The UN’s International Fund for Agricultural Development (IFAD) and the Government of China have signed an agreement to invest US$235.2 million in a project to enhance rural livelihoods which will benefit 128,000 smallholder farmers over the next six years in the Hunan province of China.
The Hunan Specialized Forestry Industry Development Project (HuSFID) will promote enterprise-led green agricultural investments that combine improved production, market access, environmental sustainability, and climate resilience. The program’s total cost of US$235.2 million includes a US$80 million loan from IFAD. The Chinese government, private sector enterprises, and project participants themselves will contribute a total of US$155.2 million.
“This investment in Hunan supports China’s rural revitalization agenda and builds climate resilience,” said Nii Quaye-Kumah, IFAD’s Representative in China. “By promoting sustainable agricultural practices, the program will empower smallholder farmers and ensure lasting economic and environmental benefits.”
While China has made remarkable economic progress, including eradicating extreme poverty in 2020, 24.7 per cent of the population—primarily in rural areas—still lives below the US$6.85 daily income threshold that defines poverty in upper-middle-income countries. Climate impacts further complicate these challenges, posing a threat to ongoing efforts to reduce poverty and ensure food security.
The HuSFID is closely aligned with IFAD’s new Country Strategic Opportunities Programme (COSOP) 2025-2030 in China which prioritizes rural revitalization and green development. China’s Rural Revitalization Strategy, adopted in 2017, aims to bridge the urban-rural income divide and build thriving rural communities by 2050. This comprehensive strategy addresses economic, environmental, and social challenges while steering the country toward a greener economy. The country also set goals to reach peak carbon emissions by 2030 and achieve carbon neutrality by 2060.
Hunan province is known for its rich agricultural heritage, with agriculture accounting for 16.8 per cent of the province’s GDP in 2022. However, Hunan is also one of China’s most disaster-prone regions. In 2024, extreme weather events—including heavy rains, floods, snow, and freezing temperatures—took a toll on local communities and disrupted livelihoods, highlighting the urgent need for sustainable solutions that protect vulnerable farmers from climate-related shocks.
The HuSFID focuses on three value chains: bamboo, tea seed oil (Camellia oleifera), and medicinal herbs. It is designed to integrate smallholder farmers into these value chains, promoting inclusive, enterprise-led business models, helping farmers adopt climate-smart agricultural practices, encouraging entrepreneurship and employment among women and youth, and ensuring that all groups benefit including ethnic minorities.
Since 1981, when IFAD became the first international financial institution to invest in China, IFAD has financed 36 projects for a total investment of US$3.66 billion, with US $1.386 billion of IFAD’s funds, benefitting around 4.6 million households.
