Wednesday - June 19,2019

Partnering to Improve Small Farmers´Lives

Partnering to Improve Small Farmers´Lives

For many of these rural citizens, agriculture has the greatest potential to lift them out of poverty, but formidable obstacles—including a lack of access to inputs, high-yield seeds, fertilizers, and formalized financing—stand in the way.

Supporting smallholder farmers is an important part of IFC’s comprehensive approach to agriculture. We work with companies, trading firms, financial institutions, and civil society organizations to help farmers overcome hurdles to higher productivity and become part of the supply chain.

Through the Global Agriculture Food and Security Program, we have been able to make a difference in the lives of thousands of smallholder farmers in developing countries. IFC manages the private sector window of this multilateral fund, which was set up to help the Group of 20 leading economies deliver on its food-security commitments.

“Taking a chance on projects with a focus on improving the livelihood of farmers is what GAFSP’s private sector window does best,” said Laura Mecagni, head of GAFSP’s private sector window. “We invest in projects that have a lasting impact across the entire food supply chain, from farm inputs to logistics and storage, to processing and financing.”

In 2014, GAFSP and IFC lent a combined $10 million to Malawi Mangoes to help the tiny agricultural start-up in Malawi develop a world-class fruit plantation in the scenic—and abundantly fertile—district of Salima.

Nearly 85 percent of all the fruit borne on Malawi’s 4 million mango trees used to go to waste—the fragrant mangoes rotting on the ground where they fell for lack of a proper processing facility. Now, after the construction of a state-of-the-art processing plant and the launch of an outreach program, smallholders in this landlocked country can modify their trees to international varieties and finally sell their produce—all under the watchful eye of Malawi Mangoes’ expert staff.

In Nepal, where smallholder poultry farmers struggle to keep up with a growing consumer demand for poultry, GAFSP’s private sector window invested nearly $4 million to enhance poultry farm productivity and boost rural farm incomes.

The investment in Probiotech, a Nepalese feed manufacturer, will help the company expand its portfolio into value-added products, benefiting over 8,000 smallholder suppliers to whom the company already provides inputs, feed, and technical assistance from veterinarians.

These investments are typical of GAFSP’s ground-breaking private sector strategy: providing loans to ambitious companies with a robust development mandate. It uses blended finance solutions and IFC’s expertise to support projects in the agricultural sector that would usually not attract commercial funding due to high risks.

GAFSP’s private sector window works in partnership with the fund’s public sector window, which to date has received pledges amounting to $1.3 billion from donor countries to deliver targeted financing for the agricultural sector in low-income countries.

Just two years into operations, GAFSP’s wager has paid off, with multiple investments already making a discernable difference in the lives of over 650,000 small and medium enterprises and smallholder farmers across the globe. The program is supported by the governments of Canada, Japan, the Netherlands, the United Kingdom, and the United States.

In 2014, GAFSP’s investments more than tripled from the previous year, with a total of 11 projects worth $400 million of which the fund contributed $50.3 million. GAFSP funding helps to leverage, on average, eight times its contribution from IFC and other private sector investors on each project. In addition, 11 advisory projects were approved which will pave the way for future investments.