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Address by Dr. Jacques Diouf on the Challenges of Water and Rural Infrastructure

Author: Jacques Diouf
November 10, 2003
Council on Foreign Relations

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Food Security in the Least Developed Countries (LDCs) and Small Island Developing States (SIDS): The Challenges of Water and Rural Infrastructure

Ambassador Lyman,

Distinguished Colleagues,

Ladies and Gentlemen,

Note: Remarks as prepared for delivery

I wish to thank you, Ambassador Lyman and the members of the Council on Foreign Relations, for inviting me to address this august gathering; it is a great honour for me and the Food and Agriculture Organization of the United Nations (FAO). To me, this confirms the high priority that the Council on Foreign Relations attaches to our mission – “food security for all.”

Developing countries have made major advances over the past thirty years in providing more and better food to their populations. Average per capita food consumption increased by nearly thirty percent at the end of the 1990s in these countries – despite a near doubling of their population.

Furthermore, the proportion of the undernourished in total population decreased from thirty-seven to eighteen percent for all developing countries over the same period – indeed a significant accomplishment. The gains from past agricultural growth, however, have not translated into food for all. Sadly, the proportion and absolute number of undernourished people has actually increased in some countries of Sub-Saharan Africa and the Near East.

For those forty-nine nations considered the world’s least developed, the proportion of the undernourished has remained unchanged at thirty-eight percent since the early 1970s. Today nearly 800 million people in the developing world remain hungry and poor – and 650 million of them live in the Least Developed Countries (LDCs). Small Island Developing States (SIDS), as a whole, are much wealthier, with higher per capita incomes, less undernourished people, and a much lower share of agriculture value-added in total gross domestic product. However, ten SIDS are also considered least developed. These SIDS are generally much poorer, have a high proportion of undernourished people, and derive as much as fifty percent of gross domestic product from agriculture.

Today I will share my thoughts on the challenges of water and rural infrastructure in these LDCs and SIDS, with a particular focus on Africa. I will briefly explain why FAO believes that investment in these areas is so important and conclude with some thoughts as to concrete areas for action and investment.

Seventy-five percent of the population in LDCs lives in rural areas. Seventy-one percent of these people are involved in agriculture. Thirty-three of these countries are in Africa – a largely rural continent in which agriculture accounts for about sixty percent of the total labour force, twenty percent of total merchandise exports and seventeen percent of gross domestic product. LDCs are increasingly dependent on food imports, with food aid reflecting a considerable external dependency. In 2000/2001, Africa received 3.8 million tons – worth about US$1.9 billion – of food aid – more than twenty-five percent of the world total – to assist millions of people suffering from food emergencies due to droughts, floods or civil strife. Latest forecasts indicate that Africa’s share of total cereal food aid might actually have increased to over thirty percent in 2001/2002 and 2002/2003.

SIDS also face unique challenges due to relatively narrow resource bases that preclude greater economy of scale in agriculture, fragile natural environments, vulnerability to the adverse impacts of climate change, and isolation from external markets. The threats associated with climatic fluctuations, such as hurricanes or sea-level rise, and the potential impact on food and water security, are recurrent and real for these countries – rich and poor.

Regrettably, what LDCs and some SIDS have in common are chronic hunger and extreme poverty – poverty that is persistent, often with seventy percent located in rural areas. People suffering from hunger and chronic food insecurity are vulnerable to disease and are economically marginalized, unable to contribute to output or demand. FAO estimates that developing countries have – on average – lost one percentage point from their potential annual economic growth due to the insufficient energy intake of their populations. Such losses are much higher in LDCs, particularly those in sub-Saharan Africa where some 200 million people – thirty-three percent of Africa’s population – are chronically hungry.

FAO has identified three principal causes of hunger and food insecurity: first, low agricultural productivity due to technological, policy, and institutional constraints; second, high seasonal and year-to-year variability in output and food supply – often the result of unreliable rainfall and insufficient water for crop and livestock production; and third, the lack of off-farm employment opportunities that contributes to uncertainty and low incomes in urban and rural areas. I am sure you will agree that the true causes and consequences of food insecurity and poverty are thus inextricably linked to the challenges of rural development. Much of the solution to these challenges lies in the expansion of agricultural productivity.

Global food production will have to increase eighty percent by 2030 in order to feed an extra 2 billion people – yet investment in agriculture and rural areas has declined in most developing countries. Some 1.2 billion people do not have access to water, twice as many do not have access to sanitation, and eighty percent of all disease in the world is due to contaminated water or poor sanitary conditions – yet, the numbers of people without water or sanitation is expected to double by 2025.

We must change this. FAO has proposed three ways to address the challenge of water. First, we must focus on short-term, small-scale irrigation projects at the village level. FAO supports many village-level projects, including the development of low-cost and relatively simple technologies designed for irrigating crops by small farmers. Only seven percent of total arable land is irrigated in Africa – with 3.7 percent in Sub-Saharan Africa – the lowest regional percentages in the developing world. Second, we need to rehabilitate irrigation systems over the medium-term – including the upgrading of management and related physical infrastructure. Third, we must focus our efforts on the longer-term development of water basins. Countries with shared river basins, particularly, need to agree on appropriate water management mechanisms, including resource allocation and control of environmental externalities. Long-term development activities will need to be pursued jointly within appropriate institutional frameworks, developed by countries that share transboundary waters.

SIDS are particularly challenged by water. These countries suffer most from coastal erosion, land loss due to rising sea levels and intrusion of sea-water in groundwater aquifers. Changes in rainfall intensity and extremes due to climatic fluctuations increase the scale of flooding, landslides, and soil erosion. Water security is not only limited to quantity aspects, but also quality. However, many of the mitigating actions that could alleviate water and climate-induced challenges are external to SIDS.

I would now like to address the challenge of rural infrastructure. Agricultural productivity increases, due to improved land and water management, are largely without benefit unless supported by investments in infrastructure that in turn facilitate market development and access. The statistics on rural infrastructure in Africa are alarming: slightly more than twenty percent of Africa’s population lives in landlocked countries – more than twice as many people as in other developing regions; less than fourteen percent of all roads in Africa are paved and air freight is less than one percent. Power generation capacity per capita in Africa is less than half of that in either Asia or Latin America.

Unfortunately, development partners have paid much less attention to agriculture and rural development over the past two decades. The World Bank, the major funding source for Africa, targeted thirty-nine percent of its lending in 1978 to the agricultural sector in Africa. By 2002, this proportion had dropped to six percent. Similarly, total lending for agriculture over the same period declined from thirteen to three percent at the Inter-American Development Bank; twenty-seven to nine percent at the Asian Development Bank; and twenty-eight to thirteen at the African Development Bank. This trend must be reversed.

All of FAO’s actions and programmes contribute, directly or indirectly, to hunger reduction in the world’s poorest countries. The success of our work relies not only on the existence of an enabling environment in terms of good governance, peace, and conducive macro-economic policies, but also on a sustainable base of natural resources, in particular water, and on a functioning physical and institutional infrastructure. We launched a Special Programme for Food Security in 1994 to improve food security in the world’s poorest, food deficit countries. This approach was endorsed by the World Food Summit in 1996 and reaffirmed by the World Food Summit: five years later – with calls for continued efforts to reduce by half the number of hungry, malnourished people in the world by 2015. The Special Programme, with financing of nearly US$560 million, is currently operational in eighty-nine countries, including forty-seven LDCs and ten SIDS. Our approach to the various other commitments made to these countries, political and financial, is to address specific needs and challenges on a case-by-case basis.

The Special Programme is reinforced by the FAO’s South-South Cooperation initiative, which allows, at a modest cost, experts from within the developing world (Asia, Latin America, and Africa), to work directly with farmers – at the community and village levels – in the recipient countries.

I also believe there is a lot of scope for the U.S. Peace Corps and other volunteer programmes to assist FAO in the management, monitoring, review, and evaluation of field projects.

Water control and rural infrastructure are part of five priority areas for investment identified in the FAO’s Anti-Hunger Programme presented at the World-Food-Summit: five years later in 2002. The Programme calls for an investment of US$24 billion per year to increase farm productivity in poor rural communities; promote the sustainable use of natural resources; invest in rural infrastructure and market access; strengthen agricultural research, extension and nutrition education; and – most importantly – establish and strengthen access to food by the most needy.

Governments of many industrialized countries are committing high levels of sustained support to their agricultural sector – despite its relatively minor contribution to overall gross domestic product. Transfers to the agricultural sector in OECD countries totaled US$318 billion in 2002. It is a telling comparison to note that overseas development assistance to agriculture in rural areas in developing countries has been totaling a mere US$8 billion per annum in recent years, of which US$4 billion is destined directly for agriculture. To be clear, I am not questioning the objectives in supporting agriculture in developed countries. Rather, I urge that such support be given in ways that do not distort the market and out-compete farmers in the world’s poorest countries.

Virtually none of the industrialized countries in today’s world has embarked on a path of sustainable economic growth without first developing its own agricultural sector. I contend, therefore that the fifty percent decline in international financial and technical support to agriculture in developing countries over the 1990s has been a misguided policy. Agriculture is often the virtual foundation of many of the economies in developing countries. And, often, most of the poor in these countries depend directly or indirectly on agriculture for their livelihoods. Furthermore, I must note that the decline in international support has been in direct contrast to the global pledges to commit resources to reduce hunger. Sadly, it may also have misled governments of poor countries to neglect their rural areas in domestic policies and investment.

FAO has never lost its appreciation of the role of agriculture and rural development in transforming economies. I am encouraged that recent international discussion of these issues has resulted in a renewed appreciation of more agriculturally-led development and poverty reduction.

At the same time, I can understand that international aid donors must be increasingly accountable to their taxpayers. Those who provide such resources want to be ensured that aid will be well spent and eventually solve the problem rather than contribute to a cycle of aid dependence. FAO thus emphasizes bankable project proposals that are focused, feasible, well managed, and sustainable.

In conclusion, and I am sure that you would conclude the same, that beyond being a moral imperative, all countries – rich and poor alike – must support increased investment in agriculture and rural development in the poorest countries. We can and must change current policies through enhanced political will at all levels. We must commit resources for concrete action, such as those that address the challenges of water and rural infrastructure in a sustainable way. Sustainable investment does not reduce, but in fact strengthens the opportunity for poor countries to benefit from their own comparative advantage – which often lies in the agricultural sector.

Thank you for your kind attention.

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