Statement by the Director-General
on the occasion of the launch of SOFA 2007

FAO, Rome, 15 November 2007

Ladies and Gentlemen,

Welcome to FAO and to the launch of the report The State of Food and Agriculture (SOFA) 2007. The topic of this year’s report is: “Paying farmers for environmental services”.

Ecosystems are the basis of human life. The services they provide are indispensable not only for reducing hunger and poverty, but also for the survival of mankind.

Continuing population growth and rapid economic development are putting environmental resources under enormous pressure worldwide. The Millennium Ecosystem Assessment, commissioned by the UN Secretary-General in 2000, has highlighted the impact of human activities on ecosystems, which can put at risk their capacity to meet the increasing demand for water, food, fibre and energy. Soil erosion, water pollution and climate change, among others, oblige the international community to find new suitable solutions.

Modern agriculture provides ever-growing quantities of agricultural, fisheries and forestry products, feeding today 6 billion people. However, this has often come at the expense of the climate, water and biodiversity.

Over the coming years, agricultural production systems must be intensified to satisfy the food requirements of a growing world population while at the same time improving the supply of environmental services which are not generally compensated for by markets. The challenge becomes bigger in the face of global warming and the production of fuels from agricultural products.

World agriculture can certainly meet this challenge. It is capable to respond to the requirements of an expanding agricultural production and those of environmental services that better meet the needs of human society. It is capable to reduce the effects of climate change through carbon sequestration. It is capable to preserve biodiversity. It is capable to contribute to the development and improvement of water supply.

But for this to happen, it is indispensable to put in place incentive measures to ensure that farmers consider the impact of their production decisions on the environment. Paying farmers to provide specific environmental services is a new policy approach that is generating growing interest among policy makers, NGOs and private decision makers.

However, payments for environmental services are only one policy tool among others for addressing environmental problems.

These compensation mechanisms must also contribute to the fight against hunger and poverty by encouraging poor farmers to participate in them and benefit from the payments.

Currently, payment schemes for environmental services are still in an infant stage. Their scope and impact are relatively limited and very varied.

However, if combined with other tools, they can be a promising instrument for strengthening the role of farmers in sustaining ecosystems by improving the management of agricultural and environmental resources.

In fact, to be effective in achieving their objectives, payment mechanisms for environmental services must be carefully designed, based on the characteristics of the environmental service and the biophysical and socio-economic context.

In conclusion, I hope that this year’s report on SOFA, by clarifying the advantages as well as the challenges that need to be addressed in implementing this approach, will serve to enrich the international debate on payments to farmers for environmental services and help answer outstanding questions in this area.

Thank you for your kind attention.

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