IFAD and Cambodia to increase smallholder farmers’ incomes by expanding market opportunities
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IFAD and Cambodia to increase smallholder farmers’ incomes by expanding market opportunities28 February 2017
Rome, 28 February 2017 – The International Fund for Agricultural Development (IFAD) and the Government of Cambodia signed a financial agreement today to fund a rural development project that aims to increase incomes for 75,000 smallholder farming households by expanding commercial agricultural markets and developing links between producers, buyers and service providers.
The agreement was signed by Kanayo F. Nwanze, President of IFAD, and Aun Pornmoniroth, Senior Minister, Ministry of Economy and Finance of Cambodia.
IFAD is providing a US$36.3 million loan towards the $61.6 million project -- Accelerating Inclusive Markets for Smallholders.
Co-financiers are the Government of Cambodia ($8.65 million), private businesses ($8.59 million) and the beneficiaries themselves ($8.12 million).
“Our goal is to enable poor smallholders to take advantage of market opportunities by working with others in the agribusiness sector to identify areas of potential growth, and to facilitate smallholder farmers’ access to financing and their ability to tap into new markets within the ASEAN economic community,” said Benoit Thierry, IFAD Country Programme Manager for Cambodia. “We also make it a point to include opportunities for women and young adults in all activities,” he added.
Though there has been a dramatic reduction in poverty in Cambodia over the last decade (from 53 per cent in 2004 to 17.5 per cent from in 2012), economic growth in rural areas has become stagnant. This situation can be improved by developing the agricultural sector and specifically, high-value agricultural products for both domestic and export markets.
Current challenges include smallholder farmers’ limited access to financing and fractured links among smallholder farmers, agribusinesses and markets. The project aims to expand the agricultural sector by organizing and guiding farmers and small and medium businesses to intensify and diversify production and boost the market value of agricultural products by improving on the quality of production and processing. The project will also develop and promote ‘value chains’ by linking producers, buyers and service providers.
A ‘value chain innovation fund’ will be established together with rural banks to provide direct financial support to innovative business proposals by farmers, agricultural cooperatives, agribusinesses and service providers. The project will initially work in 15 provinces.
Since 1996, IFAD has extended loans to Cambodia for nine programmes and projects totalling US$179.5 million reaching over 1.28 million of the poorest rural households.
Press release No.: IFAD/17/2017
IFAD invests in rural people, empowering them to reduce poverty, increase food security, improve nutrition and strengthen resilience. Since 1978, we have provided about US$18.5 billion in grants and low-interest loans to projects that have reached some 464 million people. IFAD is an international financial institution and a specialized United Nations agency based in Rome – the UN’s food and agriculture hub.