IFAD and Indonesia invest US$55 million to sustainably improve smallholder farmers` incomes and livelihoods

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IFAD and Indonesia invest US$55 million to sustainably improve smallholder farmers` incomes and livelihoods

Rome, 25 January 2018 – The International Fund for Agricultural Development (IFAD) and Indonesia signed a financing agreement earlier this month to sustainably improve incomes and livelihoods and improve nutrition for 67,400 rural smallholder farming households in 18 districts in Sulawesi Island, West Kalimantan and East Nusa Tenggara.

The agreement for the Rural Empowerment and Agriculture Development Scaling-up initiaive (READ SI) was signed earlier this month by Gilbert F. Houngbo, President of IFAD, and Luky Alfirman, Director General for Budget Financing and Risk Management, Ministry of Finance, Indonesia.

The total cost of the project is US$55.3 million, including a $39.9 million loan and a $1 million grant from IFAD. The government will contribute US$9.6 million and the private sector will make up the difference. The project will be implemented over five years.

“The project scales-up the successful Rural Empowerment and Agricultural Development project (READ), which IFAD supported from 2008 to 2014. It achieved significant results in terms of empowering smallholder farmers, increasing incomes and production, and strengthening village-level institutions. It was very effective because it supported efforts to help vulnerable smallholder farmers improve their agricultural productivity and engagement with markets,” said Ronald Hartman, IFAD Country Director for Indonesia.

“Given the successful first phase, the Government of Indonesia has identified READ as a potential model that can support achieving national development goals and has requested IFAD financing and technical support for the scaling-up of the READ approach,” he added.

Like its predecessor, READ SI will have a strong agricultural focus, facilitating smallholder farmers’ access to markets and providing them with technical support. The programme will also seek to build on its initial success in facilitating public-private-producer partnerships. Empowering smallholder farmers will continue to be at the programme’s core, while introducing an enhanced focus on nutrition and financial services. The programme will also link to and leverage national initiatives, such as the government’s “Village Law”, which provides villages throughout Indonesia with funding for community-based development activities. Work on the ground will be complemented by a policy dialogue platform to ensure a supportive policy framework and further scaling-up in the future.

Since 1980, IFAD has financed 17 rural development programmes and projects in Indonesia, investing $550 million or $1.7 billion when co-financing is included. These projects and programmes have benefitted over three million rural housholds.

Press release No.: IFAD/05/2018

IFAD has invested in rural people for 40 years, empowering them to reduce poverty, increase food security, improve nutrition and strengthen resilience. Since 1978, we have provided about US$19.7 billion in grants and low-interest loans to projects that have reached some 474 million people. IFAD is an international financial institution and a specialized United Nations agency based in Rome – the UN’s food and agriculture hub.