IFAD is increasingly engaged in policy dialogue, working to influence policy in the interests of small-scale producers and the rural poor. In so doing, the Fund's key aim is to increase awareness of the linkages between macro level policies and programmes and the micro level decisions made by millions of smallholders, rural entrepreneurs, peasants and rural workers.

The Fund also seeks to influence policy in an effort to minimize the negative effects of global trends and maximize incentives and opportunities for the rural poor. It bases its efforts on knowledge, acquired through experience, of the factors affecting rural poverty. In the policy area, with the active involvement of civil-society organizations, IFAD has given priority to combating desertification, as well as supporting agricultural research, rural financial services, decentralization policies and practices, and market-assisted agrarian reform.

IFAD continues to deepen its understanding of rural development processes and of structural and transitional poverty in rural areas. It complements this knowledge with the identification, testing and promotion of strategies and approaches – through both projects and policy dialogue – that take global trends into consideration and seek positive ways of harnessing them to sustainably and equitably reduce rural poverty.