A partnership to eradicate rural poverty - IFAD

IFAD AND THE OPEC FUND
A partnership to
eradicate rural poverty

WORKING TOGETHER FOR 25 YEARS
Enabling the
rural poor to overcome
poverty
The International Fund for Agricultural Development (IFAD) is a specialized
agency of the United Nations dedicated to eradicating rural poverty in developing
countries. Through concessional and highly concessional loans and grants, IFAD
works with rural poor people, governments, donors, NGOs and other partners to
develop and finance programmes and projects that ensure rural poor people have
secure access to the assets they need to overcome poverty. These assets include
water, land and other natural resources, financial services, technology and markets.
IFAD’s activities are guided by three strategic objectives:
• strengthen the capacity of rural poor people and their organizations
• improve equitable access to productive natural resources and technologies
• increase access to financial services and markets
Underlying these strategic objectives is the belief that rural poor people must be
empowered to lead their own development if poverty is to be eradicated. Poor
people must be able to develop and strengthen their own organizations, so they
can advance their own interests and dismantle the obstacles that prevent many of
them from creating better lives for themselves. They must have more influence
over the decisions and policies that affect their lives, and more bargaining power
in the market place.
IFAD’s work is critical to achieving the MDGs. About 75 per cent of the world’s
poorest people live in rural areas and depend on agriculture and related activities
for their livelihoods. To reach the targets of halving the proportion of extremely
poor and hungry people by 2015, agriculture and rural development must be
central to development efforts.
Since starting operations in 1978, IFAD has invested almost US$8.7 billion in
689 programmes and projects that have reached more than 250 million rural poor
people. There are 192 ongoing IFAD-supported rural poverty eradication
programmes and projects, totalling US$6.1 billion. IFAD has invested almost
US$3 billion in these initiatives.
A symbol of international
cooperation among OECD, OPEC
and developing countries
IFAD’s logo, developed in 1978, is highly symbolic.
It shows an ear of grain supported by three stalks.
The stalks represent its three founding supporters –
OECD countries, OPEC countries and developing
countries.The creation of IFAD represented a new
type of partnership, between rich and poor countries,
in which each group provided substantial financing.

Making a
difference in the fight
against poverty
The OPEC Fund for International Development is an intergovernmental
development finance institution, established in 1976 by the then 13 member countries
of the Organisation of the Petroleum Exporting Countries (OPEC). The OPEC Fund
promotes cooperation between its member countries and other developing countries
as an expression of south-south solidarity. In particular, it supports the social and
economic advancement of low-income countries.
The OPEC Fund provides concessionary loans to
help finance development programmes and projects,
along with grants for technical assistance, food aid,
research and emergency relief. In addition, it
contributes to the resources of other development
institutions whose work benefits developing countries.
Of increasing importance is the OPEC Fund's
financing of private-sector activities in developing countries.
Today, the 12 member countries of the
OPEC Fund are Algeria, Gabon, Indonesia, the
Islamic Republic of Iran, Iraq, Kuwait, Libyan
Arab Jamahiriya, Nigeria, Qatar, Saudi Arabia,
the United Arab Emirates and the Bolivarian
Republic of Venezuela. Ecuador withdrew
from the OPEC Fund in 1993.
The OPEC Fund takes an integrated, participatory approach to development,
focusing on actions that directly improve the living standards of the world's poorest
people. Most of its work is in rural areas, and includes initiatives not only in the
agriculture sector, but also in health, water supply and sanitation, education, energy,
transportation, telecommunications, industry and private enterprise development.
The OPEC Fund has developed strong alliances with its partner countries, working
with them to address areas of greatest need.
Flexibility and responsiveness are among the OPEC Fund's core principles, allowing
for prompt action when new needs and opportunities arise. Recent examples include
its participation in the Heavily Indebted Poor Countries (HIPC) Debt Initiative, its
private-sector financing window, and its special grant accounts for HIV/AIDS, food
aid and the Palestinian Authority.
All developing countries, with the exception of OPEC Fund member states, are
eligible for assistance from the OPEC Fund. Since starting operations in 1976, the
OPEC Fund has committed more than US$7.6 billion in development financing,
including US$6.3 billion in loans for well over 1,000 programmes and projects. So far,
119 countries in all developing regions of the world have benefited from its financing.
About 330 projects are currently under way.
“The creation of IFAD represented a new type of
partnership – between OPEC countries and
industrialized countries, between developing
countries and developed countries – in which
each group provided substantial financing for the
institution. It was an early example of a global
alliance across geographic or ideological
differences, joining together for the shared goal of
eradicating poverty and hunger.”
Kofi Annan
Secretary-General of the United Nations

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Women in the Buberuka highlands of Rwanda collect clay from a streambed
to make bricks and roof tiles for sale. They are supported by a local NGO,
Duterimbere, or “Advancing Forward”.

Foreword
It is 30 years since OPEC member countries set off the chain of
events that led to the establishment of IFAD and the OPEC Fund
for International Development.
Created in response to the world food crisis that was devastating
many developing countries in the mid-1970s, IFAD represented a
recognition by the international community that a global alliance
with shared goals was needed to eradicate poverty and hunger.
The establishment of the OPEC Fund was a significant gesture of
the solidarity of OPEC member states with the developing world.
The creation of both
institutions in the same
period reflected broad
acknowledgement that
partnerships were a key to
addressing urgent global
problems.
Over almost three decades,
IFAD and the OPEC Fund
have crafted a unique
partnership that transcends
mere financial cooperation. The partnership is rooted in a common
goal: enabling poor people, especially in rural areas, to secure a
better life. We work together to design, finance and implement
development programmes and projects in some of the poorest and
most vulnerable rural communities in developing countries.
What made this partnership unique at its founding is still true
today. IFAD represented a new type of partnership between OPEC
countries and industrialized countries, and between developing
countries and developed countries. OPEC member countries
provided the will and substantial resources, in partnership with
the Organisation for Economic Co-operation and Development
(OECD), of the countries to make IFAD a reality.
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Because of this unique contribution, OPEC
countries hold a special status at IFAD.
Today, the world again faces a crisis, with poverty
still the single greatest threat to security and
sustainable development. The entire international
community now has an unprecedented focus on
poverty reduction – embodied in its commitment to
achieving the Millennium Development Goals
(MDGs). Time-bound and measurable, the MDGs
call on the international community to align
priorities and approaches, and to build a global
partnership for development.
With this new global initiative, the need for effective
and flexible partnerships is greater than ever. The
first target of the MDGs – to halve the proportion of
people living in extreme poverty by 2015 – is
achievable. In Southern and Eastern Asia, there has
been considerable progress towards reducing
poverty and hunger, strongly correlated with high
levels of investment in agriculture. In sub-Saharan
Africa, where public expenditure for agriculture is
relatively low, little progress has been made.
However, it is very encouraging that African leaders
are committed to increase investment in agriculture.
Both IFAD and the OPEC Fund are fully
committed to the principle of cooperation as we
work towards achieving the MDGs. However, we
believe, too, in looking beyond the targets. Poverty
eradication is about much more than just goals. It is
about real people and real needs. It is about
grinding hardship, hunger and sickness – the daily
lot of 1.2 billion men, women and children who live
in extreme poverty.
To date, over and above their independent
agendas, IFAD and the OPEC Fund have
cofinanced 58 programmes and projects in all
developing regions of the world. Both institutions
also participate in policy dialogue and work to
harmonize activities in areas of mutual interest.
In 2004, we met officially to explore new ways to
work together.
At the same time, we acknowledge that our most
important partners are poor people themselves.
Only by responding to their needs and aspirations
will we succeed in enabling them, and their
children, to lead a better life.
In this context, the long-term partnership between
IFAD and the OPEC Fund takes on greater
significance. As development partners, we
acknowledge the many benefits of combining
resources, skills and experience. By bringing our
individual strengths to the partnership, we
generate synergies that help maximize the impact
of our joint efforts.
Lennart Båge
President of IFAD
Suleiman J. Al-Herbish
Director-General of the OPEC Fund
The key to success in our joint initiatives is
complementarity. The OPEC Fund generally
supports rural infrastructure, while IFAD focuses
on agricultural support services and investment.
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With support from their crew leader, front, women from an ethnic minority in
Hoang Su Phi,Viet Nam, build roads connecting remote villages.
5

OPEC countries
and the origins of IFAD
In the mid-1970s, a world food crisis demanded
quick action to avert mass starvation, and to
address the underlying causes of hunger and
malnutrition over the long term. In response,
international leaders met at the United Nations
World Food Conference in Rome in 1974 to
discuss the complex dimensions of the food crisis
and the measures needed to achieve global food
security. They explored initiatives that could
forge new partnerships and mobilize additional
resources. One of these initiatives was a proposal
to create a new agency, IFAD, that would focus
on the poorest and most vulnerable people in
the world: rural poor people. But a major
stumbling block remained: where would the
resources come from? Traditional donors, while
in favour of the proposed new agency, were
reluctant to give more.
The willingness of OPEC countries to provide a
substantial portion of IFAD’s initial funding was one
of the turning points leading to the establishment of
the new institution. By committing significant
financial resources, the OPEC countries also
leveraged a ground-breaking agreement by which
developing countries would have a prominent role
in the governance of IFAD.
An initial target was set for US$1 billion, with the
understanding that OECD countries and OPEC
countries would contribute the bulk of the
funding, but that other developing countries
would also contribute. This new fund would also
have a unique power-sharing arrangement. Equal
voting power would be shared among the three
categories of members: OECD countries, OPEC
nations and other developing countries.
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Transforming this idea into reality required
persistent and protracted negotiations. OPEC
countries generously agreed to provide almost as
large a share of contributions as the OECD
countries. OECD countries were convinced of the
value of participating in a fund where they would
not have full control over decision-making. In the
end, OPEC countries pledged US$435.5 million,
OECD countries US$569 million and other
developing countries US$20.6 million. The OPEC
Fund provided an additional US$20 million from
its resources for the First Replenishment. Given
the relative size of the GDP of its member
countries, compared to that of OECD countries,
the contribution from the OPEC countries was an
extraordinary gesture.
When the majority of participants signed the
agreement establishing IFAD in 1976, it was a
victory for all and a milestone in international
development. For the first time, an agency would
focus exclusively on the most overlooked and
marginalized poor people – those living in rural
areas of developing countries.
OPEC leaders reaffirm their
commitment to combat poverty
In September 2000, a few weeks after the
Millennium Summit, leaders of OPEC
member countries met for OPEC’s Second
Summit of Heads of State and Government,
held in Caracas, the Bolivarian Republic of
Venezuela.Their Caracas Declaration
reiterated the solidarity of OPEC nations
with the rest of the developing world.The
OPEC nations pledged to continue to help
meet the needs of poor countries through
individual and multilateral aid programmes,
and through the partnership between IFAD
and the OPEC Fund.
The Declaration also stated that economic
and social development and the eradication
of poverty should be the overriding global
priority. OPEC leaders urged the
industrialized countries to recognize that
“the biggest environmental tragedy facing
the globe is human poverty”.
Also for the first time, OPEC countries acquired a
decisive role in determining international
development priorities through their governance
role in a multilateral development institution.
OECD countries were pleased to have OPEC
resources available to finance programmes and
projects. And developing countries knew they
would have valuable allies in OPEC nations.
Even today, IFAD remains one of the few major
multilateral development finance organizations in
which OPEC and other developing countries hold
a majority of the votes.
7

Why invest
in agriculture and rural
development?
Extreme poverty is overwhelmingly rural. Three
quarters of the world’s poorest people live in
rural areas and depend on agriculture and
agriculture-related small industries and services
to earn a living. Most of them are smallholder
farmers, landless wage labourers, pastoralists and
artisanal fishers.
Agriculture is the major employer, the largest
sector of the economy and the top export earner
in most developing countries. The link between
spending on agricultural development, and
economic growth and poverty reduction has
become increasingly clear. In recent years, a strong
correlation has emerged between greater levels of
spending on agriculture and progress towards
achieving the MDG targets of halving the
proportion of extremely poor and hungry people.
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Gender matters
This is especially true in Eastern and Southern Asia.
By contrast, in sub-Saharan Africa where domestic
support for agriculture is extremely low, poverty is on
the rise in many countries. The commitment by
African Union members to allocate at least 10 per cent
of national budgets to agriculture and rural
development could reverse this trend.
Sixty per cent of the world’s rural poor
people are women and girls. IFAD and the
OPEC Fund encourage initiatives that
empower them.Women have enormous
potential as agents of change.When a
woman’s economic status improves, her
self-esteem and confidence increase and
she is more likely to become involved in
social action and community decisionmaking.Women
can then transform their
own lives and the lives of their families and
communities, thus becoming powerful
contributors to social and economic
development. IFAD and the OPEC Fund
support programmes and projects that
remove the obstacles preventing women
from reaching their potential. Better access
to financial services, training in new job
skills and improved access to land are key
components.
When governments invest in agriculture, small-scale
farmers can increase productivity and gain better
access to markets. As productivity rises, demand
grows for seeds, irrigation, fertilizer, tools, processing
and transportation, leading to increased employment
by the rural non-farm sector. As the farming and rural
non-farm sectors become stronger, they help sustain
the whole economy.
International trade is another key engine for growth
and poverty reduction. With improved quality and
quantity of goods produced by the agriculture sector,
and equitable access to export markets, developing
countries can generate valuable foreign exchange
earnings for domestic investment.
Following a long period of underinvestment, there is
growing recognition by developing country
governments and donors of the critical importance of
investing in agriculture and rural development. Along
with investment resources, IFAD and the OPEC Fund
provide borrowing governments with access to
knowledge and expertise that helps translate concern
for agricultural and rural development into activities
leading to increased production, economic growth
and improvements in the lives of rural people.
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Small farmers in Achaca, Bolivia meet to discuss
their yoghurt processing microenterprise.

Reversing land degradation through
the Global Mechanism
Working
in partnership
IFAD and the OPEC Fund work together as
partners to finance development programmes and
projects in some of the poorest and most
vulnerable communities in developing countries.
Their cooperation goes beyond simply combining
financial resources. They share a common belief in
the need to empower rural poor people to
overcome poverty, and a conviction that to succeed,
development programmes and projects must be
built on the experience, insights and perspectives
of rural poor people themselves.
When land is degraded, animal and farm
productivity drops, contributing to
increased poverty.The Global Mechanism of
the United Nations Convention to Combat
Desertification (UNCCD), which is hosted
at IFAD, helps countries focus their
energies, resources and knowledge on
reversing this destructive process. IFAD has
contributed US$6.25 million to support this
work.The OPEC Fund also supports the
Global Mechanism, for instance through a
US$300,000 grant to mitigate land
degradation, manage drought and improve
land management practices in West Asia
and North Africa.Another US$350,000
grant is fighting desertification by improving
water harvesting in rainfed lands, enhancing
soil fertility, and planting trees, shrubs and
fodder crops.
Support must respond to the needs of small-scale
producers who, although food producers
themselves, are among the hungriest and the
poorest. At the same time, efforts to improve
agricultural production must be part of an
integrated approach to rural development that
addresses the many dimensions of rural poverty.
The OPEC Fund is the largest cofinancier of IFADsponsored
programmes and projects after the
World Bank. Together, the partners have
cofinanced 58 projects in over 30 countries, and
more joint initiatives are in the pipeline.
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These projects bring clean water to remote villages,
and help communities form water users’
associations so that new wells and pumps are
maintained after projects end. They build new
roads and repair existing ones, making sure farm
inputs reach villages and allowing farmers to bring
their harvests to markets where they fetch a good
price. Often, projects contain a savings and loans
component, enabling people to safely save their
income and take out a loan to start a business.
Projects strengthen agricultural production by
increasing access to improved seeds and other
farm inputs, holding training courses, improving
animal health and increasing the value of crops
through processing. The partners also use grants
to finance research in agriculture, animal health,
fisheries and other areas that can ease the burden
of poverty in developing nations.
IFAD projects cofinanced with the OPEC Fund
(approved amounts in US$ 000)
Country No. of projects IFAD financing OPEC Fund cofinancing Total project cost
Angola 1 7,190 3,130 11,950
Armenia 1 15,301 5,000 28,721
Benin 1 9,000 4,000 17,000
Bolivia 3 29,500 4,500 43,051
Bosnia and Herzegovina 1 12,000 5,000 25,489
Burkina Faso 1 16,029 2,886 38,314
Burundi 4 57,846 27,423 120,315
Dominican Republic 1 14,000 5,000 24,000
Equatorial Guinea 1 4,983 1,482 18,002
Ethiopia 1 11,000 4,000 33,700
Guatemala 5 76,229 35,430 151,639
Guinea 2 25,214 11,182 43,723
Guyana 1 6,000 1,000 9,000
Haiti 1 10,572 3,275 22,314
Honduras 1 7,682 3,339 15,722
Jordan 2 21,920 10,273 70,090
Kenya 1 8,000 5,000 19,200
Laos 2 11,473 7,811 40,100
Lebanon 1 9,961 4,924 21,894
Madagascar 2 25,340 10,764 45,638
Maldives 2 4,920 3,115 21,410
Mali 2 21,700 6,010 38,000
Mauritania 2 22,327 5,990 41,294
Morocco 2 41,735 5,627 101,952
Mozambique 2 18,428 6,088 31,372
Paraguay 2 22,115 6,157 46,465
Peru 1 12,278 4,000 19,142
Rwanda 3 30,721 17,832 62,603
Sudan 2 22,002 13,616 55,614
Thailand 1 10,000 3,000 18,300
Tunisia 1 18,746 6,987 44,337
Turkey 1 13,079 9,902 30,043
United Republic of Tanzania 2 31,176 2,168 43,789
Zambia 2 36,833 1,000 46,200
Total 58 685,300 246,911 1400,383
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Each partner focuses on certain sectors in their
cofinanced programmes and projects. The OPEC
Fund generally supports rural infrastructure,
including water supply and rural roads, as well as
farming assets, including agricultural equipment,
animal restocking and private-sector
agroprocessing facilities.
IFAD focuses on agricultural support services,
including research and extension, rural financial
services, community development and creation of
local institutions, and on agricultural investments,
such as installing irrigation equipment or
developing tree plantations.
The partnership between IFAD and the OPEC
Fund combines their particular strengths to
maximize the impact of their efforts. The OPEC
Fund has special insight into the problems
associated with poverty because its member states
are themselves developing countries. This makes
the OPEC Fund a valuable ally to other developing
nations and a good partner to IFAD.
To date, the cumulative pledges of OPEC Fund
member states to IFAD amount to US$1.3 billion.
This includes US$861 million towards IFAD’s initial
capital and First Replenishment, US$430.6 million
towards subsequent replenishments, and a special
contribution of US$20 million from the OPEC
Fund’s own resources.
Of the total pledged amount, just over
US$1.1 billion has so far been paid in.
Encouraging the private sector
to help reduce poverty
The lack of a vibrant domestic private
sector is one of the reasons why the gap
between the rich and poor in many
developing countries fails to narrow.Today,
nine of every ten new jobs in the
developing world are created in the private
sector. In addition to creating jobs and
providing valuable training, the private
sector can promote efficiency and growth
by introducing competition into the
economy. It also generates trade and spurs
investment.
The OPEC Fund has, all along, provided
support indirectly to the private sector,
through, for instance, lines of credit and
extension services. In the late 1990s,
however, the Fund decided to create a
dedicated Private Sector Facility to help
promote productive private enterprise in
developing countries, including loans
directly to small, medium- and micro-sized
private enterprises.With access to
adequate funding, private entrepreneurs in
poor countries can break the cycle of low
savings, low investment and low growth and
begin contributing to a nation’s economic
strength.
IFAD’s strategy on private-sector
development and partnership includes
promoting policy dialogue for local privatesector
development, investing in local
private-sector initiatives and encouraging
partnership with the private sector as a
source of additional investment and
knowledge that can help reduce poverty in
rural areas.
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How IFAD
and the OPEC Fund
work together
IFAD and the OPEC Fund are dedicated to making a
difference in the lives of poor people.They cofinance joint
programmes and projects in developing countries that help
poor people create better lives for themselves by
improving infrastructure, boosting literacy and business
skills, increasing access to financial services and introducing
modern farming methods and materials.
And because developing nations depend so heavily on
agriculture as an employer and source of revenue, the
partners invest in agricultural research to make the most
from farming, fishing and livestock production.
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IFAD AND THE OPEC FUND
COFINANCE PROGRAMMES AND PROJECTS
The following are examples of some of the 58 programmes and projects
cofinanced by IFAD and the OPEC Fund in over 30 countries.
Modern technology boosts farming in
the highlands of Guatemala
Many of the poorest people in Guatemala are
indigenous people of Mayan descent living in harsh
mountainous environments where the high altitude
restricts the growth of many crops.
The Government of Guatemala asked IFAD to
help design a project to increase food production,
raise family income and reduce poverty in nine
districts in the northwest of the country. The
US$20.8 million Cuchumatanes Highlands Rural
Development Project received cofinancing from the
OPEC Fund, and was active from 1993 to 2000.
Farmers used new technologies and modern
tools that made it easier for them to increase
production. They adopted post-harvest storage
methods that meant less of their harvest was lost to
spoilage and they planted higher-value crops, such as
fruit trees, to boost family incomes. Small-scale
irrigation systems and catchment basins improved
water management, while measures including tree
planting were adopted to improve soil conservation.
With access to small loans, project participants
could finance new businesses, such as selling farm
inputs and consumer goods. Grass-roots groups
were strengthened, enabling rural poor people to
design and implement project activities. Self-esteem
workshops encouraged women to play a greater role
in project activities and training courses sensitized
both sexes to gender discrimination.
Food production and income increased as a
result of the project, but one of the most significant
outcomes was the impact on women, who took a
much greater role in community decisions.
Better use of soil and water yields more
income in Jordan
In north-east Jordan, limited arable land and
increasing soil degradation put severe strain on small
farmers. The US$28.1 million Yarmouk Agricultural
Resources Development Project is introducing
better farming practices that protect soil and water
resources.The six-year project started in 1999 and is
ongoing.
Farmers are using stone walls, earth banks and
terraces to stabilize the soil, while crop rotation and
other techniques allow the soil to recover. Farmers
and their families are planting orchards to provide
vitamin-rich fruits that can also be sold as cash crops.
A network of cisterns and rehabilitated springs
provide water to irrigate the orchards.
The growth of non-farm activities is helping
reduce pressure on the land and raise family
incomes. Local women are taking out small loans to
start businesses, improving the quality of their goods
and with project support, getting them to market.
More than 160 km of roads have been constructed
to ensure access to local markets.
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Healthier livestock produces more milk in Lebanon
Lebanon’s 17-year civil war left rural families with few cattle,sheep and goats.IFAD
and the OPEC Fund cofinanced the US$21.9 million Smallholder Livestock
Rehabilitation Project, to enable herding families in the Bekaa Valley to purchase
animals and obtain technical assistance to improve the production of milk, meat
and wool.The project ran from 1993 to 2002.
Farmers secured loans to buy high-yielding imported dairy cows and local
varieties of sheep and goats. Dairy cattle were vaccinated against foot-and-mouth
disease. The project constructed ten milk collection centres to provide a more
hygienic way of collecting milk.
Five extension centres trained nearly 1,000 participants in animal health,
livestock breeding and post-harvest processing.Women took courses in how to
organize small-scale entrepreneurial activities, such as selling handicrafts. Many
women formed food production cooperatives to process fruits and vegetables.
One of greatest impacts of the project was an increase in annual milk
production, from about 3,500 litres per cow to more than 6,000 litres. More
hygienic processing reduced the amount of milk rejected because of poor
quality from 20 per cent to 1.7 per cent and led to a 50 per cent rise in the
price farmers received for their milk. The vaccination campaign reduced the
incidence of animal diseases.
Harnessing the life-giving force of the Niger River in Mali
In the desert of Mali, where there is water, there is life.When rainfall is abundant,
the Niger River floods its banks, raising the water levels of lakes and ponds. In
the dry season, the lakes recede and in some years rainfall is so sparse the lakes
dry up. The limited availability of water contributes to poor agricultural
production.
The US$11 million Development Project in the Zone Lacustre helped
farmers, fishers and herders in the northern Niafunké region of the country to
conserve water and use improved farming techniques to boost yields.The project
received cofinancing from IFAD and the OPEC Fund, and ran from 1987 to 1996.
Land was levelled so that water from the lakes and ponds could be used for
irrigation. Dams and floodgates helped maintain water in the lakes for longer
periods and small pumps transferred water to nearby fields. Technical advice
enabled farmers to make the most of the floating rice system, a way of planting
seedlings in the flooded plains and transferring them as the water recedes.
Women’s groups worked plots of 5 ha of irrigated vegetable gardens using
improved varieties of rice, sorghum and other crops.The yields were large enough
so the women could feed their families and still have a surplus to sell or trade.
As the water levels of lakes and ponds rose and remained high for longer
periods, more families were able to settle there, engaging in both farming and
fishing.
A second phase of the project, approved in 1996 and ongoing, is building on
these achievements and introducing new efforts to improve health and nutrition,
including better access to clean water and sanitation.
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Improved irrigation and better animal health reduces poverty in
Morocco
In the southern arid zones of Morocco, population pressure and limited natural
resources are major constraints.The US$52.5 million Tafilalet and Dades Rural
Development Project was implemented between 1994 and 2001 to modernize
irrigation systems and improve animal health. IFAD and the OPEC Fund
contributed to the financing of the project.
The project focused on people living in two main ecosystems. One was arid
and pre-Saharan, where agricultural production depended on the availability of
water for irrigation.The other was steppe, where raising goats, sheep and other
livestock was the main source of income.
The use of small-scale irrigation is a tradition in Morocco. Equipment was
repaired and reinforced and dykes were installed to protect cultivated fields
from flooding. Rotation, land-resting schemes and other techniques allowed
farming and grazing lands to recover from degradation. Farmers planted
fodder shrubs to prevent soil erosion and ensure improved grazing lands for
livestock. More than 2 million animals were vaccinated against disease and
another 3 million were treated against parasites.
Women learned new skills to help them generate income. They also
attended literacy classes to improve their business skills.The project introduced
a new breed of goat that women could purchase for a third of the market price
and pay for in several instalments.
The women also had access to free veterinary care for their animals. A
cooperative made it possible for 1,200 women to process goat’s milk into
cheese. Women formed five associations, made up of more than 200 women
farmers and livestock herders. Women’s groups helped other women share
experiences and develop marketing plans to ensure that agricultural products
found a market outlet.
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Rebuilding lives after years of civil war in Rwanda
Following the genocide in 1994, refugees poured into Rwanda’s north-east
Umutara province, doubling the population and contributing to increased
poverty. With cofinancing from IFAD and the OPEC Fund, the Umutara
Community Resource and Infrastructure Development Project is empowering
communities to improve their lives through a ten-year project to boost crop
yields, bring clean water to villages and repair and construct rural roads. The
project was approved in 2000 and is ongoing.
The project is working with the Government of Rwanda to mobilize the
local offices of public administration and to support newly established
decentralized government bodies to provide the services villagers need. It is also
promoting the development of farmers’ and women’s organizations so rural
poor people can manage the development process and decide which activities
are most urgent.
One of the most pressing needs is clean water. Umutara is one of the driest
areas of Rwanda, and women and children often spend hours every day
collecting water. The project is drilling boreholes to reach underground water
reserves, laying 200 km of water pipes and constructing and rehabilitating dams
to provide drinking water for cattle.
More than 300 km of roads are being built or upgraded, making sure
every community has an all-weather road within 5 km so harvests can be
brought to market.
Seed-multiplication and fertilizer-marketing centres are being built in six
communes to help farmers increase production.To make sure that the poorest
and most vulnerable families can take advantage of opportunities offered by the
project, 12,000 free starter packages are being distributed, containing highyielding
maize and bean seeds, fertilizers, forage seedlings and fruit tree seedlings.
The Umutara Community Resource and Infrastructure Twin Project,
approved in 2001, is using the same strategy to bring benefits to 35,000 families
not reached through the first effort.
Community groups gain the
know-how to reduce poverty in Turkey
Per capita annual income in eastern Turkey hovers
around US$800, far lower than the national average of
US$2,800. Yet the area has well-developed roads and
good communication networks, and has considerable
economic potential.The US$30 million, seven-year Sivas-
Erzincan Development Project was approved in 2003. It
targets 50,000 people in 200 villages in two eastern
provinces, helping increase their income and improve
their quality of life. The project is receiving cofinancing
from IFAD and the OPEC Fund.
Community participation through village
associations is at the heart of the project. Training
courses offer support in planning, management and
administration so the groups can prioritize community
needs, manage grazing lands and water, and increase
their bargaining power in the market place.
Herders are learning about better animal health,
marketing and improved rangeland management.
Farmers are organizing and holding demonstrations of
farming techniques, including contour tillage, contour
strip cropping and other improved tillage techniques, to
pass what they learn on to others.
About 70 new or existing cooperatives are receiving
advice on how to serve their members better by
delivering essential services in production,marketing and
processing. Training in bookkeeping, accounting and
general business skills is enabling the groups to develop
plans to market agricultural products.
Priority is being given to needy households headed
by women, and to families with little or no land and few
or no farm animals.
18

IFAD AND THE OPEC FUND JOINTLY SUPPORT
AGRICULTURAL RESEARCH
Agriculture in developing countries not only provides food, it employs the
majority of people and earns substantial revenue. Yet many poor nations
contend with harsh climates, limited water resources, depleted soils, farm
pests and other constraints that limit their ability to make the most of the
sector. Eradicating rural poverty and achieving global food security depend
significantly on insights from research that is geared to the needs of smallscale
farmers in resource-poor conditions.
This includes research that helps improve the quantity and quality of
agricultural production by testing new seeds, better breeds and farming
methods that respond to the specific needs of rural poor people.This is why
both IFAD and the OPEC Fund invest heavily in agricultural research.
The OPEC Fund has provided more than US$16.5 million in grants to
the Consultative Group on International Agricultural Research (CGIAR).
Current support is helping to strengthen resistance to the maize streak
virus in East Africa; to fund research on barley, a key crop in the West Asia
and North Africa region; and to implement an integrated crop management
scheme among potato farmers in Latin America. The OPEC Fund is also
working with the Arab Organization for Agricultural Development to
control agricultural pests and livestock disease, through campaigns to fight
the red palm weevil, Old World screwworm, Rift Valley fever and foot-andmouth
disease.
Together with the International Center for Biosaline Agriculture, the
OPEC Fund is studying how forage and food crops can be irrigated using
saline water. The OPEC Fund has provided grants of over US$2 million
towards the initial construction of the centre, capacity building, and
research programmes.
IFAD also provides significant support to agricultural research. It has
provided US$163 million in grants to programmes and projects implemented
by centres supported by the CGIAR. It is funding a follow-up phase of a
successful US$2.7 million programme to combat the red palm weevil using
environmentally friendly control methods. The new two-year, US$7 million
programme is paying for a full-time specialist and consultants to carry out
further research and field trials in nine Middle Eastern countries.
IFAD contributed US$1.5 million to a four-year integrated crop and
livestock programme to boost the production of sheep and goats in low
rainfall areas in eight countries in the Middle East and North Africa. About
14,000 farmers and herders participated in the programme to improve
animal health, boost fertility levels, plant disease-resistant, high-yielding
fodder crops, and form collectives so they could qualify for loans. On-farm
research made sure farmers’ needs could be assessed accurately and then
farmers shared what they had learned through farmer-to-farmer training
and travelling workshops.The programme ended in 2002.
19

Milestones in the history
of IFAD and the OPEC Fund
1974 One of the most concrete results of the World Food Conference is the creation of IFAD.
The Conference adopts Resolution XIII, initiated and sponsored by 11 of 12 OPEC
nations, along with 19 other developing and three developed countries.
1976 In an expression of south-south solidarity, OPEC nations establish the OPEC Special
Fund and mandate it to provide financial support to non-OPEC developing countries
to aid their social and economic advancement.
1977 At IFAD’s first Governing Council meeting, US$1 billion is contributed jointly by
OECD, OPEC countries and other developing countries, launching an important
example of north-south cooperation.
1978 The IFAD logo is developed, representing the tripartite cooperation between OECD,
OPEC and other developing nations.
1979 IFAD and the OPEC Fund approve their first cofinancing initiative, the East Mpanda
Rural Development Project in Burundi.
1980 The 13 OPEC Fund member countries agree to turn the OPEC Special Fund into a
permanent international development agency called the OPEC Fund for International
Development.
1982 OPEC Fund nations contribute US$425.6 million to the First Replenishment of IFAD’s
Resources. Together with a special donation from the OPEC Fund, this allows IFAD to
reach its replenishment target.
1986 – 2003 OPEC Fund member states contribute to further IFAD replenishments and consolidate
their programme of joint operations.
2004 (February) Newly incumbent Director-General of the OPEC Fund, Suleiman J. Al-Herbish,
addresses the 27th Session of IFAD’s Governing Council, noting: “Our [the OPEC
Fund’s] commitment to the eradication of abject poverty is so absolute that the rural
world has become our world as much as it is that of IFAD.”
2004 (April) IFAD President, Lennart Båge, is welcomed to the OPEC Fund headquarters in Vienna
by OPEC Fund Director-General Al-Herbish. The talks reaffirm and lend fresh impetus
to the strategic partnership between the two institutions.
20

Cover photo: A man prepares vegetables for sale
at the central market in Antsirabè, Madagascar.
All photos IFAD by: S. Beccio - A. Boulat - A. Conti - R. Grossman -
N. McGirr - J. Morando - J. Spaul - P.Tartagni - H.Wagner
Printed by Palombi & Lanci srl - September 2005

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