Enabling poor rural people
to overcome poverty



Press release number: IFAD 03/05

Rome, 25 January 2005 - Organic food production could promise a way out of poverty for many small farmers in developing countries, according to a thematic evaluation by the International Fund for Agriculture Development (IFAD).

Farmers who switched to organic agriculture achieved higher earnings and a better standard of living, the study, conducted in China and India last year, showed. Similar findings were produced by an earlier study in six Latin American countries, conducted in 2001. The studies, supported by the Italian Government, looked at the role of organic agriculture in rural poverty reduction and when, and under what conditions, organics could be integrated into development programmes.

The conclusions of the studies were presented today at the Campidoglio, the Rome City Hall, by IFAD Assistant President for External Affairs, Phrang Roy, the President of the Associazione Italiana per l'Agricultura Biologica (AIAB), Vincenzo Vizioli, the Director General for Development Cooperation at the Italian Ministry of Foreign Affairs, Giuseppe Deodato, and the deputy director of the IFAD Office of Evaluation, Caroline Heider.

The meeting brought together producers, research institutions, certification agencies, development organizations and private companies to discuss and identify potential partnerships aimed at reducing poverty by investing in organic agriculture.

In 2001, organic cacao producers in Costa Rica received payments 150 per cent higher than conventional producers. But prices were not the only reason for changing production methods. Organic farming reduces health risks posed by use of toxic chemicals, as well as the high costs of chemical pesticides and fertilizers. As well, the environment benefits from improved soil management and less-polluting techniques. Being labour-intensive, organic farming also offers job opportunities in those areas where the labour force is either underemployed or out of work. This means increased revenues in rural areas and reduced migration to the cities and overseas.

In China and India , organic production is growing steadily. The value of Chinese exports grew from less than US$ 1 million in the mid-1990s to about US$ 142 million in 2003, with more than 1,000 companies and farms certified. In India , there has also been remarkable growth, with about 2.5 million hectares under organic farming and 332 new certifications issued during 2004.

However, the paradox is that farmers already producing for export are the ones benefiting from this booming sector, the IFAD study shows. Smallholder farmers are often excluded from government support systems for certification and marketing. Indeed, domestic market channels for organic products are very limited in China and even scarcer in India , according the research. A great proportion of organic products are sold informally without certification controls.

Small farmers often have to surmount a number of constraints before they can become certified producers of organic products, such as lack of technical knowledge, inadequate market information, limited storage and processing facilities and complex certification processes.

To become a promising option for small farmers around the world, the organic sector needs to develop in a sustainable way, according to the studies. If organic agriculture expands too rapidly, it may lose its added value and prices and incomes may decrease considerably.

Therefore, organic agriculture should not be considered as a panacea that can be used to reduce poverty in any environment at any time. It must be considered as one more option to be used for poverty reduction on an ad-hoc basis. However, in areas where conditions favour the adoption of organic agriculture by small farmers, it can provide a long-term solution to poverty, while reducing migration, and improving health conditions and the environment for entire communities.


IFAD is a specialized agency of the United Nations dedicated to eradicating rural poverty in developing countries. Seventy-five per cent of the world's poorest people - 900 million women, children and men - live in rural areas and depend on agriculture and related activities for their livelihoods. Through low-interest loans and grants, IFAD works with governments to develop and finance programmes and projects that enable rural poor people to overcome poverty themselves.

There are close to 200 ongoing IFAD-supported rural poverty eradication programmes and projects, totaling US$ 6.5 billion. IFAD has invested about US$ 3 billion in these initiatives. Co-financing has been provided by governments, beneficiaries, multilateral and bilateral donors and other partners. At full development, these programmes will help more than 100 million rural poor women and men to achieve better lives for themselves and their families. Since starting operations in 1978, IFAD has invested US$ 8.5 billion in 677 projects and programmes that have helped more than 250 million poor rural men and women achieve better lives for themselves and their families.