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Investing in agriculture to drive sustainable development

Kanayo F Nwanze, president, International Fund for Agricultural Development

From "The G20 Mexico Summit 2012: The Quest for Growth and Stability,"
edited by John Kirton and Madeline Koch, published by Newsdesk Media Group and the G20 Research Group, 2012
To download a low-resolution pdf, click here.

Smallholder and family farms are the key to food security and poverty reduction in developing countries. But we must improve gender equality and target investment to close productivity gaps

The world is at a historic juncture in global agriculture, with demand for food – including high-value products such as fruit, meat and dairy – growing exponentially. This demand is being driven by an ever-growing world population and the emergence of an expanding middle class across much of the developing world. To meet this demand, food production will need to rise 60 per cent by 2050. As a result, there is an unprecedented potential for agriculture to be the centre of new and vibrant markets, triggering sustained economic growth in countries across Africa, Asia and Latin America. In this context,

agricultural development can make a significant and lasting contribution to increased food security and poverty reduction, but only if development efforts centre on smallholders and family farmers.

The world's 500 million smallholder and family farms are well positioned to be the key suppliers of today's growing

urban markets, as well as continuing to supply rural markets. Today, many are poor, but with the right policy support and investments, they can supply these markets on better terms with greater capacity. More than half of these farms are in G20 countries.

The G20 clearly recognises the importance of food security. The International Fund for Agricultural Development (IFAD) is pleased to see the priority given this year to inclusive green growth, food security and improved infrastructure. Agriculture does not occur in a vacuum. It affects and is affected by a range of areas including environment, energy, finance, labour and education. The close proximity of the 2012 G20 and G8 summits to the Rio+20 conference has helped advance the realisation that sustainable and resilient agriculture is part and parcel of inclusive green growth and a green economy. However, much work remains to be done to ensure that this realisation translates into placing agriculture at the centre of a green growth, green economy agenda for sustainable development.

Wider benefits

Investing in agricultural development not only makes good business sense but also has much wider benefits. Numerous studies have confirmed that growth generated by agriculture is at least twice as effective in reducing poverty as growth in other sectors.

The pay-off for investment in agriculture is generally highest when that investment is targeted towards public goods, such as infrastructure, education, and research and development. These issues were also at the centre of a joint report that international organisations, including IFAD, presented to the G20 earlier in 2012. All these areas require urgent attention to close the large productivity gaps that still exist on smallholder farms around the world, and among the women and men on these farms.

Efforts in agricultural development must indeed include creating the conditions for women to be on an equal economic footing with men. In developing countries, women make up 43 per cent of all farmers. But they are held back by deeply unequal access to services and resources such as credit, extension, and improved seeds and fertiliser. All too often, they do not have title rights to the land they farm. Yields on farms headed by women could rise by as much as 30 per cent simply by giving women the same access to resources as men. Just levelling the playing field between women and men would result in 150 million people emerging from poverty and hunger.

It is important to remember, in considering how to advance agriculture for development, that farming is a business, no matter how small. Creating the conditions for poor farmers to grow their businesses – first to achieve food security and then to produce a surplus – allows them to break out of poverty definitively. Smallholders, and farmers in general, are the biggest investors in agriculture in developing countries. They invest not only their own money, but also their time and labour. Recognising small farmers and their organisations as primary stakeholders in development requires genuine collaboration and inclusive processes that start with the design of programmes and continue through evaluation.

Investment is rightly a central by as much 30 per cent if they had the same element of the food security agendas of the G20 and G8 this year. Smallholders need greater in 150 million people emerging from poverty domestic and international investment in rural areas that is sustainable – economically, environmentally and socially. IFAD works to ensure that its programmes and projects address these three pillars of sustainable development, which are also central to an inclusive green growth agenda.

Biogas success

IFAD's work with biogas is one example of the effectiveness of this approach. Eleven years ago, IFAD joined forces with the government of China to pioneer the use of biogas for poverty reduction. Manure is a source of methane. When it is released directly into the atmosphere, it is about 22 times more damaging than carbon dioxide. But when methane is burned it is less harmful, and provides a source of renewable and affordable energy. Biogas digesters allow waste to be channelled from domestic toilets and animal shelters into a sealed tank, where it ferments and is converted into gas and compost. Villagers who burn gas do not need to burn wood.

The project has contributed to higher incomes and reduced deforestation. Poor people who were not on the power grid now have energy for lighting and cooking and even for running generators. They can generate income from the animals that produce milk, meat, wool and eggs in addition to the dung needed for the biogas digesters. Children have light at night so they can study. Kitchens that were once filled with choking smoke now have clean air. And sanitation has been significantly improved.

The initial project was so successful that it is being scaled up in rural areas around the world. Today, IFAD supports biogas projects in China, Eritrea, Nigeria and Rwanda.

IFAD hopes that leaders at the Los Cabos Summit will take to heart the international organisations' report on sustainable productivity growth, in particular the recommendations for a holistic approach to bridging the productivity gap on smallholder and family farms. We also hope that food security and agriculture will remain central to the development agenda of the G20 for years to come. By placing these farms at the centre of agricultural development and supporting them by establishing inclusive markets, infrastructure and supportive policies, we will truly bridge the productivity gap and ensure that the improvements to rural lives and the rural environment last for generations.

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