Release number IFAD/50/06

Rome, 21 December 2006 – Approximately 50,000 poor rural households in Viet Nam’s Ha Tinh and Tra Vinh provinces will participate in a new development programme designed to help smallholder farmers add value to their products and become more involved in regional and national markets, and to create new jobs in poor rural areas.

The US$37.3 million Programme for Improving Market Participation of the Poor in Ha Tinh and Tra Vinh Provinces will be partly financed by a US$26.0 million loan and a US$400,000 grant from the International Fund for Agricultural Development. The financing agreement was signed today at IFAD headquarters by Van Nam Nguyen, Ambassador and Permanent Representative of the Socialist Republic of Viet Nam to IFAD, and IFAD President Lennart Båge.

The Government of Viet Nam will contribute US$4.1 million to the programme. The remaining funds will be provided by the German development agency, GTZ (Deutsche Gesellschaft für Technische Zusammenarbeit), the United Kingdom’s Department for International Development (DFID), the Viet Nam Bank for Agriculture and Rural Development (VBARD) and the local governments in the programme area.

In these largely rural provinces, agriculture is the dominant economic sector. There have been efforts to diversify agricultural production by introducing higher value crops, such as vegetables and fruit trees, and livestock. But the level of rural poverty remains high in both provinces. Average family land parcels in Viet Nam are some of the smallest in the world, so off-farm employment opportunities are critical to fighting poverty.

The five-year programme will provide support for capacity-building and business development activities to ensure that poor rural people are able to participate in all levels of the supply chain, from production to marketing. It will also provide access to credit and other financial services to poor rural people who want to start their own microenterprises and local entrepreneurs interested in investing in employment-creating small and medium-sized enterprises in rural areas.

The programme is due to begin during a period of vast change for the country’s economy, as Viet Nam prepares to become the newest member of the World Trade Organisation in January 2007.

''These are very exciting and challenging times for the country,'' says Atsuko Toda, IFAD’s Country Programme Manager for Viet Nam. ''What we are trying to achieve here is to create better links between poor rural people and markets. Farmers will be able to prioritise and plan their production according to the demands of the market, thereby ensuring a better return on their investment.''

With this loan and grant, IFAD will have provided funds for seven programmes in the Socialist Republic of Viet Nam since 1993, totalling US$132.79 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 196 ongoing IFAD-supported rural poverty eradication programmes and projects, totalling US$6.6 billion. IFAD has invested more than US$3.1 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 89 million rural poor women and men to achieve better lives for themselves and their families. Since starting operations in 1978, IFAD has invested US$9.5 billion in 732 programmes and projects that have helped more than 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 US$9.0 billion, and multilateral, bilateral and other donors have provided another US$7.1 billion in cofinancing.