Liberia receives $25 million loan for cocoa, coffee sectors

The International Fund for Agricultural Development (IFAD) will provide a US$24.9 million loan to the  Liberia to improve food security and reduce post conflict poverty in rural communities.

The loan agreement for the Smallholder Tree Crop Revitalisation Support Project will aim to increase the incomes of cocoa and coffee producers by raising the quantity of produce sold.

The project will revitalize 50 per cent of existing plantations and restore 315 kilometres of rural road networks to improve access to market centres for more than 280,000 people. In addition, the project will strengthen both the private sector and extension services to smallholder farmer cooperatives by the Ministry of Agriculture.

The project will reach out to the most vulnerable rural farming households in Lofa County, where the highest number of smallholder cocoa and coffee producers live; most of Liberia's poor people live in this area. More than 15,000 smallholder cocoa and coffee farmers, of which half are women, will benefit directly from the project.

With this new project, IFAD will have financed 5 programmes and projects in Liberia for a total investment of $38.3 million benefitting 30,000 households.

International Fund for Agricultural Development

Lesotho: new financing aims to help rural farmers

The United Nations agency that works to improve the lives of the world's rural poor is providing $10 million to help small farmers in Lesotho boost agricultural production.

The agreement signed in Rome between the International Fund for Agricultural Development (IFAD) and the Government of Lesotho comprises a $5 million loan and a $5 million grant to increase market opportunities for smallholder farmers and improve production in four of the tiny nation's 10 districts.

Over 70 per cent of Lesotho's population lives in rural areas, according to a news release issued by IFAD, which adds that more than three quarters of them are involved in agriculture.

Lesotho's rural population has been hit hard in recent years by a steady decline in remittances from migrant mine workers in South Africa, a major source of cash for purchasing agricultural inputs or making other necessary investments.

About 15,000 rural households are expected to benefit from the project, the latest in a total of eight programmes and projects IFAD has financed in Lesotho for about $60.3 million.

For over three decades, IFAD has invested about $13.7 billion in grants and low-interest loans to developing countries, empowering about 405 million people to break out of poverty and to create vibrant rural communities.

UN News

Mauritania receives US$17.9 million agriculture loan and grant

A US$17.9 million loan and grant from the International Fund for Agricultural Development (IFAD) to Islamic Republic of Mauritania will help to improve the incomes and the living conditions of poor rural households depending on agriculture, the United Nations rural poverty agency has announced.

The loan and grant agreements are for the second phase of the Poverty Reduction project in Aftout South and Karakoro regions.

While the country’s agriculture is fragile due to recurrent drought and the desertification, the sector employs more than 56 per cent of the country’s population.

During this second phase of the project, the Government of Mauritania and IFAD will work together to boost the potential of the agriculture sector by enabling vulnerable rural households to significantly increase their production, part of which will be used to improve their food security; to create jobs for young people in agriculture, and other related occupations. The project will also focus on capacity-building activities to help women to acquire access to new economic opportunities and responsibilities within the rural organizations.

The project will build on the accomplishments of the first phase, which began in 2002 in an area known in Mauritania as the “poverty triangle”. During this time, the percentage of households suffering from periodic food shortage decreased and improvements increased such as the status of children’s nutrition, overall living conditions and basic infrastructure.

The second phase of the project will help build an economic and social fabric based on sustainable natural resource management that will be inclusive to poor rural households, particularly women and young people. More than 21,000 vulnerable rural households, women and young people will benefit from the project.

To date, IFAD will have financed 13 programmes and projects in Mauritania for a total investment of US$115.1 million benefiting 181,950 households.

IFAD

Uganda gets $14 million agriculture loan, cynics doubt farmer-level benefits

by John Kasozi
Uganda has secured a sh35b ($14m) loan from the International Fund for Agricultural Development (IFAD) to finance the Agricultural Technology and Agri-business Advisory Services project.

The loan has a maturity of 40 years, including a grace period of 10 years, a statement from the Uganda embassy in Rome said.

Deo Rwabita, Uganda’s ambassador to Italy and Kanayo Nwanze, the IFAD president, signed the loan deal at IFAD headquarters in Rome, Italy on November 9. Rwabita is also the permanent representative to FAO and WFP.

Ambassador Mumtaz Kassam, the deputy head of mission and Robert Sabiiti, the alternate permanent representative to FAO and WFP witnessed the function.

The loan administration and project supervision will be overseen by the IDA as a co-operating institution, the statement added.

It indicated that the project would focus on raising rural poor households’ income through improved agricultural research and advisory services, while enhancing environmental sustainability and resilience to climate risks and land degradation.

It will promote the role for private sector operators in agricultural development. It will also introduce new technologies for sustainable land management to help farmers cope with risks associated with climate change.

Speaking at the signing ceremony of the loan agreement, ambassador Rwabita hailed the excellent relationship between IFAD and Uganda. He noted that the Vegetable Oil Development project in Kalangala, which he visited recently, was a success as it has improved the livelihood of participating the farmers and their families.


Being national in scope, the project will build on the IFAD co-financed National Agricultural Advisory Services Programme, which was successfully completed in December 2010.

During the implementation of the project, the agriculture ministry will be the lead agency. The additional project parties are the National Agricultural Advisory Services and the National Agricultural Research Organisation.

Agriculture is one of the mainstays of the Ugandan economy. Raising agricultural productivity and promoting agriculture businesses are high priorities for the government.

With the introduction of more profitable crops, smallholder farmers are expected to improve their yields and be able to set higher farm prices for their produce. More than 1.7 million rural households consisting of women and young people will benefit from the project.

With this new project, IFAD will have financed 14 programmes and projects in Uganda for a total investment of sh740billion (US$296.5 million) benefiting more than 4 million households.

Reader Comments 

Aaron | Bweyogerere
I''m a farmer but all the years I have done farming, I have never set my eyes or even benefited from the likes of naads, naro... These guys just use that money to buy fuel guzzling cars. The last time I tried getting a naads coordinator to my farm, he asked me for facilitation!!! So this is another waste of precious dollars.

Kilama Maxwell | Bweyale -Kiryandongo
This is good to hear, But? who are the actual beneficiaries? It is very difficult to access agriculture loans from the current banking institutions.I would suggest an agriculture bank be in place so that farmers would easily get the loans other than the so called traditional banks. otherwise the actual beneficiaries will not even have a smell of it.

kuhabwa fred | sembabule
This is a good initiative to support agriculture productivity and agribusiness projects in uganda which would be engine for massive food supply to the entire african continent and beyond however with my experience working with rural house holds to come out of cronic poverty and ensure positive results such funds should be channeled through farmer''s cooperatives, otherwise we might stop celebrating on loans agreement signing.

emma | mbarara
what is the importance of getting loans when we cant even use the money for its rightful targets!

KOMAKECH ALEX ONEK | Kitgum
rural framers in Uganda would have been the most empowered and rich farmers in East African region.Alot of financial concerns and support from both the government,local and International communities hace been shown unfortunately the money does not sinks to its rightful target.its my prayer to God and to the officials in public offices to have mercy on the Poor Ugandans who eat by chance than by choice.

ACAYE | Bergen - Norway
Alfonso,Good question,!!!! i also wonder where all the loans and grants go in Uganda!!! i hope they dont end up in private or personal accounts like the AIDS FUND!! NARO has already done enough research !!! all we need is to fund the farmers directly, in order to improve their out put and house hold incomes. i can see half of this loan ending up on financing seminars, workshops, and unnessary trips for the so called researchers!!! WE ALWAYS HAVE OUR EYES OFF the ball, and seeems nerver to get it right!!!! , very dissappointing!!!!

Peter | kampala
Let the money be used for the intended purpose, to avoid previous mistakes and setting up probing committees which consume more money! The agricultural sector needs much more investment given the prevailing environment situations.

Alfonso | Ntinda
How many loans does Uganda get in a week ? It has just borrowed from Nigeria NSSF to refurbish Mulago ! where does all the money URA collects go ? Now we cant even invest in local projects.


New Vision

East Africa could benefit from IFAD 's $600 million agric fund

by David Muwanga

It is time for the five partner states of the East African Community (EAC) including the other 16 countries that are member states of the International Fund for Agriculture Development (IFAD) to apply for funds to fill finding gaps in the agriculture ministries, an official has announced.

"We have already developed a budget of $600m for the next three years 2010-2012 through which member states of the IFAD can now apply to fill up funding gaps in the ministries of agriculture mainly for projects intended to support livelihoods of people in rural areas," said the fund's director for East, West and Southern Africa Ides v.d. Does de Willebois.

"All member states of the fund can apply and we allocate funds according to the population and the country's performance in the utilization of funds previously as some of the poorly performing countries are having their allocations reduced," he said on November 14, in Arusha, Tanzania.

This was after the opening of a five day regional implementation workshop for IFAD supported projects and programmes in East and Southern Africa at the Arusha International Conference centre (AICC) in Arusha, Tanzania.

The workshop that is joined by the South Sudan as a new member is aimed at sharing experiences on hindrances and progress by the heads of the funds projects and programmes from each country and drawing a way forward.

Tanzania's permanent secretary in the food security and cooperatives ministry Mohammed Saidi Muya said that his government has already drawn up an agriculture investment plan which is aimed at implementing seven priority programmes.

These include irrigation development whereby Tanzania has got 44m hectares of irrigable land but less than one million hectares are under irrigation.

"The other priority is production and commercialisation of agriculture targeting to involve the private sector in agricultural; production which has hitherto been a public but not a private sector concern," he said adding that this however calls for a minimum of six percent budget support which is still at between 6-7%.

He said the third priority is rural infrastructure that includes development of markets and trade and the forth being food and nutritional levels and fifth is disaster management and climate change mitigation.

"We have already budgeted for the investment plan to cost $5.304bn but we have got a funding gap of $2.876bn to which we expect IFAD to provide us with support," he said.

East African Business Week

Foreign investors discover the potential in African agriculture

by Jackson Mvunganyi

Agriculture is one of the most important economic activities in Africa. In addition to providing employment, agriculture has the potential to transform African societies through the increased export of produce to Western markets.

Many agree that transformation will not take place without increased investment in agriculture, including public or private loans to small farmers. Statistics show that Africa has about 12% of the world’s arable land but 80% of it is not in use. Observers say there are many opportunities to develop land and even make it attractive to agribusinesses.


Among those taking advantage of new opportunities are Kenyan farmers, including some who are now making millions of dollars exporting flowers.

According to the International Food Policy Research Institute, horticulture has become the third largest source of foreign exchange in Kenya after tourism and tea.

But statistics show that farming in Kenya is still typically carried out by small farmers who usually cultivate no more than two hectares.

Adieno Achieng is a small scale farmer in Kisumu. She says government can support farmers like herself by subsidizing farm inputs like fertilizers and seeds. She says that farmers would also benefit from access to agricultural loans.


But in recent years, government assistance to small farmers and to agriculture in general has been in decline.

Mohammed Beavogui is the director of the Western & Central Africa Division of International Fund for Agricultural Development (IFAD) in Rome, Italy.

He says even international development aid meant for agriculture “dropped from 20% to 4%...” But he says that there are signs to show that this trend is changing because of the rise in food prices internationally. “People complain of food prices, but for agriculture somewhere, it is an opportunity,” he says.

Leaders from many developing countries are also recognizing the need to invest in their own food security.

At the 2009 G8 Summit in L’Aquila, Italy, donors collectively committed $20 billion to agricultural development and a new approach to global food security.

Beavogui says, “The share of agriculture in development is increasing…. For example, my institution, the International Fund for Agricultural Development, got an increase of almost 50 percent of its replenishment to support agricultural projects…. All these are showing that there is an effort to invest in agriculture,” he says.

He says productivity in Africa has a long way to go to catch up with counterparts in developing nations in Asia. “We still have to introduce new seeds…new technology, and fertilizer…”


Also needed, say development specialists are improved ways to take goods to market.

“If you want agriculture to work you need to allow agricultural products to get to the market, and that means you need roads,” Beavogui says.

The decision to invest in local agriculture often depends on a region’s ability to move goods from the farm to the factories or to ports for export.

Statistics indicate that only 34% of sub-Saharan Africa’s rural population lives within two kilometers of a paved road. In most of Africa, poor road infrastructure accounts for investors deciding to look elsewhere. “Every fifth African needs at least five hours to get to the nearest market….” Beavogui says.

Economists point to Malawi, which earns up to 70 percent of its foreign exchange from tobacco. Most of it is grown in the rural areas, where farmers have to transport the crop many miles to the commercial capital, Blantyre.


There are some signs that local and western investors are slowly attracting interest in African agricultural potential. The best example is the African Agricultural Land Fund, a private equity strategy that seeks to invest in food production across sub-Saharan Africa.

EmVest Asset Management is a joint venture between GrainVest South Africa and Emergent Asset Management of Britain. EmVest is managed by people with an active interest in African agriculture. GrainVest is a South African firm that is active throughout the agriculture production chain, including crops, maize milling and futures trading.

Patrick Devenish is the CEO of agro-industrial conglomerate AICO Africa, Ltd., incorporated in Zimbabwe. He says that AICO has invested heavily in African agriculture and the returns have been good. In Zimbabwe, the company is involved in buying and selling cotton, from which it makes and sells cotton lint.

Devenish says the agricultural sector in Africa is a particularly under-targeted area that offers great returns for any western investor. He’d also like to see US companies provide a market for African agricultural exports. “We would like to see a demand pull rather than push,” he says. Government has a role to play in attracting investment, Devenish says.

“We would like to see a government focusing on providing an environment for conducive to business rather than getting directly involved in the business…. There are government interventions that have made life difficult.”

That includes Zimbabwe, he says, where the government confiscated the farms of once-successful farmers.

AICO Africa Ltd. has been providing financing to small-scale cotton farmers, says Devenish, because “the average small farmer in Zimbabwe doesn’t have access to [it]….”

Beavogui of IFAD says another project sponsored by Kofi Annan’s NGO, the Alliance for a Green Revolution in Africa (AGRA), is developing a “breadbasket approach” to coordinate agricultural development efforts in a Ghana. The plan will add up to US $500m to the agricultural component of GDP, create up to 15,000 new jobs and double the household incomes of close to 250,000 smallholders.

Meanwhile, a company called Africa Finance Corporation (AFC), which serves West Africa is helping small farmers. Its CEO, Andrew Ali, says the strategy of investing in small farms is more useful “than replicating the big farms in the midwest of the US….”

Beavogui says it’s similar to the model used by Asian nations like Singapore where small farms are the cornerstone of the country’s relatively successfully agricultural export strategy.

VOA News

Is the fight against hunger a security issue?

by Howard LaFranchi

Washington - Which is more likely to grab and hold attention: third-world hunger or global food security?

Kanayo Nwanze bets the answer is the latter. The Nigerian who recently became president of the United Nations' International Fund for Agricultural Development (IFAD) says globalization has made the hunger and rural poverty that always pulled on the heartstrings an international security issue.

"People now have a clear sense of the linkages between food security and national security," says Dr. Nwanze. That understanding is helping bring questions of hunger and rural development to a broader audience, he says, "as well as to some very high places."

Hunger now can mean increased cross-border and international migration. And the riots that accompanied recent food shortages and price hikes in several parts of the world show how hunger can destabilize governments in regions of critical importance to the international battle against extremism.

That's why issues of rural hunger and food security are increasingly cropping up in venues ranging from the US Congress to the G-8 group of industrialized countries, Nwanze says. It is the emergence of food as an international security issue, Nwanze adds, that raises the odds that the international community will help developing countries come up with sustainable answers to food production challenges.

"Sustainability is determined inside a country, the answers to food production and development have to come from within," says the agronomist who studied in Kansas State University and who is recognized for developing a high-yield, drought-resistant rice for Africa. "But we also need the participation of the broader international community to answer these challenges that today have an impact on everyone."

In Washington recently in advance of this month's World Summit on Food Security in Rome, Nwanze noted that the security dimension of hunger and food production is translating into greater interest in places like the US capital. IFAD, which Nwanze describes as a cooperative among 160 countries that provides grants for rural development projects, benefited from a US-led initiative this year to increase the organization's funding by two-thirds to about $100 million.

At the same time, the US Congress is considering the Global Food Security Act, a five-year authorization that seeks to improve US response to food crises, provide new funding for university research in agriculture and for rural development projects.

In introducing the legislation earlier this year, Sen. Bob Casey (D) of Pennsylvania pointed to Pakistan, where he said nearly half the population is considered "food insecure" and likely to become more so as the military pursues offensives against the Taliban.

"Hunger and competition for food can lead to further instability and potentially undermine government leadership at a very critical time," he said.

Short-term food shortages must be addressed, IFAD's Nwanze says, but his focus appears to be on longer-term finding production and development solutions.

"We need to think beyond production to the means of getting what is produced to the market, and to creating livelihoods," Nwanze says. Thirty years ago, Angola was touted as a food production miracle, only to plunge back to Earth when the increased production failed to spark rural development and farm-to-market infrastructure. The same thing could happen to today's bright spots, he says.

"Today we speak of Malawi and Ghana [other African stand-outs] but where will these same countries be 30 years from now?" Nwanze asks.

Christian Science Monitor

IFAD loans Tanzania $56 million to boost farmer productivity

The United Nations has given Tanzania a $56 million loan through its rural development unit to support a programme aimed at boosting poor farmers' productivity.

The loan from the U.N. International Fund for Agricultural Development (IFAD) will help small-scale farmers by supporting the government's Agricultural Sector Development Programme -- which needs $315.6 million over a seven-year period.

"The loan ... will go towards helping poor rural women and men living on less than $1 a day to boost their agricultural productivity and incomes," the U.N. said in a statement on its Web site. "The programme also assists people most vulnerable to food insecurity by giving them access to agricultural knowledge, technologies, marketing systems and infrastructure."

More than half of Tanzania's population of about 40 million depends on agriculture for a living, with most tending small plots of less than an acre.

Late last month the east African country stopped issuing food export permits, saying it had insufficient food to sell and needed to give aid to more than 240,000 people.

The east African economy is among the continent's highest per capita aid recipients. In its budget for the year to June 2009, the government said donors would provide 34 percent of its spending money.

Other contributors to the Agricultural Sector Development Programme include the World Bank, the African Development Bank, Irish Aid, the Embassy of Japan and the European Union.

Reuters

Sudan receives $13.5 million IFAD food security grant

A new project in The Sudan financed by IFAD will help 38,000 of the poorest and most vulnerable households overcome food insecurity and extreme poverty in six counties in Southern Sudan’s Central Equatoria, Eastern Equatoria and Jonglei states.

The US$13.5 million IFAD grant to support the Southern Sudan Livelihoods Development Project will target households headed by women and returnees. An additional grant of US$9 million will be provided by the Kingdom of the Netherlands, as well as a US$3.4 million contribution fromthe Government of Southern Sudan and the beneficiaries.

IFAD’s grant agreement was signed at the Fund’s headquarters here today by Lennart Båge, its President, and Kuol Mawien Athien, Minister of Finance and Economic Planning of the Government of Southern Sudan.

“The project will be IFAD’s first operation in Southern Sudan following the Comprehensive Peace Agreement signed in January 2005,” said Rasha Omar, IFAD’s Country Programme Manager for The Sudan. “It aims to improve agricultural productivity and marketing activities while building the institutional capacities of county offices to ensure a sustainable agricultural and economic development.”

The project will tackle rural poverty, which is linked to the prolonged conflict situation, population displacement, poor public services and low agricultural productivity, by supporting community-based development of productive on-farm and off-farm activities. This includes technical and financial support for agricultural micro-projects, rural infrastructure and marketing facilities.

The key implementing partners of the project are the “boma” (cluster of villages) development committees and the government county offices. The project will also rely on technical assistance provided by qualified national and international non-governmental organizations to ensure the development and sustainability of community farming, herding and fishing activities as well as development of the planning and monitoring capacity in the county offices. In addition, it will finance repairs and maintenance of rural roads that support improved food security and higher incomes from agricultural activities.

With this project, IFAD will have financed 16 projects in The Sudan for a total of commitment of US$ 225.37 million.

International Fund for Agricultural Development (IFAD)

IFAD lends Mozambique $31 million to assist small scale farmers with marketing

Mozambique has been granted a $31.1 million loan facility to enable small-scale farmers in that country to market their surpluses more profitably. The loan was approved by the International Fund for Agriculture and Development (IFAD).

Underperforming rural and agricultural markets seriously affect the livelihood of the majority of the rural population in northern Mozambique, said IFAD, a United Nations programme, in the press release.

"Because of poor returns from surplus sales, smallholders adopt low-risk strategies, resulting in some of the lowest yields in southern Africa."

The programme would improve the terms of trade for smallholders, providing them with the incentives to move out of semi-subsistence agriculture. It would support 20 000 farmers in some 670 farmers' associations and 375 small-scale traders.

The programme had been designed to encourage the poorer members of the community to participate.

"Smallholders will be able to market their surpluses more profitably, thereby increasing income. Access to and participation in agricultural markets and value chains will be improved and efficient market intermediaries and effective partnerships will be established, stimulating increases in agricultural production," said IFAD.

Since its formation in 1978, IFAD has provided $143.9 million in loans to nine programmes and projects in Mozambique.

Two thirds of Mozambique's 20 million people live below the poverty line, according to World Bank statistics.

Sapa

UN Secretary General defends FAO against attack on its work

As the Food and Agriculture Organization (FAO) readies for a summit of world leaders next month, United Nations secretary general Ban Ki-moon on May 6 defended the Rome-based UN agency, which has come under fire for its failure to help meet the growing challenges of hunger worldwide.

The harshest attack came last week from Senegalese President Abdoulaye Wade, who described the FAO as a "bottomless pit of money, largely spent on its own functioning, with very little effective operations on the ground."

Asked to respond, Ban said: "In view of the gravity and seriousness of the situation, I can understand andsympathize with the frustrations of many African leaders, including President Wade of Senegal.

"But I would like to underscore that since its founding in 1945, the FAO has been leading the international community's efforts to help promote the production and productivity [of food] and provide necessary humanitarian assistance to many people affected by food shortages."

Wade said the FAO, headed by Jacques Diouf of Senegal, should be merged with another Rome-based UN agency, the International Fund for Agricultural Development (IFAD), to establish a single mega agriculture body. Some of the functions of the two UN agencies overlap. If such a body is created, he said, it should be located in Africa, not in a Western capital.

Wade was also critical of the extravagance of UN agencies and humanitarian non-governmental organizations. He said they "will use [aid money] on all sort of tricks - administration, trips and costs of luxury hotels for so-called experts, instead of on concrete actions on the ground."

Several factors are responsible for the food crisis, including the shortcomings of international organizations such as the FAO and other UN agencies, all of which failed to anticipate the gravity of the current disaster. The World Bank, a sister institution of the United Nations, also has to share some of the blame for the current crisis because of declining funds for agricultural research over the years.

Asked about the under-sourcing for research, World Bank president Robert Zoellick admitted his institution's failure but also singled out the shortcomings of governments.

"Yes, you know the international community goes through various phases of things," he said. "The World Bank, and frankly the governments themselves, invested less in agriculture. We have a country-system based approach, where the countries are our clients and they decide where they focus it. So, as we ramped up things for HIV/AIDS and malaria and other projects, there was clearly an underinvestment in agriculture.

"I don't think it's really helpful to point fingers at this responsibility, that responsibility. The key question is, having recognized the need, and it's one that I focused on shortly after taking over the Bank, how do we try to deal with it at these various stages."

The FAO hosted the first major World Conference on Food in Rome in 1974, which proclaimed that "every man, woman and child has the inalienable right to be free from hunger and malnutrition in order to develop their physical and mental faculties."

The goals of the conference included the eradication of hunger, the need for food security and the reduction of malnutrition "within a decade". But the goals were never reached.

In November 1996, the FAO hosted another five-day World Food Summit, which adopted a Rome Declaration on World Food Security and a Plan of Action to eradicate or minimize global hunger.

The current crisis, not surprisingly, has triggered a third Food Summit, also in Rome from June 3-5, where another elaborate plan is due to be unveiled by heads of state and governments.

Still, nearly 34 years after the first FAO conference, and dozens of UN resolutions and voluminous reports later, the developing world is facing another global food shortage, along with skyrocketing prices.

The price of rice alone, a staple in many Asian countries, rose to US$980 per tonne last week compared with $460 in March.

Speaking at the launch of the annual FAO report in October 2006, Diouf said "promises are no substitute for food." Calling on world leaders to honor their pledges, he said the 1996 World Food Summit promised to reduce the number of undernourished people by half by 2015.

Still, there were more hungry people in the developing countries, around 820 million today, than there were in 1996. Far from decreasing, the number of hungry people in the world is currently increasing at the rate of four million a year, Diouf said. The World Bank has estimated that already some 100 million people may have been pushed into poverty as a result of high prices.

At a meeting of 26 heads of UN agencies in Bern last week, the secretary-general identified multiple causes for the current food crisis, including escalating energy prices; lack of investment in agriculture over the past years; increasing demand for food; trade-distorting subsidies; and recurrent bad weather.

"This crisis has multiple effects, with its most serious impact on the most vulnerable in the poorest countries," Ban warned.

The secretary-general sourced the problem to "a dramatic escalation of food prices worldwide, which has evolved into what we believe is an unprecedented challenge of global proportions that has become a crisis for the most vulnerable.

"We see mounting hunger and increasing evidence of malnutrition, which has severely strained the capacities of humanitarian agencies to meet humanitarian needs, especially as promised funding has not yet materialized," he said.

IPS

IFAD to assist Nigeria to boost rural agricultural finance

The Nigerian Federal Government has begun a fresh move to boost agriculture in the country as it approved a total loan package of about N5 billion ($37.9 million) for the development of the sector and poverty eradication.

Of the total loan amount, the International Fund for Agricultural Development (IFAD), an Italy-based United Nations agency, would contribute $27.78 million, representing 67.8 per cent of the figure.

The IFAD would also contribute a total grant of $386,800 towards the initiative. In addition, the Ford Foundation is to provide a grant of $500,000 while the Federal Government would contribute $6.17 million, representing 15 per cent of the total loan package.

The participating institutions would contribute a total of $4.762 million while the beneficiaries (farmers) would raise $785,100.

The loan is payable over 40 years with a moratorium on payment of 10 years. The loan is also interest-free. But it attracts a service charge of 0.75 per cent of the amount outstanding.

The Minister of Information and Communications, Mr. John Odey and his Agriculture and Water Resources counterpart, Dr Sayyadi Abba Ruma, told journalists at the end of the Federal Executive Council (FEC) meeting that the approval was in line with the government's policy thrust on agricultural development, wealth and job creation, food security, poverty reduction and provision of raw materials for self-reliant industrialisation.

The aim, Odey added, was to establish linkages with formal financing agencies with a view to creating viable rural financing institutions.

He said: "The Federal Executive Council took a bold step in seeking collaboration with established world financial agencies, particularly IFAD and secured a loan of $27.17 million for the development and strengthening of micro finance institutions. The aim is to establish linkages between the institutions and formal financing institutions with a view to creating viable and sustainable rural financing institutions.

"The ultimate goal is to develop rural financial services to enhance accessibility of the rural population to these institutions and to expand the productivity of Agriculture and micro rural enterprises with a view to alleviating poverty by focusing on the rural poor, especially rural women and the physically challenged.

The minister added: "The approval for this loan is sequel to the Minister of Finance memo to council seeking council's consideration and approval. The matter was renegotiated and IFAD insisted on the need for the rural farmers to have direct access to credit. What it means is that the programme will increase its credit base for the rural poor, agriculture and small and medium scale enterprises, which will reach 345,000 beneficiaries across the country.

"The programme will be implemented in 23 states with two states from each of the six geo-political zones of the country. Thirty-six local governments would also benefit and it will run for a period of seven years. Council approved that the Finance Minister should execute the agreement on behalf of the Federal Government."

Guardian Newspapers

IFAD to spend $2 billion in three years on productivity, food security issues

The president of the International Fund for Agricultural Development (IFAD), Lennart Båge, has said that investment in agriculture can transform economies and pay high dividends in terms of quality of life and dignity for poor rural people.

Speaking on how agricultural investments can drive economic growth, he said agricultural investment can drive broader economic growth, setting the stage for long-term sustainable development. “Indeed, investments in agriculture are more effective in raising people out of poverty than investments in any other sector.”

Båge said IFAD will be investing US$2 billion over the next three years to increase the productivity, incomes and food security of poor rural people. He regretted that overall investment in agriculture remains far below the level required to achieve the MDGs., noting that aid for agriculture from all donors fell between 1995 and 2002. He added that increasing investment will be effective only if poor rural people have access to the land, working capital, markets and other assets they need to overcome the barriers they face.

“ Seventy-five per cent of the world’s extremely poor people live in the rural areas of developing countries-over 800 million women, children and men. One-quarter have no secure access to land. In many areas, indigenous peoples and ethnic minorities make up a disproportionate number of the rural poor, and in all areas women are the most vulnerable and marginalised.”

Båge said that poor rural people tell them that secure access to land, water and other natural resources is one of their highest priorities. “In fact, studies show that inequitable distribution and lack of access to land are often the driving forces behind poverty and hunger, as well as the roots of armed conflict and civil war. Moreover, access and tenure security influence the decisions poor people make about land and their options. Access and tenure influence the extent to which farmers are willing to commit money, their ability to obtain credit, and how much labour they are willing to invest to improve productivity, manage natural resources, and adopt new sustainable practices and technologies.”

He noted that there is growing awareness that the interests of poor rural people must be at the forefront of development and aid investment strategies. “However, even in a more supportive global environment, success will depend greatly on local solutions to the challenges of poverty and the environment, with a strong emphasis on making the livelihood and income strategies of poor rural people the basis for sustainable resource management.”

The Vanguard-Nigeria

IFAD funds Uganda rural development programme

The International Fund for Agricultural Development (IFAD) has announced a $38.9 million livelihood support programme for Uganda.

Uganda's ambassador to Italy, Deo Rwabita, said the programme would be funded by IFAD and a grant from the Belgian Survival Fund.

"Farmers and small rural enterprises will all benefit from this programme," said IFAD Vice President Kanayo Nwanze. "Our long-term aim is to empower local people and provide broad socio-economic support to these rural districts as they move forward in the decentralisation process."

Expected programme benefits include improvements in basic infrastructure, developments of rural roads, better access to financial services and a more reasonable approach to land rights and land managements. Nutrition and health in these regions are also expected to improve, in addition to encouraging self-reliance among rural people.

New Vision

Mozambique launches $50 million inputs subsidy programme

Mozambique's government on June 13 launched a $50 million agricultural subsidy programme designed to raise its food production and cut its dependency on imports and humanitarian aid. "We are banking on improved seeds, fertilizer and crop rotation to produce enough food for Mozambicans by 2014," said Jose Gaspar, the national director of Mozambique's agriculture extensions programme .

He added that 500,000 commercial farmers, or about 17 percent of those farming in Mozambique, would be covered by the programme, which will be jointly funded by the government and the International Fund for Agricultural Development (IFAD).

Farming in the former Portuguese colony remains labour-intensive and often lacks the modern technology used in neighbouring South Africa. Mozambique expects to spend $131 million to import 500,000 tonnes of cereals as part of its food security strategy, which was put in place after years of devastating droughts as well as intermittent flooding. Severe bouts of dry weather reduced crop yields in the 2007 harvest in parts of southern and central Mozambique, but abundant rains led to unexpectedly larger yields in other parts of the country. Cereal production this year is expected to have risen 7 percent compared to last year.

But more than half a million people in Mozambique are still likely to need food aid this year, according to Gaspar. He added that seeds and other agricultural inputs were desperately needed by farmers who were devastated by flooding earlier this year.

Reuters

Uganda's sunflower production blossoms

Uganda's earnings from sunflower production have yielded 138 billion shillings ($80 million) since the project was launched eight years ago. Connie Masaba, coordinator of the Vegetable Oil evelopment Project (VODP) , said through funding from the International Fund for Agricultural Development Fund (IFAD), the country has also been able to increase domestic oil production.

Under the VODP, the total area planted with sunflower in the project districts is 255,600 hectares, which have yielded 306,720 metric tonnes of sunflower seeds. This translates to 6,680 metric tonnes of sunflower oil worth sh138b and 230,000 metric tonnes of cake worth sh34.5b ($20 million) since the project started, Masaba said.

Masaba was briefing the IFAD vice-president, Kanayo Nwanze, during his visit to IFAD-funded projects in Masindi. Kanayo was in the country to assess the IFAD-funded projects. He disclosed that IFAD had contributed about sh300b to finance the various projects in Uganda. "It is IFAD's policy that the projects are owned by the beneficiaries and we are very impressed with what we have seen so far, Kanayo told farmers at Mpumwe and Kaduku sub-counties in Masindi.

Masaba said increased sunflower production had stimulated investments in agro-processing. Vegetable oil consumption in rural areas has increased and has led to the revitalisation of domestic vegetable oil industry in the country, she said.

New Vision

Madagascar scheme assists vanilla growers become more businesslike

Madagascar is the world's leading vanilla exporter, accounting for half of global production. But it remains one of the poorest countries in the world. There are also wide disparities between small-scale growers and larger estates that sell vanilla on the international market.

The International Fund for Agricultural Development (IFAD) in 2006 successfully completed a scheme introduced in the late 1990s to tackle the issue of fairer distribution of economic benefits. It sought to help small farmers learn new skills to improve their revenues from vanilla and better manage their irregular income. A goal was the linking of the various aspects of commercial production and the market, while also promoting subsistence farming, traditionally rice growing.

Vanilla farmers were encouraged to form vanilla growers' associations to gain more selling power and negotiate better prices for their crop. They were taught to process vanilla and store it to sell strategically at a better market price. More than 400 local associations of various types were created under the project. The groups include about 10,000 members, and membership is still growing. "Small farmers had previously sold their vanilla green, just after being picked. It doesn't keep when fresh, so they had to sell it immediately at a low price to buyers who came around and collected it straight after harvest," said Fabien Randriambololona, the project manager.

Farmers were also given access to financial services through the establishment of a network of credit unions. Poor farmers were excluded from the banking system and previously had to rely on high-interest loans. "This is probably the most successful aspect of the project, linking production and sales to a system of savings and credit," said Benoît Thierry, IFAD's country programme manager for Madagascar. Previously small rural producers had no way of saving, and would spend their sudden income on disposable goods such as stereos and bicycles, which put them in a dire situation for the rest of the year, as vanilla is sold only between June and October, and they neglected subsistence farming. A total of 18 credit union branches were created, exceeding the programme's target of 14. They covered 43 communities, with savings averaging about US$10 to US$15 million and the total amount of credit granted amounting to about US$32 million.

Despite its success, the project had some drawbacks, particularly because it coincided with a period of highly volatile vanilla prices, which soared to between US$450 and US$500 per kg at their peak in 2003 before plummeting to the level of US$25 to US$70 per kg at the end of the project (which was their level when the project started in 1998-99). The price surge was partly the result of a devastating cyclone in 2000, which destroyed part of the plants and created a shortage.

With the end of the project, the situation remains difficult because vanilla prices remain low. Other tropical countries like India and Uganda began to grow vanilla after the 2003 price hike, increasing international tonnage and keeping prices down. Farmers' associations will need to continue and extend their activities, diversification away from the price volatility of vanilla is necessary, and the credit unions will need to attract more members.

The introduction of an international fair trade certificate for vanilla, which, like those for other commodities, has the aim of guaranteeing a better income for small-scale farmers, will also help improve life for small growers in Madagascar.

IFAD