Madagascar, located in the Indian Ocean, is the fifth largest island in the world. Its economy is based mainly on agriculture, tourism, production of goods with low added value, and the mining sector, which has benefited from a significant increase in foreign investment.
Madagascar is very vulnerable to climate change. An estimated 25 per cent of the population, approximately 5 million people, lives in zones at high risk of natural disasters. Over 70 per cent of the island’s inhabitants live below the poverty line, 85 per cent of them in rural areas.
The agriculture sector is the backbone of Madagascar’s national economy, accounting for 30 per cent of GDP (2009). It generates 30 to 40 per cent of exports and employs 80 per cent of Malagasy families on approximately 2.5 million small farms. The three subsectors – agriculture, livestock and fisheries – are key to reducing poverty and improving food security. They support 75 per cent of the country’s population, accounting for 86 per cent of all jobs and 60 per cent of youth employment.
Endowed with abundant natural resources, Madagascar has exceptional potential for agricultural development. Rice production is the leading economic activity, generating livelihoods for approximately 10 million inhabitants. Rice is grown by 86 per cent of households.
The rice sector’s annual average growth rate is only 1.5 per cent, a major cause of rural poverty. Other causes include fragmented production, low productivity, rural insecurity, overuse of natural resources, vulnerability to natural hazards (cyclones, droughts and floods) and limited access to economic and commercial opportunities due to isolation, aging infrastructure and difficulty accessing agricultural markets and rural finance.
Living conditions have worsened over the past 25 years, while the population has doubled, reaching 17.9 million in 2004. The political crisis of 2009-2013 hampered socioeconomic development, increasing poverty and particularly extreme poverty. The effects were exacerbated by suspension of foreign aid, which represented half of the country's budget.
The resulting decline in agricultural productivity was further aggravated in 2012 and 2013 by a locust infestation, which destroyed as much as half of food crops, and severe drought, which hampered agricultural production in most regions. Like other countries undergoing rapid population growth, Madagascar struggles to raise agricultural production sufficiently to feed everyone.
Madagascar has the world’s fourth highest rate of chronic malnutrition (47.3 per cent) and ranks fifteenth in the number of children affected (2 million).
IFAD's strategy in Madagascar, based on its country strategic opportunities programme for 2015-2019, is aimed at improving the incomes and food security of rural poor people, particularly young people and women.
Two strategic objectives support the approach:
- Ensure that effective, climate-resilient production systems are widely adopted by farms and rural enterprises;
- Improve access by rural smallholders and enterprises to markets and priority value chains.
Madagascar is highly vulnerable to natural disasters, including cyclones, droughts and floods. An estimated one quarter of the population (approximately 5 million people) live in zones at high risk of natural disasters.
Since 1979, IFAD has funded 15 rural development projects in Madagascar for a total of US$276.5 million, benefiting more than 694,000 households.