During the Millennium Summit, the World Leaders reiterated their commitment to reduce the proportion of people living in extreme poverty by half by the year 2015. Three quarters of the world’s poor – more than 900 million people – live in rural areas, and over 70 per cent of them make their living from agriculture and rural activities. This underlines the critical need to invest in rural development and agriculture if the Millennium Development Goals are to be achieved within the prescribed timeframe.

The international community, and the International Fund for Agricultural Development (IFAD) in particular, has long recognized the challenges that Least Developed Countries (LDCs) face. In the past 25 years, IFAD has provided LDCs with USD 2.6 billion to finance projects with a total investment cost of USD 6.4 billion. There are a total of 258 IFAD projects in LDCs, which account for more than 40 percent of IFAD’s annual lending. This translates into a total of USD 200 million going to LDCs annually. IFAD has also committed USD 463 million in grants to support research-for-development programmes, many of them involving LDC countries. Many of the programmes had an impact on small-scale agriculture throughout the developing world.

The Programme of Action prepared at the Third United Nations Conference on Least Developed Countries in 2001 (LDC-III) identifies food insecurity as the typical face of rural poverty. Lack of food security is linked to social exclusion, and worsened by inequity and lack of access to and control over economic resources. This underlines, in particular, the difficulties faced by vulnerable groups such as women and indigenous peoples in overcoming poverty and food insecurity. For these people, food insecurity is a denial of their rights, especially the fundamental human right to have enough to eat. It is in this respect that IFAD’s mandate to substantially reduce rural poverty, create economic opportunities for the rural poor and ensure food security continues to be important.

The vast majority of LDCs is located in Africa, where falling commodity prices, conflicts, natural and man-made disasters as well as HIV/AIDS create significant economic and social problems and greatly increase the problem of food insecurity.

The LDC-III Programme of Action states that initiatives to reverse the marginalization of LDCs are an “ethical imperative”. It outlines seven specific commitments by LDCs and developed nations that focus on areas including people-centred policy, capacity building and trade. IFAD’s programme of work encompasses all seven commitments and focuses in its main activities and projects on improving the livelihoods of the rural poor.

IFAD’s mission is to enable rural poor people to overcome poverty, by strengthening their capacity and the capacity of their organizations to influence the institutions that determine their livelihoods. The emphasis of the Strategic Framework for IFAD (2002-2006) is on empowering the rural poor to build a new and better base for livelihoods in a globalizing economy. The Strategic Framework is set on three pillars of human and social assets, productive assets and technology, and financial assets and markets. First, capacity-building to enhance the human and social capital of the poor is critical. Second, the inequitable distribution of natural resources such as land, water and forests is a major reason for entrenched poverty. Land reform and tenure systems, water rights and access to forests and other common property resources have become increasingly sources of social conflict. Third, access to markets, investment and working capital becomes a necessity for raising agricultural productivity or diversification. Promoting the growth of poor-poor institutions is a key component of IFAD’s Strategic Framework. IFAD works to empower the poor and marginalized to have a greater voice in institutions at the local and national level, promoting access to economic services like credit and savings, markets, technology, capacity-building opportunities, natural resources, market infrastructure and social services. Its approach to combating rural poverty is to look at the poor not as objects or victims of poverty, but as agents of change.

To empower the poor and marginalized is the primary goal in all IFAD projects. This can only be achieved through a participatory process and by listening to the voices of the poor and involving their organizations. By putting the focus on vulnerable groups, such as indigenous people and mainstreaming a gender perspective, IFAD reaches out to those who make up the majority of rural poor or the most disadvantaged. Putting people at the centre of development is the first step to enabling the rural poor to take their destiny into their own hands.

The social and economic transformation brought about by self-help groups has been timely and remarkable. Giving decision-making roles, especially in community affairs, to marginalized groups like women and indigenous peoples, has resulted in their playing a transformational role and becoming effective agents of change. In Nepal, for example, the Hills Leasehold and Forestry and Forage Development Project shows how, in an essentially patrilineal society, the employment of women as group promoters creates positive role models for greater women’s involvement in decision-making and management at the community level and above.

Institutions are vital for improving the conditions of the rural poor. They represent the mechanisms through which the rural poor can gain access to resources and services. Individually, the poor are unable to influence the decisions that affect their lives and organizations (Governments, NGOs and civil society) are often not accountable to them. There is therefore a need to enhance the bargaining power of poor people by supporting the development of organizations of the poor.

IFAD’s projects also work closely with Governments to sensitize them to the needs of the poor. By building on people-centred policies and working with civil society and other actors in the international arena, IFAD assists LDCs in building their own institutional and human capacities. This is complemented by a focus on the means for increasing production and incomes. The poor often have limited or no access to land, water and other productive natural resources. Many poor farmers live in environmentally fragile zones and often lack access to technologies that are responsive to their needs. Appropriate technologies and research to increase productivity are needed. However, it is crucial that new technologies are responsive to local needs and conditions. Using modern know-how to build on and enhance indigenous knowledge and technologies can be far more effective than imposing foreign or western production methods. This gap needs to be bridged.

Support to regional initiatives like the New Partnership for Africa’s Development (NEPAD) is a means to encourage stronger involvement at regional level. With a cluster of UN agencies, IFAD is supporting NEPAD in the areas of agriculture, trade and market access through knowledge management, advocacy and capacity-building. IFAD has provided support to the participatory design and implementation of the agricultural component of NEPAD and has been using its role, both within and outside the cluster, to advocate for the rural poor and their organizations to get more systematically involved.

Globalization has led to the marginalization of many LDCs. By building capacities, IFAD aims at improving the ability of individual LDCs to increase their trade and participation in a global economy. IFAD also promotes access to fair and efficient markets as central to any rural development policy. Its innovative market-based initiatives have produced promising results in several countries. IFAD has found that rural producers can be helped to organize themselves in marketing groups and can get fair prices. These initiatives need to be expanded to cover a larger number of producers, particularly women. They also need to extend to international markets, where the capacities of LDCs to compete need to be developed.

Rural finance is a vital tool in poverty reduction and rural development. Two thirds of IFAD’s current projects have a rural finance intervention. Most of the target groups are small producers engaged in agricultural and non-agricultural activities in areas with widely varying potentials. Experience has shown that direct access to financial services affects the productivity, asset formation, income and food security of the rural poor. IFAD has also long been a strong supporter of microfinance programmes and the development of rural finance systems that enable poor people to borrow and save. Microfinance components are built into most IFAD projects.

For any LDC to progress, it is imperative that there is a commitment by Governments to poverty alleviation in rural areas. Without greater attention to rural development and agriculture, countries cannot achieve the quality of life they seek for all their people.

Rural development and agriculture are key sectors to achieve the Millennium Development Goals. IFAD is addressing the structural problems the rural poor face with regard to institution-building, improved livelihoods, food security, increased productivity, fair access to markets and trade. It is increasingly doing so in South-South collaboration to enable exchange and progress on common problems within and across regions. Exchange of knowledge and technical expertise to resolve common problems, from combating drylands to supporting fair commerce and trade, is becoming more important in a globalizing economy.

Thorough evaluation of projects and preparation of case studies enables IFAD to define outcomes in the larger context of development and in a given society. This assessment also helps to define success of projects while learning useful lessons when projects did not deliver the expected outcome.

Working with development partners, at national and regional level is another important component in IFAD’s work. Many partners are involved, from the organizations of the rural poor, to parliamentarians, public administrators and academia concerned with development at rural level, to international organizations, financial institutions, donors, research institutes and advocacy groups.

Collaboration between IFAD and the Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (OHRLLS) has increased over the past years, in particular with regard to implementation of the Brussels Programme of Action, the Barbados Programme of Action for the Small Island Developing States and in the framework of ECOSOC, in particular the ECOSOC High-level segments in 2003 and 2004.