Origins

The agreement to establish IFAD in 1976 resulted from the 1974 World Food Conference organized by the international community in response to the persistence of widespread hunger and malnutrition in the world. The conference recognized that hunger and food insecurity should not be associated solely with shortfalls in food production and supply at national or international levels. Rather, they should be understood as products of deep-seated structural problems associated with underdevelopment and poverty, especially as these affect rural poor people. IFAD approved its first loan for a project in 1978.

Mandate

Thus the Fund’s specific mandate – to combat hunger and rural poverty in developing countries, especially low-income, food-deficit countries, and to improve the livelihoods of poor rural people on a sustainable basis – defines hunger not just as a food production and supply issue, but also as a livelihood issue.

Emergence of a Specific Role

In responding to this mandate, IFAD has realized that rural poor people can enhance their food security and increase their incomes only if project designs and activities are built upon their production systems and livelihood strategies, and resources allocated accordingly. To be effective, therefore, investments to reduce poverty must be linked to a proper understanding of poverty processes and how they affect different groups of poor people, and women as compared with men.

To this end, IFAD has increasingly collaborated with local stakeholders in developing its operations. It has designed and implemented projects and programmes in a wide range of natural, socio-economic and cultural environments, in remote regions and with the poorest and most marginalized sectors of rural populations. Through its experience, the Fund has acquired a wealth of knowledge of the processes that contribute to the generation and perpetuation of poverty. It has also gained valuable insights about what works or does not work to foster the conditions in which the rural poor can enhance their productivity, output and incomes.

Historical Areas of Intervention

• access to productive resources (especially land and water)
• sustainable agricultural production, including fisheries and livestock
• water management and irrigation (mainly small-scale)
• rural financial services, including microfinance
• rural microenterprises
• storage/processing of agricultural produce
• marketing and access to markets
• research/extension/training
• small-scale rural infrastructure (feeder roads, etc.)
• capacity-building for small producer groups and organizations

IFAD’s Contribution

IFAD’s contribution to rural poverty reduction has long been based on its recognition that the economic empowerment of rural poor people will not happen simply as a result of the ‘trickle-down’ effect of macro or sectoral investments. Action must address the obstacles faced by rural poor men and women and facilitate their opportunities, in their different and specific circumstances and activities. In addition, since in many low-income countries the majority of the poor and extremely poor (those with incomes below one dollar a day) live in rural areas, helping poor producers to increase their output is often the most effective, and in some cases the only, way to bring about more rapid overall growth. IFAD has therefore advocated for broad-based economic growth, built upon an explicit focus on the initiative and capacity of poor rural producers. Such an approach acknowledges the consumption needs of the poor, but it also emphasizes to their social capital and their economic potential as producers and working people. This, in turn, has necessitated an in-depth understanding of the complexities of rural livelihoods and the different roles of women and men within these livelihoods. It has also required careful targeting of interventions at people and their activities – as farmers, agricultural labourers, fisherfolk, hunters and gatherers, pastoralists and small rural entrepreneurs.

Volume of Operations (As of December 2002)

• Number of projects: 628 in 115 countries and territories
• Total IFAD investment: USD 7.7 billion
• Domestic resources mobilized: USD 7.9 billion
• Cofinancing mobilized: USD 6.6 billion
• Total value of projects: USD 22.2 billion
• Beneficiaries: an estimated 250 million

IFAD’s experience over the last 25 years unequivocally shows that rural poor people are fully capable both of integrating themselves into the mainstream of social and economic development, and of actively contributing to improved economic performance at the national level – provided that the causes of their poverty are understood and conditions are created that are conducive to their efforts. No amount of national or international assistance will radically improve the rural situation unless such transformation is based on the aspirations, assets and activities of rural people – and unless poor people own the change process. Major efforts need to be made to remove the critical material, institutional and policy obstacles that prevent the rural poor from seizing opportunities for improved livelihoods.

Development cannot be done for them. What can be done is to create the conditions that empower the poor to become agents of change.

IFAD’s New Strategic Directions

The Millennium Development Goals represent a commitment by the entire international community to take all necessary action, first and foremost, to reduce by half the proportion of people who live in extreme poverty by 2015. The Strategic Framework for IFAD 2002-2006 is the Fund’s response – a statement both of the crucial issues to be addressed and of the areas that IFAD will focus on as part of that broader international effort. The strategic framework draws on the Fund’s years of experience and reflection, and recasts IFAD’s mission in a very simple statement: enabling the rural poor to overcome their poverty. Concretely, this mission translates into three strategic objectives upon which IFAD is concentrating its investments, research and knowledge management efforts, policy dialogue and advocacy:

• strengthening the capacity of the rural poor and their organizations;
• improving equitable access to productive natural resources and technology; and
• increasing access to financial assets and markets.

The strategic framework also recognizes that IFAD must expand its engagement beyond the immediate impact of ‘its’ projects and programmes to influence the direction and content of national and international povertyreduction processes. Thus it emphasizes building complementary partnerships and broad alliances to maximize IFAD’s contribution to the international community’s larger povertyreduction effort.