A partnership to eradicate rural poverty - IFAD

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A partnership to eradicate rural poverty - IFAD

IFAD and ITALY

A partnership to

eradicate rural poverty

Enabling the rural poor to overcome poverty


Three quarters of the

world’s 1.1 billion

extremely poor

people live

in rural areas and

depend on

agriculture and

related activities to

survive. Investing in

agriculture and rural

development not

only boosts the

standard of living

for poor rural

women, children

and men, but spurs

economic growth

for entire regions.

IFAD enables poor rural people

to overcome poverty

The International Fund for Agricultural

Development (IFAD) is the specialized

agency of the United Nations dedicated to

eradicating rural poverty in developing

countries. Working with poor rural people,

governments, donors, NGOs and many other

partners, IFAD empowers communities to

lead their own development.

By focusing on country-specific solutions,

IFAD increases poor rural people’s access to

natural resources, agricultural technologies,

financial services, competitive markets,

opportunities for enterprise, and local and

national policy and programming processes.

IFAD tackles poverty not only as a

lender but also as an advocate for poor

rural people. Its multilateral base provides

a global platform to discuss important

policy issues and draw attention to the

centrality of rural development in meeting

the Millennium Development Goals.

Since starting operations in 1978,

IFAD has invested US$9.2 billion in

716 programmes and projects that have

helped more than 300 million poor rural

women and men achieve better lives for

themselves and their families. Governments

and other financing sources in recipient

countries, including project participants,

have contributed almost US$8.9 billion.

Multilateral, bilateral and other donors

have provided another US$7.0 billion

in cofinancing.

ITALY supports multilateral

investment to fight poverty

and hunger

As one of the 191 countries that adopted

the Millennium Declaration in 2000, and a

strong supporter of the 2002 Monterrey

Consensus, the Government of Italy is

committed to mobilizing and increasing

the effective use of financial resources to

achieve the Millennium Development

Goals (MDGs).

Food security and rural poverty

reduction are priorities of Italian

development cooperation. Italy’s strong

commitment to these goals stems from its

own agricultural tradition and the support

it has historically given to developing its

rural areas.

Italy has also made harmonization a

key facet of its development cooperation

policy. In the 2003 Rome Declaration,

Italy highlighted the important role of

harmonization in enhancing aid

effectiveness.

Through its contributions to

international entities, including the United

Nations and the European Union, the

multilateral component of Italian Official

Development Assistance (ODA) accounts

for about two thirds of its overall assistance

– making Italy one of the top 10 donor

countries to the United Nations system.

WORKING TOGETHER to achieve the Millennium

Development Goal of halving the proportion of people living in extreme

poverty and hunger by 2015

As the host country to the Food and Agriculture Organization (FAO), the World Food

Programme (WFP) and IFAD, Italy supports the three UN food organizations that have

different but complementary mandates and work together to achieve the MDG target of

halving the proportion of people living in extreme poverty and hunger by 2015. This role is

a reflection of Italy’s commitment to the multilateral approach to poverty alleviation.

Italy has been a contributing Member State of IFAD since the agency was established in

1977. Since then, Italy and IFAD have combined resources, skills and experiences to improve

the lives of poor rural people throughout the developing world.


Italy is one of IFAD’s

largest contributors

Among IFAD’s 165 Member States, Italy is the eighth largest financial contributor to

the agency. In the most recent replenishment of IFAD’s resources, Italy was the second

largest contributor, following the United States of America. Italy’s contribution, along

with that of other donors, will enable IFAD to carry out approximately 230 projects

during the 2007-2009 replenishment period.

Under the debt-for-development

swap agreement, signed by the

Government of Italy and the

Government of the Arab

Republic of Egypt in 2001,

an IFAD loan of US$18.5 million

is complemented by

US$30.13 million in cofinancing

from the Egyptian counterpart

fund to finance the West

Noubaria Rural Development

Project (2003-2010).

Transforming debt into development power

Debt relief for developing countries frees up resources that can be spent on poverty

reduction. A “debt swap” relieves a government’s foreign debt burden in exchange for

its commitment to spend a certain amount of its local currency on development. Italy

promotes FAO, IFAD and WFP’s access to funds that are made available by swapping

Italian credits with developing countries, thereby generating resources for additional

development projects. Moreover, Italy is an important political and financial

supporter of IFAD’s Debt Initiative for Heavily Indebted Poor Countries Trust Fund,

having contributed more than US$4 million to the fund.

Combating land degradation and desertification

Italy was an important contributor to IFAD’s Special Programme for Africa,

established in 1985. The programme worked to mitigate the impact of drought on

smallholder farmers and reverse the process of land degradation and desertification

on the continent.

Italy’s contribution to the replenishment of IFAD’s resources (US$)

Date

Replenishment Amount pledged* Amount paid*

1976

1981-1983

1985-1987

1989-1991

1997-1999

2001-2003

2004-2006

2007-2009

Initial

IFAD I

IFAD II / SPA 1

IFAD III / SPA 2

IFAD IV

IFAD V / HIPC DI 3

IFAD VI

IFAD VII

25,000,000

38,700,000

50,366,904

32,440,000

29,400,000

38,476,198

40,000,000

51,006,000

25,000,000

38,700,000

50,366,904

32,440,000

29,400,000

38,476,198

13,333,333

0

Total 305,389,102 227,716,435

* All replenishment-related contributions are converted into US$ using the historical exchange rate as set out in

each Replenishment Resolution.

1 Comprehensive of US$33,254,904 Special Programme for Africa (SPA - phase I)

2 Comprehensive of US$6,785,000 Special Programme for Africa (SPA - phase II)

3 Comprehensive of US$4,062,198 complementary contribution to IFAD's Debt Initiative for Heavily Indebted

Poor Countries Trust Fund


Italy’s voluntary contributions

support IFAD programmes

In addition to their regular replenishment contributions, some IFAD Member States

provide voluntary and extra-budgetary contributions. Since 1994, Italy has

contributed US$37.4 million in voluntary and extra-budgetary contributions to IFAD.

Reflecting Italy’s geographic and thematic priorities, IFAD leverages these funds to

cofinance and complement its programmes and projects as well as to finance pilot

activities that are not included in IFAD’s lending programme. IFAD has invested these

funds in 156 programmes and projects, boosting the power of IFAD’s loans and

grants. On average, IFAD mobilizes one dollar for each dollar Italy contributes in

voluntary funds.

In most developing countries,

the main obstacle to starting

and sustaining a business is

limited access to financial

services. In 2005, the Italian

Ministry of Foreign Affairs

provided seed capital to

launch the Facility to Support

Rural Finance (RURALFIN).

The programme promotes

vibrant financial sectors that

provide a range of services,

including microfinance.

Establishing a partnership agreement

In November 2001, Italy and IFAD signed a five-year partnership agreement that provided

a legal and strategic framework for their collaboration, including the use of voluntary

contributions. Under the agreement, Italy has contributed on average US$5.3 million in

voluntary and extra-budgetary contributions each year to support IFAD programmes and

projects in selected geographic and thematic areas.

The agreement has enhanced a broad partnership with members of Italian civil society.

Italian non-governmental organizations, farmers’ organizations, specialized banks,

agribusinesses, universities and research centres have contributed to IFAD-supported

operations by providing invaluable expertise and innovative approaches to rural

development. In particular, Italian expertise has played a key role in empowering farmers’

organizations and promoting new approaches to the sustainable development of

agribusiness activities, pro-poor ecotourism and rural finance.

While providing assistance to Asia, the Balkans and Latin America, Italy and IFAD’s

joint effort has increased its geographical focus on sub-Saharan Africa, particularly since

the G8 meeting in Gleneagles in 2005.

Empowering farmers through policy dialogue

Governments in low-income countries prepare poverty reduction strategy papers (PRSPs)

that outline the macroeconomic, structural and social policies and programmes a

country will pursue to reduce poverty and promote broad-based growth. Italy has

voluntarily contributed US$1.35 million to IFAD to help ensure that poor rural people

in Africa, Asia and Latin America are able to participate in PRSP design processes so that

their needs and interests are being properly addressed.

Italy also contributed US$1.2 million to help finance an IFAD-supported capacitybuilding

programme for farmers’ organizations in sub-Saharan Africa. In addition,

Italian support made possible the 2006 launch of the Farmers’ Forum, an IFAD initiative

that brings small farmers and rural producers’ organizations together to consult with

IFAD staff and government officials. As part of these efforts, Italy’s contribution has

helped farmers who are members of the Network of Peasant Organizations and

Agricultural Producers in West Africa (ROPPA) to become better organized and to

participate in policy dialogue at the regional and international levels.


Building market linkages

Guided by IFAD’s private-sector partnership strategy, about 20 per cent of Italy’s

contribution to IFAD links small rural enterprises with larger private-sector businesses.

In 2003, Italy provided a US$3.6 million contribution to establish a Facility for

Farmers’ Access to Markets (FFAM) in Bosnia and Herzegovina, The former Yugoslav

Republic of Macedonia and the Republic of Albania. The contribution was made

possible by the Italian law 84/2001 and supported the involvement of Italian privatepublic

partnerships.

Limited access to credit and weak markets are major obstacles to smallholder

farmers in the Western Balkans. The FFAM works with ongoing IFAD operations in

the region to link farmers and their associations with financial services and agri-food

processors, and to establish sustainable supply chains and access to competitive

markets. The FFAM is supporting:

• the creation of an integrated cooperation network of dairy producers, traders and

processors in Bosnia and Herzegovina

• new supply chains for wine, small livestock, vegetables, berries and dairy products

in The former Yugoslav Republic of Macedonia

• the transformation of a local finance fund into a successful client-owned rural bank

in the Republic of Albania

Regional distribution

13%

16%

15%

Near East and North Africa

Sub-Saharan Africa

Asia and the Pacific

Latin America and

the Caribbean

Worldwide

8%

26%

30%

Thematic distribution

In addition to the FFAM in the Balkans, Italy has funded programmes to strengthen

fibre and meat production in Bolivia, and cassava processing and marketing in

sub-Saharan Africa.

23%

26%

43%

Focusing on the environment

Italy’s voluntary contributions assist in the fight against land degradation – a serious

problem that feeds a vicious cycle of poverty in the world’s poorest communities. Italy’s

support enables IFAD to help shape national policies that improve agricultural

productivity while conserving the environment in Armenia, Egypt, Haiti, Morocco, the

Niger, the Sudan and Tunisia.

Market access and

rural finance

Pro-poor policy dialogue

and capacity building

Rural development

and natural resource

management

Conflict prevention

and rehabilitation

Italy’s voluntary and extra-budgetary contributions (US$)

Amount *

Voluntary contributions (1994-2006)

Law 84/2001 for the Establishment of a Facility for Farmers’ Access to Markets

(FFAM) in the Balkans

Inter-American Development Bank-IFAD-Italy Multi-Donor Programme to Eradicate

Rural Poverty in Latin America and the Caribbean

Facility to Support Rural Finance – RURALFIN

Socialist Republic of Viet Nam: Pilot Project for Poverty Reduction in Gia Lai Province**

23,574,635

3,632,250

2,458,500

6,104,250

1,622,000

Total 37,391,635

* Amount in US$ translated at date of receipt

** Contribution approved on 5 December 2005 but not yet received


Capitalizing on cassava

The root of the cassava plant is an essential source of calories and income for

millions of people around the globe. One of the benefits of the plant is that it can

grow in places where most cereals and other crops cannot. While cassava is

mainly grown by poor subsistence farmers, its use in industry is on the rise.

The cassava root can be processed into chips, pellets, flour, alcohol or starch,

and used in a variety of industries, including livestock feed, textiles, confections,

plywood and soft drinks.

Promoting the commercial aspects of cassava can play a powerful role in the

fight against rural poverty. In 2005, Italy gave US$1.3 million to cofinance the

IFAD-supported African Cassava Processing and Marketing Initiative for

Sub-Saharan Africa. Farmers participated in the formulation of the programme after

receiving training from a capacity-building initiative cofinanced by Italy in 2003.

The African Cassava Processing and Marketing Initiative was unveiled in

March 2006 at a regional workshop in Accra, where the Italian ambassador to Ghana

shared the slogan for the new IFAD-Italy strategy: “Think big – start small – scale up

fast!”. By “starting small”, the idea is to disseminate information about cassava

production via farmers’ groups and promote local access to seeds for planting.

To “scale up fast”, Italy and IFAD encourage the development community to seek

out viable opportunities for cassava investment and to introduce quality control

measures that will encourage private financiers to invest in cassava as well.

IFAD’s current portfolio for cassava-related operations amounts to US$106 million,

with ongoing projects in Benin, Cameroon, Ghana and Nigeria.

Baró Bará shows how cassava is

harvested in the village of Gazori,

Aguié Province, in the Niger.


New crops improve health and

boost incomes in the Niger

Alima Eberhaim with

her 18-month-old child,

Danja village, Maradi

Province, the Niger

Alima Eberhaim, 25, and her four children were among the millions of people in the Niger

who suffered from a severe food shortage in 2005 after a combination of drought and

desert locusts reduced cereal production. Many people sold their livestock and other

assets to try to survive. Alima traded one of her three goats to buy millet for her family,

but the millet lasted only one week.

It is difficult for Alima to gather enough food to feed herself and her children every day.

Like many of her neighbours in the rural village of Danja, her family has too little to eat for

long periods of time. And when food is available, it is usually just one staple product.

Without a varied diet to ensure proper nutrition, it is that much harder for poor rural

people like Alima and her family to survive drought and other crises.

Supported by Italy’s voluntary contribution, IFAD’s Project for the Promotion of Local

Initiatives for Development in Aguié provided Alima and groups of local men and women

with the resources to start growing winter crops. This was the first time local women,

who lack secure access to land and other resources, were free to engage in agricultural

businesses on their own. The groups received seeds for cabbage, onions and potatoes,

as well as technical training.

The project gave Alima and her children the possibility of better nutrition. It also

provided Alima with an opportunity to increase her income. She now sells her extra

produce at the local market. Saving a small amount of money from her new income,

Alima can now access the credit she needs to increase her small flock of goats. Such

an investment will enable Alima and her family to better cope with crises in the future.

Solar power and new skills enhance

villagers’ lives in the Sudan

Kaokab Hamad, Shrim

village, Bara Province,

the Sudan

Irrigated farming is rare in rural Sudan. In the remote village of Shrim, vegetables were

not grown during the dry season because women could not fetch enough water by

hand to feed the crops. But today, thanks to Italian support, small solar-powered water

pumps easily provide water for drinking and horticulture, transforming people’s lives in

Shrim and other villages.

Women are now free from the time-consuming task of collecting enough water for their

family’s daily needs. With the time she used to spend fetching water, Kaokab Hamad, 22,

now participates in training programmes and literacy classes made possible by another

Italian grant. The training includes home-industry skills that could be developed into

microbusinesses. These courses inspire Kaokab to plan a better future: “I want to go to

university and eventually get a proper job,” she says.


December 2006

Via del Serafico 107, 00142 Rome, Italy

Tel.: +39 06 54591, Fax: +39 06 5043463

E-mail: ifad@ifad.org

http://www.ifad.org, http://www.ruralpovertyportal.org

Contact

Vera Weill-Hallé

Director

Resource Mobilization Division

IFAD

Via del Serafico, 107

00142 Rome, Italy

Tel: +39 06 5459 2706

Fax: +39 06 5043463

E-mail: v.weillhalle@ifad.org

Vincenzo Galastro

Programme Manager

Resource Mobilization Division

IFAD

Via del Serafico, 107

00142 Rome, Italy

Tel: +39 06 5459 2609

Fax: +39 06 5043463

E-mail: v.galastro@ifad.org

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