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close this folder International fund for agricultural development (IFAD)
View the document Origins and background
View the document IFAD activities
View the document NGO relations

International fund for agricultural development (IFAD)


Origins and background

The International Fund for Agricultural Development (IFAD) was established in 1977 as the 13th specialized agency of the United Nations. The founding of IFAD was a key result of the World Food Conference, held in Rome in November 1974. The conference coincided with large-scale famine in the African Sahel, and it concluded that food and nutrition problems were due to more than occasional crop failures: they reflected a deep-seated phenomenon with roots in the whole issue of development and poverty.

According to this new approach, unless the poorest rural areas in developing countries produce more, have more food, more jobs and make more money, they will remain hungry and malnourished. This insight is reflected in IFAD's objectives.

IFAD's main goal is "to mobilize additional resources to be made available on concessional terms for agricultural development in developing Member States." Most IFAD financing goes to projects that 'introduce, expand or improve food production systems and...strengthen related policies and institutions within the framework of national priorities and strategies." The objectives that guide IFAD in setting priorities for allocation of resources are an increase in food production and improvement in the nutritional level of the poorest populations in food deficit and other developing countries.

IFAD's highest authority is its Governing Council, on which all 160 Member States are represented by a governor and an alternate. Countries are divided into three categories: there are 22 in category I (developed countries), 12 in category II (oil-exporting developing countries), and 126 in category III (other developing countries). Membership in the fund is open to any Member State of the United Nations or of its specialized agencies. Sessions of the Governing Council are held annually and special sessions may be called when necessary. The council's chair and two vicechairs are elected for a two-year term.

The Executive Board has 18 members and 17 alternates elected at the annual session of the Governing Council, one-third from each category of the fund's membership. The board is responsible for IFAD's general operations and in particular for the approval of loans and grants for projects. The board has three regular sessions a year but may meet more often if needed.

At the end of 1995, IFAD had a staff of 263 people from 50 countries. The fund also uses consultants, conference personnel and other temporary staff as needed. IFAD's secretariat is headed by the President, who is elected by the Goveming Council for a four-year term. The President, also the Chairman of the Executive Board, is responsible for the management of the fund.

The fund's resources come largely from members' contributions, special contributions from non-Member States and other sources, and funds derived from IFAD operations. The budget for 1996 as approved by the Governing Council amounts to US$50,778,000 plus a contingency of US$300,000. The agency is jointly funded by Western countries, which contribute 60% of its budget, and oil-exporting nations belonging to the Organization of Petroleum Exporting Countries (OPEC), which contribute 40%. The most recent replenishment faced certain difficulties stemming from oil-exporting countries' proposals to reduce their contribution because of low oil prices.


IFAD activities

Between 1978 and the end of 1995, the fund committed US$4.5 billion in loans under the Regular and Special Prograrnmes combined for 429 projects in 106 developing countries. The total costs of these projects stand at US$14.3 billion including substantial contributions by external cofinanciers and governments of recipient countries. During the same period, IFAD provided US$227.4 million to 601 research and technical assistance grants.

The regional shares of IFAD-suppoded projects approved between 1978 and 31 December 1995 under both Regular and Special Programmes stand as follows: Africa (sub-Saharan), 176 projects in 44 countries (35.0%); Asia and the Pacific, 110 projects in 19 countries (33.0%); Latin America and the Caribbean, 75 projects in 28 countries (15%); Near East and North Africa, 68 projects in 15 countries (16.9%).

In 1995, 33 loans were approved by the Executive Board for 37 projects under the Regular and Special Programmes, of which 12 were in Africa, ten in Asia, six in Latin America and the Caribbean, and five in the Near East and North Africa.

The loan terms for borrowers reflect the fund's lending priorities. For 1978-1995, 61.6% of IFAD loans under the Regular Programme were on highly concessional terms (an annual service charge of 1% and a maturity period of 50 years, including a ten-year grace period). Loans on intermediate terms (at a yearly interest rate of 4% and a maturity period of 20 years, including a grace period of five years) represented 26.9% of IFAD loans for that period, and those on ordinary terms (8% yearly interest and a maturity period of 15-1 8 years, including a grace period of three years) represented 11.5%.

In regional terms, 84.7% of IFAD loans to Africa under the Regular Programme were highly concessional, with Africa receiving a significant portion of IFAD's concessional financing. Most IFAD loans to Asia, 72.9%, were on highly concessional terms. In the Near East and North Africa region, the corresponding figure reached 40.2%, and in Latin America and the Caribbean 17.4%.

IFAD's specificity is reflected in the choice of projects it supports. Projects are selected to ensure that the poorest people in the poorest areas benefit from the fund's resources: small farmers, artisanal fisherfolk, nomadic herdspeople, rural landless, and poor rural women.

IFAD defines poverty as a "production problem" and poverty alleviation as "an investment." From this perspective. the answer to poverty lies in creating conditions for the poor to earn more and in understanding that "overcoming poverty does not mean less (economic) growth; it is a contributor to growth." IFAD's poverty alleviation approach mobilizes and enhances the ability of the rural poor to "expand their own income and to contribute to national growth." It is not simply a process of raising incomes, but involves structural change in economies and societies.

For IFAD, enabling the poor to participate in economic processes means:

• increasing and improving the poor's access to land through land reform, land titling, better management, and better conservation supported where necessary by irrigation, new technologies, and improved infrastructure;

• increasing the productivity and use of rural labour, emphasizing labour intensive technologies, and improved training for new skills; and

• making more capital available to the rural poor, mobilizing savings, providing infrastructure and developing financial services tailored to their situation and needs.

IFAD's regular programmes, or special programmes, such as the Special Programme for Sub-Saharan African Countries affected by Drought and Desertification, have a variety of aims.

A key objective is to secure access to land. Land distribution and ownership, including land titling, have decisive implications for the production capacities and income of the rural poor. Particularly in Latin America, the land issue has been at the heart of approaches to rural poverty. A number of the fund's operations in the region have facilitated land titling and have regularized land ownership for the beneficiaries of its projects.

For instance in Ecuador IFAD helped rationalize titles to land assigned under the Land Reform Programme. While the process of issuing titles is being completed, IFAD is helping issue temporary certificates of possession allowing access to credit. Similarly, an IFAD project in Honduras has helped small farmer and peasant groups regularize land rights in an effort to introduce long-term institutional credit and extension services.

IFAD also works to improve access to credit. The fund recognizes that the poor have great difficulty in securing access to resources, especially capital. For this reason, providing credit is a key IFAD activity. A high percentage (about 30%) of IFAD assistance to small and poor farmers goes to improving access to credit to purchase means of production (agricultural inputs, processing equipment, draught power, transport equipment and so on). One of IFAD's most important contributions in this field has been to replace conventional collateral requirements with group-based guarantees and develop innovative credit delivery mechanisms. IFAD-supported projects also give priority to promoting savings and to the voluntary formation of activity-based community and village groups.

Irrigation is another major component of IFAD-supported projects and is important in the development of rural infrastructure. The fund's experience with irrigation began with the co-financing of large-scale schemes. Noting that these schemes were not adapted to either the needs of the poor or to environmental concerns, IFAD's emphasis shifted to smallscale irrigation and improved water harvesting techniques. IFAD encourages small-scale, village-based schemes in which water users assume the responsibility for system maintenance and water management.

IFAD also works to develop entrepreneurial capacities for small-scale enterprises. Recent projects are designed to strengthen entrepreneurship for both on-farm and off-farm activities. Women figure prominently as specific targets in most of these projects. Unemployed rural youth are also increasingly targeted, as in the case of the Artisanal Fisheries Pilot Development Project for Algeria. This project is designed to provide young people with employment in new facilities that produce fishing equipment, make ice, and market fish. Fisheries projects that are based on group management and marketing activities and improved resource conservation are showing dynamic growth.

Increasingly, IFAD projects are seeking to place environmental preservation at the core of project design and implementation "to help break the vicious cycle between poverty and environmental degradation." Apart from credit, small-scale irrigation, land improvement, and soil and water harvesting, IFAD places emphasis on traditional crops, safe biological pest control in research, extension and training, and institution building. IFAD estimates that 50% of its projects involve investments with an environmental component.

IFAD's approach to rural women in development has evolved over the years. According to IFAD, "rural women are the architects of household food security as food producers, processors. traders and the guardians of family welfare." So IFAD seeks to increase the farm productivity and the off-farm incomes of women as well as to alleviate the physical drudgery of household tasks.

Since May 1986, the Special Programme for Sub-Saharan African Countries Affected by Drought and Desertification has been assisting smallholder farmers and other poor rural groups in Africa. The programme has focused on the needs and productive potential of rural women. Recently, the fund improved its information base for gender analysis and for raising awareness among rural women. Phases I and II of the programme were terminated on 31 December 1995.

IFAD has also taken a number of initiatives to implement the recommendations made at the 1992 Geneva summit on the Economic Advancement of Rural Women, which was launched at the initiative of six First Ladies from all world regions. An IFAD information and communications strategy is designed to bring the message of the Geneva Declaration for Rural Women to the field level. A number of information documents on the summit have been produced by IFAD to support advocacy initiatives.

IFAD has also developed operational guidelines for project gender analysis, which improve project design and provide a framework within which to evaluate a project's impact on rural women. Finally, the fund is preparing a handbook with basic information on development strategies with a gender perspective to respond to the needs of project managers, NGOs, consultants and others.

In addition, IFAD can make grants, which are limited by statute to 12.5% of the resources committed in any one financial year. These grants go to the poorest countries to speed up and enhance project preparation and finance project components under both the Regular Programme and the Special Programme. They also provide special operations facilities. develop agricultural research and training, and undertake initiatives with NGOs under the IFAD/NGO Extended Cooperation Programme.

Over the period 1978-1995, a total of 514 Technical Assistance Grants (TAGs) for US$24.1 million were approved under the Regular and Special Programmes. More than 70% of all IFAD grants from 1978 to 1995 have been used to support agricultural research and training.

Agricultural Research

In its Tenth Anniversary Annual Report of 1987, IFAD identified four crucial directions for its research support activities:

• adaptive research related to problems faced by smallholders in specific agroecological environments, to be achieved by strengthening national research institutions and by promoting greater collaboration between national and international applied research activities;

• increased attention to traditional crop research;

• research on low-input technologies, farming systems, agroforestry and alley cropping; and

• technologies for sustainable agriculture that combine gains in productivity with measures to protect and improve the environment, such as biological pest control.

Recent research activities support one or another of these objectives. For example, in 1990 IFAD's traditional crop production research focused on rehabilitating date palms in the Near East and North Africa and on introducing improved cassava varieties in the drier tropical and subtropical regions of Africa, Latin America and Asia. In the field of livestock, an IFAD grant to the Arab Centre for the Studies of Arid Zones and Dry Lands (ACSAD) supports applied collaborative research about camels. IFAD has also played a major role in developing successful biological controls for important pests, such as the cassava mealy bug and crop borers in sorghum, maize and cowpeas in sub-Saharan Africa. Moreover, the fund's promotion of research into semiochemicals (substances synthesized both by desert locusts and host plants) that influence desert locust behaviour is yielding positive results of benefit to the poorest households in the areas concerned. In 1992, the Executive Board approved IFAD's contribution to a research effort by the International Institute of Tropical Agriculture (IITA) to combat cassava green spider mite in Africa. In 1995 a grant of US$1.2 million was approved for the establishment of a Regional Animal Surveillance and Control Network (RADISCON) in North Africa, the Middle East and the Arab Peninsula. This programme aims at increasing livestock productivity through the reduction of zoonotic disease, and promotion of trade in healthy animals and safe animal products.

Training Activities

Training activities aim to help IFAD projects to succeed, and the fund finances training programmes on agriculture credit, the environmental dimension of rural poverty alleviation, and so on. Courses are designed for IFAD staff, project managers, national trainers or experts and policy makers.

One of the fund's most important training activities is the Agricultural Management Training Programme (AMTA) initiated in 1985, in conjunction with the World Bank and the African Development Bank. This programme, which is now in its fourth tranche, has been one of the principal instruments for improving capabilities with a direct bearing on the execution and environment of projects. At present, it puts major emphasis on the integration of externally funded project activities into the activities and responsibilities of farmers.

In 1991, the fund approved a grant to train personnel in specific institutions serving the rural subsector in Latin America and the Caribbean. Again in Latin America, the fund supported a rural development regional training programme in 1992 at the National University of Tucuman in Argentina. In 1995 a grant of US$300,000 was provided to the Rural Credit Unions in the Windward Islands—Caribbean Confederation of Credit Unions (CCCU). This programme aims at strengthening the management capabilities of rural credit unions, while improving their capacity to support IFAD-financed projects in the area.

Information and Communications

IFAD's information and communications activities aim to increase public awareness about problems of hunger and poverty, agricultural and development issues, and IFAD's role in promoting sustainable rural development in the world's most vulnerable regions.

These activities are important to IFAD, which works to ensure that its message on alleviating poverty reaches a wider public. IFAD's target audience includes the public, scholars, development experts, NGOs, project beneficiaries and persons engaged in decision making and policy making.

To reach a broader public, the fund has strengthened and expanded its press contacts and uses film, television, and radio for its messages. Several national TV stations have produced documentary films on rural poverty and IFAD's approach to poverty alleviation.

IFAD publishes an annual report each year and produces brochures. surveys, leaflets, and studies. In 1991, the agency signed an agreement with New York University Press to publish a series of studies drawn from its experience in alleviating rural poverty. Two studies were produced, Providing Food Security /or All and Ghana Under Structural Adjustment The Impact on Agriculture and the Rural Poor. The first edition of IFAD's major report, The State of World Rural Poverty, was published in 1992.


NGO relations

IFAD's first experience with NGOs took place in 1981 when an innovative NGO—the Grameen Bank—became involved in the Small Farmer Agriculture Credit Project in Bangladesh. At that time, the Grameen Bank was considered an NGO (using a broad definition) by government programmes. IFAD supported the bank in its pioneering, innovative rural credit programme based on group formation and training. The Grameen Bank's success was widely promoted. After this auspicious start. IFAD concluded a small number of cooperation agreements on an ad hoc, case by case basis.

For example, in 1983 IFAD made a grant of US$941,000 to the Near East and North Africa Regional Agricultural Credit Association (NENARCA) for a four-year training and institutional development project to enable NENARCA's member institutions to meet the credit needs of small farmers. In 1984, IFAD concluded an informal cooperation agreement with Worldview International Foundation (Sri Lanka) and contributed US$2 million to a programme for better extension services. village credit operations, training and motivation of beneficiaries in IFADfinanced projects in the region. The same year, a cooperation agreement involving a US$1.2 million grant was signed with the Fundación para el Colegio Experimental de Agricultura Simón Bolivar (Venezuela). The project established management training in rural development projects in Latin America and the Caribbean and trained students from the region in farm management. Some projects originated from informal contacts between IFAD divisions or project controllers and internationally-operating NGOs and their local partners. Others were set up when project controllers learned of the work of indigenous NGOs in beneficiary countries through government or UNDP offices.

The framework and guidelines for IFAD/NGO cooperation have evolved, based on decisions taken by the fund's governing bodies. In April 1984, the 21 st session of the Executive Board adopted a policy document, IFAD's Relations with Non-Governmental Organizations, which stressed the need for more systematic relations between IFAD and NGOs. At this session, the board approved a set of broad guidelines for IFAD/NGO cooperation and requested a conceptual framework for financial or operational purposes for collaboration between IFAD and NGOs. It also stressed the need to include NGOs from developing countries to facilitate "the involvement of the intended project beneficiaries as active participants in project execution."

IFAD/NGO cooperation was broadened with the approval of the guidelines for the Special Programme for Sub-Saharan African Countries Affected by Drought and Desertification (SPA). According to the document establishing the SPA, "Institutionally, the programme would try to bring about the involvement of NGOs whenever desirable and acceptable to the concerned governments so that it could draw upon their dynamism and close interaction with communities."

In 1985, IFAD produced a report on its expanding relations with NGOs, which recommended a four-track policy for closer cooperation:

• the establishment of a well-defined NGO focal point within IFAD;

• the establishment of an NGO consultative committee with a maximum of 15 members, plus observers;

• the creation of a special IFAD NGO fund; and

• the creation of an NGO database.

Ever since this report, these four components have been central to IFAD's development of closer relations with Northern and Southern NGOs.

In September 1987, the Executive Board at its 30th session gave the green light for the establishment of the IFAD NGO Extended Cooperation Programme (ECP) to finance NGO activities in developing countries.

The ECP, a source of grants for NGOs, is today the formal framework for IFAD/NGO cooperation. Its annual budget is approximately US$1,800,000. At the end of 1995, 53 grants had been made under the NGO/ECP, including 12 approved in 1995.

The ECP's aim is "to provide further impetus to development approaches at the country level, which enhance self-reliance and poverty alleviation through a participatory process." NGO projects co-financed by the ECP should focus on testing new technologies and new institutional approaches, and promoting training programmes for the rural poor and extension workers. They should also encompass community-based, collective approaches to rural development and resource management, such as facilitating the creation of farmers' groups and associations, water users' associations and other forms of grassroots networks. Since the ECP was set up, the agency has supported NGO projects for a total of US$2.8 million.

IFAD's relations with NGOs stem from article 8, section 2 of the agreement establishing the fund.

According to this article, "the fund shall cooperate closely with the Food and Agriculture Organization of the United Nations and other organizations of the United Nations system. It shall also cooperate closely with intergovernmental organizations, international financial institutions, nongovernmental organizations and government agencies concerned with agriculture development. To this end, the fund will seek the collaboration in its activities of the Food and Agriculture Organization of the United Nations and other bodies referred to above, and may enter into agreements or establish working arrangements with such bodies, as may be decided by the Executive Board."

IFAD does not give formal or consultative status to NGOs. However, subject to formal approval by the Executive Board, NGOs may participate as observers in IFAD's Governing Council. In 1988, IFAD met with NGOs during its International Consultation on Environment. Sustainable Development and the Role of Small Farmers. The meeting recommended the setting up of an IFAD/NGO consultative mechanism.

A further IFAD/NGO meeting in January 1989 proposed a mandate for a consultative group and explored the holding of joint IFAD/NGO consultations. At its 12th session in 1989, IFAD's Governing Council approved a proposal to hold an annual IFAD/NGO consultation, the first of which was held in May 1990. The second meeting took place in June 1991 and adopted terms of reference for future meetings.

The consultation provides a forum for dialogue between the fund and representatives of the NGO community on past, ongoing and future cooperation. The consultation always reviews a range of issues arising from IFAD/NGO cooperation as well as some specific themes. The 1995 consultation focused on land degradation and poverty and was followed by a one-day symposium on the same theme, held in the seat of the Italian Parliament. The symposium was intended to provide a contribution for implementing the Desertification Convention and integrating local communities, grassroots organizations, resource users and NGOs into international resource management efforts. In 1996 the consultation discussed the theme of Capacity Building at the Local Level, which was linked to the 1995 focus on land degradation and poverty alleviation. Thirtytwo NGOs participated in the meeting, 21 from developing countries and 11 from OECD countries.

IFAD cooperates with a variety of NGOs ranging from well known Northern ones, such as Oxfam (United Kingdom) and Plenty Canada, and well known Southern NGOs, such as BRAC (Bangladesh), to little known rural, indigenous NGOs, such as SHALAMO (Zaire), ASUR (Bolivia), and Amaschina (Ghana). IFAD has made a major attempt to cooperate with NGOs from the South, and over 50% of all NGOs working with the fund are from developing countries. Equally diverse is the range of activities in which they are involved: socioeconomic surveys, promoting group formation, managing credit delivery, farmer training, supporting the creation of small-scale enterprises, and supplementing government extension services in rural areas.

A number of NGOs, such as Worldview International Foundation and Plenty Canada, have shared in the financing of IFAD projects. IFAD estimates that between 1978 and 1991, IFAD-supported projects benefited from over US$7.8 million in co-financing by NGOs.

NGO participation in IFAD projects has grown considerably. By the end of 1993, it was estimated that 150 NGOs were participating in 81 IFAD projects. NGO participation in project activities has increased significantly over the past five. Of the 33 projects presented to the Executive Board in 1995, the majority involves collaboration with NGOs, mostly of local origin. Operational cooperation at the project level is governed by legal contracts. In most cases, NGOs are contracted to the project loans extended to the beneficiary government. NGOs have thus worked with IFAD in a variety of capacities:

• they have implemented specific components of IFAD projects;

• they have served as consultants in the project identification and formulation stage of the project cycle; and

• they have undertaken socioeconomic surveys in areas where IFAD projects are planned.

There are also cases in which NGOs have advocated successfully on behalf of IFAD. For example, during the fund's second replenishment, the UK-based World Development Movement played an important role in increasing the UK government's contribution to IFAD by UK£10 million. Similarly, Bread for the World lobbied for IFAD in the US. while the Danish united Nations Association has successfully lobbied for increased government resources for IFAD.

Since 1985, IFAD's External Relations Division has become the focal point for relations with NGOs, with an NGO liaison officer on staff. Work has also moved forward on the setting up of an NGO database within the division. IFAD's principal channels of communication with NGOs are through the newsletter IFAD Update, the Annual Report, internal documentation and reports, and the Annual Consultation.

According to IFAD's April 1996 document Background to IFAD/NGO Collaboration, IFAD plans to increase NGO involvement at different stages of the project cycle. IFAD recognizes that NGOs could play a greater role in identifying or preparing projects, as well as in evaluating them, given their close ties with rural populations.

Information will play a key role in the growth of this cooperation. Specific proposals to launch a regular bulletin have already been drawn up. The bulletin would carry information on IFAD pipeline projects, their status, and potential for NGO involvement. Another possible area of IFAD/NGO cooperation is in the area of advocacy: "IFAD and advocacy NGOs may cooperate in highlighting or publicizing mutual concerns with the aim of influencing public opinion, and ultimately public institutions to deal with these concerns.'

On 20-21 November 1995, IFAD organized in Brussels a Conference on Poverty and Hunger, with nearly 1000 participants, of which about 300 were from development and advocacy NGOs. The conference was prefaced by a three-day workshop for some 150 representatives of NGOs, UN agencies, multilateral financial institutions, bilateral donors, universities and research institutions. NGOs were given a leading role in the formulation and follow-up to the Plan of Action, thus making them major partners and decision makers in the process.

A five-pronged Programme of Action was adopted by the conference and is seen as the first step toward building an effective and dynamic coalition with civil society in the effort to eliminate hunger and alleviate poverty. The five initiatives are:

• supporting the capacity-building of civil society organizations;

• establishing a knowledge network dedicated to the exchange of civil society knowledge and experience in fighting hunger and poverty and in policy dialogue at all levels;

• developing strategies to build public awareness and to create political will, by opening up more space for policy reform and civil society initiatives:

• initiating a global programme for emergency prevention; and

• ensuring early implementation of the Convention to Combat Desertification.

In order to ensure that the momentum generated by the conference was not lost, an Interim Committee decided on the formation of specific action groups for each of the five points in the Programme of Action.