Small-scale farmers need decent wages – IFAD calls on world leaders to commit to action at Foo

JOANNE LEVITAN, International Fund for Agricultural Development

“It is an outrage, rural small-scale farmers in developing countries, who grow a third of our global food, are paid a pittance for their work,” stated the President of the International Fund for Agricultural Development (IFAD), on September 23rd in Rome. He asked world leaders, attending the UN Food Systems Summit, to take concrete actions to change this.

“It is a terrible irony, those who grow our food cannot afford to feed their own families healthy, nutritious diets,” said Gilbert F. Houngbo, President of IFAD. “With no savings and no access to capital, farming families also have no cushion against climate change and other shocks. Today’s Food Systems Summit is our chance to commit to concrete changes. We mustn’t squander this opportunity.”

The majority of rural people in developing countries earn their income from agriculture. Rural small-scale farmers, working on farms smaller than two hectares, produce over 30 percent of global food and up to 80 percent in parts of Africa and Asia. According to a recent study of a number of crops, sourced from small-scale farms in developing countries, only 6.5 percent of the supermarket price is paid to the farmer. Traders, food manufacturers and retailers take the lion’s share.

According to IFAD’s Rural Development Report, released earlier this week, the growing concentration of power within food systems has seen profits for large food companies escalate, while the people working to produce, process and distribute our food are trapped in poverty and hunger. Inadequate incomes are a major reason why around 3 billion people in the world cannot afford healthy diets.

“When rural people are paid fairly for their labour, the ripple effect is enormous. Profitable small farms put children through school, pay for diverse, healthy diets, generate employment, and boost rural economies,” said Houngbo. “Conversely, poverty and hunger are key drivers of migration, conflict and instability. Which future do we want?”

IFAD is calling for governments to work with the private sector, to implement policies which promote employment generation, decent wages and improved working conditions. A major focus needs to be on local small businesses which work across our food systems and produce, process and distribute food while creating local jobs and boosting rural economies. In particular, there needs to be a commitment, from all actors, to ensure small-scale producers can access existing and emerging markets on fair terms.

September 23rd’s Food Systems Summit, under the leadership of UN Secretary-General António Guterres, is intended to result in actionable commitments from heads of state and other leaders.

It is a culmination of 18 months of engagement with governments, food producers, civil society and companies on how to transform the way we produce, process and consume food.

IFAD invests in remote rural people, in particular women, youth and Indigenous Peoples who suffer the most from inequitable food systems, to ensure they receive decent returns for their work. IFAD has been the anchor agency for the Food Systems Summit action track, focused on advancing equitable livelihoods. Following the Summit, IFAD will co-lead the Decent Wages and Living Income coalition with the International Labour Organization (ILO) and the support of Cooperative for Assistance and Relief Everywhere (CARE) to advance this important element of food systems transformation.

IFAD is also leading an initiative to unlock the potential of public development banks across the world, to address the lack of access to finance for rural producers, while helping to shift investments to more environmentally sustainable and fairer systems.

Countries are in the process of developing their own pathways, and IFAD will continue to support its Member States in transforming their national food systems.

On the second day and final day of the summit the subject of financing was tackled.

To transform our food systems to end global hunger and be sustainable in a changing world, we must first reimagine how they are financed, stated the President of the International Fund for Agricultural Development (IFAD) to world leaders attending the UN Food Systems Summit.

About 3 billion people worldwide cannot afford healthy diets and the COVID-19 pandemic has pushed up to 115 million people into extreme poverty. The most vulnerable of these are rural people in developing countries, who are also critical contributors to our food systems. Achieving the global commitment to eradicate hunger under the 2030 Agenda for Sustainable Development requires a radical rethinking of how they are supported.

“Success will depend on making these transformations inclusive, especially for those who grow, process and distribute our food. Food systems have to work for the people who work in them,” explained Mr. Houngbo. “We need to put forward new financing mechanisms to scale up resources at country level to support the national pathways.”

Mr. Houngbo called on governments and public and private financial organizations to break out of their silos and innovate to increase the resources available to countries to support their national development pathways.

Countries must develop plans to support rural producers and build sustainable food systems within their individual contexts, linking local needs to national development pathways and international coordination, while fearlessly developing financing systems which accommodate changing global realities.

While most rural people in developing countries earn their incomes from agriculture, they are generally cut off from affordable financing that would help them to introduce new crops and innovative techniques to build their livelihoods and adapt to a changing world. An IFAD-supported study in four African countries found that even when loan products are available, in reality these tend to be inaccessible to small-scale farmers.

Following the Summit, IFAD will co-lead the Decent Wages and Living Income coalition with the International Labour Organization (ILO) and the support of CARE, to advance this important element of food systems transformation.

IFAD is also leading an initiative to unlock the potential of public development banks across the world to address the lack of access to finance for rural producers, while helping to shift investments to fairer and more environmentally sustainable systems. This will be a key focus of the Second Edition of the Finance in Common Summit to be held in Rome on October 19th to 20th, hosted by Cassa Depositi e Prestiti (CDP), the Italian National Promotional Institution and Financial Institution for Development Cooperation, in partnership with IFAD.

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