The International Fund for Agricultural Development (IFAD), a specialised agency of the United Nations, was established in 1977 as an outcome of the 1974 World Food conference. It is primarily mandated to finance agricultural development projects for food production in developing countries. In an interview with FE?s BV Mahalakshmi, Kanayo F Nwanze, president, IFAD, says that the organisation is working with partners like Icrisat to develop new varieties of crops. He also stresses on the fact that IFAD?s primary strategy involves improving access to microfinance services for people in rural areas and this in turn, will result in the economic development of the country. Excerpts:
What is IFAD?s strategy in India and what is the current level of funding. How do you propose to expand your footprint in the country?
Looking at the success of our projects in India, IFAD will double its investment in 2010-12. We had invested about $85 million in 2007-09 and plan to increase the figure to $150 million from 2010-12, with a concession of 0.25% in interest for agri projects. India received more funding from IFAD than any other country in the world. We are working in close partnership with the Centre and the World Bank to fund projects for rural development, tribal development, women empowerment, natural resource management and rural financing. In the last 30 years, we have financed over 23 programmes and projects and have approved loans for about $636 million. This has benefited over 3,652,110 households. Currently, we have six ongoing projects, envisaging an investment of $300 million, of which two will start by early 2010. IFAD plans to convert agriculture into a ?business enterprises?, build local institutions and make them self-sustained groups.
IFAD?s primary strategy involves improving primary access to microfinance services, improving livelihood opportunities for communities in semi-arid tropical areas, introducing development activities in impoverished mid-Gangetic plains, improving productivity for coastal fishing communities, developing partnerships with NGOs, exploring possibilities for linkages with institutions, and promoting policy change through project activities.
How do you view partnerships as a means to your growth?
This juncture calls for a different kind of green revolution for developing countries, focusing primarily on rural communities. The landscape has changed and improving food productivity is the need of the hour. There are over 500 million small farmers who help sustain about two billion people. Agricultural challenges and climate change are real. We are investing in small farmers to help offer ?business? opportunities to them and help them get additional economic returns. In the process, we will be investing in agricultural projects, which involve small farmers. We will also invest in road infrastructure, which help farmers access markets. In the developing world, we will support the ethnic population?the tribal groups?and also focus on rural women folk. Incidentally, 20% of our financing is dedicated to rural financing in order to enable social and political stability for an overall improvement in economic growth.
Please elaborate on IFAD?s forthcoming projects.
We are looking to upscale some projects which will aid in community resource management for the north eastern states. While the total cost is estimated to be $35 million, IFAD?s contribution will be about $23 million. We will upscale this project across eight more states, in association with the government of India and the World Bank, by early 2010. The initial project has benefited over 2,50,000 farmers. We are also working with partners like Icrisat to develop new varieties of crops. We are also co-financing certain projects by the government, in association with multi-lateral partners. The overall cost for the projects in the last 30 years amounted to $1.5 billion and our share was $636 million.
How is your association with Icrisat, one of the 15 allied centers supported by the Consultative Group on International Agricultural Research (CGIAR)? Do you see an increase in allocation of grants to CGIAR?
IFAD and Icrisat will seek to strengthen their collaboration to eliminate poverty, hunger and malnutrition in the semi-arid tropics in Asia and Sub-Saharan Africa. We will look at crop improvement, pest control and biofuels. Currently, IFAD contributes 35% of its grants, $10 million, to CGIAR centres every year. For 2010-2012, our overall budget in IFAD has increased by 67% and we will look at increasing the grants for CGIAR centres. One of the IFAD-funded projects includes legume production. Low cost legume management technologies are being taught to farmers. We have also identified improved sweet sorghum varieties, pest and disease-tolerant breeding materials and optimal spacing to maximise grain and sugar yields, collected 138 jatropha accessions, organised SHGs to understand biodiesel options, identified high yielding cassava cultivars for different eco zones and analysed cassava-based livelihoods.
How do you view the road ahead to enhancing agricultural productivity?
With just six years remaining for the 2015 Millennium Development Goads deadline, the changes are immense and research will be fundamental in identifying new and better solutions to improve the lives of rural communities. We are increasing our engagement with CGIAR centres and our support to them. We are also looking at expanding the support of the crop insurance scheme in India. The national microfinance support programme directly supports financial institutions and we will expand its access to microfinance services. IFAD funding, which is restricted to rural and semi-rural areas, will focus on lending to third parties, usually SHGs. The programme has leveraged an IFAD loan of $22 million to access a grant fund of $23.5 million and a total loan and equity fund of $89 million.
