Project ID: 1289
Executive Board Document: EB-2004-82-R-17-Rev-1

North-East Development Project

IFAD strategy in Azerbaijan supports the government poverty-reduction strategy for rural areas, which accords high priority to the rehabilitation of deteriorating irrigation systems - the backbone of the rural economy and the major resource for rural employment and food security. At the same time, it seeks to introduce appropriate arrangements for future operation and maintenance that are participatory and financially sustainable. Resolving irrigation problems alone will not be enough, however, because agricultural production has been decapitalized to an extreme extent over the last 15 years. The project will fund initiatives to: overcome the acute shortage of equipment and working capital at the farm level; introduce modern, appropriate agricultural technology; promote new marketing and processing arrangements; and improve access to credit to finance heavy demand for farm and small- and medium-enterprise (SME) investments.

It will introduce participatory irrigation management in which transparent, democratic local institutions - water users' associations (WUAs) - manage the irrigation system effectively and sustainably to facilitate increased production and income. The project will enhance opportunities for increased productivity through demonstrations of modern technologies. It will also enhance financial returns through better marketing arrangements and linkages and through increased capacity for local value adding by small and medium processing enterprises, operating at high-capacity levels. To facilitate investments in farm and non-farm enterprises, the project will increase access of small farmers and SMEs to financing provided by sustainable rural finance agencies with wide outreach, offering gender-sensitive services to small-scale farmers and microentrepreneurs.

WUAs will be the main vehicle for ensuring that project beneficiaries can participate in the decisions that affect their livelihoods. In addition, the project will help beneficiaries establish numerous common-interest groups and associations for fodder and milk production, and collection, grading, packaging, processing, transporting and marketing of agricultural produce.

Loan Amount

SDR 8.60 million (equivalent to approximately USD 12.56 million) on highly concessional terms

Total programme cost: USD 25.15 million

Cooperating Institution:

United Nations Office for Project Services (UNOPS)

Project ID: 1148
Executive Board Document: EB-2000-70-R-17-Rev-1

Rural Development Programme for Mountainous and Highland Areas

The overall goal of the seven-year IFAD-initiated programme is to help populations in the target areas improve the quality of their lives in a sustainable manner by increasing incomes and protecting the natural resource base and environment. More specifically, the programme seeks to:

(i) strengthen the organizational capacity of the beneficiaries so they may participate more fully in the market economy and better manage the natural resources upon which their livelihoods depend;

(ii) restore economic livelihoods through improved management of the resource base and better access to financial, technical and commercial services; and

(iii) strengthen public capacity to identify and respond to the needs of the mountain areas by setting up appropriate institutional mechanisms.

The target group, which comprises small private farmers operating individually or in voluntary associations, will consist of approximately 2.4 million persons (1.2 million from Azerbaijan, or about 33% of the rural population, and 1.2 million from Georgia, or about 60% of the rural population). A significant proportion of the target group will be women who, due to the absence of men family members, now carry the entire burden of farm and family work. Other target groups will include families facing resource constraints in terms of land and livestock. Approximately 18 800 households will benefit directly from programme activities.

Innovative features:

This joint programme for Azerbaijan and Georgia is unique in that it is the first project for IFAD that covers two countries. By developing a common strategy for both countries, IFAD seeks to alleviate the shared disadvantages and constraints faced by mountain-area communities during the transition from a centrally planned to a market-based economy. Key innovative features include:

- establishment of the Mountain Areas Development Agency as an autonomous, service-oriented institution. This agency will provide a clear focal point for mountain-area communities and link the target group with a range of services;

- development of farmer-led exte nsion services and community-owned and managed credit delivery systems;

- establishment of a collaborative framework to facilitate networking between the programmes in Azerbaijan and Georgia, both at the level of programme implementers and policymakers and through grass-roots organizations.

Loan amount:

SDR 6.9 million (approximately USD 9.0 million) for Azerbaijan. SDR 6.1 million (approximately USD 8.0 million) for Georgia. Both loans are on highly concessional terms.

Total programme costs:

Estimated at USD 19.2 million (USD 10.0 million for Azerbaijan and USD 9.2 million for Georgia), of which USD 406 000 and USD 659 000 will be provided by the Governments of Azerbaijan and Georgia respectively and USD 481 000, USD 500 000 by the beneficiaries of each country and USD 100 000 for Azerbaijan and USD 73 700 for Georgia by cofinanciers to be determined.

Cooperating institution:

UNOPS.

Project ID: 1033
Executive Board Document:

Farm Privatization Project

The overall objective of this five-year project is to support the Government in its efforts to reform the agricultural sector through a pilot operation that addresses issues associated with farm privatization. The project will support specifically:

systematic implementation of farm privatization;

development of the institutional capacity needed to manage and support economy-wide privatization of the agricultural sector;

provision of mechanisms and seed funds for investments by small private farmers and for public infrastructure investments at the community/villa ge level;

development of village groups and institutions to support and sustain a private farming community; and

development of social service systems to replace services previously provided by collective farms.

Project components are:

- farm privatization support services;

- rehabilitation of main irrigation and drainage systems;

- community and women's development; and

- project management.

The project area will consist of six collective farms covering an area of 19 900 ha and representing diverse agro-climatic zones and cropping patterns. The target group will consist of approximately 24 600 persons in 6 660 households.

Loan amount:

SDR 6.5 million (approximately USD 9.3 million) on highly concessional terms.

Total project costs are estimated at USD 28.8 million, of which USD 14.7 million will be provided by the International Development Association (IDA) and USD 4.8 million by the borrower.

Cooperating institution:

IDA.