The International Fund for Agricultural Development (IFAD) and the Government of the People’s Republic of Bangladesh have signed an agreement worth US$200 million to launch a project to accelerate inclusive economic growth, sustainably reduce poverty and improve food and nutrition security for 445,000 rural families.
Out of the total cost, 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).
According to IFAD’s Country Director in Bangladesh, Omer Zafar, “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.”
Zafar said, “A wide range of underlying causes hampers this transition process. There is scope to increase productivity, modernise technologies, differentiate produce, improve the quality of output, expand processing to add value, upgrade advisory services, increase access to financial services and promote structured markets.”
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.
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.
Since 1978, IFAD has financed 34 rural development programmes and projects in Bangladesh, benefitting almost 12 million households, with a total cost $ 2.3 billion, of which IFAD has invested $913 million.