Press release number: IFAD 34/06

Rome, 22 June 2006 - Organizations of small-scale producers in Paraguay, many of whom have been badly affected by ten years of decline in the traditional cotton industry, will be helped to identify possible new business ventures through a project backed by the International Fund for Agricultural Development (IFAD).

The Empowerment of Rural Poor Organizations and Harmonization of Investments Project will also assist small-scale farmers with low productivity and limited potential, indigenous groups, rural families headed solely by women and young people. About 120,000 people in eastern Paraguay will benefit. At least one third of them will be women.

The project is partly financed by a loan of US$12 million from IFAD. The loan agreement was signed at the organization’s headquarters in Rome today by the Vice President of IFAD, Cyril Enweze and Paraguay’s Ambassador to Italy, Jorge Figueredo Fratta.

Small farmers and their families are generally involved in cooperatives or economic groups, but a link has been established between poverty in the region and the weakness of these organizations. The project will work with group members to identify problems and create plans for the future based on their own needs. Stronger organizations will be able to take advantage of training and technical assistance, as well as the services and credit funds of the public banking system.

Paraguay has good financial and productive resources, but it is difficult for rural poor people to get access to them. This project will improve their ability to do so and in this way will draw rural poor people into the national development process.

Young people, indigenous people and women are expected to benefit from project activities. About 72 per cent of Paraguay’s indigenous people are under the age of 30 and they have very limited employment opportunities. Women are largely excluded from social and economic development and many rural women are slipping into deeper poverty. The project will include both groups in activities to strengthen local organizations and in the preparation of business plans.

“In the past, there has been little attention to strengthening subsistence agriculture in Paraguay”, says Paolo Silveri, IFAD’s country programme manager for Paraguay. “This project will support organizations to enable them to manage their own resources and improve their access to existing national resources.”

Sustainable business opportunities based on modernization and diverse activities, such as producing honey or raising pigs and chickens, will be adopted through this project, which will also draw together investments and project initiatives already underway in Paraguay.

Many features of the project design are based on the successful IFAD-funded Management of Natural Resources in the Southern Highlands Project (MARENASS) in Peru.

To date, IFAD has invested US$52.6 million in six programmes and projects in Paraguay.

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IFAD is a specialized agency of the United Nations dedicated to eradicating poverty and hunger in rural areas of developing countries. Through low-interest loans and grants, it develops and finances projects that enable rural poor people to overcome poverty themselves. There are 187 ongoing IFAD-supported rural poverty eradication programmes and projects, totalling US$6.2 billion. IFAD has invested more than US$2.9 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 nearly 80 million rural poor women and men to achieve better lives for themselves and their families. Since starting operations in 1978, IFAD has invested US$9.0 billion in 705 programmes and projects that have helped nearly 300 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 participants, have contributed almost US$8.8 billion, and multilateral, bilateral and other donors have provided another US$7.0 billion in cofinancing.