FAO, IFAD sign agreement to promote smallholder financing

Ms Eugenia Serova, Director FAO Rural Infrastructure and Agro-Industries Division, with Adolfo Brizzi, Director of IFAD's Policy and Technical Advisory Division.

The UN Food and Agriculture Organization and the International Fund for Agricultural Development (IFAD) on the 11th of February 2013 have signed an $875 000 agreement aimed at helping small farmers and rural households in developing countries gain improved access to agricultural and rural finance, thereby enabling their investments.

The three-year grant agreement is intended to generate new policy tools and training materials for public-sector agencies, donors, financial institutions and NGOs working to enhance smallholder access to financial services including credit, savings and insurance.

The knowledge gained will be disseminated world-wide through the Rural Finance Learning Center (RFLC), a jointly supported web platform managed by FAO which has been operating since 2004.

The grant agreement was inaugurated here last Friday during the annual meeting of the Improving Capacity Building in Rural Finance  (CABFIN) partnership, which groups the German International Cooperation Agency GIZ, the World Bank, the UN Capital Development Fund (UNCDF) as well as FAO and IFAD. The grant will support CABFIN's work plan for 2013-15. 

"Many development agencies said finance for agriculture was too risky and difficult. The CABFIN Partners believed otherwise and 10 years ago initiated a plan to jointly address learning on polices, products and models by sharing information on how it can be done, by creating the RFLC information gateway and by jointly developing technical guidance documents and working together on strategic initiatives in the sector. The continued and growing commitment of the partners is testament to the global success and impact from the collaboration," said FAO Senior Agribusiness and Finance Officer Calvin Miller.

"This  is a real model of coordination, cooperation, and harmonization in the field of rural finance and agricultural investment. It not only promotes sharing information among local public and private partners, it supports an environment of knowledge sharing and dialogue across regions," said Michael Hamp, IFAD Senior Technical Adviser, Rural Finance.

Rural Finance Learning Centre.

The RFLC is a key component of the CABFIN partnership. It ensures lessons and advice collected from around the world is broadly disseminated among the relevant stakeholders promoting access to agricultural and rural finance. It currently offers more than 3,000 selected and abstracted documents that governments, financial institutions and other organizations can use to design improved financial services, strategies and innovations to serve rural communities.

The RFLC is also the largest source of training courses and capacity building resources on the topic. The online centre serves visitors in three languages, who come from an average of 130 countries each month.

Smallholder agriculture and related businesses currently suffer from under-investment. The objective of the CABFIN partnership is to turn the situation around by enabling local institutions to learn, from others, how to offer improved, specifically-tailored financial products and risk management strategies that make such investments more attractive, including investments by rural households themselves. CABFIN also offers policy tools and advice to governments and public stakeholders.

Smallholder finance

Credit schemes designed for smallholders must, for example, take account of the agricultural cycle and provide flexible repayment plans that fit in with the cash flow of small farmers, who have little income between the planting and harvest seasons.

As an example of CABFIN initiatives, the Rabobank Group collaborates with FAO and other CABFIN members to share its experiences working with producer organizations in sub-Saharan Africa, in order to jointly develop this appropriate agricultural credit product as well as complementary products such as insurance, savings and local institutional development.

FAO has been acting as a facilitator in bringing stakeholders together, drawing and sharing lessons from such experiences.

According to FAO's flagship publication, The State of Food and Agriculture 2012, "only by catalyzing investments by farmers and directing public investment appropriately can we achieve a world in which everyone is well nourished and natural resources are used sustainably."

SOURCE- http://www.fao.org/news/story/en/item/169727/icode/

FAMILY FARMING – a means to Promote Youth’s Involvement in Agriculture and Agribusiness

Andres Solari, his father and me, Olawale Ojo during Solari's farm visit, during the GCARD2, Punta Del Este, Uruguay.

Among the many highlights of my participation at the Second Global Conference on Agricultural Research for Development (GCARD2)  with the theme FORESIGHT AND PARTNERSHIP FOR INNOVATION AND IMPACT ON SMALL-HOLDER LIVELIHOODS at Punta del Este, Uruguay on 29^th October to November 1, 2012, one experience that I would not forget very quickly was the visit to the Solari Family Farm in MonteVideo Rural in Uruguay.
Andres Solari a youth and one of the children of Mr. Solari gave a tour of the farm. The seventeen (17) hectares farm was been cared for and operated by the Solari family. These included Andres, his brother and sister, his parents and regular assistance from three of their cousins.
The farm grows peaches, apples, nectars and oranges. The processing section which is right there on the farm produces wines, jam and juice.
Touching was the fact that Andres and his siblings judiciously joined their parents in the daily running and operation of the farm business. “My mother started this farm in 1998” he said while giving a tour of the farm and sharing the history of the farm. The sister and mother handles the marketing and sales aspect of the  farm while Andres, his brother and father work on the farm itself with the support of their cousins and hired labour when necessary.
A showcase of one of the main themes of the conference itself which is PARTNERSHIP was dislayed by the Solari’s family farm. The farm works hand in hand with the National Agricultural Institute and the Department of Agronomy in the University of Uruguay. One aspect of the partnership is the reduction of the use of pesticide by provision of biological pest control at reduced cost. This partnership makes it possible for the products of the farm fit for export and allows for sustainability of the farm and environment. These factors : active involvement of the family members in the business, partnership with research bodies and cooperatives have made high productivity possible for the Solari family farm and these has bagged them so many awards such as the Sociedad Uruguay Dehortifruiticulun Award in 2005, LATU Sistemas in 2006 and right during the visit an Award of Recognition by INIA (the National Agricultural Institute).
The commercialization of their products through retailers, supermarket and joining other growers makes exporting possible for them. As a matter of fact, as at the time of the visit the mother was away in Italy to attend the Slow Food Fair which is one of the so many international fair the farm attends to expand their market base.
The example of Andres is one that African youths and families can learn from. So if you have parents that have farms: are you joining them to make it a sustainable business enterprise? Do you share your professional skills either as an accountant, HR manager, engineer and so on to improve the activities on the farm thus increasing profitability? Taking a clue from the example of Andres and his family can go a long way to elevate poverty in families both in Nigeria and Africa as a whole.

 First Published on YPARD