Opening remarks by the Director of IFAD’s Near East and North Africa Division

Recent wheat price hikes have reminded the world of the 2008 food crisis and the need to consolidate the efforts made since then to increase food production and availability in order to avert food insecurity. As the world’s largest imports-dependent region, the Near East and North Africa (NENA) was the first to feel the impact of rising international wheat prices. These were largely attributed to dwindling harvests in Russia, Ukraine, Pakistan, China and other part of the world as a result of extreme weather events such as droughts and floods.

However, amid these troubling global signals, there are also some signs of at least partial relief in NENA. Member countries of the League of Arab States (LAS) have collectively increased wheat production by almost 27 per cent. According to the Arab Food Security Report 2009 of the Arab Organization for Agricultural Development, LAS wheat production increased from 20.43 million tons in 2008 to 25.9 million tons in 2009. As a result, the bill for Arab wheat imports diminished by US1.5 billion (from US$10.54 billion in 2008 to US$9.05 billion in 2009) despite the region’s enormous demographic pressure.

Many factors have contributed to this outcome. At the political level, the strong commitments made by LAS member states at the Kuwait Arab Economic Summit to support the Arab emergency food security programme have had a positive impact. At the local level, as underscored in a recent study by IFAD and the Food and Agriculture Organization of the United Nation (FAO) entitled “Farmers’ Response to Soaring Food Prices in the Arab Region”, farmers in the region, especially smallholders, have been both able and willing to expand cereal production to capture higher local market prices. Several other studies have also found gradual increases in both the cultivated area and productivity per unit thanks to, among other factors, greater awareness and use of improved technologies, seed varieties and disease control; better farming practices; enhanced management of water and land resources; and a more favourable policy environment.

International development organizations such as IFAD continue to play an important role in supporting the sector’s growth by focusing on helping smallholders increase their productivity and incomes – and ensuring that agricultural growth does not occur at the cost of environmental or social sustainability. IFAD’s focus on smallholders is not dogmatic, but based on the results of its investments. These show that investing in smallholder agriculture achieves the dual purpose of growth and poverty alleviation in rural areas more cost-effectively than any other form of investment. IFAD invests more than US$100 million in new development projects in the region every year – an amount that is then more than doubled because of the high rate of cofinancing achieved in these projects, from both local and external developing partners.

As this newsletter highlights, we are directing ever-greater efforts to addressing the constraints on agricultural sector growth in the NENA region. These include, in particular, the escalating problems of severe water scarcity under climate stress and rural youth unemployment.

We hope that you will find this newsletter useful and look forward to receiving your reactions and suggestions.

Nadim Khouri
Director, Near East and North Africa Division

IFAD President visits Azerbaijan and participates in the annual assembly of the Islamic Development Bank


	President Nwanze received by President Ilham Aliyev of Azerbaijan.

The President of IFAD, Kanayo Nwanze, paid an official visit to Azerbaijan from 21 to 23 June 2010, meeting with President Ilham Aliyev, Prime Minister Artur Rasizade and Minister of Agriculture Ismad Abasov. The President also participated in the 35th Annual Meeting of the Islamic Development Bank (IsDB) Board of Governors in Baku.

During his meeting with President Aliyev, President Nwanze – accompanied by Nadim Khouri, Director of Near East and North Africa Division, and Abdelkarim Sma, the Country Programme Manager for Azerbaijan – commended Azerbaijan’s leadership on the socio-economic progress made and elaborated on IFAD’s operations and activities in the country.

He also emphasized the need to strengthen long-term investment in smallholder agriculture in order to reduce rural poverty and increase food productivity.

President Aliyev pointed out that agriculture was a relatively labour-intensive sector in comparison with the capital-intensive oil sector. Moreover, the wide diversity of climatic conditions in Azerbaijan created opportunities for agriculture and investment in irrigated farmland. He encouraged the delegation to look into ways to strengthen the partnership between IFAD and Azerbaijan further.

IFAD has supported four projects and programmes in Azerbaijan, with a total investment of US$48.1 million. Over 35,000 households, representing some of the most disadvantaged groups and women in rural areas of the country, are benefiting from these interventions.

During his meeting with Prime Minister Rasizade, President Nwanze elaborated on a new integrated rural development project being jointly designed by IsDB and IFAD for implementation in Azerbaijan. The Prime Minister expressed satisfaction with IFAD’s operations in Azerbaijan and interest in the new project, stating that he would do his utmost to ensure that it was presented to IFAD’s Executive Board in December 2010. President Nwanze and Agriculture Minister Ilham Abasov covered a range of issues related to IFAD’s interventions during their meeting. They also discussed the role of agriculture in ensuring food security and the importance of strengthening the sector’s capacity to create employment and income-generating opportunities in rural areas.


	President Nwanze addressing the plenary session of the 35th Annual Meeting of the Governors of IsDB.

During his visit to Azerbaijan, President Nwanze also attended and delivered a statement at the plenary session of IsDB’s Board of Governors meeting, which was attended by 56 finance ministers, many of whom were also IFAD Governors, and over 600 delegates from governments and international and regional financing and research institutions.

Accompanied by Ghassan El Baba, Director of IFAD’s Arab Gulf States Liaison Office, President Nwanze also met with Dr Ahmad Mohamed Ali, President of IsDB, to discuss the current state of cooperation between the two institutions. In his statement before the assembly, President Nwanze began by recognizing that the strategic partnership between IFAD and IsDB was quite advanced. He then stated: “Only when we join hands can we build a better future for poor rural women and men and end poverty and hunger.” He explained that “agriculture is the main employer and job creator for the women and men whom we serve.” “Our goal,” he added, “is to achieve food security and sustainable economic development by investing in agriculture and rural development…. To do so we need to create vibrant rural economies and build the right business environment based on a partnership between the public and private sectors, while keeping people at the centre.” President Nwanze stressed the need for Arab countries of the Organization of the Petroleum Exporting Countries (OPEC) to re-engage with IFAD and also emphasized the importance of re-energizing IFAD’s partnerships with multilateral and bilateral financing institutions in the Arab Gulf states.

IFAD’s Vice-President underlines the strategic partnership between IFAD and Yemen and hails the achievements of joint projects



	IFAD Vice President, Yukiko Omura.

The Vice-President of IFAD, Yukiko Omura, paid a four-day official visit to Yemen at the end of June, holding meetings with Abdul Karim Al-Arhabi, Deputy Prime Minister and Minister for Planning and International Cooperation; Nuaman Al-Suhaibi, Minster for Finance; and Mansour Al-Hawshabi, Minster for Agriculture and Irrigation. During the visit, she also toured the sites of ongoing IFAD-financed projects and met some of their beneficiaries. She was accompanied by an IFAD delegation comprising Dr Nadim Khouri, Director, Near East and North Africa Division; Omer Zafar, Country Programme Manager for Yemen; and Fathia Bahran, Country Presence Officer.

Deputy Prime Minister Al-Arhabi pointed out that the visit of IFAD's senior official represented a distinctive development in the cooperation between Yemen and IFAD. He thanked IFAD for its decision to help Yemen enhance its agriculture and rural development through grant funding, instead of loans, as of early 2009. He also briefed Vice-President Omura on the challenges facing Yemen and on his government’s efforts to alleviate poverty, particularly in rural areas. For her part, the Vice-President highlighted the advanced level of bilateral cooperation that existed between Yemen and IFAD, reiterating the Fund's interest in consolidating this strategic partnership further.

To date, IFAD has invested a total of US$206.3 million in 20 rural development projects in Yemen. These projects are worth a total of US$635.5 million and directly benefit more than 573,000 households.

At the end of her meeting with Finance Minister Al-Suhaybi, Vice-President Omura affirmed that IFAD would make every effort to increase funding for rural development in Yemen over the next three years and would also place greater emphasis on coordination with other donors and joint interventions. On his part, the Finance Minister stated that his government was keen to continue to strengthen cooperation with IFAD and to fulfil all of Yemen’s financial obligations towards the Fund. Vice-President Omura hailed this commitment and expressed the Fund’s appreciation for Yemen’s remarkable US$1 million contribution to the Eighth Replenishment of IFAD’s resources last year.

During her meeting with Agriculture Minister Al-Hawshabi, Vice-President Omura highlighted the importance of IFAD-supported projects in creating job opportunities, alleviating poverty and helping the targeted rural families to satisfy their food needs. The two leaders discussed the progress achieved in the five ongoing IFAD operations in the country, including the recently launched Economic Opportunities Programme. The Agriculture Minister said that IFAD played an important role in supporting Yemen’s agriculture sector and thus the eventual achievement of national food security. Nonetheless, Yemen currently imported more than 85 per cent of its food consumption needs, and the majority of the population was struggling to cope with high food prices. About 46.6 per cent of the population lived on less than US$2 a day during the period 2000-2007.

The Fund invests in programmes and projects in poor, marginalized parts of the country, particularly in remote coastal areas and rugged, mountainous zones. The objective is to empower poor people to improve their incomes and standards of living on a sustainable basis while protecting the country’s natural resources, particularly its diminishing renewable water supplies. Recent operations include an area-based development project in Dhamar Governorate south of Sana’a and further support for environmental protection in the Tihama Plain.

During her visit to Yemen, Vice-President Omura carried out a field tour to the sites of the Dhamar Participatory Rural Development Project, where she met with a large number of beneficiaries, particularly women farmers. Inspecting various investment and income-generating activities undertaken by the beneficiaries, the Vice-President praised the many achievements of the rural women and men and their local community organizations in this governorate.


	Vice President Omura (second left) and Minister Al-Arhabi (second right) co-chairing the seminar.

Before concluding her visit to Yemen, Vice-President Omura also participated in, and co-chaired with Deputy Prime Minister Al-Arhabi, a seminar on “Public-Private Partnership for Economic Growth and Poverty Reduction”, which brought together public- and private-sector representatives and development partners. The seminar aimed at building partnerships under the IFAD-supported Economic Opportunities Programme, which will be holding a 10 per cent equity participation in the Al-Amal Microfinance Bank. IFAD has approved the allocation of US$1 million in support of this acquisition and US$7 million to boost the bank’s lending capacity and to enable its expansion into rural areas.

This arrangement was also discussed during a meeting in Sana’a between Vice-President Omura and the director of the bank, Mohamed Al-Lai. Referring to the bank’s achievements over the last 18 months, Al-Lai pointed out that, at end-June 2010, the bank had 20,000 customers (savers and borrowers) and its total financing had reached 380 million Yemen rials (about US$1.6 million). He added that women represented 59 per cent of all customers. On her part, the Vice-President praised the steps that the bank had taken so far. She stressed the importance of strengthening the bank’s rural presence and its capacity to extend small and micro loans to small farmers, fishers and other low-income groups to fund their small enterprises and income-generating activities.

Regional Themes

An IFAD side event recommends innovative solutions and policies for adaptation of water management to climate change

Dedicated to the theme “Adapting management of water resources to climate change in the Near East, North Africa and Central and Eastern Europe”, a regional side event of the thirty-third session of IFAD’s Governing Council, which was held in Rome on 17 February 2010, recommended a series of innovative solutions and policies to meet the growing climate challenges.

Climate change poses an ever-greater threat to the resilience and sustainability of agricultural production systems and livelihood strategies. This is particularly true in dry areas, where climate change is increasingly generating risks, making already fragile ecosystems more vulnerable, and where rural households must contend with severe water scarcity, land degradation and desertification, low and highly erratic rainfall, and frequent drought. Recurrent and devastating flash foods and other inundations are also affecting agriculture in Eastern and Central Europe and have a direct impact on the livelihoods of rural people. Adapting to climate change requires adjustments and new approaches at all levels – community, local, national, regional and international.


	NEN Director Nadim Khouri (centre), chairing the panel.

The event, one of four such side events organized by IFAD’s regional divisions, was chaired by Dr Nadim Khouri, Director of IFAD’s Near East and North Africa Division. About 115 people participated in the debate, which was structured around four presentations, with discussions following each presentation. Presentations were made by a panel of experts, including Professor Lucka Kajfez-Bogataj, Lubiana University and Intergovernmental Panel on Climate Change (IPCC); Dr Safwat Abdel-Dayem, Executive Secretary, Arab Water Council; Professor Kamel Shideed, Assistant Director-General, International Center for Agricultural Research in the Dry Areas (ICARDA); Dr Ala Overcenco, Researcher at a Moldovan NGO, Agro-Inform; Mylene Kheralla, Regional Economist of IFAD’s Near East and North Africa Division; and Tawfiq El Zabri, IFAD Country Programme Manager for Jordan and Somalia.


	Professor Kajfez-Bogataj (second left) addressing the side event.

Professor Kajfez-Bogataj presented an update on IPCC data and analyses relating to the regional impacts of global warming on weather, climate and sea levels. Dr Abdel-Dayem presented a report entitled “Implications of the findings of the report of the Arab region for investments by donors/internalization by the development community”.

This report was first disclosed to the 5th World Water Forum held in Istanbul, Turkey, in March 2009. Kheralla’s presentation was on “adaptation-driven water management as a regional priority in the Near and North Africa (NENA) and Central and Eastern Europe (CEN) regions.” El Zabri and Overcenco focused their interventions on “Innovative and up-scalable solutions and methods used as means of adaptation to climate change”.


	GC delegates and IFAD staff members attending the side event.

The discussants paid particular attention to the need to intensify investments in agricultural research in order to improve smallholder farmers’ resilience to the effects of climate change and raise their productivity in a context of risk and uncertainty. They recognized that it was also important to sharpen the international research agenda so that it focused more closely on the challenges facing the regions with the greatest vulnerability to climate change. Discussants also considered the issue of rewarding communities for the environmental services they provide.

With increased competition for water from other sectors, there is likely to be a substantial reduction in the share of water resources allocated to agriculture. Clearly, there is a need to produce more food with less water to meet the increased demand for food. However, this will require more research investment to develop viable technical, institutional and policy options for the efficient, sustainable and equitable use of water. Improving on-farm water-use efficiency will directly enhance the efficiency of food production – either by producing more food with the same amount of water, or by producing the same output but with less water.


	Regional Economist Mylene Kherallah delivering her presentation.

Climate change is compounding the problems of water scarcity and food insecurity, and various climate models predict that climate change impacts will be most severe in NENA and sub-Saharan Africa. In CEN, climate change is also expected to increase the vulnerability of rural communities. However, the impact of climate change on food security can be minimized in various ways. These include integrating risk management strategies and adaptation measures into government development policy; creating enabling policies and political will; using the opportunities created by advances in science and technology; and applying integrated approaches to the sustainable use of natural resources.

Agricultural science provides ample opportunities to rationalize and optimize the use of scarce water resources and strengthen adaptation to climate change. For example, ICARDA’s studies show that the use of improved irrigation technologies (supplemental irrigation) in wheat production has reduced the amount of groundwater that farmers in Syria use by 30-35 per cent compared with conventional practices.

The rapporteur of the side event, Dr Shideed, summarized as follows the main recommendations made during the debate:

ICARDA’s Assistant Director-General, Kamel Shideed (right), reporting the findings of the side event.

New technologies are needed, in addition to those already available, for increased food production under climate change. This requires greater public and private investments and more effective dissemination of such technologies, including the potential use of solar energy to reduce the cost of desalinization.
It is important to build on indigenous knowledge and experience for coping with water scarcity – for example, studying how traditional water-harvesting techniques can be modified and applied to resolve current problems.
Combining mitigation, adaptation and production systems could be an effective way to enhance resilience. In this context, conservation agriculture (zero tillage) is an important option while the use of properly treated marginal water sources can increase the total water budget.
Pressing needs include an enabling policy environment, especially for dealing with the problem of the non-sustainable use of shallow groundwater; more rational policies for water pricing and valuation; better basin-level management to allow water to be shared more equitably among riparian countries; and careful spatial planning for adaptation and mitigation measures in areas affected by rising sea-water levels.

Country programme features

IFAD launches a new offensive against rural poverty and water scarcity in Lebanon


	President Nwanze and Minister Hajj Hassan during the signing ceremony

A new US$16.64 million IFAD-supported project will contribute to reducing rural poverty while tackling one of the major constraints facing development in Lebanon: water scarcity. The Hilly Areas Sustainable Agricultural Development Project is expected to help small farmers and poor rural communities address the increasing scarcity of water for agriculture mainly in the areas of Akkar-Dannieh, North Baalbek and Hermel, South and Lower Litani and Mount Lebanon.

IFAD will provide a soft loan of US$4 million and a grant of US$0.6 million to finance the project under a financing agreement signed by Kanayo Nwanze, President of IFAD, and Dr Hussein Hajj Hassan, Minister of Agriculture of Lebanon, at IFAD’s headquarters in Rome on 17 June 2010.

To achieve its overall objectives, the project will introduce improvements in soil and water management and help develop small and medium-sized water-harvesting and soil and water conservation measures. It will also seek better market linkages for small farmers through the provision of technical support services while strengthening the capacity of project implementing agencies and farmers′ organizations.

“The project will provide opportunities for isolated and poor farming communities, including small farmers who incurred losses during the conflict of July 2006, to improve water-use efficiency and land productivity,” said Abdelaziz Merzouk, IFAD’s Country Programme Manager for Lebanon. “It will enable them to increase their production of fruits, vegetables and other high-value crops, thus improving their livelihoods and household incomes,” he added.

Some 6,280 poor households will benefit directly from the project’s activities, which will focus on raising productivity, improving the quality of produce and lowering production costs for existing farming systems. With US$8.4 million of cofinancing from the OPEC Fund for International Development, the project will also help add value to farmers’ produce through post-harvest support services, substantially increasing farm profitability and income; and enhance the processing and marketing facilities services run by local enterprises, thus generating employment for landless or near-landless young people.

With this new intervention, IFAD will have financed four projects in Lebanon for a total investment of US$36.4 million.

Belgium and IFAD renew their efforts to reduce rural poverty and food insecurity in north-western Somalia


	Khouri exchanging views with a group of women engaged in small-scale income-generation activities during his field visit to the Tulli community.

The second phase of the North-western Integrated Community Development Programme was launched during an IFAD mission to Somalia headed by Dr Nadim Khouri, Director of the Near East and North Africa Division, from 21 to 30 May 2010. The programme’s start-up workshop was held in the city of Hargeiza, with the participation of the local authorities, including Mohamed Ahmed, Minister of Water, Mohanad EI Assad; the Executive Director of Transtec, the private Belgian firm implementing the programme; and representatives of cooperating institutions, farmers’ organizations and beneficiary communities.


	Khouri conversing with representatives of Gamsa community during his visit to the site of a sand storage dam.

The programme, which was approved by IFAD’s Executive Board in April 2010, will be financed by a grant of 5.6 million euros (approximately US$6.85 million) from the IFAD/Belgian Fund for Food Security Joint Programme (BFFS). Building on the achievements of the first phase, which closed in 2008, the second-phase programme is expected to reach a target group of 53,000 households (approximately 318,000 persons) in the north-western Awdal and Wogooyii-Galbeed regions. It will sustainably improve incomes, nutrition and health standards of the targeted communities through its four components: crop and livestock development; access to water and improved sanitation; access to rural health services; and participatory planning, monitoring and evaluation. Livestock health and mortality rates will improve, and carcass weight will increase. It is expected that a household rearing 20 sheep and 10 goats will see an improvement in annual income of US$614. Soil conservation and improved access to water will contribute additional financial benefits from fodder crops such as alfalfa and from the increased production of maize, sorghum and horticultural crops cultivated in addition to animal fodder.

During the mission, Dr Khouri also held meetings with Abdi Hayloc Walid, Minister of Agriculture; Ali Ibrahim, Minister of Planning; and other representatives of the local authorities. Accompanied by Tawfiq El Zabri, Country Programme Manager for Somalia, Dr Khouri paid a field visit to the programme’s sites and beneficiaries in the two regions. Among other activities, he met with several dryland farming communities (including those of Abuqays, Darayamaan, Taysa Watershed and Tulli); discussed gender issues with women credit groups in Abaarso; inspected a sand storage dam and vegetable farms in Agamsa; and visited Gabiley Hospital to review progress made by the drug revolving funds supported by the programme’s first phase.

A new IFAD-financed project will reduce rural poverty and enhance food security in north-east Turkey


	President Nwanze signing the agreement with Turkey's Economic Counsellor, Salih Ercan.

A new US$26.4 million IFAD-supported project will help reduce poverty and enhance food security in three of Turkey’s easternmost provinces. The Ardahan-Kars-Artvin Development Project will improve livestock and horticulture production and village service industries to the benefit of some 13,000 poor households in 160 villages in Ardahan, Kars and Artvin provinces.

IFAD will provide a loan of US$19.2 million on ordinary terms to finance the project under an agreement signed by Kanayo Nwanze, President of IFAD, and Salih Ercan, Economic Counsellor of the Turkish Embassy, in Rome on 12 April 2010.

“The project will help the local communities improve their institutional capacities and self-reliance in achieving sustainable agricultural growth along with increased farm competitiveness and strengthened farm-to-market linkages,” said Henning Pedersen, IFAD’s Country Programme Manager for Turkey. The project has three key components: smallholder and non-farm enterprise investments; village infrastructure investments; and institutional strengthening and project management. It “will help increase the assets and incomes of poor women and men smallholders and of small rural entrepreneurs who have the potential and willingness to move towards commercial agriculture and other income-generating activities,” Pedersen added.

According to its design document, the project will introduce best practices in cereal and forage production, improve livestock husbandry practices, rehabilitate and modernize village and rural infrastructure, and provide access to technologies, know-how, processing facilities and market linkages. Improved irrigation, for example, will lead to a 20 per cent increase in the yields of cherries, apricots and tomatoes.

The project will contribute to the Government’s efforts to eliminate the substantial socio-economic development disparities that continue to exist among the regions and provinces of the country. It is expected that a 20 per cent reduction in the number of people living on less than US$4.5 per day will be achieved by the end of the five-year project.
With this project, IFAD will have financed eight projects in Turkey for a total commitment of US$142.7 million.

IFAD extends a US$12.9 million grant to help create jobs for poor rural people in Yemen


	President Nwanze signing (third left) signing the memorandum of understanding with Yemen's Deputy Prime Minister Al-Arhabi (centre) and IsDB President Ahmad Ali (second right).

A new US$38.6 million IFAD-supported project will help create jobs and income-generating activities to reduce rural poverty in Yemen. The Economic Opportunities Programme will develop value chains for three high-value agricultural commodities, namely coffee, honey and horticulture products. The programme will eventually cover the entire country, but will focus initially on eight governorates (Abyan, Amran, Dhamar, Hodeidah, Ibb, Lahej, Taiz and Sana’a). Some 14,000 smallholder and landless households will benefit from the programme.

IFAD will extend a grant of $12.9 million to the programme under an agreement signed by, President Nwanze and Abdul Karim Al-Arhabi, Deputy Prime Minister of Yemen and Minister for Planning and International Cooperation.

With external cofinancing of $10.5 million from the Islamic Development Bank and $9.7 million from the European Union, the programme is expected to unleash the potential of local value chains to drive economic growth, thereby opening up opportunities for export expansion, imports substitution and the creation of jobs in rural areas.

“The programme will be governed by a public-private partnership, the Economic Opportunities Fund, and implemented by contracted service providers,” said Omer Zafar, IFAD’s Country Programme Manager for Yemen. “It will apply a participatory approach that will enable producers’ associations to become viable entities capable of managing water resources and supporting production, on the one hand, and of entering into contracts with processors and exporters, on the other,” he added.

The programme is expected to stimulate the growth and technological improvement of selected value chains and rural businesses, and promote contractual linkages between producers’ associations and markets. In addition, it will encourage compliance with national and international food quality and safety standards while developing infrastructure supportive of the selected value chains. It will also expand the rural outreach of financial institutions and enhance access to sustainable rural financial services.

With this new programme, IFAD will have financed 20 projects in Yemen for a total investment of US$206.3 million.

Voices from the field

IFAD-supported rural financial services are in high demand as poor people turn their ideas into profitable businesses in Upper Egypt - part 1

Al Ghanayem is one of 10 localities in Upper Egypt’s Assiut Governorate where newly introduced microcredit schemes and small loans are in high demand due to the unprecedented business successes of the early borrowers. The Community Development Association of Al Ghanayem (CDAA) has already extended over 2.7 million Egyptian pounds (EGP) (about US$470,000) in micro loans to 651 of the poorest rural people there – those with hardly any assets.

Yet twice as many other people are on the waiting list for micro and small loans, according to Fatnaa Ahmad Abbas, the Association’s Programme Manager.


	Handicraft products of the Abu Zeid family on display at their laboratory.

CDAA received only EGP 1 million (about US$175,000) in early 2008 from the IFAD-financed Upper Egypt Rural Development Project (UERDP) to deliver micro and small loans to some 200 borrowers. But thanks to the rapid revolving of loan repayments, the association was able to almost triple the total amount of loans it extended and increase the number of targeted beneficiaries threefold in just two years of activity.

The high local demand for CDAA loans is due mainly to the success of early borrowers in turning their ideas into profitable small businesses and microenterprises. Two women in the Abu Zeid household are the protagonists of early success stories. Bakhita Ahmad Younis, a 38-year-old housewife, had no income to feed her family other than the miniscule pension being drawn by her retired 68-year-old husband,

Faraj Abu Zeid Faraj, an artisanal woodcraftsman. To chart a better future for her three young daughters, Bakhita asked her husband to teach her his trade so she could start a business producing and selling decorative wooden household objects and kitchen utensils. But learning her husband’s skills was not enough: she needed capital to buy equipment and raw materials.


	Bakhita Younis showing one of her products.

Initially she tried to borrow money from a commercial bank but found the annual interest rates of 22-25 per cent prohibitive. She also could not provide the mandatory collateral guarantees.

As soon as she heard of the CDAA lending programme in early 2009, Bakhita approached the Association and eventually obtained a micro loan of EGP 5,000 (about US$876) at an interest rate of 14 per cent.

Bakhita paid EGP 3,500 (about US$613) to purchase an electric wood- carving machine and used the remaining money to purchase raw timber and production tools such as brushes, paint, smoothing sheets and coating additives. With her husband’s help, Bakhita began production, selling her produce at the local market. Realizing a monthly income of more than EGP 1,200 (about US$210), Bakhita was able to pay back 18 monthly instalments of about EGP 370 (US$65) each regularly and comfortably.

Only a few months after Bakhita launched her business, however, her stepdaughter, Nabiha Faraj Abu Zeid, 28, was abandoned by her husband and took refuge with her six-year-old son in her father’s house. Realizing that their presence weighed heavily on the household’s budget, Nabiha decided to replicate her stepmother’s success. She learned her father’s craft and applied for a micro loan from CDAA. She too received a loan of EGP 5000, and on the same terms as Bakhita’s loan. Since then Nabiha has also been able to realize a monthly income of about EGP 1600 (approx US$182). “Now I can take care of my son and myself …. I am no longer a burden on my father,” she said.


	Nabiha Abu Zeid at work next to her father, Faraj Abu Zeid (left).

Nabiha is pleased to have realized her own economic independence and so is Bakhita whose ambitions to expand her rural business go beyond Al Ghanayem. “It is all thanks to CDAA and IFAD that our lives have changed,” Bakhita said. She added: “As the business grows, we will be able to give work to some unemployed youngsters in the neighbourhood and produce more goods for the markets” The Abu Zeid family will now try to access the national markets of Egypt and possibly those of neighbouring countries such as Jordan and Libya.

Like Bakhita and Nabiha, almost all other borrowers in Al Ghanayem have successfully achieved their business objectives, according to Ms Abbas. She said that most loans were for livestock purchasing and rearing, an activity that many households relied on, even though it was not as profitable as the kind of artisanal activity undertaken by the Abu Zeids.

Fuad Amhad Hussein, 61, is the head of a large farming family, which has traditionally supplemented the income it earns from growing crops by rearing livestock. Fuad and his wife, Kolthoum, took out two loans of EGP 5,000 each from CDAA 20 months ago and punctually paid them off in 18 months. They were so happy with the services provided by the IFAD-supported programme that they then requested another (larger) loan from CDAA to help expand the family business still further. The third loan was for EGP 8,000 (about US$1,400).


	Farmer Fuad Amhad with his cattle.

Fuad, who is the father of three dependent daughters and two sons, is again paying the loan instalments regularly and promptly, according to Ms Abbas.

Fuad said that he and his wife had used the CDAA loans to purchase cattle specifically for breeding and fattening in order to supply the local market with fresh meat. The profit margins from meat sales were much higher than they could have commanded from the sale of dairy products. They have increased the area dedicated to clover cultivation on their plot of land in order to provide more forage for cattle fattening. The family has also improved their barns and shelters and purchased inputs and tools for animal fodder production and clover cultivation.

“Thanks to CDAA’s help, we have increased our net earnings by 20 per cent,” Fuad said.
UERDP has provided borrowers with ample training opportunities, Ms Abbas relates. This has enabled them to strengthen their skills; acquire knowledge on the use of new methodologies, techniques and technologies; and improve the processing and packaging of their produce for the markets, She added that working closely with the management of UERDP in Assiut, CDAA has helped borrowers expand to local markets in the governorate and also to access other national markets by linking them to the local farmers’ market associations.


	Fuad’s field of clover grass.

Started in 2008, UERDP, which covers many other localities in the two Upper Egypt governorates of Assiut and Qena, is already having a visible impact on local economies in rural areas. The success stories of its beneficiaries in Qena will be reported in the next issue of Rural Echoes.

In brief

Doha summit on food security in the Arab world postponed to October 2011

The Qatar National Food Security Programme (QNFSP) has decided to postpone the Summit on “Food Security in the Arab World: Partnering for a Sustainable Future” to 16-18 October 2011. The announcement was made during a recent visit by a QNFSP delegation to IFAD. The delegation, comprising Dr Mohamed Al-Maslamani, Technical Director, and Dr Mahendra Shah, Programme Director (International Organizations), met IFAD President Kanayo Nwanze and made an informal presentation on its new initiative to establish a drylands food security alliance. During the presentation, attended by IFAD and colleagues from the Food and Agriculture Organization of the United Nations (FAO) and the World Food Programme, it was stated that this alliance would be launched during the Doha summit.