Draft ISS presentation notes Vadnjal 30OCT07.docx
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DraftISSpresentationnotesVadnjal30OCT07
RevivalofAgricultureinDevelopmentAid
InstituteofSocialStudies
TheHague
Monday11November2007
PresentationbyLennartBåge,PresidentofIFAD
Mr.Chairman
Staffandstudents
Ladiesandgentlemen
Itisapleasuretobewithyoutodayandtoaddressstaff,students,andothershereattheInstituteofSocialStudies,ontherevivalofagricultureindevelopmentaid.
1.Introduction
Thetitleofthispresentation,the“revivalofagricultureindevelopmentaid”,Ibelieve,raisesanimportantyetratherprovocativeissue.
Iwanttoproposetoyouthefollowing.Therehasbeenarevivalofagricultureindevelopmentaid.Moreandmoreattentionisbeingpaidtotheimportanceofinvestinginagriculture.Yetherehasnotbeenarevivalofdevelopmentaidinagriculture.Therehasbeennolongtermorsustainedincreaseininvestmentsinagriculture,atleastforthelasttwodecades,indevelopingcountries.
Inotherwords,whileinterestsinagriculturearegrowing,therearenotmoreresourcesgoingtoagriculture.
Inthewordsofthetitleofthispresentation,therevivalofdevelopmentaidinagricultureislaggingbehindtherevivalofagricultureindevelopmentaid.
Inthispresentation,Iwillexplorethisissueofdevelopmentaidandagriculture,IwillconsiderthecaseofAfrica,andIwilloffersomeinsightsintotheworkofIFADandAgriculture.
2.Hastherebeenarevivalofagricultureindevelopmentaid?
Inotherwords,areinterestsinagriculturegrowing?
Severalhighprofileinitiativeshavebeenundertakeninrecentyearsthathavedrawnattentiontoagriculture.
∙TheSachsetal.(2002)reporttotheUNon“InvestinginAgriculture”laidoutaplanforreachingtheMDGs,calledforamajorincreaseinoverseasdevelopmentassistance(ODA),andincludedacalltoincreaseruralproductivitythrougharenewedgreenrevolutiontoraisefoodoutput.
∙TheWorldDevelopmentReport(WDR)2008on“AgricultureandRuralDevelopment”(WorldBank,2007)placesastrongemphasisontheroleandpotentialofsmall-scalefarmersinlowincomecountries.
∙IFAD’sownRuralPovertyReport(2001)stressedtheoverwhelminglyruralcharacterofpovertyand,also,placedastrongemphasisontheroleandpotentialofsmall-scalefarmers.
∙TheIFADStrategicFramework(2007-2010)articulateshowIFADcanacttoreduceruralpoverty.Thereisexplicitrecognitionofneedtotackleruralpovertyinruralareas,andtofocusonagriculture,asthebasisofeconomiclivelihoodsofmostpoorruralpeople.
Establishedin1977,IFADistheonlyspecializedfinancialinstitutionmandatedtocontributeexclusivelytoreducingpovertyandfoodinsecurityintheruralareasofthedevelopingworld.
This,Ibelieve,placesusinauniquepositionandgivesustheparticularresponsibilityforcontinuingtocallforarevivalofagricultureindevelopmentaid.
Thisrenewedattentionbeingpaidtoagriculturehasnotbeenrestrictedtointernationaldevelopmentorganizations.
∙TheComprehensiveAfricaDevelopmentProgramme(CAADP),ledbyNEPADin2003,targets10%ofgovernmentbudgetstoagricultureanda6%peryeardomesticgrowthrateforagriculture.
Clearly,therehasbeenarevivalofinterestinagriculture,especially,overthelast5yearsorso.
3.Hastherebeenarevivalofdevelopmentaidinagriculture?
Inotherwords,aretheremoreresourcesgoingtoagriculture?
Thefactisthattherehasbeenalongtermdeclineofdevelopmentaidinagriculture.
ThisdeclinecomesintheformofadecreaseinODAandadecreaseinpublicsectorinvestmentbydevelopingcountrygovernmentsgoingagriculture.
∙showstheagriculturespendingtototalspendingbydevelopingcountrygovernmentsin1980comparedwith2002.
∙Agriculturereceived18%oftotalODAin1979andjust3.5%in2004.
Despitethedeclinetherearesignsofarecentup-turninODA.
∙showsthedeclineintermsofWorldBankSpending.
TherecentupturninODA,asevidencedbythepreviousslide,hastakenplaceundertherubricofdebtreliefratherthansectorassistance;andtheprincipalgrowthareahasbeenthesocialsectornottheagriculturesector.
∙TheshareofsocialsectorallocableODAhasincreasedfrom26%in1990to57%in2005.
Itisworthnoting,too,incomparisonwithODA,thatforeignprivatesectorflowsintoAfricaarecomparativelymodest.Investmentshavetendedtobelarge-scaleandlimitedtoexportcropsandhigher-potentialareas.
Althoughthereareinitiatives,suchastheAllianceforaGreenRevolutioninAfrica(AGRA),supportedtheRockefellerFoundationBillandMelindaGatesFoundation,whicharefocusingondevelopmentofmarketsforsmall-scalefarmers.
Clearly,notonlyhastherebeennorevivalbuttherearefewerresourcesgoingtoagriculture,especially,overthelastfewdecades.
However,theamountofODAthathasgonetoagriculture,inabsoluteterms,Ibelieve,issubstantial.
ThisincludesODAfrommultilateralorganizations,likeIFAD,andbilateralassistancefromcountriessuchastheNetherlands.
∙Ofthe5multilateralfunds,includingtheAfDF,EC,IDA,IFADandUNDP,USD6billioninODAwenttoAfricanagricultureandruraldevelopmentbetween1998and2005.
∙ThelargestcontributorwasIDAwithover$1.7billionfollowedbyIFADwithover$1.4billion.
∙Themajorityofthiswenttoagriculture(63%)comparedwithruraldevelopment(37%).
AstatisticthatmaybeofparticularinteresttoyouconcernsODAcontributionsbytheNetherlands.Between1998and2005,theNetherlandswasthefifthlargestcontributorbehindtheUnitedStates,Japan,FranceandGermany,ofODAtoAfricanagricultureandruraldevelopment.
∙TheNetherlandscontributedmorethan$427million,comparedwithalittlelessthan$660millionfromGermanyand$750millionfromFrance.
4.WhatisthestateofagricultureinAfrica?
AfricaandSub-SaharanAfrica(SSA)inparticular,iswhereprogressisslowesttowardsachievingtheMDGS.
Manyofthecountriesare“slippingback”or“farbehind”inreachingMDG#1–theeradicationofextremepovertyandhunger.
ThemajorityofthepoorinAfricacontinuetoliveinruralareas.
∙Onaverage,70%oftheruralpoorindevelopingcountriesliveinruralareas,althoughtherearesignificantcountryandregionalvariations.
∙showstheruralpovertyratesinAfricaandotherdevelopingcountries.
InthesouthernandeasternregionofAfricaruralpovertytendstobehighlyconcentrated.
∙Morethat25%pftheruralpoorliveinEthiopia,Kenya,Madagascar,TanzaniaandUganda.
Theincidenceofpovertytendstobemoreprevalentintheconflictandpost-conflictcountries.
∙InAngola,theincidenceofpovertyandthetotalnumberofruralpoorarehigherinwaraffectedareas.
∙InUganda,insecurityinthenorthandnortheastofthecountry,causedbyrebelinsurgencyandcattlerustling,isamajorcauseofpovertyinthesepartsofthecountry.
InAfrica,largenumbersoftheruralpooraresmall-scalefarmersinvolvedinagriculture.
∙Small-scalefarmersownoroccupybetween0.5hectaresand2.0hectaresofland.
∙Womenprovideaboutone-halfofthelaborforceandproducemostofthefoodcropsconsumedbythefamily.
Yet,despitethepervasivenessofpoverty,atIFAD,webelievetherearemanyopportunities,aswellaschallenges,inAfricanagriculture.
Allowmetotakeyouthroughafewof,whatIbelieve,areamongstthegreatestopportunitiesandchallengeswhenitcomestotacklingpovertyinAfrica.
Agricultureisaleadingsectorinlowincomecountries.Thisisreasonablywelldocumented.
∙showsGDPpercapita($)plottedagainstagricultureasa%ofGDP.
∙IncountrieswithGDPpercapitaoflessthan$3000,agriculturecontributesasmuchas60%ofGDP.
However,therearewidevariationsacrosscountriesandovertimeinagriculturegrowth.
∙Somecountries,suchasGabon,movedfrompoorperformancein1990-2000tobetterperformancein2000-2004;otherssuchasMalawimovedintheoppositedirection.
∙Somecountries,suchasAngola,grewat13.7%ayearduring2000-2004,butgrowthhadretreatedby1.4%peryearduring1990-2000.
∙Onlyaboutone-quarterofcountriesinAfrica,includingBenin,BurkinaFaso,Ghana,NigeriaandTanzania,showedconsistentagriculturegrowthofover3percentduring1990–2000.
Thereisgreaterrecognitionthattheruralpoor,especiallywomen,pursuelivelihooddiversificationstrategies.
∙Ellis(2004)etalprovidesevidence,fromselectedAfricancountries,demonstratingthatasmuchas50%ofruralhouseholdincomesaregeneratedfromengagementinnon-farmactivities.
∙Themainsourcesofnon-farmincomesincludetransfersfromurbanareasorabroad,remittancesandpensionpayments.
∙Theimportanceofremittances,atleastatagloballevel,isincreasinglyrecognized.InarecentpublicationbyIFADandtheInter-AmericanDevelopmentBank(IDB)itisreportedthatmigrantsworkinginindustrializedcountriessentmorethan$300billiontodevelopingcountriesin2006.
Demandforfoodisontherise.InAfrica,thisisduetolandandurbanizationpressuresaswellaspatternsofconsumptionversusproduction.
Theaveragelandcultivatedperagriculturalpersonisdecreasing
∙showsthecultivatedlandperagriculturalpersoninhectaresfor6Africancountries.
Theshareoftheurbanpopulationinthetotalpopulationisincreasing.
∙Jayne(2006)predictsthatmorethan50%ofthepopulationofAfricawillbeurbanby2015:
∙2000=10farmhouseholdsfeed7non-farmhouseholds;
∙2020=10farmhouseholdsfeed16non-farmerhouseholds.
Themajorityofsmall-scalefarmersarebuyers,orwhatJayne