IFAD and trade liberalization 

IFAD’s objective is to contribute to accelerating and deepening the global process of reducing rural poverty and food insecurity. The Fund has an important role to play in achieving the Millennium Development Goals: directly, and catalytically, through sharing insights with other development partners as to who the rural poor are, how they become or remain poor, and how they may be enabled to overcome their poverty. There are many different groups of rural poor, with very different livelihood situations: smallholders, herders, fisherfolk, landless agricultural labourers, indigenous groups and, cutting across all of these, poor rural women. The varying situations of these people involve specific challenges, and IFAD is heavily engaged in developing different types of responses to each such challenge. However, a number of common elements are increasingly entering the environment of all groups of poor people – although they may be experienced differently. One of these elements is the organization and evolution of markets. Virtually all poor rural people rely on markets to access goods essential for their human, social and material development. In most cases, reducing such people’s poverty will require better linkages between small-scale poor producers and a variety of official and other local institutions, civil society and market actors, including medium- and larger-scale private-sector entities.

The influence that markets and trade can have in reducing poverty was recognized both in the Millennium Development Goals and in the Monterrey Consensus, and the relation between rural poverty in developing countries and international markets was at the centre of the Doha Development Agenda. International markets for agricultural products are directly and indirectly important for a very large number of the world’s 900 million rural people living in poverty. The reduction of agricultural protectionism and subsidies, particularly in developed countries, would help many of the rural poor obtain better prices for their products and strengthen their basis for long-term livelihood change and improvement.

How much the rural poor may benefit from the changes envisaged in international trade regulations depends upon both the macroeconomic policies of national governments in the developing world and the extent to which those governments provide the institutional, policy and material framework foundations for a positive response from different groups of rural poor. To benefit from trade opportunities, the rural poor need access to capital, relevant technology, land, water, infrastructure and opportunities for organization. Without these, the direct benefits of changes in trade regulations may be modest in terms of rural poverty reduction.

Increasingly, the issue of markets and the poor must be seen in terms of the consequences of globalization rather than of changes in trade regulation alone. The global economy is changing in such a way as to increase the influence of non-local markets – but also to challenge the viability and profitability of existing relations with them among the rural poor. The rural poor need assistance to successfully meet these challenges. In order for that to happen poor rural producers, governments and donors will need to appreciate and develop answers to some fundamental questions, including: how to reduce small farmers’ dependence on traditional exports to developed country markets; how to diversify into higher-value products; how to enter the value-added chain – everything from improving processing and quality control to addressing tariff escalation issues; how to forge mutually beneficial relations with the larger-scale private sector; and, how much to focus on developed country markets – as opposed, for example, to focusing on regional, national and local markets in the developing countries themselves.

These questions have become critical at the beginning of the twenty-first century, and they will need new, twenty-first century answers. In some cases they will involve strengthening, and in other cases changing, rural livelihoods. The answers will differ according to the situation of each group. The basic issue for poor rural people – and for IFAD – is how to help strengthen livelihoods through raising on- and off-farm productivity, and translate higher output into higher incomes through effective engagement in market processes.

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Source: IFAD 



Fishermen’s Futures

The Arabian Sea is one of the world’s richest fisheries, yet until recently fishermen living along its coast in Yemen remained desperately poor. This short video looks at how an IFAD-supported project helped transform poor fishermen into successful fish exporters, who now sell their catch to buyers from Saudi Arabia, Japan and Europe.

[Go to IFAD site to see the video]

IFAD project sets up innovative vanilla growing scheme in Madagascar

Madagascar is the world’s leading vanilla exporter, accounting for half of global production, but it remains one of the poorest countries in the world.  Most vanilla production is concentrated in the fertile area of Sava, in the north-east, where about 70 per cent of the population depends on the lucrative spice. The region is relatively wealthy compared to the rest of the island, but there are wide disparities between small-scale growers and larger estates that collect and process vanilla and sell it on the international market.

FAD's rice irrigation project transforms Mandrare region of Madagascar

A project supported by IFAD to rehabilitate rice production and develop more efficient farming methods in southern Madagascar has transformed the Mandrare basin from a famine-stricken region into a rice-exporting area.

How the Kenya Women Finance Trust became a model lender

Sometimes, numbers speak louder than words. Six years ago, the Kenya Women Finance Trust (KWFT) was losing around US$290,000 a year. By 2006, it was posting annual profits of US$1.87 million and changing the lives of more than 100,000 poor women. By any standard, this is a remarkable turnaround. But behind the numbers lies an even more remarkable story.
Source: IFAD 

Boosting farmer’s profits through better links to markets

Poor farmers in Tanzania are using modern information and communication technologies like mobile phones and even the Internet to get access to market information, and to learn how to build better and more collaborative market chains from producer to consumer. Market “spies”, known locally as shu shu shus, investigate prices and other aspects of local markets, then use their mobile phones to report the information back to their villages. Soon they might be using SMS to access Internet-based databases of locally-relevant market information.

Trading commodities via SMS

Lack of access to reliable and up-to-date market price information is a serious problem for smallholder farmers across Africa. Without this information, they are vulnerable to unscrupulous traders giving them prices at below-market rates. Furthermore, they are reluctant to diversify into different cash crops for fear of not finding a profitable market for their output

Small-scale farmers become entrepreneurs

Have you ever wondered where the cabbages, potatoes, tomatoes and green beans sitting on supermarket shelves come from? In Mozambique if you shop at Shoprite, Africa's largest food retailer, which has operations in 16 countries, you'll be buying vegetables produced locally by small-scale farmers.


The International Fund for Agricultural Development (IFAD), a specialized agency of the United Nations, was established as an international financial institution in 1977 as one of the major outcomes of the 1974 World Food Conference. The Conference was organized in response to the food crises of the early 1970s [...]

Source: IFAD  © IFAD   Copyright of IFAD texts by IFAD



Trade, finance and sustainable development
Presented by the Third World Network 

Martin Khor, Third World Network, underscores the need to correct the imbalances of the past by ensuring that developing countries do not suffer further losses in the agricultural and services sectors, and to place the principle of sustainable development ahead of national treatment in the WTO.
Martin Khor, Third World Network, addressed the implications of the most recent World Trade Organization (WTO) negotiations for the WSSD. He explained how the 1995 Uruguay Round negotiations that created the WTO have overridden the global compact for common but differentiated responsibilities for sustainable development embodied in the 1992 Rio agreements, by requiring developing countries to liberalize manufacturing while allowing the North to maintain subsidies and high tariffs in agriculture and textiles and to engage in biopiracy. He highlighted proposals presented by developing countries at the recent WTO Ministerial meeting in Doha, including a call to prohibit the patenting of all living materials, versus a call for national treatment in investment, competition and government procurement by Northern countries. He emphasized the need to ensure that national treatment in these areas remains only a subject of discussion and not one of a future agreement in WTO negotiations, and to change the WTO's governance system to improve developing countries' participation and leverage in negotiations.

Binny Buchori, International NGO Forum on Indonesian Development, discussed Indonesia's debt crisis, noting that Indonesia's development budget has decreased by 40% to allow the country to service its US$143 billion debt. She questioned how Indonesia could achieve sustainable development and poverty eradication under these conditions. She said the true test of the WSSD will be whether agreement can be reached on alternative and innovation solutions to the debt crisis.

Victoria Tauli-Corpuz, Tebtebba Foundation, emphasized that trade liberalization has led to a drastic depletion of the planet's natural wealth, which in turn has led to conflict between communities and corporations as well as within communities themselves. She said trade liberalization has also resulted in the dumping of cheap, highly subsidized agricultural and textile products in developing countries, which has devastated the livelihoods of indigenous peoples. She noted that, despite indigenous peoples' enormous contributions to maintaining ecosystem services, their resources are being destroyed and their capacity to continue to provide these services seriously eroded. She stressed that corporate accountability and changing production and consumption patterns must be at the top of the WSSD agenda.

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Binny Buchori <>
Victoria Tauli-Corpuz <>