4 decisions that shaped rural futures at IFAD’s Governing Council

Every year, delegates from IFAD’s Member States come to Rome to participate in the Governing Council. This is IFAD’s main decision-making body, where 180 Member States collectively set IFAD’s direction for the years to come.

With dramatic changes in the development space and ever more pressing challenges, the need for multilateralism and coming together as one to chart the best path forward for rural people has never seemed so critical. To do this, we are committed to investing in the first mile – that is, in the rural areas of developing countries, where much of the world's food is grown.

As IFAD prepares to welcome Member States and a record number of ministers and governors, we look back at decisions made at previous Governing Councils that have made a difference in rural people's lives.

At its 35th session in 2012, the Governing Council empowered a new IFAD programme, the Adaptation for Smallholder Agriculture Programme (ASAP), to accept complementary contributions. This allowed funds earmarked for climate and environmental finance to be channelled effectively to small-scale farmers, so they can adapt and thrive in a changing world.

Rural people in developing countries have always been at the frontlines of climate change. But even today, they don’t have access to the finance they need to adapt to climate challenges. Small-scale farmers only receive 0.8 per cent of available climate finance flows.

But ASAP and its successor programme, ASAP2, have made a difference. In the decade since the Governing Council’s important decision:

• 1.8 million rural people are now working on climate adaptation, natural resource management and disaster risk reduction.
• 1.6 million hectares of land are managed using climate-resilient practices.
• 50 million tons of greenhouse gases have been avoided or sequestered.

Now, the third programme, ASAP+, will mobilize US$500 million and benefit over 10 million people. It’s envisioned to be the largest fund dedicated to channelling climate finance to small-scale farmers.

Around the world, people leave their rural homes to find employment in cities or other countries. The money they earn and send home can be transformative for their families and communities.

While the average remittance is only about US$250 a month, workers collectively send home three times more money than all official development assistance worldwide. These funds have the potential to lift countless families out of poverty and to establish enterprises that revitalize rural economies.

At its 38th session in 2015, IFAD’s Governing Council proclaimed 16 June the International Day of Family Remittances and called on the United Nations General Assembly to recognize this observance. The General Assembly adopted it the very next year, and since then IFAD has marked the day with a celebration of the crucial role that migrants play in ensuring their families and rural communities flourish.

IFAD also leads the Global Forum on Remittances, Investment and Development, and works to make it cheaper, faster and safer to send and receive these funds.

In 2019, the Governing Council made a momentous decision. At its 42nd session, Member States agreed to amend IFAD’s basic legal text to allow it to extend financing to private sector organizations and smallholder cooperatives. Until then, IFAD had only been authorized to extend finance to states and certain intergovernmental organizations.

Around the world, small and medium-sized rural businesses and farmers’ collectives struggle to get loans, insurance or other forms of finance. Whether they’re emerging entrepreneurs hoping to supply improved seeds in their villages or groups of fishers wanting to invest in refrigeration equipment for their catch, rural people, especially in developing countries, are often considered too risky to finance by many conventional banks.

Since the 2019 decision, IFAD has launched the ground-breaking Agri-Business Capital (ABC) Fund, which brings investment to rural areas, nurturing businesses and creating employment, especially for rural youth. IFAD has also created the Private Sector Financing Programme, which supports private sector financial service providers in lending to rural businesses.

In 2021, the Governing Council agreed to another critical update to IFAD’s legal texts by allowing it to borrow funds and issue bonds to raise capital. IFAD issued its first sustainable development bonds the next year and became the first United Nations fund to enter capital markets since the World Bank Group.

This means that, even as overseas development assistance from richer countries declines, IFAD offers private investors a way to fund sustainable development projects and thus invest in the future.

IFAD mobilized the equivalent of US$344 million to finance projects through four private placements issued in 2022 and 2023. These funds allow an estimated 1.6 million people access to more nutritious food and support the construction of water-related infrastructure on 45,600 hectares of farmland.