Press release No.: IFAD/43/08

Rome, 17 September 2008 - A $31.1 million loan to the Republic of Mozambique from IFAD will enable smallholders to increase their agricultural incomes by marketing their surpluses more profitably. The IFAD programme is co-financed with the Alliance for a Green Revolution in Africa.

The total cost of the Rural Markets Promotion Programme is US$40.6 million.

The loan agreement was signed today in Rome by Carla Elisa Mucavi, Ambassador of the Republic of Mozambique to Italy and IFAD’s President Lennart Båge.

Poor-performing rural and agricultural markets seriously affect the livelihoods of the majority of the rural population in the northern region of Mozambique. Two thirds of the population live below the poverty line.

Because of poor returns from surplus sales, smallholders adopt low-risk strategies, resulting in some of the lowest yields in southern Africa. The programme will improve the terms of trade for smallholders, providing them with the incentives to move out of semi-subsistence agriculture.

The programme will provide direct support to 20,000 farmers in some 670 farmers’ associations and 375 small-scale traders.

Programme activities have been designed to facilitate the participation of the poorer members of the community.

Smallholders will be able to market their surpluses more profitably thereby increasing income. Access to and participation in agricultural markets and value chains will be improved and efficient market intermediaries and effective partnerships will be established, stimulating increases in agricultural production.

Government agencies, farmers’ organizations, agribusiness enterprises and service providers will be strengthened.

Smallholders will also benefit from improved access to markets and social services through better transport.

To date, IFAD has provided a total of US$143.9 million in loans for nine programmes and projects in Mozambique.

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IFAD was created 30 years ago to tackle rural poverty, a key consequence of the droughts and famines of the early 1970s. Since 1978, IFAD has invested more than US$10 billion in low-interest loans and grants that have helped over 400 million very poor rural women and men increase their incomes and provide for their families. IFAD is an international financial institution and a specialized United Nations agency. It is a global partnership of OECD, OPEC and other developing countries. Today, IFAD supports more than 200 programmes and projects in 85 developing countries and one territory.