In the majority of developing countries, the agriculture sector represents the main employer, the largest sector of the economy and the principal export earner. It is estimated that GDP growth generated by agriculture is up to four times more effective in reducing poverty than growth generated by other sectors. At the heart of the sector is smallholder farming, which supports and feeds around two billion people. In the interests of poverty reduction and food security, increased investment in the sector is essential.
Recognizing the importance of agriculture, OFID has consistently channeled much of its development assistance to the rural areas. At the end of 2012, OFID’s cumulative support to agriculture stood at US$2,032.4 million, or 14% of total approvals. This included assistance for:
OFID is also quick to act in times of famine, regularly supporting the work of the World Food Program, and has strong ties with other specialized UN agencies, such as the Food and Agriculture Organization of the United Nations; the International Fund for Agricultural Development . OFID also works closely with the Common Fund for Commodities, providing financing to help develop improved production technologies and secure market access for small-scale commodity producers.
In 2012, OFID approved nine agriculture projects with a combined value of US$91.2m, or 7.8% of total commitments for the year. The largest share went to Africa (87.7%), with the LAC region taking 11.6% and Asia 0.7%.
The bulk of the funds (87.7%) was given in public sector lending:
One US$10m transaction was approved under the Private Sector Facility. Accounting for 11% of commitments, it went towards the establishment of a state-of-the-art sugar plant in Egypt.
The remaining approvals related to grant financing totaling US$1.2m for the following small-scale grassroots agriculture projects: