Project area: The project will target Regions IX, X and Caraga, located in the west, north and northeast of Mindanao, which are among the six poorest regions of the country. Within these three regions the project will target 10 provinces selected using criteria such as incidence of poverty, presence of organised Agrarian Reform Communities (ARCs) clusters, agricultural and agri-business development potential and availability of services. Within these ten provinces the project will target 11 ARC clusters. Selection criteria for the ARC clusters include a potential for further agricultural and agribusiness development, availability of markets, availability of an ARC Cluster Development Plan,commitment of the participating agrarian reform beneficiaries (ARBs) and availability of support services.

Target group: The total size of the target group is an estimated 135,000 agricultural households (about 675,000 people) including ARBs, other smallholders, un- or underemployed rural youth, indigenous peoples, women, and business development partners, including eligible people’s organizations (e.g. farmers’ cooperatives and associations) involved in the value chains selected and willing and able to participate in project interventions.

Project objectives: The overall goal of the project is to contribute to reducing the incidence of poverty in the ten target provinces of Regions IX, X and Caraga, while the project’s development objective is that the target group vulnerability is reduced through crop diversification and increased farm income.

Project description: The project has three components.

• Participatory Value-Chain Analysis and Planning. The expected outcome of this component will be that value chain business development plans for selected crops are validated and implemented, resulting in improved farm income.
• Integrated Smallholders Agricultural and Rural Enterprise Development. The expected outcomes of this component are improved production, value addition and marketing of the selected agricultural commodities.
• Project Management, Monitoring and Evaluation (M&E) and Knowledge Management. The expected outcome of this component is that the project is completed on time and within the agreed budget and to the satisfaction of the beneficiaries. The component will finance the costs of project management and coordination, compilation, reporting and M&E activities at national, regional and provincial levels. In addition, the project will finance policy studies, stakeholders’ consultations and other events related to the planning and implementation of the value-chain approach to agro-enterprise development, mechanisms for convergence, and any other relevant policy studies.

Important features: The project contributes to achieving the goal of the Philippine Development Plan 2011-2016 of a competitive and sustainable agriculture and fisheries sector through improved food security and increased rural incomes, and supports the National Comprehensive Agrarian Reform Programme. The project is part of the National Convergence Initiative, which seeks to synchronize the initiatives of the three departments engaged in rural development – Department of Agrarian Reform, Department of Agriculture, and Department of Environment and Natural Resources – and optimize the use of the resources available to support sustainable rural development. The project’s design also supports two of the three strategic objectives of the IFAD results-based country strategic opportunities programme and aligns well with IFAD’s strategic framework (2011-2015).

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Potential cofinanciers and domestic contribution: The project would cost about US$ 45.2 million. The proposed project financing includes an IFAD loan and grant of US$ 33.0 million and a Government counterpart contribution of around US$ 7.4 million. Beneficiary counterpart contributions would account for US$ 4.8 million.