International Federation of
CFU – Zimbabwe 2009 ANNUAL CONGRESSHarare, 4- 5 August 2009 KEYNOTE ADDRESS By Mr. Ajay Vashee, PresidentInternational Federation of Agricultural Producers (IFAP) President Trevor, Special Invited guests, Farming colleagues from CFU. As you know, at the World Farmers’ Congress held in Poland, June,2008. IFAP elected a farmer leader from a developing country for the first time in its 62 year history. This was an honour for me as a farmer from Zambia, and the Southern African Region. Providing an opportunity for all of us to give more visibility to IFAP and to the needs and aspirations of the farmers it represents. In this address, I have been asked to overview the most important issues of the global agricultural agenda, and these are also the issues that are at the heart of the work program of IFAP. Agriculture was pushed up to the top of the global agenda by the “food crisis” and the “energy crisis”. The media abound with stories about high prices of food and high prices of energy. Food and energy prices are blamed for pushing up inflation rates, reducing consumer purchasing power, and forcing millions more people back into poverty and hunger. The way these issues are addressed is critical for us in farmers’ organisations. In IFAP, we see this as a real opportunity to increase investment in agriculture and to get long-overdue improvements in infrastructure and services to farmers. In order to make this a sustainable and orderly process, we are urging national governments to sit down with their farmers’ organisations – and other private sector partners – to make a new plan for achieving food security and rural development, and plan which puts the farmer in the centre since he or she is the main stakeholder in boosting food production. We will need to make sure that these plans are correctly financed and implemented. Plans by themselves do not put money in farmers’ pockets; they need to be implemented. The scenario which we must avoid is that governments lose faith in markets and return to heavy intervention. There are things that are the clear responsibility of government, particularly establishing a stable policy and regulatory framework in which farmers can work and invest. But there are areas where government interference is not helpful, for example providing development assistance that adversely affects the functioning of markets. The food crisis has hit developing countries the hardest, especially the countries of Africa. It has extinguishing any hope for Africa to meet the UN target of reducing the number of people suffering from hunger by half by 2015. Higher food prices last year added another 75 million people to the number of people suffering from hunger. For this year, the situation looks even worse. Because of high prices for seed and inputs, especially fertilisers which have tripped in price for some products since the beginning of 2007, farmers in developing countries are only planting one-third of what they did the previous year. As a result another 100 million people are expected to be added to the number of people in the world suffering from hunger in 2008, driving the total to over 1 billion people worldwide – one-sixth of the world population. Obviously this is a situation that the international community cannot ignore. It is also a situation that farmers’ organisations need to manage, since consumers find it very easy to blame farmers for higher food prices. And supermarkets find it very easy to increase food prices in a completely disproportionate way relative to the increases in prices at farm level. I have had opportunity to attend the High Level meetings on the Millennium Development Goals and related events at the United Nations in New York, and have then followed up with visit’s to the World Bank in Washington D.C. There are eight Millennium Development Goals. They form the basis of the international development agenda for 2000-2015, and serve to focus governments’ attention on what needs to be done and how to measure progress in doing it. The goals address issues such as: maternal health, reducing child mortality and HIV/AIDS, universal access to primary education, gender equality, environmental sustainability, etc. and of course reducing hunger and poverty. The goal to reduce hunger and poverty dominate all the discussions at the UN in New York on the MDGs. As farmers, we should be pleased that agriculture is at last receiving the priority that it deserves. According to the OECD, there has been a significant structural change in world food and energy markets. Higher food and energy prices are here to stay. Agricultural prices over the next 10 years are expected to be 40 percent higher on average than over the last 10 years. Oil prices, which were $20-$30 per barrel until 2002-2003, are not expected to fall to these levels per barrel for the foreseeable future. I am sure that you know the reasons for this situation. A major factor is the growing middle class in the developing countries of Asia, Russia and the oil exporting countries. Per capita income in these countries is situated in that critical area of moving from $2 per day to $10 per day which boosts food demand considerably. It boosts demand especially for livestock products, and thus requires production of more animal feed. Thus, in addition to the food needs of a growing world population, rising incomes in advanced developing countries are driving food demand. On top of this, many countries are investing heavily in bioenergy to lessen their dependence on highly-priced imported oil. Biofuels produced from farm crops, like maize, sugar cane or palm oil – and now Jatropha – are the best options for mitigating greenhouse gas emissions in the transport sector, until the third generation of bio fuels comes along. Biofuel production worldwide is also adding to demand for farm crops. But before I go further, I want to stress that biofuels are not responsible for the rise in food prices, as some people are saying. Of course food companies are complaining about paying higher prices to farmers for their raw materials and are blaming biofuels, but the data shows that biofuels accounts for only about 10 percent of the food price rise. The highest price rise last year was for rice, and rice is not used for biofuel. In those countries suited to biofuel production, farmers want the possibility to keep this outlet as a diversification opportunity. This is something that IFAP will keep supporting, preferably as an option that is market-driven. The challenge posed by the food crisis is therefore to double farm output between now and 2050 in order to meet global consumption requirements. This will have to be done on the essentially the same land area, using less water. At the same time, farmers are being asked to reduce greenhouse gas emissions to fight climate change and also to conserve biodiversity. It is a big challenge, especially in the context of the global financial crisis. So what is the plan to deal with this? Well it has three parts: The first is humanitarian assistance to feed the 900 million people who do not have enough food to sustain life and work. This is the job of the World Food Program (WFP) based in Rome and supported by many bilateral food aid programs. The significance for farmers is that the World Food Program is giving priority to purchasing food locally, and this means mainly in Africa. The Director of the World Food Program wants to transform WFP from a solely humanitarian organisation that buys and distributes food aid into a development organisation that provides contracts to small-holder farmers in Africa to supply food to WFP on a regular basis. In order to achieve this, she will first have to persuade governments to make multi-year commitments to support WFP, rather than ad hoc donations. But the idea has a lot of merit. If small-holder farmers can receive contracts from WFP, say on a three-yearly basis, then this will provide collateral for loans and an incentive for them to invest. Food purchases would obviously have to meet WFP standards so they will be accompanied by capacity-building of small-holders on meeting these standards. Here is an opportunity that we must organise ourselves to exploit in the future. The second part of the plan to address the food crisis is to move beyond short-term humanitarian assistance to try to prevent the number of hungry people from growing next year. High prices of seed and fertiliser are discouraging farmers from planting, so that the situation will likely get worse. In response, FAO is channelling half its technical cooperation budget into buying seed and fertilisers, and made an appeal for $1.7 billion to buy feed and fertilizers. The Farmers of Africa have always maintained on the need for funds for improvements to feeder roads to the ports. SADC and the Private Sector are promoting ‘Development Growth Corridors’. Improving distribution systems, however, will need more than improved port facilities and roads; it also needs an examination of all the obstacles in the system that hinder the facilitation of trade and commerce. Getting seeds and fertilizers to farmers in time for the growing season is of course critical. However, this discussion raises many policy issues that farmers’ organisations need to think about. The first policy issue is water. Seeds and fertilizers work much better with irrigation. In fact, for IFAP, irrigation is a key part of raising farm productivity in order to respond to the food crisis. In Africa, only 7 percent of the farm land is irrigated; 4 percent in Sub-Saharan Africa and 1 percent in the Horn of Africa. This compares with Asia where 40-50 percent of agricultural land is irrigated. Africa therefore needs to invest much more in water capture, water conservation and drip irrigation systems. With the predicted effects of climate change being particularly severe in Africa, Farmers’ Organisations need to push water issues much higher up the agenda. Use of water in farming already accounts for over 70 percent of total use, so we have to use this wisely. Another policy issue raised by the seeds and fertilizer discussion is biotechnology. For example, several US foundations are working with the Monsanto Company to produce a GMO drought-tolerant variety of maize for Africa. The program is called WEMA – Water Efficient Maize for Africa. What do we feel about using biotech products in Africa? It takes 16 years to breed a new crop variety by traditional methods, and this can be shorted to 5 years through biotechnologies. The last policy issue being fertilizers, there is a real lack of investment in producing new fertilizers. However, a company in Australia has developed a new product called TWIN-N. This involves freeze-drying nitrogen-fixing bacteria and then rehydrating them at 50 grams per litre. It is sprayed on crops at 4gm per ha and can replace three bags of urea per ha. Given the fact that urea prices have gone through the roof, this kind of technology certainly deserves a closer look. To close the productivity gap with the industrialized countries and Asia, Africa definitely needs to use more fertilizers, but can all farmers afford them? The case of Malawi is interesting in this regard. In 2004, they introduced a farm input subsidy program – essentially subsidizing fertilizer use. This program is credited with transforming a food deficit situation to a surplus in only three years. Malawi’s domestic maize needs are 2.2 million tonnes; in 2007/8 the country produced 2.9 million tonnes, and became a regional supplier of maize to the World Food Program. The issue of post-harvest losses was also addressed through the introduction of 600 steel silos. As a result, post-harvest losses to pest infestation, which were running at 40 percent, were cut dramatically. In fact the World Bank has changed its liberal stance to favour what they call “smart subsidies” such as those used in Malawi. The key point of course is that the subsidized fertilizer sales should not displace private sales, or it will have no effect on overall fertilizer use. Smart subsidies should be designed to promote markets and not to replace them. Coming back to the third part of the plan to deal with the food crisis is long-term. It concerns the sustainable development of world agriculture. There is considerable discussion about what is a sustainable development model for world agriculture. Former US President Bill Clinton told a private sector meeting at the UN that the future was for local farming for domestic self-sufficiency. He countered that World Bank had admitted that its model in the 1980’s was wrong. That model foresaw that the world would be fed by the most efficient agricultural producing countries and that trade barriers should be reduced so that this could happen. Today, with the high cost of energy and the persistent problems of poverty, President Clinton and his Foundation are advocating that countries should produce their own food needs. He said, currently the average American meal travels 1000 miles to reach the consumer; in 20 years it will travel only 100 miles. In the past, investment in agriculture in African was primarily for export crops. We planted cotton, coffee, cocoa etc. and imported our food needs. Investment was driven by what could be sold in Europe and elsewhere. Today, Africa has to invest in food production to ensure a minimum level of food security. This is especially important in the small-scale sector, since that is where the food problems are concentrated. Hunger is a poverty problem; half the people receiving food aid from the World Food Program are small-farmers. Clearly the response to challenges faced by farmers in developing countries has to be based on investment in local food production through infrastructure development, well functioning markets and incentive-based agriculture production. Donors have said that they will support such development. IFAP for its part is engaging in actions such as ESFIM – a large research program on “Empowering Small-scale Farmers in Markets”. The program will involve projects in 11 countries, half of them in Africa. If more investment can be attracted into developing country agriculture for food security reasons, then international trade rules must take this into account. Investments in small-holder agriculture may need to be protected in the short term from competition from highly competitive exporting countries. In September, IFAP will hold its annual special event at the WTO Public Form in Geneva on exactly this and other question’s. Many countries now believe that the lack of tariff protection on food crops has increased import dependence and affected food security in developing countries. Many countries will of course remain net importers of food. However, higher food prices and export restrictions have made them very wary of relying on market forces. Some countries are no longer confident that they can trade their way out of trouble in the event of a future food crisis. The result is that some nations like China and the countries of the Middle East are renting land in Africa and elsewhere to produce their own food supplies. This is also true for energy crops. Europe has decided that 20 percent of its energy has to come from renewable sources by 2020 and that there should be a 10 percent incorporation of biofuels into gasoline and diesel by 2020. Some countries in Europe with have to import biofuels to meet their target. Companies that are anticipating this are already setting up Jatropha plantations overseas, including here in Africa. As farm leaders we have to be vigilant about these developments both on the food and energy fronts. Agriculture in African needs investment, but this investment must result in sustainable improvement in the livelihoods of our farmers. In the OECD countries, farmers are pressing their governments for significant changes in public policy for agriculture to respond to the food crisis. After years of dismantling farm support policies and promoting agri-environmental measures, farmers in the OECD are pushing their governments to maintain the productive capacity of their agricultures. They want greater emphasis to be placed on research and development and on improving productivity. I have talked at some length about the world food and energy crises and opportunities and challenges they offer for farmers worldwide. Now let me turn, to two other challenges that greatly affect the context and room to manoeuvre to deal with food and energy issues. The first is the environment and the second is the finance. Starting with the environment, the key international issue is climate change, and the next is biodiversity. In December 2009, in Copenhagen, governments will sign the successor agreement to the Kyoto Protocol. This Protocol will lay down commitments by governments to reduce greenhouse gas emissions. IFAP is working to have agriculture included in this new agreement. There are two aspects to climate change – mitigation and adaptation. Agriculture has significant climate change mitigation potential. Crops and grassland are excellent carbon sinks. Biogas can contribute to electricity production, including in developing countries which need electrification for food processing and storage and to create jobs. However, agriculture is also held responsible for about a quarter of the world’s greenhouse gas emissions. This is mainly from three sources: clearing of native vegetation (carbon dioxide), nitrogen fertiliser use (nitrous oxide) and livestock production (methane). Farmers need the talents of researchers to find and exploit the best climate change mitigation opportunities in agriculture. Environmental indicators need to be developed on the carbon balance of individual farms, and farmers should get credit for what mitigation is already being done such as direct drilling or permanent pasture. ‘Adaptation’ means adjusting to increased weather variability caused by climate change and increased intensity of floods and droughts. For example in Australia droughts are usually expected to occur once in 35 years, but recently there have been four droughts in a row. Partnerships with scientists will be critical to adapt to climate change. New drought resistant plants will be needed and new measures to deal with increased outbreaks of pests and diseases. Also farmers need better tools to manage increasing risks from weather and market volatility. To look into this, IFAP has a special working group on risk management and will soon develop a research programme on available risk management tools for Farmers in Africa. Mr. Douglas Taylor-Freeme is a member of the IFAP Executive in addition to being the Chairman of SACAU. Dough, and the CFU are also playing a key role on the IFAP Grains & Feeds Committee, we appreciate this contribution very much. The other environmental challenge I want to mention is biodiversity. 2010 will be the International Year of Biodiversity. IFAP is working with the UN Convention on Biodiversity to prepare this event. Linkages between agricultural systems and biodiversity are very strong and deserve to be highlighted. Natural resources worldwide are under pressure especially in fragile ecosystems mostly located in developing countries, which urgently need to be rehabilitated e.g. arid zones. Farmers need to identify how their activities relate to biodiversity and to promote practices that improve sustainability and reduce the impact of those which constitute a threat to biodiversity, while at the same time maintaining the economic viability of their agricultural activity. Farmers understand the need to conserve biodiversity in order to maintain the gene pool. The question is who should pay for it? Therefore, there is a need for political will from national governments, donors and development agencies governments to identify ways to and effective tools that will reward farmers for their efforts to work towards the rehabilitation of ecosystems and the restoration of the relationship between agriculture and biodiversity through sustainable agricultural practices. Incentive pricing schemes are needed for developing products based on local biodiversity, for example with under-utilized species or livestock that enhances biodiversity in relation to local conditions. Research in this area is essential to identify positive synergies between biodiversity and economic activities. This would include, for example, research on the role of flora and fauna and micro-organisms on soil fertility, insect pollination and pest control. Finally a word about financing for development. In the developing countries, agriculture has largely been neglected for the last 20 years by national governments and development partners. Only 4 percent of ODA goes for agriculture, compared with 20 percent in the 1980s. Only 10 countries in Africa have met the Maputo Declaration commitment of allocating 10 percent of their budget on agriculture. But this situation is changing. At the UN in New York, developed countries were pledging much larger amounts of development assistance to agriculture. Recently the G8 countries also pledged another US $ 15 Billion dollars for fighting the food crisis; the President of the EU Commission pledged to use $1 billion of unspent EU subsidy funds to increase agricultural production in developing countries; the Japanese Prime Minister pledged to double public and private investment in Africa by 2012; China announced that it would establish a new Trust Fund in FAO to enhance agricultural productivity in developing countries, and also grant duty-free access to 95 percent of the products of the Least-Developed-Countries. Together, OECD countries have committed to raise development aid from 0.28 percent of GDP in 2007 to 0.7 percent of GDP in 2015. The great majority of this money will be for Africa. Africa does not have sufficient financial resources to pull itself out of the poverty trap, so these extra pledges are most welcome. However, we must be vigilant about these pledges. Since the food crisis started, several billion dollars has been pledged to help developing countries. However, very little of this money has actually come in and plans are not getting funded. Too often, governments make commitments at the UN that are regularly reaffirmed and infrequently honoured. This needs to change. If governments can come up with $200 billion a year for arms purchases or $700 billion to bale out US banks, then it is only lack of political will that prevents them from coming forward with $5 billion per year which will take agriculture out of poverty and hunger. IFAP will lobby for governments to do a much better job of honouring their commitments. However, our national governments must make efforts too. They must give higher priority to agriculture and actively promote entrepreneurship and increased competitiveness. Most development assistance goes to governments and probably a lot of it is wasted. As farmers’ organisations we need to use this window of opportunity to get our national governments to adopt a new attitude towards agriculture and food security and build a new long-term strategy with the agricultural organisations and other private sector partners. We must not let this agenda get away from us. I thank you all,