The International Fund for Agricultural Development (IFAD) and the Royal Government of Cambodia (RGC) signed a financial agreement on Tuesday in Rome, Italy, to provide funding for a rural development project aiming to increase incomes for 75,000 households living in 15 provinces in Cambodia.
The agreement was signed by Kanayo F. Nwanze, President of IFAD, and Aun Pornmoniroth, Cambodian Senior Minister and Minister of Economy and Finance of Cambodia.
According to IFAD, the total funding for the project is $61.6 million. IFAD is providing $36.3 million for the project, the RGC will provide $8.65 million, Cambodian private sector will provide $8.59, and the rest of funding will come from the beneficiaries themselves.
“Our goal is to enable poor smallholders to take advantage of market opportunities by working with others in the agribusiness sector to identify areas of potential growth, and to facilitate smallholder farmers’ access to financing and their ability to tap into new markets within the ASEAN economic community,” said Benoit Thierry, IFAD Country Programme Manager for Cambodia. “We also make it a point to include opportunities for women and young adults in all activities,” he added.
IFAD said that the poverty rate in Cambodia has significantly decreased from 53 percent in 2004 to 17.5 percent in 2012. However, economic in rural areas has become stagnant. This problem could be solved by improving agricultural sector, especially high-value agricultural products for domestic and export markets.
As reported by IFAD, the current challenges facing by Cambodian smallholder farmers are limited financial access and the lack of links between farmers, agribusiness and markets.
To tackle these problems, the project will encourage farmers, small and medium businesses to intensify and diversify production by improving the quality of production and processing in a view to boost the market value of agricultural products. The project will also promote value chains by linking together producers, buyers and service providers.
Regarding financial access, the project will create a "value chain innovation fund" by cooperating with rural banks to provide direct financial support to innovative business proposed by farmers, agricultural cooperatives, agribusinesses and service providers.
Since 1996, IFAD has provided loans for nine projects totaling to $179.5 million for about 1.28 million poorest households living in rural areas in Cambodia.
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