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Increasing agricultural productivity and profitability

Poor rural people rarely control the conditions that determine their livelihoods. Geographically dispersed in remote rural areas, small producers lack the basic infrastructure — banks, roads, power supplies and Internet connectivity — needed to run a business. 

Most cannot produce a large enough volume of products to interest buyers, and, when they do, they are often hit with high transaction costs, making it difficult to earn a living and compete in markets.

Smallholder farmers often lack opportunities to negotiate better terms of trade for their agricultural products and to hold governmental and non-governmental organizations accountable for their role in rural development. Their powerlessness is closely linked to a lack of services, as well as the limited provision, and quality, of public goods.

However, effective rural institutions and organizations can help poor rural people overcome these barriers by:

  • increasing their productivity and profitability by giving them direct access to critically needed resources, services and markets;
  • reducing the price of inputs for farmers through larger collective purchases; and 
  • acting as a forum for exchanging knowledge and experience, as well as jointly-owned assets, such as equipment and machinery.

Organized groups and communities are more likely to have their voices heard and their demands met. When farmer organizations and cooperatives join forces at higher levels, they can influence policy dialogue and decisions that affect their ability to succeed. 

Strong rural institutions also promote social cohesion and stability, decreasing the adverse consequences of political and economic disenfranchisement.

Institutions as drivers of rural change

IFAD is dedicated to securing rural people’s access to productive resources and strengthening rural institutions and organizations. Functioning, inclusive institutions are key to rural transformation and to ensuring that our poverty reduction efforts are sustainable.

Organizations such as market associations and cooperatives help rural women and men negotiate better prices for their produce and access markets. These organizations also facilitate dialogue among smallholder farmers, governments, donors and the private sector. 

When rural voices are heard, it is more likely that pro-poor policies will be comprehensive, complementary, and well-placed to meet the diverse needs and realities of small producers in rural communities.

Training, financing and practical support

IFAD-supported projects provide training and financing to support a diverse array of organisations, including water users’ groups, agricultural producer and trade associations, and women and youth associations, among others.

Our activities strengthen rural institutions and develop their organizational capacity — at both the local and national level — so that rural people can overcome social, political and economic barriers, and seize wider opportunities.

For example, we partner with rural financial institutions, such as banks, micro-finance institutions and credit unions, to make it easier for marginalized groups such as indigenous peoples, youth, and women to access loans and credit for their farm and off-farm activities, including for longer-term investments. 

IFAD also provides resources to support communities with planning processes, with a particular focus on women. Community-driven development approaches rely on local committees to prioritize investment needs for rural development. It also helps ensure IFAD-supported activities reach as many people as possible.

We have also helped to produce a Toolkit, a Field Practitioner’s Guide, and a Good Practices Guide to support rural institutions and organizations increasing food security around the world.

Spotlight

Spotlight

As COP15 tackles desertification, here are three ways IFAD is helping farmers in sub-Saharan Africa build their resilience to climate change

Sub-Saharan Africa’s drylands – that is, the areas where more water is lost through evaporation than gained through rainfall – are facing widespread degradation. There are many factors causing this, but one of the most prominent is the use of agricultural practices that aren’t adapted to the land, such as overgrazing and intensive agriculture.

Projects

Projects

Tonga

Tonga Rural Innovation Project

India

Integrated Livelihoods Support Project

Kenya

Programme for Rural Outreach of Financial Innovations and Technologies (PROFIT)

Asset Publisher

Stories and news

Stories and news

Grant-based development interventions are worth it. But how – and when?

June 2022 - BLOG
Conventional wisdom has long held that giving grants to small-scale farmers produces temporary gains at best. But recently, our research into a grants-based intervention employed by PRICE, an IFAD-funded initiative in Rwanda, found benefits that have lasted for five years and counting.

As COP15 tackles desertification, here are three ways IFAD is helping farmers in sub-Saharan Africa build their resilience to climate change

May 2022 - STORY
Sub-Saharan Africa’s drylands – that is, the areas where more water is lost through evaporation than gained through rainfall – are facing widespread degradation. There are many factors causing this, but one of the most prominent is the use of agricultural practices that aren’t adapted to the land, such as overgrazing and intensive agriculture.

These numbers show that restoring drylands and preventing desertification is good for the planet – and good for us

May 2022 - STORY
From California to the Sahel, from the steppes of Central Asia to the Andes, drylands are some of the most productive ecosystems in the world. But they’re also some of the most fragile.

Tapping public policies and programmes to boost IFAD’s impact

April 2022 - BLOG
In many countries, we have the opportunity to partner with public policies and programmes to deliver the services our project participants need. Although effective inter-institutional coordination is never simple, it is doable – and entirely worth the effort.    

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Related publications

Related publications

Farmers’ Organizations in Africa

June 2018
The Support to Farmers’ Organizations in Africa Programme (SFOAP): Main phase (2013 - 2018) is a continental programme which strengthens the institutional capacities, policy engagement and engagement of value chains of African farmers’ organizations (FOs). The programme supports the 5 regional networks of African FOs (EAFF, PROPAC, ROPPA, SACAU and UMNAGRI), their members at national level, and the pan-African FO (PAFO).

Lessons learned - Formalising community-based microfinance institutions

September 2016
Despite the progress made in the microfinance sector, its expansion has been hindered in large measure by institutional and financial impediments. This situation has led some institutions to embark on an institutionalization, institutional transformation, or regrouping process to overcome the obstacles in their path.

How to do note - Formalising community-based microfinance institutions

September 2016
The purpose of this publication is to provide IFAD CPMs, MFIs, and all technical and financial partners with a methodological tool that will facilitate efficient implementation of the institutional transformation or regrouping processes of microfinance institutions, especially those that serve rural populations – processes that a priori are highly complex.

Related documents

Related documents

Enterprise Risk Management Policy Tags: INSTITUTIONS AND ORGANIZATIONS
Type: Policy, Policies and Strategies