Press release number: IFAD 39/05

Rome, October 12, 2005 - Poor farmers and households headed by women living in the most remote villages will benefit from a new agricultural development programme in the Kingdom of Bhutan.

The US$19.7 million development programme will be financed in part by a US$13.9 million loan and US$100,000 grant from the International Fund for Agricultural Development (IFAD). An additional US$1.3 million grant will be provided by the Netherlands Development Organisation and the Government of Bhutan will contribute US$3.1 million. The loan agreement was signed at IFAD headquarters today by the IFAD President, Lennart Båge and the Permanent Representative to the Permanent Mission of Bhutan to the United Nations, Sonam T. Rabgye.

The programme will improve the livelihoods of 22,000 rural families in Lhuentshe, Mongar, Pemagatshel,Samdrup-Jongkhar, Trashigang and Trashi Yangste, six of the poorest and most food insecure districts in the Kingdom of Bhutan. The eastern districts are areas of rugged terrain with high mountain ranges separated by deep valleys. For those living in these isolated villages, access to the outside world is difficult.

The development programme will increase the productivity and incomes of poor rural farmers, especially women, through improved road connections and agricultural infrastructure as well as providing access to rural financial services. New local market sheds and collection points will make it easier for farmers to sell and trade their crops and access to agricultural technology will help them increase their harvests and become more food secure.

The programme will also strengthen local organizational capacity and institutions so that village leaders and members of the community can actively participate in the development process. It will serve as the main platform for the preparation of Bhutan’s forthcoming Tenth Five-Year Plan in the programme area.

“This programme builds on 20 years of experience in rural poverty reduction in Eastern Bhutan,” said Ya Tian, IFAD’s country programme manager for the Kingdom of Bhutan. “Increasing the participation of the local community is essential to ensuring the success of the programme. The full integration of the programme into the local development plan will ensure the programme’s sustainability and enable the rural poor to overcome their poverty.”

With this loan IFAD will have financed six projects in the Kingdom of Bhutan for a total of US$40 million dollars.

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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 - 800 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 192 ongoing IFAD-supported rural poverty eradication programmes and projects, totalling US$6.5 billion. IFAD has invested about US$2.8 billion in these initiatives. Cofinancing 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 almost US$8.7 billion in 690 projects and programmes that have helped more than 250 million poor rural men and women achieve better lives for themselves and their families. Governments and other financing sources in the recipient countries, including project beneficiaries, have contributed about US$8.4 billion, and multilateral, bilateral and other donors have provided about US$6.9 billion in cofinancing.