Spurring economic growth through agricultural investment
Global Donor Platform works to improve aid effectiveness and ensure agriculture's key role in hunger fight
20 September 2005, Rome -- Michael Wales, Principal Adviser of FAO's Investment Centre, explains why investment in rural areas is key to tackling poverty and talks about one initiative that is working to ensure that agriculture is front and centre on the poverty alleviation agenda.
FAO continues to drive home the message that more funds must be directed towards agriculture and rural development if countries are to meet the first Millennium Development Goal of halving by 2015 the number of people living in extreme poverty and suffering from hunger. Why is the focus on rural areas so important?
Around 75 percent of the world's poor live in rural areas. So tackling poverty means addressing the problems that these poor rural populations face. The irony is that the majority of these people are farmers, or depend on agriculture-related activities for their incomes, yet they do not produce or earn enough to meet their basic needs.
Growth is essential to alleviate poverty and growth means investment, particularly in agriculture.
What, if any, concrete steps are being taken by the international community in this regard?
One initiative dealing with this issue is the Global Donor Platform for Rural Development, which was created around three years ago to bring together donor organizations, and particularly those parts of donor organizations dealing with agriculture and rural development, with the idea of undertaking advocacy work in the development community on the crucial role agriculture plays in poverty alleviation.
Membership includes most of the major international financing institutions and bilateral development agencies.
What are the Platform's objectives?
The main objective is to reduce poverty and enhance economic growth in rural areas in developing countries through improved donor cooperation and harmonization of approaches and procedures. So it's in line with a growing trend towards harmonizing donor practices, evidenced in March by the Paris Declaration on Aid Effectiveness in which more than 100 donor and developing countries agreed to 50 commitments to enhance aid's impact on reducing poverty and inequality.
The Platform sees its role as identifying how this relates specifically to the agriculture sector -- what makes the agriculture sector different and distinct and how to translate these principles of donor harmonization and alignment into effective action at country level.
What has it done so far?
Four pilot countries - Burkina Faso, Cambodia, Nicaragua and Tanzania - were selected for assessments of what works and what doesn't, what conditions promote donor coordination in practice and what constraints hinder it, and how global level coordination can best support countries at national level. The idea is to promote a common programme and framework of support at country level so there is no duplication but rather complementarity of action among donors.
The assessments have been completed and detailed proposals for supporting the harmonization process have been prepared. Eventually, the Platform hopes that common procedures and agreed frameworks for donor activities can be developed at the country level.
The Platform also performs an advocacy role. For example, in response to the recent UN Summit, the 24 members have issued a short pamphlet emphasizing the critical importance of agriculture and rural development in addressing the first MDG.
What is FAO's role?
As donors and funding institutions put more into direct budget support and move away from projects and sector-specific support, ministries of agriculture need assistance in coming up with programmes and advocating for their importance on their country's poverty alleviation agendas. Agriculture tends to be the weakest sector in doing this, so we will be involved in training and capacity development so that they can come up with viable investment plans that are consistent with poverty reduction strategies and medium-term expenditure frameworks.
FAO is co-chair of the Global Donor Platform, along with the German Federal Ministry for Economic Cooperation and Development (BMZ). As part of a three-year, 15 million euro food security programme funded by the European Commission, 1.4 million euros have been earmarked to FAO's Investment Centre for work with the Donor Platform. So we are playing quite a big role.
The tectonic plates of development assistance are moving and the Platform is riding this movement and trying to figure out what it means for agriculture. Poverty alleviation is not just about health and education - the focus must be on growth, wealth creation and incomes. You can build schools and health centres, but without growth in the economy, you can't afford to buy drugs or pay teachers. Agriculture has to have a central place on the agenda as the main driver of growth in most developing countries.
Members of the GDPRD:
French Development Agency (AFD), Asian Development Bank (ADB), Austrian Development Agency (ADA), Canadian International Development Agency (CIDA), Department for International Development (DFID), Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ), European Union, DG for Development (EU), Federal Ministry for Economic Cooperation and Development (BMZ), Food and Agriculture Organization (FAO), Interamerican Development Bank (IADB), International Fund for Agricultural Development (IFAD), Italian Ministry of Finance and Economy (MFE), KfW Entwicklungsbank (KfW), Ministry of Foreign Affairs-France (MAE), Ministry of Foreign Affairs-Luxemburg (MAE Lu), Ministry of Foreign Affairs-Finland (MFAF), Ministry of Foreign Affairs-Austria (MFA), Organisation for Economic Cooperation and Development (OECD), Swedish International Development Cooperation Agency (SIDA), Swiss Agency for Development and Cooperation (SDC), Ministry of Foreign Affairs-Norway, The Netherlands Ministry of Foreign Affairs (NMFA), The World Bank (WB), United States Agency for Intenational Development (USAID)
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