Alesha Black, director of the Council’s Global Food and Agriculture Program, sat down with the recently appointed president of the International Fund for Agricultural Development (IFAD), Gilbert Houngbo. Take a listen to the full interview, check out highlights from their conversation below, and read Gilbert Houngbo's new op-ed on remittances and financial inclusion.
ALESHA BLACK: I’m here with Gilbert Houngbo, the new President of IFAD as of April. Thank you for making time to speak with us today. The Council’s global food security audience is very interested in the work that you’re going to be doing at IFAD, so this is a great way for us to introduce you.
You’ve had such a distinguished career, in the UN and in many roles, and as a head of State, I’m curious—how does IFAD’s mission align to your personal passions and the trajectory of the work that you’ve done throughout your career?
GILBERT HOUNGBO: First of all, thank you for having me here. For me, I don’t consider my work at IFAD as “work”—it is my passion and my belief, having grown up myself in rural Togo. I know the hardship that smallholders experience—my parents use to have ten hectares, and we tried to make our living from that. The challenge that smallholders are going through, I believe I’ve lived it. What I did not live through, which is clear today, is the youth bulge, especially in the rural settings. So with all of that, quite frankly, and having been in different roles, you have a sense of responsibility vis a vis the youth, the youngsters today.
That’s how I see IFAD, an institution that is focusing on smallholders, focusing on the most vulnerable groups, focusing on the women. It’s helping them not only to increase food production for food security, but it also addresses the nonfarm activities, to help smallholders increase their income and hopefully lift them out of poverty. Agricultural development is a solution given the challenges the world is facing today not only in terms of food security, but in terms of fighting inequalities, in terms of creating decent jobs for youngsters, and also as a solution for global security. This is my passion and I can talk about it for hours.
BLACK: Could you talk about how IFAD works and what makes you so unique as compared to other agencies?
HOUNGBO: So, first of all, very quickly, it’s good to remind our audience that IFAD was created in 1977, after the food crisis in the mid-70s, so its interesting to link to what’s happening 30 years later in 2008 and now. The whole point is to provide financing to the rural smallholders—to make sure that they can continue food production and contribute to food security. IFAD and the three Rome-based agencies are quite complementary.
FAO is responsible for working with governments to develop national agricultural policies, and is also responsible for the normative side of agriculture, whereas WFP is mainly working on humanitarian crises. IFAD is providing funding, the financing, for smallholders in the agriculture sector. Every three years we do what we call a replenishment, where we go to our major donors, and that’s what we use for our loans and grants.
Every year we have $1 billion in loans out globally, that will eventually be repaid, and with the replenishment—the money we get from our donors—plus the reflows, we can leverage $1-3 billion (i.e. for a $1 billion contribution for a three year cycle, we can develop a program of $3 billion).
In developing programs we’re also working with the other development banks—this is the IFI side of us—to really cofinance our activities. From a $3 billion grant, we can have a global program worth double that. Then there’s agriculture side of us, where we tap the experience of the FAO, in a policy setting, and we implement it on the ground by focusing on smallholders. In doing so, we focus on women, and on youth, a new area of dimensional focus for us is nutrition, and we’re making sure that by the end of 2018, all our programs are climate change mainstreamed. Also, essentially 100 percent of our loans are sovereign loans, or loans to the government. We’d like to add to that, to use grants to provide money to other NGOs or actors that are contributing to the same global agenda. We’re also looking at how we can bring in the private sector—where IFAD can use its knowledge and expertise and play a “derisking” role, and loan directly to smallholders.
BLACK: I want ask, you mentioned gender, and this is a topic that has been part of the conversation around agriculture for a very long time. I’m curious if you could talk about the policies that you think at the national level are most effective at empowering women in rural areas.
HOUNGBO: Part of the challenge that IFAD faces is that in some countries, the social barriers are huge, quite frankly. Where we do have success is that more and more at the community level, there is recognition that focusing on women has a multiplying effect, all over the community, rather than focusing on using social barriers as a resistance.
When I talk about the rural transformation side of things, we need to make sure that there is access to basic services. Which means access to health services or education, which are not IFAD’s area of expertise. That’s where we need to make sure that our programs are in sync with the national-level strategy, with what other agencies are doing. It’s obvious that the more you have services available, the easier it is for women to continue income-generating activities. Equal access to productive rights is a huge agenda item—either access to land, or land titles, or with succession management after the head of a family passes away. Linked to that is making sure that programs we are financing do not lend themselves to child labor, or create detriments for young girls.
On the positive side, though, when you focus on women you see real impacts. Between 2010 and 2015 we have seen 24 million people come out of poverty, and half of those people are women. Ultimately, that increases the number of girls attending school. And that creates hope at a community level. At the policy level, it does involve government policy, but it’s also about enforcing that policy at the local level, and you also have to bring in the local authorities in the common belief of focusing on gender.
BLACK: There’s a lot of conversation right now about the role of foreign aid in general in US policy. The United States has been a longstanding supporter of IFAD and a lot of other institutions. I wonder in your conversations with the United States or other donors to IFAD, what’s the case that you make about why agricultural development is so vital to our shared interest?
HOUNGBO: First of all, in the last 40 years, the United States has been by far our top donor—giving close to $1 billion. You can imagine the role that US money has contributed to achieving poverty reduction. The leadership that we’ve seen from the United States, though, is not limited to the money and what the money achieves. As a member of our managing board, the United States has helped to make sure that IFAD is nimble, agile, and effective, and drawing lessons from the debate on development aid effectiveness in general.
Your other question is about why to put money in IFAD and not elsewhere. The case I’m making is very simple. Unless we fight against inequalities—you know, in most of the low-income countries, 25-35% of GDP is still coming from the agriculture sector. In most of the least developed countries, 60% of existing jobs are created in the agriculture sector. Those youngsters—I believe that when we are able to make a difference by improving local conditions at the village level—they will think twice before deciding, out of desperation “I want to move to the city” or “I want to leave my country” and live with the consequences. I’m making the case that investing in the long-term is still cheaper than jumping from one crisis to another, and investing in the most remote areas, and in women, is our best chance to contribute to a better world.
BLACK: I understand that IFAD is going to be releasing a report about remittances soon, and that’s obviously connected deeply to the mobile phone. I wonder if you could just talk about how you think about the phone as a tool for finance, for information, for market access, and how you’re seeing that transform the position of young people and farmers around the world.
HOUNGBO: I want to convey that technological innovation is part of the solution, and I want to be very forceful about that—today, I believe that at a policy level, we need to encourage countries to use technology at the national level, even beyond cellphone technology, to map soil, to have smarter use of fertilizer and water, which is linked to the climate dimension. More and more drones are being used to reduce the costs of production. Meanwhile, access to financial data, market information, technical information about production on cellphones is really happening. And again, back to my rural transformation point, when you have a youngster in a village, if they can have the same access that they could have in the capital, maybe they don't feel the need to physically be there. That’s part of what’s happening in the development of technology and innovation is really going to be part of the solution.