Agence Française de Développement grants a 300 million euro loan to IFAD to support millions of small farmers
To address the devastating consequences of climate change on hunger and poverty in rural areas, Agence Française de Développement (AFD) today signed a EUR 300 million loan agreement with the International Fund for Agricultural Development (IFAD) to help small farmers in high-risk countries build their resilience to shocks and increase their productivity.
If we want to put an end to hunger and poverty in the world, we need to focus our action on the most vulnerable parts of the world where the people most affected by poverty live, namely rural areas. This loan demonstrates France's strong commitment to investing in rural people and IFAD's role as an aggregator of financing in the fight against climate change in accordance with the Paris Agreement.
Projections show that climate change could push 100 million people into poverty by 2030, especially workers in the agricultural sector, and increase the number of people suffering from hunger. In 2019, nearly 690 million people will be hungry, an increase of nearly 60 million in five years. With Covid-19, 135 million more people could be affected by the end of the year, and poverty is expected to increase for the first time in decades.
AFD's sovereign loan aims to reverse these trends. The funds will be used to help small farmers in rural areas increase their productivity, better manage scarce natural resources, access new markets and financial services, and strengthen their resilience to climate change.
As smallholder farmers produce 50% of the world's food calories, these investments will have a strong impact on the global food supply.
AFD is working with IFAD on a variety of activities including strengthening agricultural and climate risk management, cofinancing projects in Cuba and Angola and developing the capacities of several farmers' organizations in Africa.
AFD has contributed US$292 million to IFAD since its creation and has previously allocated a 200 million euro loan to IFAD.