Press Release No. IFAD/GC/04

Rome, 20 February 2001. President Muhammad Hosni Mubarak of Egypt Tuesday praised the International Fund for Agricultural Development (IFAD), a specialised United Nations agency, for its ''efforts to accelerate agricultural development in Egypt, Africa and developing countries in general''. He was addressing IFAD’s 24th Governing Council session, which concludes Wednesday.

Mr Mubarak called for making rural development a high-priority issue on the world community’s agenda. ''It should be equally, if not more, important that the ongoing interest in urban development in order for us to achieve the aspired goal in due time,'' he added. In this context, he said, ''IFAD’s activities gain an increasing importance in assisting the developing countries to fulfil their hopes and ambitions in eliminating hunger, alleviating poverty in rural areas and facing the adverse effects of open-door and economic liberalisation policies.''

The ''distinguished relation'' between Egypt and IFAD had played an important role in Egypt achieving a leap in the field of agriculture. Under an advanced strategy for agricultural development during the 1980s and 1990s, Egypt has eliminated all forms of governmental intervention in the agricultural sector that is governed by market mechanisms. Mr Mubarak said the Fund had financed projects that served the objectives of the Egyptian agriculture development plan.

Rural development in Egypt up to 2017 aims at increasing annual growth rate of agricultural production to 4.1 percent, providing new job opportunities, improving the standard of living and the income of the farmers and achieving food security. ''Our strategy for the coming phase focuses on rationalizing the use of irrigation water, protecting environment, supporting agricultural institutions in the fields of research, especially in biotechnology, genetic engineering, extension services, marketing and agricultural co-operation as well as supporting women’s role and the activities of non-governmental institutions in agricultural development,'' Mr Mubarak told the delegates to the Governing Council.

Commenting on negotiations on the agricultural sector started under the World Trade Organization, he said these had been ''complex and difficult, given that they require the balancing of a wide array of interlaced and sometimes contradictory considerations''. This involves balancing between the interests of developing, advanced, net food-importing and net food-exporting countries. This also involves balancing between trade liberalization in agricultural commodities, on the one hand and the protection of small farmers and the fulfilment of food security on the other. ''All this must be carried out within a supportive framework for sustainable development, environmental and human health protection, particularly as diseases have become more dangerous and more easily communicable,'' he added.

The President of Egypt said: ''I would like to hail, in particular, your initiative to establish a credit fund in order to finance new projects in Gaza and the West Bank in response to the request of the Palestinian Authority.'' He also paid tribute to the Fund’s contribution to the initiative of relieving debt burdens of heavily indebted poor countries, launched by the G-8 Summit of major industrial nations in Germany in 1999. IFAD will contribute USD 60 million through a special fund established for that purpose under the auspices of the World Bank.

Egypt is the largest recipient of financial assistance by IFAD in the Near East and North African region and the sixth largest in the world. It was one of the first countries in the region to be shored up by the Fund. Since 1980, IFAD has financed seven projects there with an investment of about USD 158 million. The projects have so far benefited about 5 million people and drawn additional USD 234 million of co-financing to some of the poorest areas in the country. Four of the projects have been completed and three are still ongoing. Evaluations of IFAD operations in Egypt indicate that these have resulted in improved incomes and living conditions for large segments of the smallholder farming communities.

IFAD provides support to Egypt also through its regional research and training grant programmes. The Fund backs NGO initiatives as well. Two grants were provided to finance the activities of two NGOs, specifically aimed at assisting women-headed households and other poor farming households, which cannot access loans from commercial banks.

In consultation with the Government of Egypt, IFAD has developed a new strategic framework for assistance to the country. It aims at adapting IFAD operations to Egypt's policy context, and establishing a synergy between IFAD's specificity for rural poverty alleviation and the government's own policy. IFAD’s objective is to assist in the creation and expansion of employment opportunities in rural areas, by focusing on the development of newly reclaimed lands and associated areas in the North West Coast of Egypt. The major thrust of these operations is technology transfer, support to marketing horticultural products, assistance to both small and micro-enterprise development and provision of additional financial services accessible to the rural communities.

The Agricultural Production Intensification Project is one of the three schemes underway.

Approved in March 1994 and scheduled to be completed by the June 2002, the project encompasses the three governorates of Al Minya, Al Fayoum and Beni Suief. Appropriate technology is currently being generated through a research initiative, which applies a whole-farm approach. By developing new lending modalities, the project has already improved access to credit for 50 percent of the users who were previously barred from the facility.

The East Delta Agricultural Services Project is another scheme underway. Approved in December 1996 and scheduled to be completed by the end of 2004, the project covers the newly reclaimed desert lands between the Suez Canal and the Nile Delta irrigated by the Al Salam Canal. The main objective is to facilitate the settlement and agricultural production of about 26,000 families on newly developed lands in the East Delta.

The final goal is to increase farm incomes and lay the basis for the development of a viable rural economy in the area. Farm tertiary irrigation and drainage systems are being constructed, domestic drinking water is being provided for needy communities, and the credit bank is being assisted in extending its operations to the project area. Support is also being provided for the establishment of community organisations that may participate in the management of the irrigation system. The project aims at improving farmers' access to credit.

The third ongoing scheme is the Sohag Rural Development Project, which was approved in September 1998 and is to be completed by the end of June 2005. The project covers the whole of the governorate of Sohag. The objective is to support the sustainable development of rural villages in Sohag, using participatory approaches. In particular it will strengthen local institutions enabling them to identify and prioritise the necessary rural infrastructures required, and then provide matching grant funds for their construction.

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IFAD is a specialised agency of the United Nations with the specific mandate of combating hunger and poverty in the most disadvantaged regions of the world. Since 1978 IFAD has financed 578 projects in 114 countries, allocating almost US$ 7 billion in the form of loans and grants. Through these projects, about 250 million rural people have had a chance to move out of poverty.

IFAD makes the greater part of its resources available to low-income countries on very favourable terms, with up to 40 years for repayment and including a grace period of up to ten years and a service charge of 0.75% per year.