Hon Chairperson, hon Minister, hon Deputy Ministers, hon members and the House at large, I am going to focus on the impact of food prices, smallholder farmers and horticulture on food security in South Africa. Food security refers to the availability of food and one's access to it. A household is considered food-secure when its occupants do not live in hunger or fear of starvation.
According to global statistics on food security, close to 852 million people are chronically hungry owing to extreme poverty, while up to 2 million people lack food security intermittently, owing to varying degrees of poverty. This is according to the Food and Agriculture Organisation, 2003. Six million children die of hunger every year and 17 000 every day. These are scary statistics which alert all of us to the seriousness of the problem.
Recent price volatility on international markets is putting pressure on global food security. The increases in food prices have been triggered by a number of factors, such as inflation and the increase in oil prices. It should be noted that the root cause of the recent food security crisis goes back almost 30 years, when investment in agriculture started declining because of the growing perception that agriculture was unprofitable. Government investment in agriculture in developing countries also fell by one third in Africa and by as much as two thirds in Asia and Latin America during this period.
In many developing countries, particularly low-income countries, a policy vacuum accompanied the decrease in investment. Governments dismantled older, costly instruments that had supported agriculture, but did not replace them with new, more effective ones. In the absence of spending and supportive policies, the growth rate of agricultural productivity began to drop from 3,5% in the 1980s to about 1,5% today. Global food stocks have also diminished by almost 3,4% a year since 1995.
Climate change is expected to reduce the availability of arable land and water, and more agricultural land is being devoted to biofuels rather than to food crops. Most of the world's smallholder farmers are struggling to live and feed their families on less than $2 a day. Many have not been able to respond to increased demand, because they lack access to assets and capital and they face higher transaction costs, which are making it difficult for them to adapt and respond quickly to market developments.
Smallholder farmers do not compete on equitable terms in local, regional or global markets. They often lack access to markets because roads are poor or the fact that transportation is too expensive. Higher food prices do not always filter down to the farm gate where poor farmers often have to sell their produce. As a result, the increased demand is being met by large commercial farmers in the developed and food-exporting countries. From 2007 to 2008, cereal production in developed countries increased by 11%. Production in developing countries rose to 0,9% in the same period. And if you exclude Brazil, India and mainland China, production in developing countries actually fell by 1,6%.
Given the above scenario, it is clear that supporting smallholder farmers would not only enhance world food security, but would make a significant dent in poverty. Leaving them out of the equation will push many into greater poverty and hunger. When people cannot make a living on the land, they are often forced to leave it. This economic migration has implications for social tension, urban poverty and conflict.
Smallholder farms are often very efficient in terms of production per hectare, and they have tremendous potential for growth. Experience shows that helping smallholder farmers can contribute to a country's economic growth and food security.
For example, Vietnam has gone from being a food-deficit country to a major food exporter, and it is now the second largest rice exporter in the world. It achieved this largely through the development of its smallholder farming sector. In 2007 the poverty rate fell below 15%, compared with 58% in 1979. About 73% of Vietnam's population lives in rural areas, and agriculture is their main source of income.
Smallholder farmers can contribute to a greater food supply for the world, but, first, they need secure access to land and water, as well as to rural financial services to pay for seed, tools and fertiliser. They also need roads and transport to get their products to the market, and the technology to receive and share the latest market information on prices. They need stronger organisations so that they can have greater bargaining power in the marketplace and can influence national, regional and global policies related to agriculture.
Above all, smallholder farmers need a long-term commitment to agriculture from their own governments and the international community, backed by greater investment.
In the area of horticulture, it is clear that there is a need for substantive investments to be made in irrigation, biotechnology, plant breeding, post-harvest technologies, pest and disease management, and food safety to sustain the projected growth indices.
At the Maputo Declaration, the New Partnership for Africa's Development, Nepad, recommended that African governments should allocate 10% of their budget to stimulating agricultural development. Only a few African countries have achieved this: Malawi, Nigeria, Tanzania, Ghana, Rwanda, Madagascar, Mali and Senegal. The majority of the countries invest less than 1% of their budget in agriculture and even a smaller fraction in research and development. This must change if food security is to be addressed.
In terms of revisiting and implementing the resolutions of the Maputo Declaration, Maputo Declaration of 12 July 2003 provided strong political support for the Comprehensive Africa Agriculture Development Programme, the CAADP, and its evolving plan of action. The heads of state and government resolved, inter alia, to revitalise the agricultural sector, including livestock, forestry and fisheries through special policies and strategies targeted at small scale and traditional farmers in rural areas and the creation of enabling conditions for private-sector participation, with the emphasis on human capacity development and the removal of constraints to agricultural production and marketing, including loss of soil fertility, poor water management, inadequate infrastructure, pests and disease.
They resolved to implement, as a matter of urgency, the CAADP and evolving action plans for agricultural development at national, regional and continental levels. To this end, the heads of state and government agreed to adopt sound policies for agricultural and rural development and committed themselves to allocating at least 10% of national budgetary resources to the implementation thereof within five years.
Further, they resolved to call upon the African Union Commission, the steering committee of Nepad, the Food and Agriculture Organisation and other partners to continue their co-operation, providing effective support to African countries and the regional economic communities in the implementation of the CAADP.
They also resolved to ensure, through collaborative efforts at national and regional levels, the preparation of bankable projects under the CAADP for the mobilisation of resources for investment in agricultural growth and rural development. The heads of state and government also resolved to ensure the establishment of regional food reserve systems, including food stocks linked to Africa's own production.
Hon Chairperson, thank you. We support this budget, even though it is not enough. Thank you. [Applause.]