IFAD and Malawi to build resilience and productivity of small-scale farmers and MSMEs amid ongoing crisis

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IFAD and Malawi to build resilience and productivity of small-scale farmers and MSMEs amid ongoing crisis

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Rome/Lilongwe, 05 October 2023: As Malawi’s food insecurity worsens due to ongoing multiple crises, the International Fund for Agricultural Development (IFAD) and the Government of Malawi today signed additional funding of US$57 million to increase support to small-scale farmers and micro, small and medium-sized enterprises (MSMEs). The funding will be channeled through two ongoing IFAD supported programmes – the Programme for Rural Irrigation Development (PRIDE) and the Financial Access for Rural Markets, Smallholder and Enterprise Programme (FARMSE)—and will enable project participants to access climate smart technologies and rural finance, increase productivity, provide market linkages and catalyse commercialization in the agriculture sector.

Agriculture is the country’s main economic activity, accounting for 30 per cent of its Gross Domestic Product (GDP) and 80 per cent of its export earnings, as well as employing 64 per cent of the country’s work force. However, the sector performs below its potential due to myriad challenges including increased climate impacts, low mechanization, poor access to finance, weak market linkages and limited access to irrigation. 

“Despite the current situation the country finds itself in, Malawi has the opportunity to transform its agricultural sector as envisioned in its Malawi Vision 2063 agenda, especially under pillar one, which focuses on agricultural productivity and commercialization,” said Bernadette Mukonyora, IFAD Country Director, Malawi. “This additional funding was made possible because IFAD invests in rural food systems that are purpose-built and respond to the current crisis.”

To reduce small-scale farmers’ reliance on rain-fed agriculture, which 80 per cent depend on, the Programme for Rural Irrigation Development (PRIDE) will receive US$27.7 million to rehabilitate five irrigation schemes and establish two new ones. This will allow farmers to grow high-value crops - tomatoes, onions, vegetables, pigeon beans, rice, beans, sesame - throughout the year. In addition, small-scale farmers benefiting from the irrigation schemes will also be able to access climate information via SMS to help them build their resilience to continuous climate shocks.

Agricultural finance is a critical catalyst to deepen productivity and commercialization in Malawi. In this regard, the Financial Access for Rural Markets, Smallholder and Enterprise Programme (FARMSE) will receive US$24 million to help connect farmers and MSMEs to rural finance. To safeguard these investments, farmers will be linked to markets and provided access to climate weather index insurance.

IFAD’s commitment to accompanying Malawi on its journey toward fulfilling the Malawi Vision 2063 agenda is further demonstrated by the opening of the IFAD Malawi office today. Under the guidance of the country director, the office will help coordinate in-country investment as well as policy engagement with partners and stakeholders.

Since 1981, IFAD and its partners invested US$731.96 million in 14 programmes and projects benefiting more than 2 million rural families in Malawi.

Press release No.: IFAD/96/2023

IFAD is an international financial institution and a United Nations specialized agency. Based in Rome – the United Nations food and agriculture hub – IFAD invests in rural people, empowering them to reduce poverty, increase food security, improve nutrition and strengthen resilience. Since 1978, we have provided more than US$24 billion in grants and low-interest loans to fund projects in developing countries.

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