Bringing investment to rural sector key priority: IFAD president

Bringing investment to the rural sector is a key priority for the International Fund for Agricultural Development (IFAD), President Alvaro Lario said, adding that investment in agriculture is two to three times more effective in reducing poverty than in any other sector.

In an interview with PTI, Lario stressed on the importance of bringing private capital to the rural sector, and said that globally, investments worth around $ 75 billion is required to adapt to the impact of climate change.

Founded in 1977 in response to a global food crisis, IFAD is a specialised United Nations agency and an international financial institution that tackles hunger and poverty in rural communities.

 

"IFAD's priority is to mobilize financing, especially long-term financing for rural areas and especially to have and deliver a long-lasting impact for those who need it most," Lario told PTI.

"So for us, finance is a means to an end and we know that investment in agriculture is two to three times more effective in reducing poverty than in any other sector," he said.

He said IFAD has partnered with India for nearly 50 years and India is among its founding members, as well as one of IFAD's largest borrowers and also a donor.

Lario said for India, the three big questions are, "how do we make agriculture more remunerative for farmers, how do we enhance productivity at the same time as we're tackling a lot of the climate shocks and how do we move from food security to nutrition security."  The IFAD president said climate shocks are one of the biggest threats to global food security, with rising temperatures, shifting rainfall patterns, and extreme weather events already reducing yields and disrupting a lot of the rural livelihoods.

"So we know that small-scale farmers need approximately at least 75 billion US dollars to adapt to many of these climate shocks," he said.

"In case of India we're seeing seasonal water scarcity, rising temperatures, more frequent droughts, so there's a lot of investments that can actually support these small-scale farmers globally. In global climate finance, what we're seeing is that these small-scale producers, hundreds of millions of rural people, are only receiving less than one per cent of the overall global climate finance," he said.

He pointed out that agriculture accounts for around 20 per cent of GDP in India and it employs around 42 per cent of the workforce.

"So even though there has been a lot of progress, we believe that continuing investing in pro-poor inclusive value chain and connecting small-scale producers to markets continues to be fundamental," he said.

He stressed on bringing private capital into the sector.

"We're also trying to bring private capital, private local companies with the government by really bringing a partnership of the public, the private, and the producers themselves. We're also adopting agro-ecological approaches that are currently supporting commercially viable and sustainable value chains so that once more the goal is to improve the income of small-scale farmers and also the resilience to shock," he said.

He said IFAD's approach is about "co-creating solutions" with the central and the state governments in India, making sure the private sector is brought in, and ensuring that small landholders, tribal communities, rural youth and women are very much at the centre of many of these investments.

"This will very much translate into a more vibrant market-driven rural economy that will create the jobs and opportunities that many of these rural communities lack. For that we need to aggregate, we need to make sure that many of these investments are aggregating, scaling up, processing and really making that formal market access a reality," he said.

"For this transformation we will also need a lot of the private sector enterprises, that's why we need to create the incentives jointly with the governments to make sure that this mobilization of private sector capital is happening where it matters most, which is in the first mile of where food is being produced," he added.