ZCZC
BSS-21
IFAD-BANGLADESH-AGREEMENT
IFAD signs deal with govt to launch microenterprise project
DHAKA, Dec 9, 2019 (BSS) – The International Fund for Agricultural
Development (IFAD) and the government 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 Secretary of the
Economic Relations Division (ERD) Monowar Ahmed, said a press release here
today.
The total cost of the project is US$200 million, of which IFAD is
providing an US$80 million loan and US$1 million grant. The remaining costs
will be covered by the implementing agency Palli Karma-Sahayak Foundation
(US$13 million), the beneficiaries themselves (US$0.9 million) and
collaborating entities in the private sector, partner organisations and non-
bank financial institutions (US$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, country director of IFAD 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 micro entrepreneurs 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productivity, outdated technologies, lack of differentiated produce, poor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 Chattogram, Khulna, Rajshahi and Rangpur, the
project will offer small-scale farmers and micro entrepreneurs 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,” Zafar added.
The project will also organise 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.
The project is in line with Bangladesh’s National Agriculture Policy which
aims to accelerate the transformation from semi-subsistence to commercial
agriculture through productivity gains diversification, value addition and
agro processing.
Since 1978, IFAD has financed 34 rural development programmes and projects
in Bangladesh, benefitting almost 12 million households, with a total cost
US$ 2.3 billion, of which IFAD has invested US$913 million.
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