Boosting investments in agriculture for structural transformation in Least Developed Countries

19 June 2012, Rome – UN agencies, donor governments and representatives of some of the world’s most vulnerable countries have called for boosting investments, both public and private, in sustainable agricultural development in the least developed countries (LDCs) to spark structural transformation of their economies and to end hunger and poverty.

The speakers recognized that the developing world as a whole, has made impressive progress in combating hunger and poverty. However, of the 49 countries categorized as ‘least developed’, few are on course to meet the first Millennium Development Goal target of halving the proportion of people who suffer from hunger. Nearly all the LDCs are in sub-Saharan Africa and the Asia Pacific region.

Some 260 million people across the group of countries continue to battle hunger, while malnutrition remains a considerable hindrance to health and human development. Recent FAO figures indicate that one in four children under the age of five is stunted for a lack of sufficient varied nutrients.

With the on-going economic crisis affecting donor countries, it is feared that the international support needed to expand investments in agriculture and related areas such as infrastructure will be reduced, along with progress made in agricultural development.

“This is a difficult time for all, but this time is most difficult for those who are already deprived. The resources must go to those countries that need them most. And that must be the criteria when we talk about allocating limited resources,” said Gyan Chandra Acharya, the United Nations High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States. He was visiting Rome to meet with representatives of Member Countries and the Rome-based agencies, and attending the FAO Conference, the organization’s highest governing body, during which the budget and the programme of work are under discussion, taking the opportunity to focus attention on the difficult situation of the LDCs.

Participants recognized that low productivity and a lack of income from agriculture limits access to food in LDCs, and that creating decent work in agriculture, especially for the young, remains a challenge. Yet, some LDCs have been able to cut hunger significantly between 1990 and 2010, said Jomo Kwame Sundaram, FAO Assistant Director-General.  “What experience shows,” he added, “is that with the right policies and deployment of new instruments, especially social protection measures that can influence household decision-making, even countries with large rural populations with very low productivity can make major progress toward reducing hunger and undernutrition.”

Investment in agriculture plays a critical role, according to Jomo: “It is important to recognize that 1 percent growth in per capita agricultural output contributes to 1.6 percent growth in incomes for the poorest 20 percent – that’s a much greater impact than for manufacturing or for services.”

The high-level side event, “Food security, sustainable agriculture development and structural transformation in LDCs,” included FAO, represented by Jomo, who also conveyed a message on behalf of Director-General José Graziano da Silva to the group, as well as by FAO’s partner agencies in Rome, with IFAD represented by Associate Vice President for Programmes Kevin Cleaver and WFP represented by Assistant Executive Director Elisabeth Rasmussen. The Rome-based food agencies and the UN Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States were the event’s hosts.

The panellists from member countries were: Muhammad Addur Razzaque, Minister for Food of Bangladesh; Marc Yombouno, Minister of Agriculture of the Republic of Guinea and Mehdi Eker, Minister of Food, Agriculture and Livestock of Turkey.

M. Razzaque underscored the success of Bangladesh in reducing hunger and malnutrition and underlined the challenges ahead, including closing the financing gap in the sector and meeting technical cooperation needs. Similar challenges were echoed by M. Yombouno in his presentation, during which he also said, "The international community should pay particular attention to sustainable increase of productivity among smallholders and family farmers, who account for the lion's share of food supply in developing countries."

M. Eker underlined the important role that Turkey has increasingly been playing in development, with US$200 million of aid channelled to the LDCs.

“Turkey has invested US$200 million in public and private funds in the LDCs, assisting 30 of the LDCs,” Eker said. He underlined that when Turkey assumes the chairmanship of the G20 group of the largest economies in 2015, promoting development in the least developed countries will be a priority.

The German permanent representative to FAO, Thomas Wriessnig, also underlined his country’s commitment to addressing the challenges of the LDCs, especially in light of decades of neglect of agriculture, which were only now beginning to be reversed. He underlined that real progress won’t be possible so long as gender discrimination continues to exist, and that considerable investments are needed to reinvigorate agriculture in the LDCs, with cooperation from countries and all development partners.

The group agreed that transformational change will involve the whole system, from linking farmers to markets, building infrastructure such as roads and storage, strengthening collective bargaining power for farmers through cooperatives, assuring access to finance and providing social protection for people most at risk, especially when the unpredictable, but often severe effects of climate change are factored in.

Limited productivity, combined with limited affordability of food, leads to “the perfect poverty trap” in LDCs, said Acharya, since most are also reliant on imported food, at a price that is too high and is expected to remain high. Agriculture development in LDCs therefore holds great potential for the eradication of hunger, poverty as well as for the promotion of sustainable development.