IFAD’s Investments for Food Security in the Arab World

Omer Zafar

Near East, North Africa and Europe Division

International Fund for Agricultural Development

Food Secure Arab World – A Roadmap for Policy & Research

Beirut, 6-7 February 2012

Cereals demand and supply in Arab Countries

Cereal demand and supply in Arab countries (2000 – 2030)

IFAD’s investments to improve food security

managing natural resources

increasing agriculture productivity

promoting rural finance

upgrading value chains

creating economic opportunities

public-private partnerships

Improved Water Management

Water Infrastructure

Appropriate Technologies

Local Institutions

(WUAs)

Natural resource management - water

Water scarcity

75% decline in per capita renewable water resources since 1950

projected further 40% decline in water resources by 2050

IFAD’s investments

Natural resource management - water

IFAD investments include:

soil and water conservation

rainwater harvesting

alternative water resources

distribution systems

on-farm water use efficiency

livestock water points

total area reclaimed is more than 700,000 hectares, or 12% of total cultivable area

IFAD investments contributed to de-rocking 180,000 hectares

directly benefitting 70,000 households, doubling arable land in targeted areas

Syria: investing in land reclamation through de-rocking

Natural resource management - land

Institutional Support

Resource Management

Resource Conservation

deferred grazing

shrub plantation

reseeding

veterinary services

genetics improved

water availability

linking pastoralists’ institutions with

services and markets

Natural resource management - rangelands

IFAD investments include:

Status: rangelands are at risk of degradation, with economic losses

Status

cereals yields are 50% of world average

cereals productivity growth is declining

horticulture productivity growth is relatively good

Increasing agricultural productivity

Increased Agricultural Productivity

Agricultural Technologies

Extension Services

Delivery Systems

IFAD investments include:

R&D partnerships

improved varieties

improved management practices

demonstration plots & field schools

increased private sector role

Increasing agricultural productivity

Promoting rural finance

support access to a variety of financial services

promote a range of financial institutions and modalities

support demand-driven and innovative approaches

encourage market-based approaches

focus on sustainability and poverty outreach

promote an enabling environment for rural finance

Promoting rural finance:

Sanadiq in Syria, Sudan, Somalia, Yemen

Achievements

76 sanadiq created, with 13,500 members (45% women)

22,000 loans disbursed, amounting to USD 17 million

loans are short-term with maximum one year duration

investments in agriculture, livestock, off-farm micro-businesses

Way Forward

legalisation of sanduq as financial institution

creation of Apex institution for financial and other services

linkages for refinancing from financial institutions

innovative forms of capitalisation

Promoting rural finance:

Sanadiq in Syria

Promoting rural finance:

Refinancing

loan forward

repayment contract

Smallholders

(producers'

associations)

Agribusiness

(enterprises)

MarketsIFADMinistry of

Finance

Refinancing

Facility

loan

repayment

loan

repayment

Financial

Institutions

Promoting rural finance:

Refinancing

Refinancing helps financial institutions to:

increase rural outreach and attract new clients

adapt financial products to rural demand

invest own funds and leverage additional funds

introduce innovative collateral requirements (e.g forward contracts)

Way Forward

diversify financial instruments (micro-leasing, equity financing)

technical assistance to mobilise deposits and savings (exit strategy)

Promoting rural finance:

Equity financing

temporary strategic investments in rural enterprises (often family-owned or cooperative) with market demand, growth potential and job creation;

combined with non-financial advisory services (managerial, technical, market access);

the foundation is the value chain approach (agriculture, fisheries, livestock, off-farm and non-farm sectors)

economic benefits for the rural poor through backwards linkages with producers, job creation for unemployed and under-employed, and rural economic multiplier effects

Creating economic opportunities - investments

Market driven investments to promote economic opportunities and create jobs

selected value chains with comparative advantage, market demand and growth potential (agriculture, livestock, fisheries, non-farm)

broad range of rural financial services (savings & credit groups, microfinance, debt finance, refinancing, equity financing)

market-derived infrastructure development linked to the selected value chains

producers’ associations and win-win contractual arrangements with processors, traders and markets

agribusiness development (SMEs linked to smallholders and/or creating job opportunities) and non-farm enterprises

Creating economic opportunities - services

Services for smallholders

smallholder producers’ associations

climate-smart, environmentally-friendly technologies

access to a range of financial services

access to technical and business services

GGAP training and certification

skills development and rural labour market intermediation

Services for enterprises

access to a range of financial services

access to managerial, business, technical services

HACCP / ISO compliance and certification

market promotion

Upgrading agricultural value chains:

operational experiences

Producers'

Association

(smallholders)

PA support

Technology

Financial

Business

Services:

Financial

Business

Marketing

HACCP / ISO

Services:

GGAP

contract

forward Agribusiness

(enterprises)

Market

(domestic; export)

Market

promotion

Market-derived Infrastructure

IFAD’s active portfolio in the Arab region

IFAD’s active portfolio in the region covers 10 borrowing/recipient countries and amounts to USD 930 million

of this, USD 450 million is financed by IFAD and USD 480 million by cofinanciers (domestic & external)

this portfolio is now directly reaching some 2.9 million poor rural people across about 3,100 communities

as such, the active portfolio is reaching 2.4% of the rural population or 6.5% of the rural poor in borrowing/recipient countries

in 2011, the average investment cost (loan/grant) per beneficiary amounted to about USD 52

380,000 ha of land under improved management practices

250,000 ha of land under irrigation scheme constructed or rehabilitated

220 livestock water points constructed or rehabilitated

3,200 drinking water systems constructed or rehabilitated

IFAD’s active portfolio in the Arab region:

some results

270,200 poor rural people in strengthened community organisations

32,000 poor rural people in savings and credit groups

23,500 poor rural people trained in income generating activities

20,500 poor rural people trained in post-production, processing and marketing

IFAD’s active portfolio in the Arab region:

some results

1,500 km of roads constructed or rehabilitated

IFAD’s active portfolio in the Arab region:

some results

1,400 savings and credit groups formed and/or strengthened

460 savings and credit groups with women in leadership positions

IFAD’s active portfolio in the Arab region:

some results

Cofinancing Islamic Development Bank OPEC Fund for International Development World Bank Arab Fund for Economic and Social Development Global Environmental Facility borrowing/recipient Governments private sector such as commercial banks and investors beneficiaries

Knowledge UN Economic and Social Commission for Western Asia International Center for Agriculture Research in Dry Areas International Center for Biosaline Agriculture International Food Policy Research Institute Food and Agriculture Organisation National agriculture research institutes

IFAD’s active portfolio in the Arab region:

Partnerships (selected)

Thank you