Egypt: Smallholder contract farming for high-value and ... - IFAD

The goal of the IFAD-funded West Noubaria Rural Development Project (WNRDP) is to enhance
the livelihoods of the target population through increased and sustainable economic activity and
greater social self-reliance, which would be achieved through the following objectives:
• achievement of social cohesion and a sense of community in the villages;
• reliable, equitable access to the support services that are essential for economic and social
well-being;
• diversified and profitable farming based on more efficient water use;
• self-sustaining arrangements to provide accessible and effective credit services; and
• a diversified and strengthened local economy that contributes to wider national economic
advancement.
Through the project, farmer associations have been established and successfully linked to Agrofood
Egypt for the production of organic potatoes.
The Small and Medium-Sized Enterprise Promotion Programme for Fruit and Vegetable
Processing in Egypt is a four-year US$7 million project funded by the German Agency for
Technical Cooperation. It was launched in early 2006 to assist processers in upgrading their
production methods and applying international standards, including HACCP and International
Organization for Standardization 22000, thereby enabling better penetration for Egyptian
processed foods on the international market. The programme has provided assistance to processors
of olive oil, herbs and spices, pickles and frozen produce. The project supplements the activities of
the USAID Agricultural Exports and Rural Incomes Project and the IFAD Upper Egypt Rural
Development Project.
The USAID Microfinance Support Project. Over the past decade, USAID has become the largest
supporter of microfinance activities in Egypt. (Its share has been estimated at 70 per cent of the total
funding.) It supports microfinance programmes at seven microfinance institutions throughout
Egypt, as well as programmes with the National Bank for Development. USAID’s support is based
on the provision of refinancing facilities for lenders and concentrated technical assistance. Loans are
provided to owner-operated enterprises employing up to 5 people (microenterprises) or 6-15 people
(medium-sized enterprises). Loan sizes range from EGP 500 to EGP 5,000 for microenterprises and
EGP 5,000 to EGP 25,000 for the other enterprises, with maturities of 4-12 months for working
capital loans and up to 24 months for capital expenditure. Interest is charged at commercial rates,
and the operating costs of microfinance institutions are taken into account.
The programme has also encouraged the development and application of group lending
methodologies focused on women. As of August 2005, these programmes had reached 450,000 active
borrowers. Of these institutions, though, only one operates in the project’s target area, and it
focuses mainly on the urban area of Assiut City.
The Financial Investment and Sector Cooperation Programme–Rural Component is a
development project of the Ministry of Agriculture and Land Reclamation funded by the European
Union (EU). It was designed to provide loan facilities for the development of private-sector SMEs,
medium-scale private-sector farms and rural enterprises. The project is funded under EuropeAid’s
MEDA programme. The total funding available is €18 million, of which €16 million is allocated for
a line of credit. Implementation of the four-year project commenced in 2005. The project’s overall
objectives are to increase income and job opportunities in rural areas and to increase food
production for local and export markets through the provision of financial and institutional support.
This support will be provided to farmers, agricultural entrepreneurs and their respective
intermediary organizations that are involved in post-harvest operations, input supply, or marketing
activities. The project’s €16 million credit line would be managed by an agent bank that would
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