Press release number: IFAD 11/04

Rome, 20 February 2004 - Poor families, many of them headed by women, in two Himalayan states of India will benefit from a new project designed to help communities strengthen their local institutions and take advantage of opportunities to increase their incomes through better access to markets, resources and know-how.

The USD 84.3 million project will be supported by a USD 40 million loan from the International Fund for Agricultural Development (IFAD). The loan agreement was signed today at IFAD headquarters by IFAD President Lennart Båge and Dr Sudhir Gunvantrai Mankad, Additional Secretary, Ministry of Finance, Government of India.

“This is an important project, especially since there are very few donor agencies actually working in the Himalayan states of India,” says Mr Båge. “In fact, this is the first time an IFAD-backed project has been implemented in the State of Uttaranchal.”

In the past, the people of the Uttaranchal and Meghalaya states were highly self-sufficient. But now many are finding it increasingly difficult to survive. One reason has been a recent population boom, which has forced communities to stretch already limited resources. But another, more compelling reason has been the escalating degradation of land, forests and other natural resources. As local people are more exposed to external influences, often through television, consumption patterns are changing.

While poor women will be most likely to benefit from the project, all community members will be invited to take part. “In order to prevent resentment, we need to encourage broad participation,” explains Shyam Khadka, IFAD’s Country Programme Manager for India. “Moreover, a wide range of participants helps to ensure that the project addresses people’s real needs and yields enduring benefits.”

The basis of the project’s work will be the creation of grassroots organizations that include women and extremely poor individuals – groups previously excluded from community decisions. The project will then work with these organizations in a variety of ways to help such marginalized people become self-supporting.

The project will link beneficiaries with formal financial institutions, which will give people access to savings accounts, individual and group loans, and innovative insurance services that cover illness, loss of livestock or death of the family breadwinner.

The project will also work with community-based organizations to give people the opportunity to receive additional resources and training. For example, small farmers will be able to diversify their crops, build additional fisheries or acquire more productive livestock breeds. People running small enterprises will be able to learn how various processing and marketing activities can add value to their products. Important business skills, such as bookkeeping and business plan preparation, will also be offered.

With this loan, IFAD will have financed 18 projects in the Republic of India, totaling USD 505 million.

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IFAD is a specialized agency of the United Nations dedicated to combating rural poverty in the most disadvantaged regions of the world. Since 1978, IFAD has invested USD 8.1 billion in 653 projects and programmes in 115 countries and territories. Through these projects and programmes, about 250 million rural people have been supported in their efforts to overcome poverty.