Project ID: 1321
Executive Board document: EB-2005-84-R-23-REV-1

Rural Development and Modernization Project for the Eastern Region

Who are the beneficiaries? The project target group includes 73 000 men and women living under the poverty line, comprising 33 000 direct and 40 000 indirect beneficiaries. The composition of the target group includes poor small farmers (75%), microentrepreneurs and artisans (10%), and young men and women (15%). The project will support the latter with training in labour skills. A total of 10 000 women heads of household, wives and life companions are direct beneficiaries.

Why are they poor? El Salvador is among the poorest countries in Latin America. From 1980 to 1992, the country endured 12 continuous years of civil war, causing deep social and infrastructural damage and a marked economic decline. The effects of Hurricane Mitch in 1998, two earthquakes in 2001 and the global decline of coffee prices further weakened the economy and increased poverty. Widespread rural poverty and a lack of economic opportunities were major causes of the internal conflict and the intensive migration of the Salvadoran population. In spite of some economic progress, the majority of the population faces low levels of social and human capital, limited access to productive assets, low income-generating capacity and a deteriorated natural resource base.

What they expect from the project? The project includes three major thrusts designed to overcome historical causes of poverty: (i) strengthening the human and capital resource base; (ii) transformation of current subsistence agricultural and non-agricultural activities into profitable, market-oriented rural business; and (iii) rehabilitation of deteriorated areas and establishment of a permanent pattern of sustainable natural resource use. The project will build beneficiaries capacity to participate in the process of developing profitable agricultural and non-agricultural rural business. To increase beneficiaries’ income levels in a sustainable manner, the project will be organization, market and business oriented. It will evaluate the market competitiveness of both agricultural and non-agricultural productive activities to bring about a shift from subsistence production to income-oriented market production. In an interactive process, farmers’ and micro-entrepreneurs’ organizations will evaluate the marketing potential of selected products prior to receiving financial or technical support. To reduce transaction costs and promote more efficient management of production and marketing, the project will promote, strengthen and modernize smallholder and microenterprise economic organizations. The project will also support beneficiaries to reverse the deforestation, soil erosion, desertification, environmental deterioration and loss of water prevalent in the eastern region through training, education and investment.

Loan and grant amount:
Loan: SDR 9.95 million (equivalent to approximately USD 15.0 million) Grant: SDR 670 000 (equivalent to
approximately USD 1.0 million)

Total project cost: USD 22.2 million

Project ID: 1215
Executive Board document: EB-2001-74-R-22-Rev-1

Reconstruction and Rural Modernization Programme

It is estimated that at least 21 400 people will benefit directly from the programmes agricultural technical assistance, including 8 400 women. The reconstruction component will provide support to the target population so that they can recover and improve the social and productive infrastructure damaged by the earthquakes. It will also improve their income-generating capacities through better access to markets and demand-led technical assistance and investments. The main activity of the rural modernization component will be the systematic provision of market information and intelligence, innovative/new marketing opportunities, price forecasting and, more importantly, agricultural and non-agricultural market analysis for commodities and goods produced by farmers and small entrepreneurs. Smallholders organizations, cooperatives, grass-roots organizations and rural communities will benefit from technical or financial assistance. A total of 15 000 landless youths (both men and women) will receive skills training, and 3 600 people will receive technical and financial support for the creation of small rural enterprises and businesses. The programme will adopt a gender-equity approach and is expected to contribute to decreasing gender inequities in rural areas. A parallel scheme financing by the World Bank will create synergies with the programme, thus enhancing the impact on poverty reduction.

The extreme poverty of most rural inhabitants in El Salvador reinforces the need for IFAD to continue focusing on smallholders, landless farmers and rural women as their primary targets. Of the approximately 1.8 million inhabitants in the programme area, 1.1 million live in rural areas. According to the multipurpose household survey carried out by the Government in 1996, 436 220 persons located in 47 municipalities were living in poverty. Because of El Nio in 1997, Hurricane Mitch in 1998 and the earthquakes of early 2001, the number of rural poor is estimated to have increased by nearly 10% over 1997 levels. By late 2001 about 72% of the countrys rural population were poor. The programmes target group will comprise about 233 000 persons. Some 90 000 persons will benefit either directly or indirectly from the programme, while 40 000 adults and youths will benefit directly from access to programme?s reconstruction and rural modernization activities.

The programme will operate within a highly participatory framework. Grass-roots organizations will actively participate in programme implementation and will take part in decision-making processes. The programme will also involve beneficiaries in monitoring and evaluation processes through innovative social audit mechanisms.

Loan amount:

SDR 15.65 million (equivalent to approximately USD 20.0 million) on highly concessional terms

Total programme costs are estimated at USD 30.5 million

Cooperating Institution:

United Nations Office for Project Services (UNOPS)

Project ID: 1115
Executive Board Document: EB-99-66-R-21-Rev-1

Rural Development Project for the Central Region (PRODAP-II)

The key objective of this six-year IFAD-initiated project is to contribute to the alleviation of rural poverty through building local capacity and increasing rural incomes, hence i mproving the standard of living of the rural poor. More specifically, the project seeks to:

- increase production and diversify income opportunities in agricultural and non-agricultural activities, small-scale enterprises and marketing;

- strengthen local farmers' organizations and institutions to facilitate their participation in the identification, design, implementation and evaluation of project-supported activities;

- implement an efficient, sustainable credit system based on the gradual transfer of responsibilities and funds to local intermediate financial institutions;

- build a sustainable technical assistance and extension service through the gradual transfer of supervision and administration to local farmers' organizations;

- mainstream and strengthen the gender perspective through project activities, ensuring equal participation of men and women in activities and benefits and reducing gender inequities in the project area; and

- promote sustainable management of soil, water and forest resources.

The project area covers a total of 32 municipalities with an estimated rural population of 235 000 people. Of these, 74% live under the poverty line and 42% live in conditions of extreme poverty. The target group consists of poor smallholders and landless farmers, households headed by women (women represent 31% of the target population), agricultural and non-agricultural workers and small rural entrepreneurs. The target population is comprised of 30 000 families, with an average of six members per family.

Innovative Features:

- This project is based on participatory processes through which responsibility for project implementation and evaluation will gradually be transferred to the beneficiaries. Beneficiaries have participated in the project's overall design, through workshops held during the formulation and appraisal stages.

- The project will set up an innovative coordination link among all three IFAD-supported projects - the Rehabilitation and Development Project for War-Torn Areas in the Department of Chalatenango (PROCHALATE) in the north, the Rural Development Project for the North-Eastern Region (PRODERNOR) and PRODAP-II - to ensure an integrated and coordinated development effort throughout one of El Salvador's poorest regions.

- Another innovative aspect of this project is that implementation will be based on demand, and the contracting, administration and supervision of technical assistance will be decentralized - on the basis of a cost-sharing system - in order to strengthen local organizations.

- A transition is foreseen from the centralized Agricultural Development Bank credit system developed for PRODAP-I to a system of placing credit through local financial intermediaries.

As with all IFAD-initiated projects, significant resources have been allocated to strengthen the mainstreaming of a gender approach throughout the project structure.

Loan Amount:

SDR 9.6 million (approximately USD 13.0 million) on intermediate terms.

Total Project Costs:

Estimated at USD 20.0 million, of which USD 5.1 million will be provided by the Government and USD 1.9 million by the beneficiaries.

Cooperating Institution:

UNOPS.

Project ID: 1069
Executive Board Document:

Rural Development Project for the North-Eastern Region

The main objective of this six-year project is to increase employment opportunities for landless men and women and boost the added value of agricultural production by means of sustainable growth in productivity and diversification of income sources. Project components are:

- support for family income-generating activities;

- rural financial services;

- social and productive investments fund;

- environmental management and conservation; and

- project coordination.

The project will directly benefit approximately 12 000 poor rural families in the Departments of Moraz n and La Unión, where approximately 42% of the households live in extreme poverty. About 6 000 households, including 1 600 headed by women, will receive support to incorporate technologies and investments to increase agricultural production. The remaining 2 000 households, half of which are headed by women, will receive assistance in establishing microenterprises for agro-industrial processing and services. Some 4 000 rural young men and women will be trained in skills demanded by the local and national labour market.

Loan amount:

SDR 13.1 million (approximately USD 18.0 million) on intermediate terms.

Total project costs are estimated at USD 21.5 million, of which USD 3.0 million will be provided by the borrower and USD 500 000 by the beneficiaries.

Cooperating institution:

United Nations Office for Project Services (UNOPS).