Rome, 19 December 2011 –The International Fund for Agricultural Development (IFAD) will provide a US$ 5 million loan and US$5 million grant to the Kingdom of Lesotho to increase market opportunities for smallholder farmers and improve agricultural productivity in four of the ten districts of the country- Botha-Bothe, Leribe, Berea and Mafeteng.

The loan and grant agreement for the Smallholder Agriculture Development Project was signed by Jonas Sponkie Malewa, Ambassador of the Kingdom of Lesotho, and Yukiko Omura, Vice President of IFAD.

Over 70 per cent of the country’s population live in the rural areas. More than three quarters of these people are engaged in agriculture. Until a few years ago remittances from migrant mine workers in South Africa were a major source of income for rural people, providing vital cash needed to purchase agricultural inputs and productive assets or to invest in household assets and housing. However, a steady decline in remittances over the past years has hit hard rural populations. Although there has been some economic growth in the country, income generating opportunities are still limited in the rural areas.

The new project will support smallholder farmers and farmer groups to take advantage of opportunities to increase agricultural productivity and diversify into market oriented agriculture. To help develop markets for their outputs, the project will also support agriculture-related rural businesses.

Co-financed by the International Development Association of the World Bank (IDA) through a US$10 million credit and the government of Lesotho, about 15,000 rural households will directly benefit from the project, of which about 50% are women.

With this new project, IFAD will have financed 8 programmes and projects in Lesotho for a total IFAD investment of approximately US$ 60.3 million benefitting more than 130,000 households.

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Press release No.: IFAD/91/2011

The International Fund for Agricultural Development (IFAD) works with poor rural people to enable them to grow and sell more food, increase their incomes and determine the direction of their own lives. Since 1978, IFAD has invested about US$13.7 billion in grants and low-interest loans to developing countries through projects empowering about 405 million people to break out of poverty, thereby helping to create vibrant rural communities. IFAD is an international financial institution and a specialized UN agency based in Rome – the United Nation’s food and agricultural hub. It is a unique partnership of 167 members from the Organization of the Petroleum Exporting Countries (OPEC), other developing countries and the Organisation for Economic Co-operation and Development (OECD).