The International Fund for Agricultural Development and the Philippines government have agreed to invest US$95.1 million in agribusiness to fight poverty and raise incomes for 469,200 rural people in the east and south of the country, the United agency said on Tuesday.
“To boost the rural economy and reduce poverty in rural areas, it is important that agribusiness enterprises drive a process of inclusive rural transformation, creating market opportunities for smallholder farmers as well as jobs for other disadvantaged rural people,” said Alessandro Marini, IFAD Country Director for the Philippines.
“The project will support the development of inclusive, sustainable and resilient commodity chains, providing farmers and agribusinesses with a range of services, including access to finance and business and technical advisory services, as well as key economic infrastructure such as farm-to-market roads,” he added.
The Rural Agro-enterprise Partnerships for Inclusive Development and Growth (Rapid) project aims to increase smallholder farmers’ incomes and generate employment in 20 of the poorest provinces in Mindanao and the Eastern Visayas regions, according to IFAD.
It will seek to create the conditions for the sustainable development of micro and small enterprises in specific agricultural commodity chains (cocoa, coffee, processed fruit and nuts, and coconut), IFAD said.
IFAD is providing a $62.9 million loan and a $2.5 million grant towards the total cost of Rapid. The project will be cofinanced by the Government of the Philippines ($10.8 million), domestic financial institutions ($12.4 million), local private sector partners ($2.8 million), and the beneficiaries themselves ($2.1 million).
The financing of the remaining $1.6 million will be finalised at a later date, according to IFAD.
Though the Philippines is a lower middle-income country, more than 20 percent of the population lives below the poverty line. This figure rises to 35 percent in rural areas, where agriculture is the main source of income, IFAD noted.
Low economic growth and higher rates of underemployment impact poor areas. This is partly due to farmers’ lack of access to productive capital, to knowledge and technology, and to limited market access, said IFAD.
Rural poor people also have few options for generating off-farm income and lack access to affordable financial services, IFAD underlined.
IFAD has financed 16 projects in the Philippines since 1978 for a total investment of $877 million, of which IFAD has provided $321 million.
These projects have directly helped more than 1.8 million people.
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