindness and raise death rates by 25-30 percent by weakening the body's immune system.
Hidden hunger extends beyond the poor. It is related to unhealthy food intake, and therefore, is a problem that also affects the non-poor population. Hidden hunger is particularly prevalent in Central Asia, the Pacific, Bangladesh, and the Philippines. It is imperative that the development community supports early childhood development programs in these countries as a priority. Programs that support education, provide clean drinking water and promote investment in agriculture and food production as well as better access to health facilities through improving the transport infrastructure can further supplement these efforts to tackle hidden hunger in the region.
The regionalization and globalization of agricultural markets is rapidly altering the pattern of food production and consumption. Food production is increasingly promoted nowadays by large-scale commercial enterprises and competitive smaller agricultural farmers. Food for self-consumption is often cheaper in the market than through production in subsistence farming. The approach to agriculture development, poverty reduction and food security in the future must take these factors into account.
During the next 25 years Asia's population is expected to increase substantially resulting in food grain demand rising by about 40 percent from the present level of 650 million tons. In both urban and rural areas food products will mainly be bought rather than self-produced. Thus one of the priority areas for ensuring food security will be how to increase the total production of food to match the increasing total demand.
The spectacular increase in agricultural production seen during the Green Revolution was largely due to enhanced agricultural productivity. For example, cereal production in the region doubled between 1970 and 1995. Almost all of this increase stemmed from higher productivity on practically the same amount of agricultural land. Particularly successful was the development of highyield varieties such as hybrid rice and special varieties such as the vitamin-A rich golden rice. The required increase in food supply in the future will also have to come largely from higher agricultural productivity. This is likely to be led by commercial farming on irrigated land with good access to markets. A substantial increase from rainfed and marginal areas, using less labor, less water and less arable land will require major breakthrough in new varieties.
There is a need to increase investments in science and technology including biotechnology, and other research and training. In today's context, biotechnology research is also important for the development of industrial agriculture to meet new energy demands such as the demand for biofuels and for the demands of the booming paper and furniture industries in Asia. Governments should consider using both monetary and non-monetary incentives to promote R&D in this important area. The donor community with the support of international agricultural research centers and research foundations (such as the Rockefeller Foundation) can also support biotechnology programs in Asia. Some of the major research on vegetables, trees, cereals, and legumes has been done with the support of private companies. Thus, involvement of the private sector in these efforts will also be important.
There is also a need to expand irrigation potential and diligently protect the environment to ensure the sustainability of the productive potential of all factors of agricultural and rural production. Demands to address rural environment issues, with particular emphasis on soil conservation and flood protection, are growing in the region. All development stakeholders have to pool their efforts to meet some of the challenges of the future.
While adequacy of production and supply of food is one factor, providing the means to the poor to buy these is another critical aspect of ensuring food security. Most of today's rural poor live in dryland and wetland areas, or coastal and upland regions. They have little opportunity to compete with commercial agriculture. Therefore, the bulk of the population, particularly the chronically poor, the landless poor, and the poor on marginal lands, require income sources other than agriculture. Food production may give them some livelihood, perhaps also some better nutrition, but it will not lift them out of poverty. Thus, efforts towards agriculture and rural development should focus on expanding the income earning opportunities - both farm and off-farm - of the poor.
It is estimated that less than one-third of the income of Asia's rural poor now comes from the sale of agriculture products. Hence the new agenda for poverty reduction in the rural areas should be twofold:
• first, supporting market production, through rural infrastructure such as roads and harbors, research, trade and regional cooperation; and
• second, promoting rural poverty reduction through off farm employment, mobility, and promotion of new innovative products such as organic food and herbal medicine, forest produce, and biofuels.
Both strategies rely significantly on the dynamics of the private sector. The public sector will continue to have a major role, and the development of the private sector, as another source of investment in partnership with the public, is also important to put agricultural growth on a sustainable path. In today's context, closer cooperation with the private sector is critical, particularly to promote supply chains that benefit the poor's income opportunities in the worldwide-web of integrated markets. This will also protect the poor from being overwhelmed by globalization. Public investment in primary and post-agricultural production, particularly in rural infrastructure, creates the enabling environment for the eventual private capitalization and commercialization of agriculture.
It is high time that we let the power of trade do its full share in spreading prosperity all over the world. Promoting greater trade, regional cooperation, and giving developing countries better access to developed markets for agricultural exports should be a priority. Free and fair trade in agriculture, together with the trade investment that it brings, has greater potential than aid to generate resources to mitigate poverty and hunger.
The new agenda also calls for a new partnership between governments, donors and the private sector. A vibrant and dynamic private sector can drive development, but governments need to create an environment conducive to such private sector growth. This will involve agricultural and trade reforms, rural infrastructure, and research and development. Governments also need to promote environmental investments fora more sustainable future of agricultural production. Further, there is a need to promote new innovative mechanisms for financing and enhancing knowledge support to the emerging needs of the region. This will also comprise a much closer look at public-private partnerships and the provision of regional public goods including infrastructure and trade.
Let me speak briefly about ADB activities in these areas. In line with other donors, ADB's financial support to agriculture and rural development has changed significantly since the 1990s. Direct investments in agriculture and natural resources have increasingly been replaced by other related rural investments in response to the changing demands of the region. In support of its poverty reduction strategy, ADB has made large investments in rural transport, rural electrification, rural microfinance and rural governance, all directly affecting agricultural productivity and environmental poverty. ADB's recently adopted Medium-Term Strategy II for 2006-2008 also mentions rural infrastructure as a high priority.
Your Royal Highness, Excellencies, distinguished guests, colleagues of the development community, let me now summarize and conclude my presentation.
There is now a widely shared understanding on the need to raise investment and research in rural development and rural poverty reduction. Despite rapid urbanization all over Asia, the rural economy can be a driver of growth if it is properly linked to national, global and regional markets. Support to agriculture continues to be an important intervention to sustain growth and reduce poverty. However, a more comprehensive approach to poverty reduction would be needed that incorporates the broader realities in which the rural poor live today. It should address nutritional and other vulnerabilities of the poor, and generate off-farm employment opportunities - many of which are related to the food industry. These efforts must also comprehensively address the whole range of environmental issues facing us today.
In the new global scenario, public and private investments in rural infrastructure and science and technology are becoming increasingly important. There is a growing consensus that investments in agriculture, particularly in rural infrastructure (such as transport and communications, energy and water) need to be scaled up and new ways of mobilizing public and private finance resources for food security need to be explored. Governments and the donor community have a major role to play here.
For the development community the implications of this new paradigm of rural and agricultural development include diversified lending and provision of knowledge products in both farm and non-farm agriculture, in the key areas of agribusiness, rural infrastructure, support services (research, finance and markets), and ecosystem management. FAO and ADB are important institutions in the region. Let us more closely work together to jointly meet the challenges coming from globalization, market driven development and environmental factors.
Thank you for your attention.
