Third UN Conference on LDCs

5^th Meeting (AM)

ENHANCING AGRICULTURAL CAPACITY OF LEAST DEVELOPED COUNTRIES

ADDRESSED AT THEMATIC SESSION OF BRUSSELS CONFERENCE

(Received from a UN Information Officer.)

BRUSSELS, 15 May -- An interactive thematic session, entitled “Enhancing Productive Capacities: The Agricultural Sector and Food Security”, was held this morning on the second day of the Third United Nations Conference on Least Developed Countries, being held in Brussels from 14 to 20 May.

The session, which included statements from six panellists and interventions by delegations from the floor, examined the problems of, and the prospects for, enhancing the agricultural productive capacities of least developed countries (LDCs), including the interrelationship among agricultural development, food security, rural development and poverty alleviation.  The concrete actions that bilateral and multilateral development partners could take to accelerate LDC agricultural development and, in so doing, substantially reduce poverty and hunger were also discussed.

One of the panellists, the President of the International Fund for Agricultural Development (IFAD), Lennart Bage, said it was important to assess not only the needs of the poor, but also their strengths.  They were the experts on their own situation, and the empowerment of the poor was one of the central themes of the recent IFAD report on rural poverty.  He also identified assets, technology, markets and institutions as the main ingredients for success.

Food security in LDCs should have high priority among the poverty-reduction programmes, another panellist, the Assistant Director-General of the Food and Agriculture Organization (FAO), H. De Haen, said, stressing the crucial importance of investment in the agriculture sector.  FAO analysis showed that if investments in primary agriculture in sub-Saharan Africa continued at their current level, those countries would fall almost 40 per cent short of the Millennium Declaration goal for reducing malnutrition by 2015.  Thus, food security for all would involve huge additional resources. 

During the interactive session, speakers emphasized that product prices had done nothing, but fall in the last decade and continued to do so.  So, while more and more people were tilling the land, they were finding that they had less and less to eat.  Why?  It was also noted that southern agriculture had to compete with world agriculture, especially production from the northern countries, where

there had been an explosion in activity.  Could that go on?  More specifically, a speaker asked, given the composition of the current playing field, was there a remedy that would allow poor people to find way out?

A number of speakers said that countries needed to make agriculture a priority and a close partnership was needed among the State, the private sector and the providers of funds.  In particular, the LDCs were looking to the Bretton Woods institutions in order to achieve real results.  Other issues raised included:  agricultural planning and rural diversification; trends in production; marketing; “deliverables”; access to land and markets; links between agriculture and poverty; and transportation.

The panel also included:  Baba Dioum, General Coordinator, Conference of Ministers of Agriculture, West and Central Africa; Sartaj Aziz, former Foreign and Finance Minister of Pakistan; D. Tripathy, Agriculture Division Chief, African Development Bank (ADB) Group; and Stein Bie, Director-General, International Service for National Agricultural Research.

Facilitators for the session were Eddy Boutmans, Secrétaire d’État à la Coopération au Développement, Ministry of Foreign Affairs, Belgium, and Khandu Wangchuk, Minister for Trade and Industry, Bhutan.

Rubens Ricupero, Secretary-General of the United Nations Conference on Trade and Development (UNTAD), also spoke, following the interactive debate.

A thematic session on intellectual property and development will be held at 3 p.m. today.

Background Paper

The Food and Agricultural Organization (FAO) prepared a report for the session entitled The Role of Agriculture in the Development of LDCs and Their Integration into the World Economy (document A/CONF.191/BP/6), which describes a broad range of issues, such as:  the current situation of agriculture, including trends in production and consumption; the links among agricultural growth, rural development and poverty; the external economic environment; trends of least developed country (LDC) participation in world agricultural trade; agricultural prospects in light of the World Trade Organization agreements; and policies to develop agricultural potential.

The report states that agriculture is the mainstay of the LDC economies, underpinning their food security, export earning and rural development.  Yet, agricultural production for the domestic and export markets has lagged, related to the many internal and external difficulties these countries face.  The internal difficulties include low productivity, rigid production and trade structures, a limited skills base, short-life expectancy and low educational qualifications.  At the same time, with the growing integration of markets from globalization and trade liberalization, the LDC economies have to operate in an increasingly competitive environment.

“Reversing this decline and integrating LDCs into the world economy represent enormous challenges”, the report states.  But, most LDCs have enormous untapped agricultural potential to meet the challenges, with considerable scope for more effective use of resources and higher productivity.  The paper goes on to highlight elements of a strategy for LDCs that will help them exploit their agricultural potential.

It also makes recommendations for actions to spur agricultural growth in the next decade, and proposes a number of priority measures for LDCs, among them:  maintaining sound macroeconomic and trade policies; strengthening health and education services; establishing an institutional environment that improves access to markets; upgrading the marketing, transport and communication infrastructure; and safeguarding natural resources.  These actions, it states, will be more effective if development partners increase official development assistance (ODA), support the transfer of technology and facilitate market access for LDC commodities.

Statements by Facilitators

EDDY BOUTMANS, Secrétaire d’État à la Coopération au Développement, Ministry of Foreign Affairs, Belgium, said this morning’s debate must try to provide answers to the many questions raised by people in LDCs, whose lives and food security depended on agricultural production in an era of globalization.  Some of the questions addressed such issues as the role of the agriculture in LDCs and access to world markets for products from countries whose economies were dependent upon agricultural production.  Technical cooperation, agricultural research, mastery of new agricultural techniques were all issues that needed to be addressed.

KHANDU WANGCHUK, Minister for Trade and Industry of Bhutan, also a facilitator, said agriculture in an era of globalization was a sensitive area and one in which LDCs could find themselves very vulnerable, particularly when one realized that the production of adequate crops did not ensure adequate food security for all.  Food security was not just about increased production, but also access to and availability of food.  Enhanced management, distribution and marketing were needed to ensure that the food supply addressed poverty needs in LDCs.  As such, selective modernization of the agricultural industry would be crucial to lifting production, income and marketing of food in the LDCs.  Further, the morning’s discussions should cover the likely implications of globalization for agriculture.

H. DE HAEN, Assistant Director-General of the Food and Agriculture Organization (FAO), said that the central task of the Conference was to agree to reverse the trend of rising poverty and food insecurity and decide what concrete action to undertake to help the 650 million people living in the LDCs.  Enhancing agricultural production involved a broader set of policies than those related directly to agriculture.  Strong and sustained agricultural growth was key to achieving sustainable development, for more than two thirds of the poor lived in rural areas.  An overall environment of peace and stability, supportive institutions and policies and access to basic social services were needed to reach development, but many LDCs lacked those components.  Among the success stories in the fight against hunger were such countries as Benin and Mauritania, where the incidence of malnourishment had fallen significantly. 

He said future challenges included:  competitiveness in export markets; a gradual erosion of preference systems; and increasingly rigid international standards.  He stressed the crucial importance of investment in the agricultural sector.  The LDCs themselves needed to implement a set of strategies targeting interventions for the poor and vulnerable.  Food security in LDCs should have high priority in the poverty-reduction programmes.  FAO analysis showed that if investments in primary agriculture in sub-Saharan Africa were to be continued at the current level until 2015, those countries would fall short of the 2015 goal for reduced malnutrition by almost 40 per cent.  Thus, food security for all would involve huge additional resources. 

He went on to say that development partners’ role should include, but not be restricted, to the ODA.  However, since the 1980s, the proportion of finance to agriculture had been declining.  It was necessary to find new and innovative sources of financing.  Least developed countries needed to be granted advantages in market access, and the FAO was prepared to help those countries achieve greater food security.  A major opportunity to demonstrate a renewed commitment for development would come in November 2001, when the FAO would host a World Food Summit to review the implementation of the first such event five years before, and to mobilize support for its plan of action. 

LENNART BAGE, President of the International Fund for Agricultural Development (IFAD), said that there were many examples of countries that had achieved significant development, and that meant that the ambitious targets set by the international community in the eradication of poverty were achievable.  However, reducing poverty by half in LDCs, especially in Africa, would require a much higher level of investment than was currently available.  Agriculture was not an end in itself -– poverty eradication was the main target  -- but it was necessary to pay special attention to broad-based rural development. 

If the international community wanted to achieve the Millennium targets, the current trends needed to be reversed, he continued.  It was important not only to assess the needs of the poor; it was important to assess their strengths.  They were the experts on their own situation, and the empowerment of the poor was one of the central themes of the IFAD report on rural poverty.  Better access to health education and basic services were also stressed.  The report identified assets, technology, markets and institutions as the main ingredients needed for success. 

Land reform was more important than ever, he said.  There were new and promising initiatives for land reform in such countries as Brazil and the Philippines, and they needed to be emulated.  Also, access to fair markets was of special importance for the rural poor.  Rural producers should also receive aid to organize into groups, which could afford better access to production, knowledge and technology.  Rural and agricultural development should once again become the centre of the development discussion.  It was not the donors who could achieve development for the poor.  The poor themselves, when given an opportunity, were strong and capable of raising their incomes and building more secure lives for themselves.  General blueprints could not provide a solution –- programmes must be adapted to specific conditions. 

BABA DIOUM, General Coordinator, Conference of Ministers of Agriculture, West and Central Africa, said 34 of the LDCs were located south of the Sahara in Africa, where the worst poverty was rampant and where many could not feed themselves because of a lack of production and an inability to get resources to people.  If anything was to be done, agriculture was the pivotal sector to be addressed.  While many spoke of growth, what sort of growth was being talked about?  Was agriculture going to respond to consumer demand at national, regional and international levels?  “We need to stand aside for a moment and take note of the fact that agriculture has been marked by contradictory performance”, he said.  There had been no political vision for agriculture.  Related programmes had actually done damage, rather than enhance the sector.

He said that access, poor organization, and weak democracies were just some of the problems that needed to be highlighted when considering how to bring agriculture into the mainstream.  There was much talk of access for LDCs, yet over the last 30 years preferential treatment had still not managed to lead LDCs towards the open marketplace.  The global context was supposed to be characterized by openness, but what did that mean without technology or commonly defined standards?  Political will was also needed to create investments on behalf of the people.  Demand must express the wishes of consumers.  That called for producers who knew what the market wanted.

Noting that various international agreements had been signed, he asked how LDCs could benefit from them when the regulations governing those agreements were not clear-cut.  He also highlighted the need for equality and shared standards and said the latter needed to be defined in a mutually beneficial manner.

SARTAJ AZIZ, former Foreign and Finance Minister of Pakistan, said the most worrisome fact was the grim reality that the growth rate of agricultural development in the LDCs was below the rate of population growth.  Per capita food production in those countries was, therefore, negative.  The LDCs’ share of the world’s agricultural trade had fallen to 1.6 per cent.  Low levels of production, exports, imports and capacity had resulted in a food security situation in the LDCs that was very serious.  In addition, the number of malnourished had doubled  -- from 116 million to 235 million. 

He stressed that the potential of agricultural development in the LDCs was not being fully utilized, as many of those countries were not using even half of their land.  Why was that potential not being used? he asked.  One reason was a lack of investment.  Agriculture must be transformed in order to reduce poverty and ensure food security.  Debt relief would free financial resources for agricultural production.  He added that poverty would not be reduced by projects alone, but by programmes, infrastructures and capacities.

D. TRIPATHY, Agriculture Division Chief, African Development Bank (ADB) Group, said that while the resources from donors had been falling, the Group had tried to keep its agricultural programmes at a steady level.  He stressed the need to ensure better collaboration among financial institutions, donors and local people.  Agricultural planning and rural diversification needed to receive particular attention.  Additional investments of at least 20 per cent annually were needed in order the reverse the downfall in agricultural production.

The African Development Fund had approved some $10.8 billion for different projects, he continued, much of which went to rural areas for agricultural purposes.  As for credit policies, the LDCs had access to interest-free concessional resources.  The Bank Group had significant experience in the LDCs, but long-term sustainability programmes needed to supplement initial investments.  Rural participants now had more knowledge about new technology.  When LDCs were given the opportunity to apply improved crop and animal husbandry, they had achieved remarkable results.  The Bank was also emphasizing new areas of investment, supporting technological policy and other changes, emphasizing rural development.  Since the 1980s, it had supported new practices in agriculture, irrigation and the use of fertilizers.

STEIN BIE, Director-General of the International Service for National Agricultural Research, said that agricultural development relied on agricultural research.  Technology alone could not produce safer food; it must be linked to policies and institutions.  Many new technologies that could contribute to more sustainable production were not really “rocket science”.  Most of the technologies that could be offered to poor farmers would not attract protesters against gene engineering, either.  However, there had been a sharp decline in agricultural research at both national and international levels.

He went on to say that no country in recent history had managed to increase its sustainable agricultural production without a sustainable investment in agricultural research.  He was watching with growing despair how countries were closing down their research facilities.  Research was increasingly directed at those who had the financial capacity to buy the end products of research.  Poor people just did not have such purchasing power.  The issues of the poor were not addressed, because there was no money in it.

It was gratifying to see “some change of heart” in the major research institutions towards the poor consumers in recent years, however, he continued.  It was important to rethink the destruction of research capacities in countries.  Capacity beyond the private sphere could lead to important successes.  It was important to have the foresight and will to think 10 to 20 years ahead, for there was no alternative.  The international research community stood ready to support national efforts in sustainable development.

Interactive Debate

During the interactive debate, speakers emphasized that access to food was a human rights issue.  It was also stressed repeatedly that access to land and access to markets were among the key issues to be addressed at the current forum.  Yet, some speakers warned that prior to seeking access to international markets, it was necessary to ensure access to local markets -– as one speaker pointed out, “Before feeding others, you need to feed yourself.”  Many farmers in the LDCs had no access to their own markets and that issue needed to be addressed on a priority basis.

The issue of sub-Saharan Africa and increasing agricultural productivity in that region was another issue that received much attention.  Attention was drawn to the fact that one of the factors preventing intensive development of agriculture in Africa was the Tsetse fly, which spread sleeping sickness in the area of highly fertile land.  The impact of the disease prevented the transition from subsistence farming to more intensive forms of agriculture, and significant investments were needed to address that problem.  One of the projects involved sterilization of the Tsetse flies, which, combined with more conventional methods, could lead to great success.  Several urged a clear, coordinated plan for African Tsetse programmes.

In response to that call, one of the panellists warned that intervention in eradicating the Tsetse fly was not that simple, as it had to take further considerations into account.  For instance:  what would happen when the fly was gone?  Who would own the land?  Although not discouraging the approach advocated to eradicate the Tsetse fly, he urged participants to exercise caution, as such a major and complex challenge must be approached wisely.

One speaker highlighted the fact that product prices had done nothing, but fall in the last decade and continued to do so.  So, while more and more people were tilling the land, they were in effect finding that they had less and less to eat.  Why had that situation been allowed?  It was also noted that southern agriculture had to compete with world agriculture, especially production from the northern countries, where there had been an explosion in activity.  Could that go on?  More specifically, given the composition of the current playing field, was there a remedy that would allow poor people to find way out?

Other speakers noted that in many LDCs, the problem was not about trade, but availability of products.  While farmers were doing a good job, market access made their products too expensive.  In some cases, it was cheaper to buy products from Europe than to bring them from five kilometres down the road.  Transportation problems prevented huge amounts of food from being delivered.  International programmes needed to address the problem of infrastructure. 

Other speakers said that the problems of LDCs in Africa warranted the development of specific African models.  Countries kept on using the same old models they had inherited from the colonial era.  It was suggested that governments and parliamentarians in the LDCs ask themselves whether their operational models met the requirements of their specific countries, or whether they were simply throwbacks.

A panellist said that it was important to determine the role of the State, the international players and the civil society in the efforts to achieve access to land and agricultural development.  Cultural aspects and natural specifics had to be borne in mind.  As for market access, improvement in production costs and the quality of agricultural products were needed for the development of markets.

Speakers also stressed the link between poverty and farming, for agriculture was the centre of many LDCs’ economies.  Agriculture meant life in those countries.  For example, one speaker said, agriculture was 70 per cent of the gross national product (GNP) in the Sudan.

A speaker said that over the years agriculture and poverty had been going hand in hand in the LDCs and restructuring problems contributed to that situation.  Countries needed to make agriculture a priority and a close partnership was needed among the State, the private sector and the providers of funds.  In particular, the LDCs were looking to the Bretton Woods institutions in order to achieve real results.  It was important to change the focus and look at long-term effects of policies and actions.

Special conditions in the LDCs needed to be taken into account before making demands on them, a speaker said.  When LDCs liberalized their economies, they found it difficult to secure financing to meet their development needs. 

Environmental disasters and lack of technologies were among the problems.  More transparent programmes were needed to allow LDCs to develop their economies. 

A representative of the World Trade Organization (WTO) addressed the question of trade versus agriculture and development.  In order to secure access to international markets, it was important to ensure a stable supply of products.  The WTO rules permitted LDCs to put in place price supports for farmers, and new rules were being negotiated for the future.  “Starting today”, it was necessary for LDCs to get involved in those negotiations, for their outcome would seriously affect their future.

A panellist said that the real answer lay in the increase in productivity.  The problem of access to land and the land rights of farmers were of great importance.  A proposal was being discussed that those donors who wanted to increase their aid to LDCs could earmark the funds directly towards poverty reduction. 

In a summary statement, RUBENS RICUPERO, Secretary-General, United Nations Conference on Trade and Development (UNCTAD), said that he had been encouraged by the discussion.  It was important to organize interactive debates, where instead of a succession of written statements on general topics, an attempt was made to ensure interaction between the participants.  Another intention was to encourage a focus on “deliverables” -- which meant concrete results.  One of the most important outcomes of the discussion could be the fact that it attracted attention to a significant reduction in the level of ODA.  Recalling yesterday’s statement by the United States Agency for International Development (USAID), he said that it demonstrated a clear commitment to the support of the agricultural sector and he urged participants to devote more resources to the development of agricultural production.

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