IFAD and China invest US$183.5 million to reduce rural poverty through Agribusiness development

Beijing, 31 October 2018 – The International Fund for Agricultural Development (IFAD) and China have signed a financing agreement to reduce poverty and increase incomes for 198,847 rural people in 10 counties in the Qinba and Liupanshui Mountain areas in Sichuan and Ningxia Provinces.

The agreement was signed in Beijing today by Gilbert F. Houngbo, President of IFAD, and Liu Kun, Minister of Finance, China.

The total cost of the new programme (known as the Innovative Poverty Reduction Programme: Specialized Agribusiness Development in Sichuan and Ningxia) is US$183.5 million, of which IFAD is providing a $79.5 million loan and a $500,000 grant.

Though China has experienced significant economic growth, at the end of 2017 about 30 million people still lived below the poverty line, largely in remote and mountainous areas of the central and western regions.

The overarching aim of the programme is to reduce rural poverty by strengthening local economies, and providing incentives to cooperatives and agro-enterprises to integrate poor smallholder farmers in their supply chains. The new programme will help smallholders increase their incomes through improved access to finance and new markets, development of agribusinesses and participation in value chains.

“The programme will test the viability of innovative methods such as linking smallholder farmers to e-commerce and supermarkets,” said Matteo Marchisio, IFAD Country Director for China. “We will also be testing a benefit-sharing mechanism between agro-enterprises and poor farmers, among other new ideas,” he added. “We will then assess the potential for replicating on a larger scale.”

The programme will directly benefit 198,847 people in Cangxi, Xuanhan, Guang’an, Xuzhou and Yilong counties in the Qinba Mountains in Sichuan Province and Pengyang, Yuanzhou, Sunjiatan, Hongsipu and Xingqing counties in the Liupanshui Mountains in Ningxia Province.

Further to the financing agreement, IFAD’s President  will be in Beijing this week to meet with Hu Chunhua, Vice-Premier, China. He will also meet with Liu Kun, Minister of Finance, and participate in the International Forum on China’s Reform and Opening Up and Poverty Reduction, in Beijing. In addition, Houngbo will travel to Chansha to meet with Han Changfu, Minister of Agriculture and Rural Affairs, and  participate in the Ministerial Forum on Global South-South Cooperation in Agriculture.

Since 1981, IFAD has financed 31 rural development projects and programmes in China, for a total investment of $2.63 billion, of which IFAD has provided $1.01 billion. These projects have directly benefitted 4,500,981 rural households.

IFAD has invested in rural people for 40 years, empowering them to reduce poverty, increase food security, improve nutrition and strengthen resilience. Since 1978, we have provided about US$20.4 billion in grants and low-interest loans to projects that have reached some 480 million people. IFAD is an international financial institution and a specialized United Nations agency based in Rome – the UN’s food and agriculture hub.