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IFAD’s programme priorities and BioenergyAccra, Ghana, 18 October 2010

Dr. Rodney D. CookeDirector, Policy and Technical Advisory DivisionInternational Fund for Agricultural Development

IFAD at work

From 1979 to 2009:• 829 projects in 115 countries• Supported 300 million rural poor • Total IFAD disbursement: over USD 12 billion• USD 670.5 million in 33 new projects in 2009• USD 850 million forecast for 2010

Smallholder farming

500 million smallholder farms worldwide supporting around 2 billion people. They:

Farm 80% of the farmland in Asia and Africa.

Produce 80% of the food consumed in the developing world

Feed 1/3 of the global population.

Women are increasingly the farmers of the developing world, producing between 45% and 80% of household food.

Opportunities and Risks for Agriculture

RISKS 

– Environmental degradation - the need to make agriculture both productive and sustainable

– Climate change - the importance of adaptation & mitigation measures

– Increasing competition for scarce resources: land & water

– Slower growth of agriculture productivity in relation to growth of demand

– Food price volatility– Aid fatigue & fiscal crisis– Smallholders pushed aside by

corporate farms– Bio-fuels substitute for food

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OPPORTUNITIES- Increasing demand for

agricultural products- Emergence of regional & global

value chains- Biotechnology-driven

agricultural research changing technology options

- New markets for bio-fuels- More resources for agriculture

in short term (L’Aquila, GAFSP, EU)

- More commitment by governments, e.g. CAADP

- Globalised trade & private investment in agriculture

- Changing business models- Payment for environmental

services more widespread

The role of smallholders in closing the divide

• 500 million smallholder farms worldwide

The challenge: to transform smallholder agriculture

into successful agribusinesses

I

• Integrate livestock to Integrate livestock to match rising demandmatch rising demand

• Develop private Develop private Agro-processing & Agro-processing & mktgmktg

• Cash crops: a role Cash crops: a role for promising for promising underutilised cropsunderutilised crops

Options for rural smallholders

• Improve basic foods and Improve basic foods and staplesstaples

Interventions in the agricultural sector: Energy

– An estimated 2 billion people lack access to modern energy services. They rely on traditional biomass sources such as wood, agricultural residues, and animal dung.

– Encourage local energy development to meet local energy needs which will reduce deforestation, provide cleaner burning fuel and provide the basis for intensifying agricultural production;

– Reduce the GHG emissions by promoting cleaner burning biofuels through smallholders farming following CA practices..

Nexus between poverty and energy

• Most poor people use biomass for energy.• Environmentally unsustainable.

Why are biofuels important for the rural poor?

Why are biofuels important for the rural poor?

• Almost 2.5 billion people in developing countries earn their livelihoods from agriculture.

• Of these, 900 million live below the poverty line.

• Agriculture directly employs 1.3 billion people.

• And, agriculture contributes only around 4% of global GDP.

• Small agricultural basket that cannot sustain that many.

Why are biofuels important for the rural poor?

• Expand the traditional agricultural basket (food, feed, fibre), by including biofuels.

• Selected bio-fuel crops offer this opportunity.

• Provided food security, environmental, land and water issues are addressed.

IFAD’s guidelines for in biofuel development

• IFAD’s Strategic Framework (2007-2010), recognizes the importance of biofuels as a major market opportunity for the poor.

• The Round Table discussion on biofuels in the GC 2008, led to the conclusions that participation in biofuels has to be:– pro-poor, – pro-nature, – pro-livelihoods, – pro-women, – while ensuring food security.

Why is IFAD focussing on research?

• Existing knowledge on 1st generation technology, but these are food crops.

• Capital investments on 2nd and 3rd generation technology, most of which are not suitable for the poor in developing countries.

• More research is needed on non-food biofuel crops to make them competitive.

Facility for non-food biofuel crop development

Objectives

1. coordinated research in a time-bound action plan along the entire value chain;

2. finance local energy provision pilot projects to enhance food security;

3. collect and disseminate information, research findings, and successful experiences;

4. facilitate and strengthen R&D networking and knowledge sharing; and

5. mainstream biofuel investment projects in partnership with the private sector.

Is low expenditure on agriculture justified?

• A 1% p.a. increase in agriculture growth, on average leads to a 2.7% increase in income of the lowest 3 income deciles in developing countries (WDR 2007)

• Agriculture is 2.5 to 3 times more effective in increasing income of the poor than is non-agriculture investment (WDR 2007)

• Agriculture growth, as opposed to growth in general, is typically found to be the primary source of poverty reduction (IFPRI, 2007)

• Agricultural growth the pre-cursor to overall economic growth: Europe and North America (in the early part of the 20th century), in Japan a little later, and more recently in China, India, and Vietnam

Biofuels and water

• Intensive cultivation of monoculture cash crops causes environmental externalities associated with:– Pesticides, fertilizers, high water use (which lead to water

pollution and depleted resources).

• Small scale farming production has lesser environmental impacts.

Why not promote smallholder biofuel crop production Why not promote smallholder biofuel crop production using CA techniques?using CA techniques?

Conclusion

• Biofuels should be treated like any other cash crop.

• Impacts could be minimized by preferring crop varieties and farming techniques which cause low or positive impacts.

• A more balanced and a clear view on biofuels needs to be disseminated.

Thank you!

Biofuels and food security

• Available analysis indicated that in general bio-fuels are not a primary cause of hunger, nor a direct driver of food insecurity (GEF-STAP Workshop on Liquid Biofuels, 2006).

• Bio-energy crops could be a means to alleviate poverty, and to increase food security through income generation.

• Food security is not just a problem of production, rather a problem of unequal access within developing countries (FAO 2005).

• Supply of energy in rural areas is central to intensification of agriculture.

This has become a pressing issue only because some This has become a pressing issue only because some countries have used food crops for biofuels production.countries have used food crops for biofuels production.

Solution: Do not use food crops for bio-fuel production, or Solution: Do not use food crops for bio-fuel production, or promote multiple use crops.promote multiple use crops.

IFAD’s Development Objectives

• Strategic objectives: poor rural men and women in developing countries have better access to, and have developed the skills and organization to take advantage of:

– Natural resources (land and water);

– Improved agricultural technologies and effective production services;

– A broad range of financial services;

– Transparent and competitive agricultural input and produce markets;

– Opportunities for rural off-farm employment and enterprise development; and

– Local and national policy and programming processes.

Principles of Engagement

• Selectivity and focus– IFAD won’t work outside rural areas; provide relief, GBS.

Social services under specific conditions.• Targeting

– Poor and vulnerable people: farmers, fishers, pastoralists, landless. Always women, sometimes IP, orphans. Great variation by country, not always absolute poorest.

• Empowering poor rural people– Building skills, capacities, confidence; supporting their

organizations – local and national.

Principles of Engagement (contd)

• Innovation, learning and upscaling– IFAD’s role to innovate, and through experience promote

upscaling by governments/donors• Effective partnerships

– Local partnerships generally good, more partnerships needed with donors and international organizations

• Sustainability– Need to improve sustainability of project impact – key

factors achieving impact; local ownership and building skills of target group

Problematique: not enough lights in Africa

Earth lights on