1) Most of the world's population still lives in rural areas, though populations are shifting to urban centers, especially in Asia and Latin America. 2) Rural populations face risks like illness, food insecurity, land and water competition, and effects of climate change. 3) Smallholder agriculture remains important for rural livelihoods and can provide a path out of poverty, though not for all. Productive, profitable, and sustainable smallholder systems are needed.

1. Conference on New Directions for Smallholder Agriculture Edward Heinemann IFAD 24 January 2011

2. Rural populations, today and tomorrow Overall, the developing world is still more rural than urban: 55% of pop’n – 3.1billion people – are rural Populations are changing (first in E. Asia and LAC, last in SSA), with: Demographic transition: declining dependency rates creating conditions for ‘demographic dividend’ Total ru ral populations peaking, and then starting to decline Total urban populations overtaking rural populations S&C Asia E&SE Asia S&C Asia LAC MENA SSA Today, rural populations either already in decline, or growing at ever slower rates. (What are implications for land fragmentation / consolidation?)

3. What’s changing for those rural populations? More and more rural people emerging from extreme poverty. Between ~1988 and 2008: Nos. rural people on > $1.25 a day up from 1.1 billion to 2.0 billion (67% increase) Nos. of rural people on >$2 a day up from 430m to 1.16 billion (>70% increase) New economic opportunities for rural people are emerging: Higher rates of economic growth in all regions, in many cases driven by agriculture Rapidly growing urban markets for high value agricultural products Integration of urban and rural areas - ‘new rurality’ New opportunities, beyond agriculture, for growth in rural economy

4. What’s changing for those rural populations? (contd.) On the other hand, rural poverty remains widespread: 1 billion rural people still live on <$1.25 a day In SSA >60% of rural population (300m people), in S. Asia 45% (500m) Rural people – particularly poorer – also face substantial risks, some new and growing: Personal / household level risks: ill health, death, social ceremonies Post-2008 food crisis, higher, more volatile international food prices Access to land and water under multiple threats - competition, scarcity Natural resource degradation, compounded by climate change State as a source of risk – conflict / weak governance High risk environment pushes people into poverty, prevents them from seizing new economic opportunities Appreciation of risk central to RPR’s discussion of opportunities open to poor rural people, in smallholder farming and RNFE

5. The role of agriculture for poor rural people In most countries, most rural households depend on non-agricultural as well as agricultural income sources Everywhere, non-farm income of growing importance for growing numbers of rural households Yet overall, 4 out of 5 rural households engage in some sort of farm activities. On-farm production: Most important in SSA, least in LAC Most important, along with agric. labour, for poorer households Will smallholder agriculture be the route out of poverty for the 1 billion rural people on <$1.25 a day? Not for all – for many, rural employment / self-employment, migration But it will be for some – ever-declining numbers over time, with increasingly commercialised systems And it will be a first step up out of poverty for many others

6. And what sort of smallholder agriculture will provide that step up? Accessible to rural households with limited resources Productive Profitable Sustainable, resilient

7. Smallholder agriculture that is profitable Profitability and production systems: On one hand, a function of productivity and sustainability On the other, a pre-requisite for the increased investment that makes possible higher productivity and greater sustainability A driver of commercialisation – restructuring - of production systems Profitability shaped by markets: Growing domestic markets for higher value products offer new opportunities – often more accessible to smallholder farmers than global markets, though some impose similar requirements Distinction may be restructured vs. traditional markets rather than export vs. local markets Support to focus on expanding opportunities, reduce risk and transaction costs, shift power within value chains

8. Smallholder agriculture that is p roductive, sustainable and resilient ‘ Sustainable agric. intensification’: Urgency of agenda to respond to growing threats of NR degradation and scarcity, and reduce exposure to shocks and of climate change Focus on improved soil / water management; harnessing of agro-ecological processes for enhancing soil fertility; selective/frugal use of external inputs; Includes e.g: conservation tillage; range of water and soil conservation / management techniques; integrated plant nutrient management; crop rotation; integrated crop and livestock/fish systems; agro-forestry; IPM Not an alternative to conventional approaches to agricultural intensification, rather complementary; not an exclusive approach Not a blueprint for intensification: means different things in different regions (Asia vs. SSA) and in different contexts Knowledge intensive: need for systemic understanding; contextualisation, adaptation and innovation, linking farmers’ own and scientific knowledge Agenda to focus on security of tenure, incentives for adoption – including PES, institutional transformation, skills development

9. How to make that happen? In addition to specific measures, attention and investment needed around four cross-cutting issues: The rural areas must become a place where people want to live and do business: need to invest in the rural areas in infrastructure, utilities, services, and improve governance Managing risk prevents poor rural people from taking advantage of opportunities: need to make the rural environment less risky, and help people to better manage risk Knowledge-intensive agriculture requires individual skills and capacities: need to expand access to education, technical and vocational skills development, all adapted to rural needs, and with focus on agriculture Organizations of poor rural people give them confidence, power and security: strengthened collective capacities for reducing risk, managing assets, marketing produce, representing and negotiating interests