The International Fund for Agricultural Development (IFAD) - Activities
A. Loans and Resources
The first project loans were approved by IFAD's Executive Board in April 1978. At the end of the three-year period, 1978–80, the fund's cumulative commitments amounted to nearly US$ 900 million in loans and grants for some 70 of its developing member states.
For the period 1981–83, IFAD expanded its operational program. By 1983, IFAD's total financial commitments since April 1978 exceeded US$ 1.4 billion for projects and programs in some 80 member countries in Africa, Near East and North Africa, Asia, and Latin America and the Caribbean. By mid-1987, IFAD had extended loans totalling US$ 2.3 billion to 89 developing countries to finance 204 projects. From 1978 to 2002, IFAD financed 617 projects in 115 countries, committing US $7.7 billion in loans and US $31.9 billion in grants. These assisted 47 million rural poor households, equivalent to 257 million people. Loans were extended to lower income countries at highly concessional terms, repayable over 40 years, including a grace period of ten years and a 0.75% service charge per annum.
The first replenishment of IFAD resources was unanimously approved by the fund's Governing Council in January 1982. Member countries offered to provide contributions totalling US $1 billion for the period 1981–83, including US $620 million from List A (developed) countries, US $450 million from List B (oilexporting developing) countries, and US $32 million from List C (other developing) countries.
In 1986, the Governing Council agreed on a second replenishment of IFAD's resources totalling US$ 488 million, of which List A countries pledged US$ 276 million; List B countries, US$ 184 million; and List C countries, US$ 28 million. In 1990, the Governing Council agreed on a third replenishment. Member countries offered to provide contributions totalling US$ 567 million of which List A countries pledged US$ 378 million; List B countries, US$ 124 million, and List C countries, US$ 65 million. A fourth replenishment, totalling US$ 470 million, began in February 1997. Of this, US $419 million was pledged as of 9 December 1999. A fifth replenishment, totalling US $473 million, covered the period 2001–03. Over the IFAD V period, donor contributions covered 46% of IFAD's total resource needs, and the rest were met through reflows from past loans (49%) and investment income (5%).
B. Lending Policies and Operations
IFAD loan operations fall into two groups: projects initiated by the fund and projects cofinanced with other financial and development institutions. IFAD-initiated projects are those for which the fund has taken the lead in project identification and preparation and in mobilizing additional resources from other financial agencies where necessary.
Most of IFAD's assistance has been provided on highly concessional terms—loans repayable over 50 years with a 10-year grace period and an annual service charge of 1%. About one-quarter of the loans are repayable over 20 years at 4% annual interest, while a few have been offered at 8% over 15–18 years. However, at its 17th session of January 1994, the Governing Council adopted a resolution which amended the lending terms and conditions for the first time since the fund's establishment.
In the future, those developing members countries having a Gross National Product (GNP) per capita of US$ 805 or less in 1992 prices, or which qualify for loans from the World Bank's "soft loan" agency, the International Development Association, will normally be eligible to receive loans from IFAD on highly concessional terms. Loans on highly concessional terms will be free of interest but will bear a service charge of 0.75% per annum and have a repayment period of 40 years, including a grace period of 10 years. The total amount of loans provided each year on highly concessional terms will be approximately two-thirds of the total lent annually by IFAD.
IFAD loans represent only a part of the total project costs; the governments concerned contribute a share. In most of its projects, IFAD has cooperated with the World Bank (IBRD and IDA); the African, Asian, Inter-American, and Islamic development banks; the Arab Fund for Economic and Social Development; the Central American Bank for Economic Integration; the World Food Programme; the EU; OPEC; and other multi-institutions.
Members of IFAD
(as of 2002)
LIST A: DEVELOPED COUNTRIES
LIST B: OIL-EXPORTING DEVELOPING COUNTRIES
Libyan Arab Jamahiriya
LIST C: OTHER DEVELOPING COUNTRIES
Bosnia and Herzegovina
Central African Republic
Korea, Democratic People's Republic of
Korea, Republic of
Moldova, Republic of
Papua N. Guinea
St. Kitts and Nevis
St. Vincent and the Grenadines
São Tomé and Príncipe
Syrian Arab Republic
Tanzania, United Republic of
The Former Yugoslav Republic of Macedonia
Trinidad and Tobago
IFAD, while seeking to preserve an appropriate balance in its regional allocations, also has attempted to respond to the special needs of the 74 low-income, food-deficit countries. Well over 80% of the fund's loans were channelled to these countries in the 1978–95 period. The regional shares of IFAD-supported projects approved between 1978–95 under both regular and special programs were: Africa (sub-Sahara), 41%; Asia and the Pacific, 26%; Latin America and the Caribbean, 16%; and Near East and North Africa, 16.4%.
In January 1986, IFAD, as the first international financial institution to respond to the socioeconomic crisis in sub-Saharan Africa, in the wake of the disastrous droughts and famines of 1983–85, launched the Special Programme for Sub-Saharan African Countries Affected by Drought and Desertification (SPA), with a target for resource mobilization of US$ 300 million. This target was outrun by contributions reaching US$ 322.8 million from five developing countries and the European Community.
The program aims to restore the productive capacity of small farmers, promote traditional food crops mainly grown by small-holders, and initiate small-scale water control schemes, in addition to recommending measures for environmental protection and providing assistance to governments in regard to policy.
By January 1993, a second phase of the program became effective. While it preserves the focus of the first phase, it extends its conceptual frame and operational scope. Specifically it carries environmental and soil conservation objectives from on-farm to off-farm (particularly in the common property resource domain), and addresses overall coping strategies of households and communities through economic diversification. New commitments in 2001 totalled US $405 million for 25 loans averaging US $16 million each.
In selecting an area of a country for assistance, IFAD determines whether the area is geographically or functionally isolated from the rest of the national economy; the extent to which its population has a lower average per capita income than the national average; the degree to which the area is food-deficient; whether it has relatively inadequate delivery systems and infrastructure in comparison with the rest of the country; and the proportion of poverty—for example, the proportion of landless—in comparison with other rural areas. In terms of impact, IFAD's projects, at full development, will help some 30 million poor rural households out of hunger and poverty.
C. Technical Assistance
IFAD provides grant financing for technical assistance in project preparation, institutional development, agricultural research, training, and other activities which support the fund's activities. In 2001, IFAD provided US $17 million for 16 technical grants.