‘Only 1.7% of climate finance is going to small farmers who produce 1/3 of food in the world’: Reehana Raza

‘Only 1.7% of climate finance is going to small farmers who produce 1/3 of food in the world’: Reehana Raza

REEHANA RAZA, Regional Director, Asia and the Pacific Division, International Fund for Agricultural Development (IFAD), speaks to HARIKISHAN SHARMA on IFAD’s work in India, climate change, G-20 and other issues. Edited excerpts of the interview.

What kind of work the IFAD does in India?

The IFAD’s mission is to alleviate rural poverty. It works in the area of agriculture, agricultural productivity. It is focused on small-holder farmers. In India, we have six projects. The total IFAD lending is about $1.2 billion but with co-financing it is about $3.89 billion.

How have the challenges of agriculture development changed over the past 10 or 20 years in India?

I don’t have the institutional memory because I am relatively new. But I think clearly we are in a very different time. I mean, IFAD was founded after the first oil shock and food crisis in 1973 and that really provided the impetus of looking at how you can strengthen food security and food production in the developing world…We are in another food crisis and [that is] very much driven by external shocks… I think the issue of climate change and its impact on small-holder farmers… Only 1.7 per cent of climate finance is going to small farmers and yet they produce one-third of the food in the world. So, the real question for us is how to make sure that we are directing financing to this very important group… And also now, of course, with the food crisis looking at food security. That is where our focus is. I mean, historically I don’t know what the projects were but these are the projects now, essentially based on small-holder farmers.

What per cent of the IFAD funding in India goes to climate resilient agriculture?

100% of our funding goes to small-holder farmers… At IFAD, our focus is to ensure that 40% of our funding is going to climate action. In India, that would be our goal as well. So, this 40% of funds that are coming to India should be going to climate adaptation. That is the objective.

This year, we saw that sudden increase in temperature in late March led to decrease in wheat production in India due to which the government banned wheat export in May. Do you think that countries like India should plan their policies and expenditure in a way that more and more climate resilient crops are grown?

We are looking at making sure that small-holder farmers are adapting to climate change… I think the agrarian question in India is very challenging, you know… You had your, what was it recently, protests… These are very tough questions that I think the Indian government is dealing with… These are big subsidies. Restructuring the agrarian is difficult in any country… I think the policy makers in India are trying to look at that big range of subsidies. Trying to reallocate those resources into more efficient processes. We met the CEO, NITI Aayog and the CEO was telling me that the Prime Minister has a new initiative, the LiFE [Lifestyle for Environment]… So, they were asking us specifically about climate and agriculture… The number of things they could talk about, based on what they know from research and different things, about adding regenerative agriculture, better water use, drought, things like that. But there are bigger structural problems… IFAD is too small to determine India’s structural questions… We may try to leverage our resources in a way that we can influence that debate but, in the end, obviously it is the government of India that has to make those choices.

Has the IFAD planned any specific activities for mission LiFE?

They reached out to IFAD to ask us for our suggestions on the agricultural space. And I think the team is working on that specific area.

In the past two years, Covid-19 has reversed global gains in human development sector. Has the IFAD assessed the impact on food security across the globe, particularly in Asia Pacific region?

We do try to assess the impact it is having directly on our projects specifically. So, we are always trying to assess. Exactly because most of our projects are agriculture related. So, we have a sense of what is happening in the fertilizer prices, in commodity prices because that feeds directly into our cost of projects and determines how much we can actually do… A lot of the technical analysis is actually done more at FAO [Food and Agriculture Organization] and World Bank. These are the agencies that are tracking food security as such.

How do you see India’s role in today’s food security scenario?

India is going to lead the G-20. So, this is a very big opportunity… India is the fifth largest economy in the world right now. So, I think in terms of agenda-setting, the Indian government has a huge opportunity for the G-20…I’ve heard, while I am in Delhi, there is a debate about climate justice… I think the Indians are putting on the agenda about climate justice, about who really pays… Climate change is happening. It is happening now and developing countries are paying the price… So, I can get the sense that they are pushing the agenda that way.

Did India’s decision of banning wheat export surprise a global institution like IFAD?

As I said, the IFAD is very keen to keep trade open. They don’t want these kinds of restrictions because they think that these restrictions feed into this fluctuation in commodity. So, I think, that is something that international organisations clearly will push back to India, you know, but that’s all they can do… they can push back and they can negotiate one-to-one with the Indian government. I think it is interesting to think about what that means and translate into the G20 agenda…The G-20 is now being led by countries that are sort of low middle income countries – Indonesia and India, and next year it is going to be South Africa or Brazil, one of these. So, the needs of these countries are very different from the countries who actually led G20 in the early years… It will be interesting to see how India takes that and puts that on to the agenda and the G-20.

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You said trade restrictions are a hindrance for global food security, but when the government tried to undertake agricultural reforms, it met with tough resistance. How do you see this process?

I think the politicians and policy makers face an agrarian reform. It is probably India’s biggest challenge in some sense…It is a sector where there could be a lot of efficiency gains and that is what the government recognises. But at the same time, you know, these are strong interest groups that have been receiving subsidies for a very long time and have been benefiting from an existing system. It is very hard to dislodge. Theoretically, we can always say reform is good but reform is not always determined by economics but also by political arguments…I think there are gains to be made with agrarian reform in India, but these are decisions that are really in the hands of the government…. I think an institution like IFAD only plays a role in the policy space… You know, once you have a system where you have encouraged that kind of farming and you subsidise that kind of farming, it is very hard to change existing practices.

Do you think it would be the right humanitarian step, and even in terms of trade and economics, that India should extend help to Pakistan and reopen trade in view of the recent floods there?

I think neighbours should absolutely help neighbours, that should be the best way forward.

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