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Add to Preferred SourcesThe International Fund for Agricultural Development (IFAD) and the Government of the People’s Republic of Bangladesh have signed an agreement to launch a project to accelerate inclusive economic growth, sustainably reduce poverty and improve food and nutrition security for 445,000 rural families.
The financing agreement for the Rural Microenterprise Transformation Project was signed by IFAD President Gilbert F. Houngbo and Monowar Ahmed, Secretary, Economic Relations Division, Ministry of Finance, Bangladesh.
The total cost of the project is US$200 million, of which IFAD is providing an $80 million loan and a $1 million grant. The remaining costs will be covered by the implementing agency Palli Karma-Sahayak Foundation ($13 million), the beneficiaries themselves ($0.9 million) and collaborating entities in the private sector, partner organizations and non-bank financial institutions ($96.8 million).
Poverty rates in Bangladesh have decreased from 49 percent in 2000, to 24.3 percent in 2016. In spite of this impressive progress, an estimated 40 million people still live below the poverty line.
Rural poverty remains higher than urban poverty, and agriculture accounts for only 15.4 percent of the GDP, but employs 41 percent of the population.
According to Omer Zafar, IFAD’s Country Director in Bangladesh, the key drivers constraining the agriculture sector are farmers’ limited access to what they need: updated technology, viable markets, and financial services.
“Millions of small farmers and microentrepreneurs are unable to transition from semi-subsistence farming to commercial operations. A wide range of underlying causes hampers this transition process, among them low productivity, outdated technologies, lack of differentiated produce, poor quality of output, limited processing to add value, inadequate advisory services, insufficient access to financial services and the absence of structured markets,” said Zafar.
This new project aims to respond to these challenges by boosting the agribusiness sector and increasing the overall profitability of farming by integrating food production with selected agriculture value chains. Focusing on the districts of Chittagong, Khulna, Rajshahi and Rangpur, the project will offer small-scale farmers and microentrepreneurs access to improved production technologies, financial services and market linkages.
“The project will create synergy between producers and agribusinesses, enabling sustained income growth and employment creation,” added Zafar.
The project will also organize and train producers to have the necessary skills to meet food safety standards, enabling them to increase the quantity and improve the quality of their output. This will also ensure higher-quality produce is available for agribusinesses.
Original source: IFAD
Published on 09 December 2019