DRAFT INTERNATIONAL FUND FOR AGRICULTURAL DEVELOPMENT (TWELFTH REPLENISHMENT) ORDER 2023

Nick Smith Excerpts

Monday 20th February 2023 General Committees

[The Minister of State, Foreign, Commonwealth and Development Office (Anne-Marie Trevelyan)]

I beg to move,

That the Committee has considered the draft International Fund for Agricultural Development (Twelfth Replenishment) Order 2023.

The Minister of State, Foreign, Commonwealth and Development Office, my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell) would have been taking part in this debate, but he is travelling on ministerial duties in Turkey, visiting earthquake sites. He sends his apologies.

It is therefore my pleasure to present this order on the Government’s behalf and to seek the Committee’s support for a UK contribution of up to £36.96 million to the International Fund for Agricultural Development over the 12th replenishment period from 2022 to 2024. This represents a 44% reduction compared with our contribution to the 11th replenishment, in line with our international development strategy, which sets out how we will shift the balance of the aid budget toward bilateral programmes. This will give us greater control and flexibility over how taxpayers’ money is spent. At the same time, we recognise the importance of multilateral organisations such as IFAD. That is why we are continuing our support.

IFAD is unique. It is both a specialised United Nations agency and an international finance institution. It provides loans and grants to developing countries for programmes that improve food security and nutrition, support adaptation to climate change, empower women and increase incomes. IFAD is a comparatively small organisation, with a very specific mandate. It works exclusively in the rural areas of developing countries—where around 80% of the world’s poorest people live—to help to end extreme poverty and hunger. Most of those people depend on agriculture, and growth in this sector is up to three times more effective than in other sectors in raising incomes among the poorest. Investing in IFAD makes sense in order to reduce both poverty and food insecurity. Agriculture is crucial to economic growth, and in some of the least developed countries, it can account for more than 25% of GDP.

Covid-19 and climate change have had a devastating impact on the lives and livelihoods of some of the world’s poorest people. IFAD’s 12th replenishment consultation focused on supporting recovery and building back better. Since then, Russia’s invasion of Ukraine has multiplied the threats for developing countries, exacerbating the risks of a food security crisis.

For the first time in two decades, extreme poverty is on the rise. Up to 828 million people faced hunger in 2021 worldwide, and the number of undernourished people has increased by about 150 million since the covid-19 outbreak. In 2021, a third of the global population was affected by food insecurity. IFAD12 is helping to respond to that global challenge. It has committed to reforms to continually improve its performance, and it was ranked first overall in the Centre for Global Development’s “The Quality of Official Development Assistance” report in 2021.

In the IFAD12 replenishment negotiations, the UK, together with the other member states, secured commitments from IFAD to allocate 100% of core replenishment funding to the poorest countries and at least 50% to Africa; to step up focus on climate change and ensure that at least 40% of core funding supports that; to dedicate at least 25% of core resources to fragile situations, particularly in the Sahel and the horn of Africa, strengthening collaboration with partners to help reduce humanitarian need; and to continue strengthening its focus on social inclusion, empowering women and girls, indigenous peoples and persons with disabilities.

[Nick Smith (Blaenau Gwent) (Lab)]

I have just been looking through the House of Lords Library paper, “Horn of Africa: Projections of a famine in 2023”. It states:

“The Horn of Africa is experiencing its longest drought in 40 years. Compounded by high food prices and political instability, this has led to 36.4 million people suffering from hunger across the region…Although a famine has yet to be officially declared, it is projected to occur in 2023.”

How will cutbacks in the IFAD contribution affect the UK’s support for the horn of Africa?

[Anne-Marie Trevelyan]

I will cover that. The hon. Gentleman raises exactly the point about the challenges of food insecurity and the extended challenges that so many communities and countries face, not only because of the impacts of the disruption to supply chains from covid-19, but because the climate change impacts driving such things as famine are becoming more and more common.

Although IFAD is a small organisation, it will continue to focus on—and has made commitments to focus on—those countries most in need. Helping to improve their agricultural base and provide food opportunities for growth for those communities is at its heart. It is a relatively small organisation and, of course, if the challenges of famine hit countries and areas of Africa as they have done, the challenges for the World Food Programme and other organisations will continue to rise—that has been one of the great challenges. The Minister of State, Foreign, Commonwealth and Development Office, my right hon. Friend the Member for Sutton Coldfield, is in Turkey visiting the earthquake sites, and the work that Turkey did to help get the Black sea grain initiative up and running to ensure that Ukrainian grain could get out to some of those poorest countries, for which that grain was critical and delivered often by the World Food Programme, was really important.

So many of these disruptions happening all at once are putting our most vulnerable friends and neighbours under enormous strain. The hon. Member for Blaenau Gwent is absolutely right that finding funding in all our restrictive financial envelopes continues to be a challenge, but we are pleased to support IFAD and its 12th replenishment.

[Nick Smith]

I thank the Minister for her response. Will she tell me in detail why there has been, or what has happened, with the 44% reduction in the UK’s pledge to IFAD, and about its possible effect on what is going on with a probable drought in the horn of Africa?

[Anne-Marie Trevelyan]

As I set out, redirecting our funding towards a more bilateral programme was a decision taken by the Foreign Secretary. My right hon. Friend the Member for Sutton Coldfield, the Minister responsible for development, is working through that.

The realities of the challenges we are facing with limited budgets for ODA and the huge costs that the refugee crises are adding to the ODA budget mean that there is a reduction in the commitment this year. We have wanted to continue to make a contribution to IFAD’s replenishment, because we consider it to be an important and very effective organisation in helping to reach some of the poorest communities. I do not have the details of whether the horn of Africa will be in this. I am happy to write to the hon. Member for Blaenau Gwent about that specifically, because I do not have the details of the country-by-country plan.

[Nick Smith]

This is my last contribution, and I thank the Minister for her response. I said “drought”, but I meant famine. I would be really grateful if the Minister could outline what resources are being made available to help with the famine in the horn of Africa.

[Anne-Marie Trevelyan]

I will ensure that my right hon. Friend the Member for Sutton Coldfield writes to the hon. Gentleman with the appropriate information in the coming days.

I will set out IFAD’s aims over the coming replenishment period. It aims to increase the incomes of over 60 million people and help to improve the agricultural production of over 50 million people, while improving market access —the all-important aspect—to sell produce to over 50 million people and enhance the resilience of 28 million people, including, as the hon. Member for Blaenau Gwent mentioned, to the challenges that climate change is bringing to some of those communities.

The objective is to reach the most vulnerable people at risk of being left behind, and there is a particular focus on women, young people, indigenous groups and people with disabilities. For example, in Asia, where more than 418 million people are estimated to suffer from hunger, IFAD is supporting projects such as the adaptation for smallholders in Nepal, promoting climate-resilient farming and better community infrastructure. These are practical, targeted projects that can help to make a difference.

IFAD is also increasing its work on climate change, building on the UK-supported adaptation for smallholder agriculture programme to channel climate finance directly to the most vulnerable. The programme has reduced forest and land fires in Indonesia and boosted prosperity for local people. The challenges of bringing enhanced sustainable management to over 3 million hectares of peatland across Indonesia, for instance, have helped to prevent 20 million tonnes of carbon emissions and restore nature. IFAD is focused on those most critical areas.

IFAD is also partnering with the Green Climate Fund and others to help countries access larger pots of climate finance, particularly in Africa. That includes the joint programme for the Sahel in response to the challenges of covid-19, conflicts and climate change. The programme will strengthen the livelihoods of small producers, especially women and young people in very challenging, fragile contexts. Since its creation, there has been strong support across the House for IFAD and its impact on the lives of millions of the world’s poorest and most marginalised people.

I recommend that we continue our support to IFAD. In doing so, we will deliver our objectives to reach some of the world’s poorest people in countries with the greatest need, boosting food security and enhancing economic opportunities and growth. I commend the order to the Committee.