Media backgrounder MB/11/08

In race against time, IFAD works to assist hurricane recovery and boost agricultural production in the island’s poorest northern areas

Rome, 17 November 2008 - The next harvest is never far from people’s mind in Haiti. More than half of the island’s food supplies are imported so the surge in food prices earlier this year hit hard, leaving many families hungry and triggering riots.

Much hope was pinned on local production but during a key period for local agriculture, four hurricanes struck Haiti, destroying much of the harvest, agricultural infrastructure and livestock.

Now it is a battle against time. More crop failure will mean even more hunger, and to avoid that Haiti must get its agriculture sector swiftly back on its feet. Smallholder farmers who had little to live on relied on relatives abroad for small sums of money. But the global economic downturn means remittances from expatriate Haitians are also at risk.

IFAD is working with the rural poor on two key challenges – boosting agricultural production and supporting remittance programmes – with simple yet innovative solutions; a bag of seeds and a card that cuts the costs of sending cash home.

A bag of seeds

Over 240 000 smallholder farmers are receiving a package of vegetable seeds, cereal seeds, manioc, sweet potato and banana plants. IFAD has made available USD 10.2 million to help smallholder farmers start planting again.

The agricultural rescue package, implemented by IFAD’s sister agency, FAO (Food and Agriculture Organization) is intended to have a swift impact on local production and make more food available in the local markets.

This response is exceptional, building on 30 years of IFAD financing of medium and long term projects to help the rural poor.  

The most recent project is a USD 27 million programme to rehabilitate collective irrigation systems used by thousands of poor small farmers in two of the country’s poorest areas: the North-East and North-West provinces.

“Haiti’s agricultural potential remains extraordinary, despite wide deforestation and soil erosion. If we can just get water to the small farming plots, which are widely spread out, then even without fertilizers farmers can significantly boost yields, to three harvests per year” said Anna Pietikainen, IFAD Haiti Country Programme Manager.

The project will help 18,000 families in remote rural areas by allowing small farmers to grow a greater range of crops and boost output through better water management.

“The irrigation project involves and empowers local water user associations in managing their water resources to the full” noted Josefina Stubbs, Director of the Latin America and Caribbean Division of IFAD who will be meeting senior government officials and the Prime Minister of the country on 21 November to intensify action on the ground.

A card that connects the US and Haiti

Remittances from the Haitian diaspora, mostly in the United States, have long been a lifeline for many Haitians, far exceeding foreign direct investment or development aid and reaching poor people in isolated areas.

IFAD supports innovative remittance programmes that help the money flows be spent not just on daily needs but on building rural economies. 

One of these is the alternative bank Fonkoze, (“shoulder to shoulder” in Creole) which serves the unbanked by providing loans for small businesses, savings products tailored to poor people, currency exchange services at preferential rates, low-cost money transfer services, and literacy and business skills training.

The financial crisis and economic slowdown is already impacting remittances, especially in the United States where many Haitians live. According to the Inter-American Development Bank, after years of double digit growth, the value of remittances from the US to Latin America and the Caribbean will this year decrease for the first time.

In response IFAD is stepping up support for an innovative project, for an integrated pre-paid remittance card for Haitians in the US. The card works on the Visa circuit,  costs just one dollar a month to run, allows the owner’s employer to directly deposit funds without charge and will allow the cardholder to deposit funds into Fonkoze ‘investment accounts’ of families in rural areas of Haiti.

Money from these funds is made available in microloans for rural community projects.
With these projects, IFAD has financed seven projects in Haiti with approved loans totalling USD 84.3 million and has provided grant support to local organizations for a total of USD 2.2 million.

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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.