HC Deb 24 October 1986 vol 102 cc1471-500

12.1 pm

The Minister for Overseas Development (Mr. Chris Patten)

I beg to move, That the draft International Fund for Agricultural Development (Second Replenishment) Order 1986, which was laid before this House on 30th June, be approved. My I first say how pleased I am to be in a position to move this order today, especially when I had thought that my main appearances at the Dispatch Box this week were going to be during debates on sex education and allied subjects. There is, I am sure, a wise and divine purpose in our affairs. I should also like to say what an honour it is to follow in the footsteps of my right hon. Friend the Member for Aylesbury (Mr. Raison). He has made, and will continue to make, we all hope, a significant contribution to development matters. He now has a wider canvas for his honest and thoughtful approach to politics.

As the House will know, IFAD is a specialised agency of the United Nations. In several ways it is unique. It was set up following the 1974 world food conference. It began operations in December 1977. Its main objective is to raise more money, on soft terms, to help developing countries to improve their food production systems and related policies and institutions. Its priorities are to increase food production in the poorest food-deficit countries, and to improve as well nutritional standards among the poorest people in these and other countries. It is the only lending body exclusively concerned with these targets. It has specialised in trying to get aid through to peasant communities, and particularly to women, whose role as farmers and traders is so often neglected.

IFAD is unique in another way, too. It was founded, and it functions, on the basis of a partnership between three distinct groups of countries. Each of them holds one third of the voting power and one third of the board of directors. Category I consists of OECD countries, category II of OPEC countries, and category III covers the non-oil exporting developing countries. Its president is traditionally an OPEC country national. Only category III members are eligible for assistance from the fund. With modest administrative and financial resources, IFAD has in the short time of its existence already put its stamp on rural projects worldwide. Up to the end of last year, 28 Commonwealth countries had received from it loans and grants worth about $635 million since the beginning of 1978.

Because IFAD is a partnership, it has always received its funding from contributions negotiated jointly between category I and category II. It started off for the period 1977–80 with $1,024 million, on a burden-sharing ratio of 57 per cent. from OECD countries and 43 per cent. from OPEC countries. Category III members made further contributions of $19 million. The Western donors had always believed that each group should make equal contributions, as each held an equal stake in the institution. This was resisted by OPEC members and in the end — a triumph for pragmatism — a compromise was struck.

The first replenishment of the fund was meant to cover the period 1981–83. This had to be extended as its start was delayed. There were again arguments between category I and category II members about the right balance in their relative contributions. These were hard to resolve. Agreement was eventually reached early in 1982 for a replenishment of $1,100 million, in the ratio of 58 per cent. OECD and 42 per cent. OPEC. Category III members contributed $30 million.

Negotiations for the new second replenishment began in July 1983. They were even more difficult and prolonged. Category II members continued to challenge the concept of the comparative levels of contributions. They also argued that their reduced economic circumstances—the price of oil was falling—justified a smaller share of the funding. Category I members held to their original view that funding should be evenly shared between the two groups. The delay meant that IFAD's resources had to be stretched out again to cover a much reduced regular lending programme in 1985 and part of 1986.

In the end, agreement was reached at the fund's annual meeting in January this year for a replenishment of $460 million, of which $276 million will come from OECD countries and $184 million from OPEC, which is a ratio of 60:40. On top of this, category III countries have pledged about $24 million.

The fall in IFAD's core funding has been dramatic and very disappointing, but its effects will be much reduced if donor members ratify their agreement and make payments promptly. The money will then be committed over two years or so, to the end of 1988, instead of over four years. However, it is very clear that things cannot go on like this. All members have therefore agreed, under section IV of the governors' resolution on the second replenishment, that the president should report to the governing council on IFAD's future financial base. The president has set up a high-level expert group to examine all the relevant issues. I understand that its report will be submitted to the next governing council in December. We then expect to give our initial reactions to its proposals and to take part in detailed discussions over the following months.

Mr. Sydney Chapman (Chipping Barnet)

My hon. Friend mentioned the 58 per cent., now 60 per cent., that is contributed by OECD countries. The OPEC countries claimed that, because of the fall in the price of oil, their contribution should be lower. Their claim was successful. During the next round of negotiations, can the House be assured that discussions will take place not only on the OECD and OPEC contributions to IFAD but also on the proposition that they should be regarded as part of the total overseas aid contributions of individual OECD and OPEC countries? That would reassure many people who feel that the OPEC countries should be playing a much greater part in overseas aid generally, if not through IFAD in particular.

Mr. Patten

I am sure that my hon. Friend's point will be raised in future discussions, together with a number of other proposals—for example, the further fragmentation of IFAD's activities, a point to which I hope to be able to return later.

The discussion that will be taking place from next December will be crucial to the future and to whether IFAD can still realise the original vision of its founders.

The draft statutory order authorises the Secretary of State to pay the British contribution to the new replenishment. If Parliament approves this order we shall contribute over £9 million, which is equivalent to over $13 million at the agreed exchange rate. Our share of the total OECD contribution remains the same as for the last replenishment, that is about 4.8 per cent. We intend to pay in three instalments, by depositing non-interest bearing promissory notes. The first of the notes has to be deposited within 30 days of our instrument of contribution coming into effect, the second on the anniversary of the entry into effect of the replenishment, and the last by 31 December 1987. We expect them to be encashed over a period of years from about January 1989. The arrangements include provision for other countries to modify their contributions pro rata if one or more donors fail to meet their obligations in full.

To help keep IFAD going while we are waiting for ratification by the necessary number of other contributions, I have decided to release our first year's tranche for commitment as an advance contribution under paragraph 7 of the governors' resolution.

IFAD's special programme for Africa was proposed last year, in the wake of the famine, at a time when finalisation of the replenishment itself was still in doubt. But it was only launched formally this January. It is being financed by pledges which are entirely voluntary, rather than negotiated. Although it has a target of $300 million, only $40 million—already contributed—was needed to start it off. It is restricted to the 24 countries most liable to droght and desertification. It is not financing famine relief, but longer-term development, designed to improve the self-reliance of those it helps. In fact, these activities are practically indistinguishable from IFAD's regular programme in such countries.

Special programmes or trust funds of that kind pose dangers, as I am sure the House will understand, to the integrity of the institutions to which they are attached. They encourage the risk of eventual fragmentation into a range of funds contributed for restricted areas, or restricted purposes, distorting the overall priority which each institution or recipient ought to preserve. They are more costly to administer. As time goes on, donors tend to put more and more money into such funds and less and less into core programmes. We have seen this over the last few years, for example, with the United Nations development programme which has not grown nearly as much as special purpose funds in the United Nations development system.

In the case of IFAD, a voluntary fund of this kind and size also poses clear dangers to the whole system of negotiated contributions, on which the institution is founded. So far, though several Western donors have promised contributions, not one OPEC country has made a pledge to the special programme for Africa. Our own policy is therefore to make contributions to such funds only in very exceptional circumstances.

What is more, we have been giving increasing emphasis to agriculture and food production in our own bilateral programme over the past two years. In 1985 our bilateral aid to agriculture and related activities in Africa totalled £92 million, of which some 90 per cent. went to sub-Saharan countries where the need is greatest. Recent allocations include new commitments of £10 million to the western savannah project in Sudan, and £10 million for rural development in Zimbabwe. We also support research into tropical agriculture through the Overseas Development Administration's scientific units, the Plant Breeding Centre and the international agricultural research centres. In our bilateral programme, we are placing increasing emphasis on long-term agricultural development, and, of course, much of the assistance that we provide in this area has for a number of years been in the form of grants, not loans. It is also reasonable to point out that we make substantial contributions to other multilateral programmes for helping Africa and its agriculture. We are committing £75 million to the World Bank's special facility and £800 million to the latest instalment of the European development fund, much of it for Africa, and, of course, much of it going to agriculture.

Nevertheless, IFAD does face exceptional problems. And there is an obvious need to boost what we are all doing to revive African food production — a point widely recognised outside and inside the House—at a time when so many African Governments have pledged themselves to very far-reaching reforms in their agricultural policies and institutions. I have therefore decided, in addition to our replenishment contribution, to offer IFAD £7 million, or some $10 million, towards the African special programme. This amount, which is more or less what Germany and the United States are at present considering making available, is rather more than we should have expected to pay had the special programme been part of the total replenishment. I am sure that that news will be welcome on both sides of the House.

In making our offer we shall reiterate our very strong concern that the special programme should be incorporated into IFAD's core programme again when the third replenishment comes to be put in place, since we do not believe that it ought to be a permanent and separate operation. I hope the decision to contribute to this special programme will be seen, as it should be, as a reaffirmation of our commitment to strengthening the development of agriculture in the Third world, and particularly in Africa — a commitment manifest in our substantial bilateral and multilateral contributions.

I commend the draft order to the House in the conviction that its approval will help IFAD to continue its profoundly important work, with the full support of the British Government and people.

12.8 pm

Mr. Stuart Holland (Vauxhall)

I congratulate the Minister on his appointment to the important post of Minister for Overseas Development. He comes from a good intellectual stable. Indeed, he almost provokes me to make that remark by wearing the badge of it around his neck and having shared it with him it is a pleasure to see him across the Dispatch Box.

I trust that the Minister will be able to make a major contribution to a change in Government policy towards not only agricultural development but other aspects of development policy. Labour Members would he glad to have the assurance that he will be seeing the Prime Minister a little more often than his predecessor did, and that the fight for development, which in one sense he has started today with his contribution to the special fund, will be continued with a challenge to the downward trend of overseas development assistance as a share of the gross domestic product and a reversal of the cuts in the programme which the Government have taken.

It is important that the IFAD special fund should be supported and we are glad that the Government have been able to come into line with the contributions which have been made by other countries such as Japan, West Germany and others. The question is whether the resources will be enough and whether they can at this stage, in any meaningful sense, offset the fall which has taken place so far in IFAD's core funding.

The Minister referred to the fact that not one OPEC country was prepared to contribute to the special programme. That is hardly surprising. The fall in the oil price is devastating enough for this Government's economic policy. But this is a diversified developed economy and most of the OPEC countries are not. Therefore, their resources are more constrained by the fall in the oil price than are those of the other OECD donor countries.

Mr. Chris Patten

I am sure that the hon. Gentleman will recognise that the negotiations about the replenishment have been going on for some time and began well before the more recent and substantial fall in the price of oil.

Mr. Holland

I recognise that, but in his statement the Minister mentioned the massive fall in the original target for funding. That cut is not offset even by the special fund contributions. We must take that into account in our evaluation of the Minister's statement.

Earlier this year the Foreign Secretary, in his speech to the special session of the General Assembly on the economic situation in East Africa, said: For too many years too little attention has been paid to the most basic need, the production of food. Africa needs adequate, reliable and cheap supplies. Africa has the capacity to feed itself. Yet in Africa hunger persists in many places. That should be an affront to our consciences. The Foreign Secretary claimed that the short-term situation had improved, but in reality it has not. The short-term position has become worse.

Let us examine the underlying trend and consider the growth in per capital food output in the 24 low-income countries in Africa to which IFAD's contribution is most relevant. Only five of those countries have a negative food growth output in the 1960s but now 18 countries have a negative food output. That is three and a half times the 1960s level.

Of the total African countries, only 10 had negative growth in the 1960s whereas today 28 have negative growth. That is a threefold increase. That increase in terms of need is not reflected in the Government's overall strategy to African agriculture.

The point was well put by Shahid Javed Burki, the director of the World Bank's international relations department in a paper which he presented in Harare. He said: The reason for pessimism concerns the prospects of the increasing domestic output of food in the more vulnerable parts of Africa. Mr. Burki does some simple arithmetic, taking the poorest among the poor countries—Ethiopia, Malawi, Tanzania and Uganda. Between 1978 and 1980 those countries produced 14 million tonnes of cereal equivalent which was equal to 80 per cent. of the World Health Organisation requirement. At that level of domestic output, mass starvation would have occurred, so the countries imported 500,000 tonnes of food, equivalent to 5 per cent. of their export earnings. Mr. Burki asks what would happen in the 1990s. If the population increases by 3 per cent. per annum and if food output also increases by 3 per cent., in 1990 they will produce a total of 19 million tonnes, leaving an import balance of 6 million tonnes to avoid famine. That level of importation would be equivalent to 50 per cent. of their projected export earnings.

Thus contributions from the special IFAD fund at a reduced level are simply not enough. They do not take account of the underlying facts and the difficulties of agricultural food production within increasing population growth in several of the poorest countries, not only in Africa but in the rest of the world. Nor do they take account of the overall crisis in sub-Saharan Africa caused by increasing interest rates on debt and falling commodity prices.

That argument was well put by Professor Reginald Green, who is now attached to the university of Sussex. He stresses that, in the 1980s, sub-Saharan Africa is characterised by low and falling GDP per capita, rising debt service requirements, declining import capacity and current account deficits. This has resulted in Draconian import cuts leading to what can only be described as import strangulation. During the period, the terms of trade have massively worsened for these agricultural exporting countries. The estimates made by Mr. Aqarwala for the World Bank are of a deterioration in terms of trade of about 10 per cent. Other estimates, which I believe to be more realistic, reckon that the terms of trade have worsened in recent years by as much as 25 per cent. This means a fall in revenue from export earnings for cash food products combined with a rise in interest rates on the debt.

Until we address the question of IFAD's special contributions in that wider context, its measures will be remedial rather than enable African countries to restructure their underlying agricultural problem.

The issues addressed by IFAD, including the role of women in agricultural development, are welcome. One of IFAD's better features is that it takes its involvement in agricultural development seriously and can go beyond the formal provisions in the Lomé convention so that women can apply directly for agricultural development funds.

In East Africa, on average, women work 40 per cent. more than men but are paid 60 per cent. less. That sexual inequality is recognised. Credit should be given where credit is most due — to women and to women's agricultural co-operatives. Co-operative forms of agricultural development should be supported.

Mozambique has recently experienced a political tragedy which has aggravated the crisis in that front-line state. It has horrendous problems with agricultural development. One of the reasons why the United States Administration is not prepared to give full backing to IFAD is because of IFAD's agricultural development programmes as reflected in Mozambique where the strategy is that of communal village projects for agricultural development or of agricultural extension projects. A communal strategy is necessary, not for ideological reasons, as the United States believes, but because it is the way to provide schools and health posts to serve rural populations on a communal basis. The United States has been giving aid to the small private farmers in Mozambique but has been refusing to support the communal development programme. This is the kind of area where IFAD can play an exceptional role. The tragedy is that the role it is playing is offsetting the negation of public intervention in agriculture on the United States' own support programmes.

Mr. William Cash (Stafford)

Can the hon. Gentleman tell us the extent to which the internal political instability in some of these countries is directly related to their problems? Both sides of the House acknowledge that those countries have severe internal intrinsic problems in agriculture and that if they were to address themselves to improving political stability, they could solve a great number of the problems that the hon. Gentleman describes.

Mr. Holland

I am glad that the hon. Member has asked that question, because it enables me to tell him that the political instability in the front-line states is caused minimally by themselves and to the maximum extent by destabilisation from South Africa. That is well seen, even in the question of how the plane carrying Samora Machel fell out of the sky. It has been estimated in the front-line states that the cost to them of destabilisation of their domestic development by South Africa has been running at $2 billion to $3 billion a year. The indirect cost to their own joint economic cooperation through SADCC and the SADCC conference, even assisted by the Nordic countries, has been massive. If the United States were to play the role that it should be playing in relation to South Africa and if the Reagan Administration were to put their weight behind the sort of view that we have recently seen in the United States Congress, we might get more political stability in the region as a whole and have a chance for a real agricultural development.

Another point is implicit in that which the hon. Member for Stafford said. One of the limitations about the World Bank approach is born-again marketeering, which we see not from Burki's international division within the World Bank, but from its economics division. The United States Administration assumes that only market forces can achieve agricultural development. [Interruption.] Perhaps the hon. Gentleman would like to get to his feet rather than make his point from a sedentary position. That is the emphasis that is being given.

I shall not detain the House by outlining the emphasis given to it in the Foreign Secretary's statement during the debate in the UN special session. The fact is that agricultural producers are on the margins of existence and cannot possibly hope to cope with falling commodity prices and high interest rates. Farmers in rural areas are being crucified by the higher debt costs to their countries. They cannot sustain their indigenous agricultural development programmes against a background of falling commodity prices.

The whole cash crop export system is in question. We should not be surprised at that because of the problems of drought. But drought alone would not have caused famine in so many African countries if there had been sufficient support programmes in rural areas to sustain many of the farmers over a period of shortage of rain. Several of us in the House are interested in these issues and are well aware that even in a full drought period a tropical rainstorm can occur. It can last several minutes and bring down tonnes of water which rush down the rivers or the wadis and escape into the soil, simply because steps to provide such basic measures as coffer dams and catchment areas have not been taken. These are the most elementary programmes that can be undertaken to retain water over the long term.

Such problems are being addressed by IFAD. The Minister's declaration of his willingness to support the special fund is welcomed by the Opposition. It brings us into line with other OECD countries, but does so at a far lower level of overall finance than should be the case. The Minister spoke about the way in which the Government have supported overall agricultural development in Africa through their rural development assistance programmes. Overall, the aid allocations have declined from £10 million per annum in 1980 to a much lower average level. Of the £95 million emergency food for Africa programme undertaken by the Government for famine relief, only some £9 million was new money.

The Minister tells us that the Government are giving increasing attention to tropical agricultural support and to the tropical seeds research institutes. It is a pity he has been so badly briefed in this matter. If he had been able during the Recess to read some of the debates in the House, he would have seen that there exists on both sides of the House the gravest anxiety about the cuts his predecessor undertook in that area. If he increases programmes which at already down to less than £1 million or £2 million, then in terms of the needs of Africa as a whole, he might as well be multiplying zero by zero.

A further point in the case for supporting IFAD and one which the Minister has not stressed are the benefits that such action gives to British industry and employment. The point was made by Mr. Jazairi when he was in Britain and saw groups of hon. Members and some individual hon.Members. It is clear that more than 70 per cent. of the United Kingdom's global share from dispersements under IFAD projects has been achieved in sub-Saharan African countries and that more than 85 per cent. of this has resulted only from procurement in projects financed in countries selected for the special programme. To put it simply, the United Kingdom gets back £2 in orders for every £1 it puts into IFAD. That parallels the position stressed by the Sport Aid commercial that the BBC would not run—"Bury the debt and not the dead"— whereby Africa is actually paying back £3 to £4 for every £1 that it receives either in capital contributions or through aid programmes.

I wish to raise a specific and concrete issue concerning agricultural development and disease. Following the drought, the Horn of Africa faces a real problem from locusts. On 21 October, the Minister said that the Government were giving £2.5 million of British aid for locust control and spelt out where that would go. We welcome that special contribution, but are not sure that it is enough. There is a special problem in the Horn of Africa and one of the regions most afflicted by drought is Tigre; the Minster must address himself to that.

The locust invasion has come from outside Tigre — from Eritrea, Sudan and the Arabian peninsula. However, there is an extensive breeding area for the rest of the Horn of Africa now in eastern Tigre, especially in the Danakil plains. The swarms have now reached the hopper stage and are doing extreme damage to pasture lands and crops in the area. Once they begin swarming, they will do untold damage to pasture lands and crops throughout Tigre, Wollo, the rest of Ethiopia ad Eritrea and could also spread to the Sudan.

Because of the political position in Ethiopia —1 am sure that the Minister is following my argument closely — the reality is that the Dergue is not allowing the spraying of crops in Tigré in line with the spraying programmes taking place elsewhere. The only weapons at the disposal of the Relief Society of Tigré are sticks and branches. It has no pesticides or equipment to launch its own protection operation. The society has made a statement to me, in which it says: If no measures are taken within this month the consequences will be worse than the recent famine. People and animals will again start dying within a few months, as they ave no reserves whatsoever to fall back on. Those who survive will once more trek in their hundreds of thousands to Sudan. What the society asks is what we ask — that the Government will make the strongest possible representations to the Dergue in Ethiopia that such a spraying programme be undertaken. Given the urgency of the matter, I hope that the Minister will make that commitment from the Dispatch Box today. If the spraying programme is undertaken, the Relief Society of Tigré has given an assurance that it will co-operate with any measure taken to save crops and lives. If the Minister ignores this matter, he may find that it hangs around his neck for the remainder of the relatively short time that he holds his office — [Laughter.] The hon. Member for Hertford and Stortford (Mr. Wells) may laugh, but this is precisely the sort of advance warning of a real tragedy and pest problem in the Horn of Africa that was given to the House about drought during the past two or three years. We had advance warning that, unless this Government, with other Governments, did something through multilateral action about the railway from Port Sudan to Darfur province, the railway would break down and the relief could not get through. The hon. Gentleman does not do himself justice. If this House does not address such issues, it is not fulfilling its role.

Mr. Bowen Wells (Hertford and Stortford)

I made a speech in the House about the railway. I am not laughing about the serious problem of locusts in the Horn of Africa. I wrote to my hon. Friend the Minister two months ago to ask what we could do, and he will no doubt tell us the figures to show how we have contributed to try to offset those difficulties. However, I am laughing at the hon. Gentleman's suggestions that the Dergue Government and Ethiopia will take any notice of a letter written by my hon. Friend. I suspect the Dergue Government of using the locust and food problems in Tigre to starve those wretched people into submission. I am laughing at the futility of writing that letter. I am also laughing at the suggestion that my hon. Friend will not be long in his office. I hope he is there for a long time, because overseas development will benefit enormously.

Mr. Holland

That intervention is depressing. It means that, faced with such a tragedy, the Government cannot take the multilateral action that the Minister says is the best action in such circumstances. If the hon. Gentleman is right, all we have is talk, talk, and talk again when what we need is action to offset the drought, deprivation, crop disease and death afflicting the Horn of Africa. Will the Minister rise to the challenge? He has been told that he has been sent to the salt mines and, quite rightly, he rejected that. Those of us concerned with development do not consider ourselves to be either in the salt mines or the Siberian power station. We are in the potential power station for global development. What greater challenge can any Minister wish?

However, how will the Minister face up to the challenge and how will he deliver? In the case of the Sudanese railway, which collapsed with such disastrous consequences, putting so many lives at risk, the Minister's predecessor said that we had to work through multilateral agencies and bring our EEC partners with us, because these things take time. However, were this Minister to make available light aircraft flown by our pilots to spray the crops it would be relatively difficult for the Dergue Government to oppose such an operation, certainly with the kind of aircraft it has at its disposal, which are baroque, over-developed technology MiG fighters flying at high altitudes that could have difficulty swatting a light plane.

Why does not the Minister use his imagination? I said that to his predecessor in the case of the Sudan debt crisis. I told him not to play around with the multilateral agencies and that if he wanted to make a mark on behalf of not only his party but the House and the British people, he should cut the Gordian knot and, instead of waiting for multilateral pressure, do something himself. I pointed out that we are a shipping and oil-producing nation, while the Sudan has tremendous problems with fuel and its distribution. I suggested that he should commission a tanker, fill it with fuel and send it to Port Sudan, and then send the bill to the EEC Commission. In the case of the locust crisis in the Horn of Africa, why does not the Minister immediately get on to the Ministry of Defence and ask about the technical feasibility of getting our light aircraft there? They could easily be transported from Port Sudan and start proper spraying.

Mr. Cash

Has not my hon. Friend the Minister, in the short time that he has been in the Ministry, already taken a significant initiative in relation to the European Community? I speak as one who is on the Select Committee on European Legislation, who has noticed this. My hon. Friend's initiative was extremely important, having regard to the utter condemnation by the Court of Auditors about the way in which the EEC Commission operated as regards the food crisis in Africa last year and the year before. My hon. Friend has already taken a significant initiative and deserves congratulations, not strictures.

Mr. Holland

The hon. Gentleman mistook my opening remarks. I have a high regard for this Minister. I saw him when he came to university, bright-eyed and bushy-tailed, to start his undergraduate course. It was an excellent intellectual stable, and I am only sorry that the Minister left by the wrong political door. I am challenging, encouraging and urging the Minister to be serious about this.

Such action has been taken before in the drought crisis of the early 1970s, when my right hon. Friend the Member for Clydesdale (Dame J. Hart), who was then Minister for Overseas Development, got conflicting reports about the nature of the drought in sub-Saharan Africa in Chad, Niger, Mali and Upper Volta, as it then was. She sent me out to see what was going on and make a recommendation in a report. We came back with a simple finding. We needed four-wheel-drive, five to 15-tonne vehicles to get the food out to the areas where the drought was biting hardest and to avoid people having to come to main distribution centres to get the food.

The Minister will have difficulties if he tries to replicate what my right hon. Friend did. No such four-wheel-drive vehicle was to be had on the market. My right hon. Friend got on to the Ministry of Defence and said, "Can you let me have those vehicles?" The Ministry said, "We cannot spare them." She said, "I will buy them from you at face value. I will replace them if you will let me have them." The result was that, within a few days, those vehicles were being driven across the Sahara to help with the food aid problem.

That is the sort of challenge which the Minister faces in relation to the locust problem in the Horn of Africa. I hope that he will fulfil the promise that he has shown and our high expectations of the role that he can play for development. I hope, especially, that he will start not only with the good measure which he has taken in terms of the contribution to the special fund for IFAD, but by tackling the problem of locusts and crop disease in the Horn of Africa.

12.45 pm
Mr. Colin Moynihan (Lewisham, East)

I, too, warmly welcome my hon. Friend the Minister to his new Department. I am sure that he will live up to the high expectations held by hon. Members on both sides of the House. If his tenure is short-lived, I hope that that will be due to promotion to the Cabinet in the not-too-distant future, to which he would bring the great advantage of experience of overseas development. That could only be for the good.

I also welcome my hon. Friend's initiatives to date, especially on the special fund. It is vital that we do more for agriculture in our bilateral assistance and our multilateral programmes. To date, I regret that we have been lax on this. To that extent, I agree with the hon. Member for Vauxhall (Mr. Holland). About 24 per cent. of the amount that we give to multilateral agencies goes to agriculture while, as the excellent report written last year by the all-party parliamentary group on overseas development shows, aid to agriculture represents marginally less than 30 per cent. of our total bilateral assistance. That is far too small a proportion when the main challenge in development is assisting recipient countries to develop suitable agriculture — not high technology taken off shelves from western Europe, but suitable technology for them to develop the agriculture best suited to their development programmes and needs.

To that end, I hope that the Minister realises the importance of increasing, not decreasing, United Kingdom manpower to assist in agriculture, especially in Africa. Regrettably, over the years, there has been a major reduction in manpower aid to agriculture in Africa and, indeed, to Africa as a whole. The figures speak for themselves — from 7,402 in 1972 to 4,242 in 1977 and down again to only 1,782 people in 1982. We must reverse that trend to assist the development of agriculture in Africa.

I am delighted that, through the special fund, we shall have an opportunity to increase the proportion of money that we disburse to agriculture, because that sector provides one of our biggest challenges. I am sorry that this has not been mentioned in more depth so far. What we give in aid with one hand we are massively taking away with the other through iniquitous agricultural protection by industrialised countries. Many developing countries have internal political problems that are to the detriment of development, but in developing countries that do not have internal political crisis, development programmes are put in jeopardy as a result of agricultural protectionism in the industrialised world.

Many of these countries are involved in sugar production. Although it is not relevant, perhaps I should declare an interest as I have had a long association with Tate and Lyle. European Community farmers received 18 cents a pound for sugar in 1985. That sugar was dumped on the world market at 5 cents a pound, but the Community continued to buy imported sugar at 18 cents a pound. That sort of subsidy is iniquitous because there is a marginal and comparative advantage for countries in the developing world to produce cane sugar. The United States Government give massive subsidies for irrigation and land clearance projects and then pay farmers not to grow crops on that land. That is another example of subsidisation.

IFAD is in many respects the equivalent of the World Bank's International Development Agency, which works for the poorest countries in the world. The IFA 13 works in agriculture for the poorest nations and, particularly through its special programmes, for the countries most affected by the sub-Saharan famine.

I hope that the challenge of agricultural problems in sub-Saharan Africa will be taken up following the replenishment and that IFAD will go from strength to strength. Sub-Saharan Africa has the highest birth rate in the world, at 3.2 per cent. The population will double in 22 years and quadrauple in 44 years. The population of Ethiopia in 1950 was 18 million; by 2025 it will be 106 million. The population of Nigeria was 40.6 million in 1950; by 2025 it will be 295 million. The population of sub-Saharan Africa, where the special fund will be most important, is 363 million; by 2025 it will be 1.2 billion.

Even the most optimistic growth rate for agricultural development in sub-Saharan Africa— 2.5 per cent. per annum over the next two decades — will not keep up with the projected population increase. That means that there will be even more malnutrition and that the punishing years of famine will become even more frequent unless we take up the challenge of assisting in these areas of development. Those are the facts and the challenges that IFAD must face.

As I said in a sedentary intervention during the speech of the hon. Member for Vauxhall (Mr. Holland), I see more care and attention, not less, being given by IFAD and the World Bank to, among other things, the solutions that the hon. Gentleman mentioned. During part of the summer recess, I worked as a consultant to the World Bank, concentrating on the medium-term economic growth programme for Bolivia, a country with which IFAD is closely involved, and examining its development problems. Much more emphasis is being placed on women in development programmes. That is a vital area which has been overlooked in the past, not least in Africa where women do most agricultural work but take up too few of the training places in colleges. Back in the fields they are much more significant than the ratio of men and women in the colleges would suggest.

Mr. Stuart Holland

I am delighted that the hon. Gentleman is pleased that he is giving advice to Bolivia. I trust that the Bolivians are just as pleased.

In terms of the World Bank's economic philosophy and what it is doing, it is not simply a matter of reading the most recent World Bank report, which is a paean of praise for market forces from beginning to end and is one of the most disreputable documents ever published by the World Bank. We must also consider the role played by the Anne Kriegels and the Lals of the economic division, who are born-again marketeers. They advocate market solutions for countries where they are irrelevant. They export the south-east Asian model to sub-Saharan Africa, which is about as relevant to the needs of the real world as astrology is to astrophysics. The World Bank should not be operating like that. I trust that the hon. Gentleman has remedied the situation in Bolivia, but it would be a good idea if the World Bank changed its approach too.

Mr. Moynihan

I strongly disagree with the hon. Gentleman and would love to have a lively debate on that point, but I cannot do so now. The economics division has projected market forces as an important concomitant to the sort of approach that I have been pursuing and considerable attention is being given to it in the projects department. It represents appropriate technology and is working well in the agriculture sector in respect of colonisation programmes, as they are called in south America, smallholder schemes, and so on. Such work, along with credit programmes for rural farmers, is important. I am delighted to report that it is now being actively pursued by the World Bank. I hope that more will be done, as it represents an important part-solution to the problems of agriculture in the developing world.

Perhaps I can underpin my remarks by explaining why I believe IFAD is an appropriate vehicle for development. Before I became a Member of Parliament, I worked with that body and I know at first hand just how efficient it is in the implementation of programmes and in its operations. It is not a fat and over-bureaucratised organisation, as some might argue that UNESCO is. Thus, it is inappropriate to say that it is inefficient or in need of modernisation. It is a very efficient tool.

IFAD also addresses the medium and long-term processes of structural reform in agriculture. It recognises that the productive capacity of smallholders must be rehabilitated. The question is how that is to be achieved. It is argued by IFAD that extension services should have a greater role and that their credibility should be enhanced. It is also argued that credit services should be allowed to work with and through the private sector, and that much more emphasis should be placed on traditional agricultural production. In other words, one should be looking for market opportunities for such products of sub-Saharan Africa as cassava, millet, sorghum, and yam. It is argued that they should be developed, rather than concentrating—as other bilateral donors have done—on crops that are primarily geared to export, such as wheat, rice and maize.

Thus IFAD is looking at traditional agricultural production. As it is one of the few agencies to concentrate on that, we should support it. But it has also turned its attention to small-scale irrigation schemes which are appropriate in sub-Saharan Africa. That is important, because world-wide there are too many examples of very large-scale irrigation projects that have not necessarily benefited their recipients. Small-scale irrigation projects, including the provision of wells, are an important feature. I am glad that IFAD has concentrated on them, as they are conducive to agricultural development.

I am also pleased that IFAD has concentrated on soil conservation and on the problems of soil fragility and of conservation-based agriculture. Every year, the world loses a billion trees. Consequently, it is important that we should have at least one major international lending agency that concentrates on conservation-based agricultural policies. IFAD does that, and I welcome it.

One of the great advantages of the Minister's decision to support the special fund is that it will act as a snowball and countries sitting on the fence regarding possible donations to the special fund will come forward and support it as strongly as it should be supported. Unless decisions have overtaken my knowledge, I understand that Australia, New Zealand and Canada have been hesitant about joining the fund. Now that the message has gone out from this House on the special fund, I hope that it will receive further support from those countries and others that have yet to make a decision. In that sense, today's announcement is especially important and appropriate.

In conclusion, I shall give an example of one project that I know well and on which IFAD has concentrated in Bolivia. It is an innovative project. It is recognised that in agricultural extension it is important for the beneficiaries actively to participate in the implementation and planning of projects. Too many projects around the world are imposed on communities without involving them in the initial decision making, planning and project preparation. I welcome the fact that IFAD has taken that initiative and has set up a model project in Bolivia which has had quite remarkable success.

The dispersal of agricultural credit to beneficiaries has already exceeded the original target. A total of 130,000 new plants are growing in an afforestation effort. I mentioned earlier the importance attached to afforestation projects by IFAD. More than 50 fish breeding ponds are in operation. Similar increases in Bolivia have resulted in crops, and incomes have resulted from many other projects of a similar nature in other countries.

It was seeing that project and the work done in Bolivia during the summer that led me strongly to urge the Government to support the special fund. I am delighted that I have not been put in the embarrassing position, as a PPS who is meant to be rigidly attached to the party line, of arguing strongly for this additional income for the fund. I must say that this was somewhat unexpected when it was announced at the Dispatch Box, but if it is a portent of what is to come from my hon. Friend the Minister, I strongly welcome his presence in the House for such debates and I wish him every success in future.

1.2 pm

Mr. Eric Deakins (Walthamstow)

I congratulate the Minister for Overseas Development on his appointment and the well-deserved tribute he paid to his predecessor, the right hon. Member for Aylesbury (Mr. Raison). However, I thought that the tribute was a rather backhanded criticism of his right hon. Friend the Prime Minister for sacking someone with such an honest and thoughtful approach to politics.

I draw the Minister's attention to a minor error in the draft order. It is an error that rankles with me and, I hope, all hon. Members. There is a spelling error in the draft order which is unforgivable from any Government Department. The spelling of the adjective in the phrase one of Her Majesty's,principle Secretaries of State is incorrect. It should have read "principal". That should have been changed before the order was laid.

The IFAD position, as the Minister described it, is not at all good. While one welcomes his contributions to the special fund, one must bear in mind that a vastly reduced amount of money will go to agriculture, especially in Africa, through IFAD as a result of the reduction in contributions by OPEC members. The figures that I have been provided with suggest that the total will be only $460 million compared with $1,100 million previously. Any such reduction in the present state of agriculture, especially in Africa, is to be deplored.

One good thing about the second replenishment for IFAD is that it takes place against a change in perception on the part of Governments in Africa about the importance of agriculture in their economic development and economic growth and the fact that many of the policies pursued in the past have not contributed to the welfare of the rural economy or the growth of agricultural production.

I shall quote briefly from the document which the African countries prepared for the United Nations special session on Africa earlier this year. They stated: A substantial raising of the level of productivity in all sectors, particularly in agriculture, is the sine qua non for putting the African economies on the road to development. They continued: In any programme of action for African recovery and development, the rehabilitation and development of agriculture demands the highest priority. There is also an urgent need to take fundamental measures to deal with the problems of drought and desertification". Another passage reads: The satisfaction of food requirements for the African people hinges on the rapid reversal of the declining trends of productivity in the rural areas. The alleviation of the problem of growing mass poverty, the capacity to increase foreign exchange earnings and the subsequent dynamization of internal demand forces also depend largely on the rapid improvement of rural incomes and the revitalization of the rural sector. This is an important document, which shows that there has been a change of heart by all African Governments.

My final quotation from the document reads: IFAD's recently established Special Resources for Sub-Saharan Africa should be strongly supported by the international community, and the future financial strength of the institution should be secured. I heartily welcome, as I know the whole House has, the Minister's announcement that he is reversing the policy announced by his predecessor. We congratulate him on that.

As the hon. Member for Lewisham, East (Mr. Moynihan) said, the dimension of the problem, especially in sub-Saharan Africa, is becoming worse. It is sad that, although international attention is more concentrated on the problem, there seems, according to IFAD, to be fewer resources available in total to deal with the problem. The Food and Agriculture Organisation estimated a short time ago that Africa would have to double its food production in the 1980s to have enough to feed itself. It pointed out that Africa is the only part of the world that now grows less food per head of population than it did in 1960. That is a devastating indictment.

Since 1960, food production in Africa has increased by less than 2 per cent. a year, and the growth rate is now falling. The population, however, has grown by well over 2 per cent. a year, and that rate is rising. From 1960 to 1970, the amount of food available to each person in sub-Saharan Africa increased marginally by about 01 per cent. each year. Between 1970 and 1980, it fell annually by 1.2 per cent. a year. That is not the position in any other part of the world, so we need to give special attention to Africa. This is not a matter for IFAD and individual donors alone. The World Bank is playing a major part and it is a welcome sign that it, as well as the IFAD, donor Governments and African Governments, is increasingly regarding agriculture as the crucial sector in development.

The new president of the World Bank, Mr. Barber Conable, in an address to the board of governors in Washington on 30 September, said: We will regard agricultural development in the poorest nations as central and critical in the battle against poverty. In "World Bank News" in May there was a special article on economic development in Africa. The article addressed the population dimension, which was mentioned by the hon. Member for Lewisham, East, and focused on the connection between population and the need to increase agriculture production. Part of the article talks of the threat rapid population growth poses to the natural resource base"— it is obviously a considerable one—and says: Throughout the African continent, natural support systems are under growing strain. This is not merely, as my hon. Friend the Member for Vauxhall (Mr. Holland) said from the Opposition Front Bench, because they are threatened by locusts and civil wars.

The paragraph continues: In country after country, sustainable yield thresholds of forests and grasslands are being breached. Soil erosion, the loss of soil organic matter, and the depletion of soil nutrients are diminishing land productivity over much of Africa. Although essentially agrarian, African countries are losing the ability to feed themselves. In 1984, approximately 140 million of its 546 million people were fed entirely with grain from abroad. That proportion is likely to increase between now and the end of the century.

My final quotation from the World Bank report is taken from a memorial lecture given recently in Washington by Mr. Robert McNamara, the former excellent president of the World Bank. He said: Altering the economic policy environment in sub-Saharan Africa more in favor of agriculture would dramatically alter the economic scene. It would apportion scarce economic resources more rationally across the economy. It would improve the international competitiveness of the agricultural sector. It would provide incentives to farmers both to produce more, and to produce more efficiently. And it would stimulate more employment, more exports, and more income-earning opportunities. If anyone understands the problems of Africa and its agriculture, it is Mr. McNamara who spent 12 years as president of the World Bank and a great deal of time visiting African development projects. We must pay great attention to what he says.

I end as I began, congratulating the Minister, welcoming his announcement and hoping that he can persuade his colleagues, especially the Foreign Secretary and the Prime Minister, that aid to Africa and its agriculture is vital if we are to avoid further crises in that sad continent. We need more aid and more development, both bilateral and multilateral. The Minister has made a good start. We wish him every success in the battles that he will have in his Government to increase the amount of overseas aid.

1.11 pm
Mr. Bowen Wells (Hertford and Stortford)

I join hon. Members in warmly welcoming my hon. Friend the Member for Bath (Mr. Patten) to his new post as Minister for Overseas Development and I do so in no routine and formal way. We know of his excellent record in ministerial office and other capacities and we welcome the strength, deep understanding and compassion that he will bring to debates about some of the poorest people of the world. We welcome the lead that he will give our nation to help those countries to help themselves. He will build on the programme of his predecessor my hon. Friend the Member for Aylesbury (Mr. Raison), to whom I wish to pay tribute. He fought the battles in the ODA in an unpromising climate within our Government and largely succeeded in reversing a reduction in the ODA budget.

I wish my hon. Friend the Minister good luck in his first battles, which will be on the size of the ODA budget.

I hope that he will be strengthened by our support in convincing the Treasury that we need a larger budget to accommodate the additional resources that he has announced. In spite of advice and pressure not to do so from his Department, his announcement will make money available for IFAD, the special fund for Africa.

IFAD was promoted by the developing countries to find a way of generating money from the oil-rich countries which had huge surpluses in the mid-1970s. It was founded in 1977 with the objective of using those surpluses for the benefit of the poorest people in the world and we should pay those oil-rich countries tribute for that generosity. However, the position has altered dramatically. I welcome the Minister's announcement that serious consideration will be given to how we can carry on with IFAD, given the relative impoverishment of the oil-rich countries which is undermining the basic idea behind the formation of IFAD.

IFAD has established itself in a special role within the United Nation's system of agencies. It has concentrated on the poorest countries and on peasant farming agriculture. Because of the starvation that we have witnessed in the last few years in sub-Saharan Africa, peasant farming is of the greatest importance. Multilateral agencies have been unable to give the kind of attention to it that IFAD has been able to give to it. There was a gap in the system. Quite often it was filled, although sporadically, by bilateral aid. Now IFAD has stepped in to fill that gap. We must find a way to continue that aid and to provide much better finance for peasant farming.

The drop in IFAD's resources from $1,100 million to a pledge of $460 million for the next three-year period is completely inadequate to meet the expanded challenge that IFAD must now confront. The special fund for Africa has tried to redress that shortfall in the context of the 24 poorest countries in Africa, and IFAD's success deserves my hon. Friend's support.

I am worried by my hon. Friend's account of why the ODA is reluctant to respond to special appeals. He said that the UNDP core budget had been reduced because of the special fund that it has launched for Africa. I ask my hon. Friend to examine that statement with care. The British Government have considerably reduced their contributions to the core budget of the United Nations development programme.

The example set by our Government has been followed by other Governments. Thus, the UNDP core budget has been reduced still further. Like IFAD, it is a voluntary fund. That reduction was justifiable in the circumstances connected with the total ODA budget. To argue that, because the core budget has been reduced and the special fund for Africa is in some way connected with it, and therefore is diminishing the core activity of the organisation, is a thorough non sequitur.

The reason for officials advancing that argument to the Minister is the contraction of the bilateral budget of the ODA, compared with its multilateral contributions. That is a direct result of keeping the ODA budget too small.

Of course we must accommodate the multilateral agencies and make contributions to them. In the case of many of those agencies we have to make contributions; contracts and international treaties have been made and we have to provide our proportionate share. That is particularly true of the European Economic Community's budget for overseas development, to which we are obliged to respond in proportion. That is the major cause of the increase in multilateral contributions. In 1979 we contributed 40 per cent. of our total bilateral budget to multilateral institutions. Now our contribution is approaching 60 per cent.

After a budget has been reduced in real terms and then begins to increase in real terms, the bilateral programme is squeezed. Therefore, we must resist any suggestion that we should provide even more money for multilateral aid. My hon. Friend said that it was argued that this represented a distortion of the core funding, that it distorted overall priorities within the programme and that this is a mere rationalisation, resulting from the nature of the problems that confront his Department. I am delighted that my hon. Friend has overruled those arguments and that he has made a contribution of which we can all be proud. I congratulate him on it.

The amount of money that my hon. Friend has contributed is more than just a token, but let me examine the figure. My hon. Friend announced a contribution of 10 million United States dollars, or £7 million, for the special fund. That is half the amount that I understood, after reading the World Development Movement's brief, would be our proportionate share of any special fund.

In addition, my hon. Friend made no reference to the period over which he would expect to contribute that. As I understand it, the social fund is expected to be drawn down over three years and that would mean that the ODA's contribution would be only about £2.3 million per annum. That is not to be sneezed at, but it is a small sum. It may be proportionate to the contribution of the United States and others, but it is a small figure. I urge my hon. Friend to consider whether this is an adequate response to the needs of the special fund. However, I understand, as I have outlined, why he would have difficulty in arguing for a still larger sum. None the less, it is a small figure to deal with the special difficulties with which IFAD is being asked to deal.

Many of the programmes in our bilateral budget are of immense importance. In particular, I welcome the announcement that my hon. Friend is giving additional money to the research being carried out in western Sudan into sub-Saharan African problems of dry farming. There are some significant developments in that area which could transform it. First, it is clear from the research done so far that the wadi bottoms in the desert are capable of being farmed. They retain sub-surface water which could be tapped and could provide the farming necessary to support the much larger populations about which my hon. Friend the Member for Lewisham, East (Mr. Moynihan) and the hon. Member for Walthamstow (Mr. Deakins) are deeply concerned.

Unfortunately, the nutrients in that soil are so limited that it is doubtful whether they will be able to support the necessary crops for any length of time. After one, two or three years the nutrients will be absorbed and will not be renewable, leading to the disastrous type of shifting agriculture that has been the traditional practice in the area over the years.

However, there are developments, to which I hope our money is going, which will provide moisture at the roots of the crops and trees being planted in the area which involve injecting into the soil an absorbent material which retains sufficient moisture for plants to absorb the nutrients in the material and to survive, prosper and provide the food needed. That is the sort of investment in rural development in small areas which our bilateral budget is designed for and is supremely able to give. I am delighted that my hon. Friend has seen fit to contribute in that special way.

I do not want to undermine our bilateral budget because it has worthwhile projects which have become more efficient and better focused over the past seven years or so. We owe a great deal to the ODA and people working in it for the quality of their work. As I have made clear, we should he doing even more.

My hon. Friend the Member for Lewisham and the hon. Member for Vauxhall (Mr. Holland) have pointed out that, from the IFAD fund, we gain £2 of procurement for every £1 that we contribute, so there is a self-interested motivation for contributing to the special fund. It probably has not escaped my hon. Friend the Minister's attention that if we had not contributed to the special fund we would not have been able to benefit from the procurement under that fund from which, as I have said, we disproportionately benefit.

I want my hon. Friend the Minister to give serious consideration to a fact that I learnt on a recent visit to Washington with the all-party committee on overseas development. The Japanese Government and the Japanese tenderers tender for every contract put out by the United Nations agencies. One wonders how they can do it. To tender for those contracts is an expensive business which involves research and travel. Indeed, the production of the documents is a costly business. The Japanese Government meet all the costs. The Japanese do not benefit from their contributions on a 2:1 basis as we do; they benefit by 13:1.For every Japanese yen put into the World Bank the Japanese draw out 13.

There is a lesson for us. For many reasons, we should support tenders for UN contracts and put them on a level with the Japanese. That could be a potent source of export orders and therefore a means by which we can reduce unemployment here, particularly in your constituency, Mr. Deputy Speaker, because it would be involved. Such a scheme would be of mutual benefit to us and to the countries overseas.

I hope that the Minister will take that suggestion up with the Minister for Trade to whom I have written on the subject. We must support our tenderers. I hope that in future we receive more that £2 of procurement for every £1 that we invest.

A parallel fund is that operated by the IDA. That fund has recently been agreed at $11.5 billion — a major reduction on the IDA-6 in real terms, but an increase on the IDA-7. This is too small an amount. To keep up in real terms with the increased call on its resources by China and India, the fund should amount to $20 billion.

The finance director of the World Bank, Mr. Moeen Quereshi, recently said that many of the African countries would not have been excluded from further IMF support because they could not pay the short-term high-interest loans without balance of payments support if a more generous contribution had been made to IDA-7. That would have assisted productive enterprise and prevented the need to import food. That food could have been grown at home with the help of grants and assistance from the IDA.

The IFAD special fund and the IDA fund are too small. Per capita food production in Africa is declining. There is also a net flow of capital and interest payments out of Africa to the World Bank, the International Monetary Fund and the developed countries. Can the world justify taking resources out of such countries without trying to put back more money?

I welcome the Minister's support for the special fund but I hope that he will be able to persuade the powers that be in our Government and elsewhere to offer more support. The Minister has already made progress with the food aid programme within the EEC. I hope that larger funds will be produced domestically and internationally so that these serious problems can be addressed.

1.29 pm
Mr. Guy Barnett (Greenwich)

I am glad to follow the hon. Member for Hertford and Stortford (Mr. Wells) because we were together on the recent visit to Washington by the all-party group on overseas development. I agree with some of his comments about that visit. I congratulate the Minister on his appointment. If 1 have any regrets, they arise from the remarks by my hon. Friend the Member for Vauxhall (Mr. Holland) who suggested that there might be some Balliol collusion. I hope that no such collusion will exist across the Dispatch Boxes. I speak as one who attended a different but no less illustrious college at the same university.

I agree with a number of things that the Minister said. I agree with the decision that he announced and I think that it has had an almost universal welcome in the House. What he has announced may not be enough but the principle behind the decision to contribute to the special fund of IFAD was the right one to make. When the Minister's predecessor was asked about this subject, he said: I agree that the development of agriculture is a high priority throughout the Third world. IFAD does a good job, but I remind my hon. Friend that the more we put into multilateral agencies such as this, the less is available for our own bilateral programme".—[Official Report, 2 December 1985; Vol. 88, c.17] I am afraid it appears that the consequences of the Minister's action are that to that degree there will be less for our own bilateral programme. As the hon. Member for Hertford and Stortford (Mr. Wells) said, we need more money. I understand the anxiety in the Department that an ever larger proportion of our aid budget goes to multilateral agencies and that an increasing proportion of that multilateral budget goes to the disgustingly inefficient European development fund and the programmes that it runs. That is sad, because, like the previous Minister, the right hon. Member for Aylesbury (Mr. Raison), I agree that our bilateral programme is on the whole well run, especially in agriculture, about which I shall say something later. But there is a problem and it will eat further into the bilateral programme that Britain is able to mount in the developing world.

I have no doubts about the value of our contribution and I echo many of the congratulatory remarks that have been made about IFAD and its relevance to the problems of agriculture in the Third world, especially the relevance of the special programme that it recently mounted for Africa. Some hon. Members spoke about water conservation and the importance of forestry. I should mention also the emphasis placed on the importance of seeds, implements and fertilisers and the emphasis that is given to traditional crops such as cassava, sorghum and millet in the more vulnerable areas of the African continent.

The fund quite properly emphasises the importance of production in small units by smallholder farmers. For some years there has been an argument about overseas development and about what is and is not real aid. I have become more and more impatient with this argument. It is as though there was special merit in providing for food production as opposed to crop production for export or in placing emphasis on agriculture rather than on infrastructure developments of one kind or another. In many respects these are false arguments because crop production and the production of food by the farmer and his family are of equal and complementary importance to his standard of living. The road that carries the crops out and is used to carry supplies to rural areas is also important. I approve of the road that Britain provided in the Embu and Maru areas of Kenya. That is an example of a road that opens up an area in which there can be increased production of crops for export, which helps Kenya's balance of payments.

The emphasis on smallholder farming is important where it produces both crops and food for the family. In certain more favourable climes it can often produce a variety of crops so that the very diversity that an individual smallholder produces can, to some extent, shield him against fluctuating commodity prices. That is a powerful case.

Mr. Bowen Wells

Does the hon. Gentleman agree that one of the most outstanding examples of that is in Kenya, a country that he knows well, where the smallholder tea and coffee plantations also produce cash crops for the markets, and therefore provide food not only for the family but for the wider population in those areas? Those co-operatives were started by the Commonwealth Development Corporation, which comes within my hon. Friend the Minister's Department but which my hon. Friend may not yet have had an opportunity to see.

Mr. Barnett

I am grateful to the hon. Gentleman for that intervention because I, too, wish strongly to recommend to the Minister that he takes an early opportunity to see the tea and coffee production that was originated by the CDC in Kenya. It is now the responsibility of the Tea Development Authority in Kenya. If the Minister has the opportunity to visit that country, I hope that he will also see the Mumias sugar operation that I saw earlier this year. I did not actually visit the factories, but I saw, at a distance, the enormous change that it has made to the whole terrain. I discovered that farm incomes and the general level of prosperity in western Kenya had been considerably enhanced by that development, which can only be good.

It is important to emphasise that so far I have been talking about the relatively well endowed parts of Africa —areas fortunate enough to receive two crops a year because the rainfall pattern makes that possible and where there is a high level of fertility in the soil so that farmers can reap modestly good incomes even with the sort of difficulties mentioned by my hon. Friend the Member for Vauxhall arising from the desperate position in which their Governments find themselves with the fluctuating and often falling commodity prices, although Kenya is relatively fortunate in the way in which tea and coffee prices have moved. Nevertheless, it is possible for many farmers to provide for themselves and also to receive a cash income, which makes their position fairly reasonable.

One of the strong points that came out of the report of the all-party parliamentary group on overseas development published just over a year ago was, alas, that, contrary to what the Minister said, Britain does not seem to figure very well in the more vulnerable areas of Africa. When the Minister's predecessor spoke, quite properly, about the value of the British contribution to agriculture in Africa, he sometimes failed to recognise the degree to which the more vulnerable areas were sometimes neglected. If the Minister has not yet had the opportunity, to glance at the report, he may be interested in what it says on pages 20 and 21 which refer to the distribution of British aid. At the bottom of page 20 the report states: Rural development expenditures have remained a very low proportion of total spending. In fact, the figure for allocation — rather than expenditures — shows an even sharper decline from £3.7 million in 1979 and £10 million in 1980 to under £0.2 million in 1984. Those are the areas about which we need to be concerned. We need to find more money for the more difficult matter of rural development in the vulnerable areas. That is more difficult and it takes longer—it may take five, 10 or 15 years before one is able to restore the position in areas that were vulnerable in the recent famine.

In that connection, I hope that the Minister will look carefully during his first few months in office at what has happened to the old scientific units such as the Tropical Development and Research Institute. That aspect of the Department's activities has been severely cut both in staff and in ability to provide the scientific advice that is badly needed by countries affected by drought, locusts and poor conservation of soil. We have a special contribution to make in that sector, whether through organisations such as IFAD or through bilateral programmes.

We have an enormously important contribution to make. Yesterday I met representatives of the British Consultants Bureau, which has a variety of professional advice available to the Department and international agencies and is unrivalled in the expertise that it can offer. Many hon. Members will be aware of the significant contribution that the water industry is making, in particular through Water Aid, which is practically and voluntarily supported by the staffs of Thames and other water authorities. Those are important contributions and they can be of a special order because of our experience and our tradition as a former colonial power. For instance, the number of people who worked as agricultural officers and the number of institutes in our universities and research institutes are the inheritance of the institutions set up to back up the work done by the Colonial Office in earlier days.

Mr. Cash

I had the great opportunity of going to Canada with the CPA delegation in July, and heard that that country is thinking about ways of exporting its water. Has the hon. Gentleman heard of this, and does he regard Commonwealth co-operation on such a scale and in such a way as realistic?

Mr. Barnett

There are some occasions when I feel that we would he well advised to export some of our water. However, I suspect that this would be an expensive operation and I prefer the suggestings made by the hon. Member for Hertford and Stortford about water conservation. My hon. Friend the Member for Vauxhall spoke about other forms of water conservation for use during dry periods. We must recognise the fact that in the African continent the rains may fail. A survey that I did many years ago showed that in one area—a particularly well endowed area not far from Lake Victoria — the rains failed on average this century once every three years.

Such experiences are written into many traditional methods that African farmers use, from which we should he learning. Sometimes we are all too apt to go out to Africa and tell the world how to live—I have made this point before — forgetting that many of the traditional methods of African agriculture are born of such experience. Often, we can reinforce what that experience teaches because it is based on the practical experience of African farmers.

I underline my support for IFAD, and for the step that the Minister has taken, which is absolutely right. I hope that it is the forerunner of more pressure by the Minister on his fellow Ministers and, indeed, on the Cabinet. Most hon. Members will be behind him. He will know that a growing and articulate body of public opinion supports him. He has already said that overseas development will be an issue in the next general election. I hope that, both within and outside the House, he w ill give the subject a higher profile than it has enjoyed in the past.

1.45 pm
Mr. Richard Livsey (Brecon and Radnor)

I congratulate the Minister on his appointment and wish him well. I also congratulate him on his announcement this morning of additional support for the International Fund for Agricultural Development's special fund. Our problem is that, in the decade up to 1983, United Kingdom aid to sub-Saharan Africa decreased in real terms. Let us hope that his announcement this morning will reverse that trend, because during that decade, Japan, the United States, Canada and even the OPEC countries increased their contributions. However, from what we heard this morning, OPEC is no longer in a position to increase its contribution.

The hon. Member for Lewisham, East (Mr. Moynihan) mentioned the gap between a 2.5 per cent. increase in food production and a 3 per cent. increase in population in many of the countries which we are discussing. That is one of the most serious statistics with which we must wrestle. Food production cannot catch up with population growth unless we have a crash programme to help the African countries especially to help themselves.

References have been made to the problem of locusts in the Horn of Africa. That is a serious problem that must be tackled immediately. We cannot wait a minute longer. Another unfortunate problem is the war in the Sudan, which is causing tremendous disruption and hardship and increased poverty and starvation among the people of that country. The staff of the college at which I used to lecture — the Welsh agricultural college — are engaged in a programme in the Sudan to try to assist the people there. They are training the trainers so that the people of the Sudan can learn how to help themselves in developing their agriculture, but they have a difficult task because of the present conditions in that country. The low technology development of the innate farming practices in African countries must be encouraged. In that respect, I agree wholeheartedly with the hon. Member for Greenwich (Mr. Barnett).

The statistics on starvation in the African continent are alarming. In the few years up to 1985, 1 million Ethiopian people died from starvation each year. In the wider context of the Third world, 12 million children under the age of five died in 1978, and recent statistics suggest that the present figure may be 15 million. The World Bank has estimated that 800 million people are starving. No one in any Western country can be proud of those figures. We must tackle the problem urgently and with a great deal of spirit and direction.

The most telling statistic that I have heard is that it costs $400 to transport I tonne of grain or wheat to Africa, but that an African can grow I tonne of wheat a year for the next 20 years at a cost of just $200. That is an astonishing state of affairs. We must help those countries to help themselves. The Minister's announcement today is a move in the right direction.

We have not met the United Nations target contribution of 0.7 per cent. of GDP in aid for Third world countries. We have been stuck at about 0.35 or 0.36 per cent. of GDP. Knowing the Minister's record. I am sure that he will do something to put that right.

The development of local agriculture is the key. The IFAD has a major role in developing African and Third world agriculture and we must back it. I believe that, with our encouragement, the Minister will show the way.

1.51 pm
Mr. Geraint Howells (Ceredigion and Pembroke, North)

I endorse the sentiments of hon. Members who wish the Minister well in his new job. He has a challenging task and I am sure that he will enjoy his job and will help those who are less fortunate than we are.

Earlier this year I joined hon. Members from both sides of the House on a visit to Somalia. I plead on behalf of the people of Somalia. I have heard hon. Members arguing that solutions must be found to long-term problems such as the development of local agriculture, but I believe that the biggest problems are the short-term problems.

The parliamentary delegation visited the camps in Somalia where millions of people live in hope that i:heir next meal will come from somewhere. I saw women queueing all day for a week's rations. It was a depressing sight. On the other hand, we in the Western world produce so much food, but we leave the surplus in intervention stores for years and then dispose of it at a giveaway price or dump it in the sea. There is something radically wrong with our marketing and distribution system in Europe.

We were invited to see what we were told was a brand new school in northern Somalia. We discovered that the building consisted merely of branches that had been pushed into the ground. A few camels had been slaughtered and skinned to provide some cover from the sun. The children had nothing to write on, they could only listen to the teacher. Partitions between the classes were also made of branches. I thought to myself how fortunate we are in the West where we live in prosperous nations.

The President and other members of the Somalian Government told us that they were not interested in loans, because they would never be able to repay them. They were interested in grants and aid from other countries and organisations. We are all morally bound, no matter which party we support, to try to persuade people in power to help such countries.

The countries of the world spend enough on arms in a fortnight —$17.5 billion—to feed, house, educate and look after the health of every individual in Africa for a year.

Some of us believe ourselves to be Christians, and are thus morally bound to try to help those who are less fortunate than we. On their behalf, I urge the Minister to give them more aid. Perhaps he could ask the Agriculture Minister to try and persuade his European counterparts to do something with the surplus food. I know that it would be difficult to persuade them, that it could be sent to other countries, and to Somalia in particular. That country has good roads to the camps and an excellent port which could accept the food.

I hope that my little plea will be heard by someone somewhere, so that those unfortunate people can be better cared for and to live in a better society in the future.

1.55 pm
Mr. Chris Patten

Perhaps it is appropriate that we should he debating this order on United Nations day. Indeed, it may or may not be appropriate that the debate should have been launched by two hon. Members from the same stable — which was not Trinity. However, if the hon. Member for Greenwich (Mr. Barnett) was in the Chamber, I would not want him to think that there was a conspiracy. Indeed, I mean no disrespect to the hon. Members for Brecon and Radnor (Mr. Livsey) and for Ceredigion and Pembroke, North (Mr. Howells) when I say that if the Liberal party's spokesman on these matters had been in the Chamber, the hon. Member for Greenwich might well have thought that a conspiracy was afoot, as he is also entitled to wear the same halter as I have on today.

I enjoyed the speech of the hon. Member for Vauxhall (Mr. Holland). Last time I heard him speak it was in the Oxford union with, I believe, Richard Crossman. I agree with some of what he said, and about the importance of examining with some urgency the basis of IFAD's future financing. Indeed, I mentioned that at the beginning of the debate. I hope that we shall be able to make substantial progress after December. The hon. Gentleman suggested that the trend of IFAD's activities was insufficient. But if the new replenishment and special programme are committed, as planned, until the end of 1988, IFAD will be providing $300 million or more each year. That is well above the level for every year since 1982. In a sense, no amount can be enough, but IFAD is not the only player on the field.

Mr. Stuart Holland

From the Minister's earlier remarks, I assume that the £7 million involved is spread over a three-year period, and so amounts to about £2.3 million a year. However, the minimum necessary is at least double that amount. The target figure should be at least £5 million a year. I hope that he and his colleagues will work on that point so that IFAD's funding is more in line with real needs.

I also hope that the Minister will deal with the locust problem. It is a matter not simply of whether light aircraft can get into Tigre but of getting backpacks in to spray crops, and so on. The Eritrean Relief Association has made a submission to the Minister, and if he has not received it, we can let him have it. I hope that he will be able to respond to it.

Mr. Patten

I certainly want to consider the contribution that we are making to the special fund, its amount and its proportion in relation to what other countries are doing, and the important question of locusts which the hon. Gentleman mentioned in his speech, but perhaps I could do that in sequence of argument so that my remarks may be easier to follow than they otherwise would be. The hon. Gentleman spoke extremely eloquently about the problems of Africa. However, I did not agree with everything that he said, as I shall make clear later and as I hope to have opportunities of making clear during many similar debates over the next several years.

I remind the House of what we are doing for Africa. We have made and continue to make a substantial contribution to development in that continent. We have provided over £2,000 million of aid through bilateral and multilateral channels to Africa since 1982. A total of £570 million was provided in 1985 alone, when 43 per cent. of all British aid went directly or indirectly to Africa. In terms of bilateral aid, Sudan received over £42 million last year; Kenya, £34 million; Zambia, £26 million; Zimbabwe, £24 million, and the list continues.

We shall continue to provide effective assistance to those African countries which have demonstrated their need for it and their ability to use it to good purpose. Two recent examples underline that commitment. We have offered £25 million in fast spending aid for Tanzania to support economic reforms agreed with the International Monetary Fund. I recognise the courage and the difficulty which some of those reforms will involve. I have just announced £6 million of grant aid for the Gambia in support of its economic recovery programme, which is backed by the fund and the World Bank. Britain has also been ahead of many other donors in converting past aid loans to the poorest countries into grants. I think that we are well up at the top of the field with the Germans. That policy has been worth £1 billion to those countries. Africa alone has benefited to the tune of £260 million.

It is important for OECD countries and those in the developed world to give African and other developing countries the help they need, especially when they adopt policies which are more likely to lay down solid foundations for sustainable development in future. That is especially relevant to agriculture on which we rightly contribute much of our effort.

I listened to what the hon. Member for Vauxhall said. I thought that there was a disjuncture between his remarks and some of the speeches that I read made during the United Nations special session. For example, I thought that there was a disjuncture between what the Senegalese Foreign Minister said at the end of the session and the action programme drawn up largely by the African countries. An increasing number of African Governments are a great deal more realistic about economic policy than the hon. Gentleman.

Mr. Stuart Holland

When the hon. Gentleman has spent more time at the Dispatch Box—he is new to the portfolio—he will realise that Senegal is not among the least developed African countries. It is the main beneficiary from the Lome programme. Senegal does well out of virtually every programme that goes south of the Mediterranean. A speech by a Senegalese Minister is not exactly definitive proof that we are remedying the problems of sub-Saharan Africa.

Mr. Patten

I can help the hon. Gentleman by sending him, in addition, a speech made by President Kaunda, that I read the other day. I am not sure whether he would apply the same arguments to President Kaunda, in his position. I should be perfectly happy to go through with him what the Tanzanians have just agreed to do, I think sensibly, and what the Gambians have agreed to do.

The hon. Member for Vauxhall mentioned some names with which I am still too much of a tyro to be acquainted. He referred at some length to what he regards as the World Bank's market-oriented solutions, which he considers not to he relevant to African countries. That argument is refuted by the clear economic revival in Ghana and the great increase in agricultural productivity in Zambia. Both Ghana and Zambia have taken difficult policy decisions, which are decidely market oriented, on World Bank advice.

Mr. Stuart Holland

The reality is, as the Minister will learn if he talks to President Kaunda, that both he and the Tanzanians who talked to me about this matter were made an offer that they were not in a position to refuse. It was a "godfather" offer from the International Monetary Fund that was backed by the British Government. In other words, his predecessor would support a bilateral programme only if Tanzania would agree to IMF conditionality. That was deeply resented by the Tanzanians. Ghana has a debt of $2 billion and it takes 67 per cent. of its export earnings to finance the repayments on that debt. It is a crippling debt. Only two days ago I was talking to those in the Ghanian presidency about this matter and they said that they would like the Minister to do something about it.

Mr. Patten

I am not able yet, though I look forward to being in the position, to drop names in the hon. Gentleman's style, who in time will be a formidable competitor for the right hon. Member for Leeds, East (Mr Healey). He still has some way to go along the road. The hon. Gentleman's experience and his remarks about Africa are not borne out by what has happened or by what has been happening in a number of African countries. I look forward to returning to the Chamber with a great deal more anecdotal experience. I look forward also to trying — I am sure successfully — to move on the hon. Gentleman from the formidable intellectual position which he now occupies. He seems to be stuck in a rather early stage of Tanzanian socialism, which has gone out of fashion everywhere except the National Executive Committee of the Labour party.

The hon. Member for Vauxhall referred in passing to European food surpluses and the situation in Africa. He will know how much importance I attach to that. With respect to the hon. Member for Ceredigion and Pembroke, North (Mr. Howells), I do not think that my analysis and his would necessarily tally, but I confess in saying that that I do not represent an agricultural constituency. It is vital for us to reform the European Communities food aid regulations. It took nearly five years for us to gel: the present entirely inadequate regulations in place and we shall be trying in a matter of months to reform the regulations.

I hope that we shall have the support of organisations such as the World Development Movement, which I understand has organised a petition on the subject throughout Europe. I hope that we shall be able to make significant progress at the next development council meeting in November. Even if we cannot bring off a new food aid regulation from that council. I hope that we shall be able at least to make sufficient progress to see a new regulation introduced as soon thereafter as possible. That is vital because I think that public opinion is increasingly outraged by the cruel paradox of substantial surpluses in Europe and famine and deficit in Africa and elsewhere.

The hon. Member for Vauxhall referred to locusts. We have provided a total of £2.5 million this year for locust and pest control in Africa, over £800,000 of which was recently announced as being available for urgently needed insecticides, spraying equipment and transport in Botswana, the Gambia, Mali, Senegal, the Sahel and Niger. Of the remainder, nearly £1 million has been provided for various forms of pest control in Ethiopia, especially in connection with the drive against armyworm.

I listened with interest and sympathy to what the hon. Gentleman said about Ethiopia. As he will be aware, there are certain difficulties in dealing with sovereign Governments. I do not mean this as pejoratively as it will sound, but an approach which has at least something in common with gunboat diplomacy, however admirable and humanitarian its objectives, is difficult to carry through. However, there is a substantial problem, of which I am aware, with the villagisation and resettlement programme in Ethiopia. We are considering how best we can deal with that now both on our own and through multinational organsiations. I am hoping to send a senior official from the ODA to Ethiopia shortly to see what more we can do in terms of rehabilitation and generally.

At the meeting of the joint assembly of the European Parliament and ACP countries I was able to talk—I am name-dropping again—to the Ethiopian ambassador to the European Community and to an Ethiopian Minister whom I learnt to call Comrade Mersie. I put these points forcibly to them and, as I have said, we are hoping to send a senior official to Ethiopia shortly. I shall ensure that I see the document about the situation in Tigre and Eritrea, to which the hon. Gentleman referred.

I was particularly grateful to my hon. Friend i:he Member for Lewisham, East for welcoming me to the Dispatch Box in this guise. My hon. Friend and the hon. Member for Walthamstow (Mr. Deakins), whom I know cannot be present for my reply and who had the courtesy to explain that he had a constituency engagement, both referred to population policy and its importance to our multilateral and bilateral aid programme. Population policy will be on the agenda of the development council meeting on 11 November. The Commission has put forward a paper on the subject and I hope that we shall have an interesting and useful discussion. There are considerable sensitivities on the issue. Some of them are even greater in donor countries than in recipent countries, if I may make that slightly provocative point. We should attempt to reach a commonly agreed position in the EC next month.

My hon. Friend also referred to women in development—a subject which I was able to discuss with the president of the World Bank on Monday. He made some interesting remarks in his speech to the governors of the World Bank at the end of September, to which the hon. Member for Walthamstow also referred. My hon. Friend the Member for Hertford and Stortford (Mr. Wells) suggested that I should make as many early visits as possible to some international financial institutions and I hope to begin with a visit to the World Bank and the International Monetary Fund at the beginning of the new year.

My hon. Friend the Member for Hertford and Stortford, whose speech reminded me what a tiro I am in these matters, dealt particularly with the relationship between core funds and special programmes. He took me to task ever so nicely, as he is perfectly entitled to do, about what I said. I gathered from his remarks that he thought that what I said had been planted in my mouth by a Department which I have already learnt to respect and enjoy. I am grown up enough to be responsible for anything I do or say these days.

Quite apart from the arguments about the relationship between bilateral and multilateral aid, I am disinclined to accept fragmentation. One consequence of the multiplication of special programmes is that one avoids dealing with basic problems — for example, IFAD's replenishment. Special programmes mean more bureaucracy for the administration of small amounts of money. Special funds are administratively more costly than core operations.

My hon. Friend asked me about the amount of money that we are making available for the special programme. He was right to refer to the time scale. The money will be drawn down over three to four years. I must again emphasise that, proportionately, we shall be contributing more than a number of other countries will be contributing. If OPEC had contributed to the special fund, and had it reached $300 million, our contribution to the programme would have been less. If the programme fetches up without OPEC at substantially less than that amount, our contribution will be above our normal share.

In my judgment, it would be wholly wrong for our contribution to the special programme to exceed our contribution to the replenishment. I understand the importance of obtaining a good share of the procurement which follows on from the work of the fund. I shall take up my hon. Friend's remarks, following his visit to Washington earlier this autumn.

The hon. Member for Brecon and Radnor (Mr. Livsey) referred to a number of matters concerning Sudan. I was able to discuss these matters about 10 days ago during the extremely valuable visit to this country of the Prime Minister of Sudan. The hon. Member also referred to the position of children in developing countries. He may know that recently I have announced an additional grant of £1 million in response to a UNICEF appeal for assistance to children in certain African countries, particularly for immunisation. That is over and above our normal grant, which is about £6.5 million.

The hon. Member for Greenwich (Mr. Barnett) sugested that our contribution to the special programme would mean that we should have less money to spend elsewhere. I am pleased to say that we are making this contribution from a budget that is now growing in real terms. It will come out of our unallocated reserve. I realise that these terms of art are even more familiar to certain hon. Members than they are to me. Whole books, not to speak of House of Commons Select Committee reports, have been written on such subjects. Nevertheless, I am pleased to be able to say that our contribution to the special programme will not displace any other bilateral programme that may be proposed.

The hon. Member for Greenwich also referred to the Commonwealth Development Corporation. I am looking forward to seeing some of its work. My hon. Friend the Member for Hertford and Stortford also referred to the CDC. Its contribution to developing countries has been impressive. I note also what the hon. Member for Greenwich said about the important role played in the work of the ODA by its scientific units, in particular the Tropical Development and Research Institute. I have heard much about the excellence of its work, particularly in agricultural research. I am looking forward to visiting it soon to see its activities for myself.

Finally, the hon. Member for Ceredigion and Pembroke, North (Mr. Howells) reminded us, with his admirable and characteristic Welsh eloquence, of the objective of our aid programme. I hope that, with other hon. Members, I shall be able to play a small part in helping to achieve that objective and, as a step along the way, I should like to commend again this order to the House.

Question put and agreed to.

Resolved, That the draft International Fund for Agricultural Development (Second Replenishment) Order 1986, which was laid before this House on 30th June, be approved.