1. THE WORKSHOP FOR THE NATIONAL FOCAL POINTS ON THE IMPLEMENTATION OF THE BRUSSELS PROGRAMME OF ACTION FOR THE LEAST DEVELOPED COUNTRIES New York 17 – 21 May 2004, Role of Agriculture in the Development of LDCs Harmon C. Thomas Chief Commodity Policy and Projections Service Commodities and Trade Division FAO, Rome

2. I.Development challenges facing LDCs and the role of the agricultural sector II.FAO approach to the implementation of the BPoA Outline of the Presentation

3. I.Development challenges facing LDCs and the role of the agricultural sector Challenges: - reducing poverty; and -enhancing food security

4. Extent of poverty: proportion of the poor in total population (Select LDCs) Source: World Bank, World Development Indicators 2003

5. Extent of food insecurity: percentage of population undernourished, 1998-2000 (available data for 36 LDCs) Source: FAO, SOFI 2002

6. I.Development challenges and the agricultural sector Importance of the agricultural sector in LDCs Why is the agricultural potential in LDCs underexploited?

7. 1. Importance of Agriculture in LDCs -Proportion of population dependent on agricultural activities -Share of agriculture in GDP - Share of agriculture in exports -Agricultural potential

8. The rural sector: population size, 2001 Country Rural pop. as % of total pop. Total pop (million) LDCs Total Rwanda 74 94 684.3 8.0 Bhutan 932.1 Burundi 916.4 Nepal 8824.1 Uganda 8524.2 Malawi 8511.6 Ethiopia 8467.3 Burkina Faso 8312.3 Cambodia 8213.5 Eritrea 813.9 Laos 805.4......

9. Share of population dependent on agriculture for livelihood (frequency distribution of LDCs)

10. Share of agriculture in GDP (frequency distribution of 42 LDCs)

11. Share of agricultural products in total merchandise exports (frequency distribution of LDCs)

12. Share of single agricultural commodity in total merchandise exports (frequency distribution of LDCs) Source: FAO (2003)

13. Agricultural potential (35 LDCs) Arable land in use as % of potential Number of countries 5 – 20%13 Congo DRC; Mozambique; Central African R; Angola; Liberia; Guinea-Bissau; Mali; Madagascar; Zambia; Sudan; Chad; Tanzania; Guinea. 21 – 50%8 Gambia; Lao; Burkina Faso; Benin; Sierra Leone; Myanmar; Ethiopia; Cambodia; 51-90%7 Malawi; Nepal; Mauritania; Bangladesh; Togo; Uganda; Somalia; Above 90%7 Burundi; Haiti; Yemen; Lesotho; Eriterea; Afghanistan; Rwanda. Source: FAO 2003

14. 2. Why is the agricultural potential in LDCs underexploited? Domestic factors –Low investment and utilization of modern technology –Ineffective domestic policy frameworks External factors - distorted international markets and the challenges arising from integrating into such markets

15. Domestic factors Low investment in agriculture 199219951999 Investment in agriculture (millions US $, at 1995 prices) Burundi152215 Zambia20163 Madagascar162437 Nepal693471 Yemen10746156 Ethiopia164127….. Myanmar32317053099 Source: FAO (2003)

16. Government expenditure on agriculture as a share of total expenditure Source: FAO (2003)

17. External assistance (ODA) to agriculture in all developing countries

18. Why is the agricultural potential in LDCs underexploited? External factors Differences in support to agriculture (rich vs. poor countries) Challenges arising from integrating into distorted international agricultural markets

19. External factors.... consequences

20. Agricultural trade balance, 1960 to 2000 Least developed countries Source: FAO data

21. External factors.... consequences Specific challenges –Displacement effect of import surges –Continuing rise in food imports –Financing the increasing food import bills

22. Displacement effects of import surges Examples of import surges and production shortfalls

23. Rising commercial food import bills – LDCs & NFIDCs

24. Rising commercial food import bills - LDCs Source: FAO (2003) 1980-891996-2001Change million US$ percent LDCs Total2716498584 Myanmar17.1145.7752 Tanzania39.8202.7409 Uganda20.085.2326 Haiti66.5247.7272 Nepal32.7118.8263 Malawi12.040.9241 Bhutan3.411.2230 Cape Verde13.142.5224 Benin32.691.1179 Laos9.024.5172 Bangladesh341.7891.3161 Equatorial Guinea4.18.4103 Tuvalu0.51.0103 Kiribati4.17.890 Zambia33.161.887 Comoros9.415.059 Cambodia33.248.947

25. Ability to finance food import bills Food imports as a percentage of total exports of goods and services minus debt service, 1999

26. Conclusions: What needs to be done from a development and food security perspective? Reform international agricultural markets –by reducing/eliminating distortions in such markets Improve the policy incentives in LDCs for productivity raising investments in agriculture Financial and technical assistance –to help LDCs diversify from excessive economic dependence on one or a few agricultural commodities

27. I.Development challenges facing LDCs and the role of the agricultural sector II.FAO approach to the implementation of the BPoA Outline of the Presentation

28. II. FAO Approach to the implementation of the Brussels PoA Mainstreaming those aspects of the PoA within FAOs mandate into its existing Programme of Work. Addressing the specific problems of LDCs on a case-by-case basis through FAOs technical assistance programme. Annual reporting to FAO Council on progress of implementation

29. II. FAO Approach to the implementation of the Brussels PoA FAOs technical assistance to LDCs is focussed on: –Strengthening supply-side capacity and production –Responding to emergencies

30. FAO Contributions to the implementation of Brussels PoA: major areas of assistance PoA Commitments Major FAO activities Commitment 1-FAO Anti-hunger programme Commitment 3- Food and nutrition education - Nutritional care and support for people with HIV/AIDS - Agricultural education, training and extension -Support for rural women -Food safety and quality standards - Building institutions that foster farmers and rural peoples organisations Commitment 4- Special programme for food security - Strengthening agricultural productive capacity: productivity, diversification and quality enhancement - Livestock production and health - Forest and forest management - Fishery industry: utilization, development and marketing

31. FAO Contributions to the implementation of Brussels PoA: major areas of assistance PoA CommitmentsMajor FAO activities Commitment 4 (cont.) - Assistance on emergencies - Support in policy formulation and agricultural development strategies - Food insecurity and vulnerability information and mapping system Commitment 5- Promoting regional economic integration by collaborating with Regional Economic Organisations (REO) - Support to the NEPAD initiative of the African continent - Technical analyses and support on trade negotiations - Assistance on agricultural commodities Commitment 6- Support to developing and implementing national forest programmes - Assistance for disaster preparedness and prevention

32. FAO and mobilization of resources for LDCs FAO field programme –In 2003, more than 510 FAO field projects, with a total budget value of US$ 532 million, were active in 45 of the 49 LDCs. FAO assistance to LDCs in mobilising external assistance to agriculture and rural development projects. –During 2001 – 2003, FAO assisted LDCs by mobilizing external funding commitments for 84 agricultural and rural development projects, amounting to total investments of US$1,428.9 million.

33. FAO Field Programme Delivery in LDCs by technical sector, 2003

34. Thank you