The International Fund for Agricultural Development (IFAD) and the government of Madagascar have signed an agreement for the provision of US$250 million to support a programme that will help develop smallholder agriculture and produce value chains in the south of the island nation.
In a statement issued from its headquarters in Rome, IFAD said the 10-year Inclusive Agricultural Value Chains Development Programme (DEFIS) programme would improve incomes and food and nutrition security for 320 000 smallholder households in 8 regions of southern Madagascar.
The Ministry of Agriculture and Livestock of Madagascar is a co-financier and implementing partner.
“The total cost of the programme is US$250 million, including a $26.5 million loan and $26.5 million grant from IFAD. The programme will be co-financed by the Government of Madagascar ($33.7 million), the African Development Bank ($50 million), the OPEC Fund for International Development ($20 million), the Green Climate Fund ($15 million) and by the beneficiaries ($14.3 million).
“A financing gap of $64 million could be covered by subsequent IFAD resource allocation processes or by other financial partners to be determined during the implementation of DEFIS. The programme will be implemented over a period of 10 years in order to provide stable and predictable financing to producers,” IFAD said.
The organisation said limited investment in agriculture, especially in the rural areas, was among the chief causes of poverty, food and nutrition insecurity in Madagascar. Among other interventions, the programme will invest in selected production hubs to facilitate agricultural services provision, products aggregation and farmer access to competitive markets.
It is also aimed at strengthening existing farmer support institutions with special focus on agricultural services provision, while promoting producer contractual arrangements between smallholder farmers and private sector firms.
“To improve the productivity of smallholder family farms and better link them to markets, the new programme will concentrate its investments in 8 priority value chains – rice, maize, cassava, groundnut, coffee, onion, small ruminants and honey, with 3 priority crops selected in each region.
“In addition, DEFIS will invest in the promotion of sorghum in order to build the resilience of production systems for family farms in semi-arid zones in the extreme southern regions, which are highly vulnerable to the adverse effects of climate change,” IFAD said.
Under the programme, 20 000 ha of existing irrigation will be rehabilitated, while 8 000 ha of new irrigated schemes will be developed. Further, the programme will fund micro-improvements on 7 000 ha of irrigated land and support the construction of 300 water points with 50 underground water catchment reservoirs for small ruminants.
Financial service providers participating in the programme will receive assistance in the development of products and services that are adapted to meet the needs of small-scale family farms.
Up to 490 storage warehouses, 45 collection centres, 50 local markets and 800 km of rehabilitated rural roads will also be developed to ensure that farmers have access to functional post-harvest and market access systems.