Release number IFAD/44/06

Rome, 8 December 2006 – Approximately 20,000 poor people will participate in a new IFAD-supported development project to create and consolidate family-owned rural enterprises in Brazil’s semi-arid North-East region. More than 100,000 people are expected to benefit from the project as a result of increased incomes, improved living conditions and multiplying effects within the regional economy.  

The US$47 million North-East Rural Family Enterprise Development Support Project will be partly financed by a US$23 million loan from the International Fund for Agricultural Development. The project loan agreement was signed today by Ms Liana do Rego Motta Veloso, Deputy Attorney General, Ministry of Finance and IFAD’s President Lennart Båge, at IFAD headquarters.

Brazil’s Ministry of Agrarian Development will contribute US$22 million to the programme while US$2 million is to be invested directly by project participants.

The North-East region is home to the largest concentration of poor rural people in Brazil. The project will initially be implemented in the Xingó area, where rural poverty is prevalent, and help poor families involved with the development of small agro-industries and other rural enterprises to enhance their business skills and increase their incomes.

“This project is offering an alternative to many poor rural people who do not have access to enough land or have lost their farming jobs because of mechanization or diversification in production,” said IFAD’s Country Programme Manager for Brazil, Jean-Jacques Gariglio. “Some have already moved on and started their own small rural business. But in many cases they need technical assistance or access to credit to strengthen their enterprises or to create new ones that could lift them out of poverty. This is where we are coming in.”

The project will work to strengthen organizations of rural entrepreneurs and help them to identify and promote new business opportunities. It will establish a rural financial service system and ensure that participants have access to technical support services and credit as well as markets to sell their products. The project will also create mechanisms to guarantee equitable and continued access of women and youth to project services and resources. 

There are already some 600,000 rural small enterprises and microenterprises, both formal and informal, in Brazil’s North-East region. Most of these enterprises, which include food products and textile handicrafts, are the result of initiatives of poor rural women.

With this loan, IFAD will have provided funds for six projects in Brazil since 1980, totalling about US$141 million.

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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 188 ongoing IFAD-supported rural poverty eradication programmes and projects, totalling US$6.3 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 85 million rural poor women and men to achieve better lives for themselves and their families. Since starting operations in 1978, IFAD has invested US$9.2 billion in 716 programmes and projects that have helped approximately 301 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$8.9 billion, and multilateral, bilateral and other donors have provided another US$7.0 billion in cofinancing.