Home » REGIONAL NEWS » Africa: China and UN Agency Financing Agreement Promotes Agribusiness Development and Increased Productivity for Smallholder Farmers

Africa: China and UN Agency Financing Agreement Promotes Agribusiness Development and Increased Productivity for Smallholder Farmers

Rome — The International Fund for Agricultural Development (IFAD) and the government of the People’s Republic of China are financing a US$125.2 million project to increase small farmers’ production of cash crops and improve marketing of their produce with the aim to reduce chronic poverty for 387,000 rural families in the Luoxiao Mountains in Jiangxi province.

IFAD will provide a loan of $43 million and a grant of $800,000 to finance the Jiangxi Mountainous Areas Agribusiness Promotion Project. The loan agreement was signed today at IFAD headquarters in Rome by Kanayo F. Nwanze, President of IFAD and Yang Shaolin, Director General, Department of International Economic and Financial Cooperation, Ministry of Finance, China.

China is the first developing country to achieve the United Nations Millennium Development Goal of reducing by half the number of its people living in extreme poverty and hunger. But despite this, China still faces many challenges to reduce poverty especially in rural areas where about 50 per cent of the population lives.

The project will address the chronic rural poverty that is prevalent in pockets of remote and mountainous areas of Jiangxi province by assisting smallholder farmers to develop market-oriented livestock and agricultural products, and facilitate access to remunerative markets.

As of 2013, 50 per cent of total employment in China is in rural areas. The poorest rural households tend to derive a large share of their income from agricultural activities, which often show low levels of productivity and net profits.

“It is important that we reach poor rural farmers living in remote areas where families are isolated and without access to farmer cooperatives, agro-enterprises or information to improve agricultural production,” said Matteo Marchisio, Country Programme Manager, IFAD. “By linking them to markets, their opportunities increase to improve their incomes and, ultimately, their livelihoods. Farmer incomes in the target area are only 61 per cent of national levels, we want this to change.”

The Jiangxi province is one of 14 priority areas identified by the Chinese government to channel poverty reduction efforts. The IFAD-supported project is cofinanced with contributions from the government of China, the beneficiaries themselves, participating financial institutions, and cooperatives and enterprises. It will be implemented over a five-year period.

To date, IFAD has invested in 28 projects in China with a total cost of more than $2 billion of which IFAD contributed $818.9 million, directly benefitting 4,265,300 households.

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