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:

• crop and livestock production
• artisanal fisheries
• agro-processing
• marketing and trade
• sponsoring agricultural research and other activities that foster knowledge exchange and training
• investment in rural infrastructure

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:

• Congo DR received US$5m for a rice cultivation project
• Malawi secured US$10m to improve value chains for groundnuts and potatoes
• Egypt obtained two loans (US$35m and US$30m) to modernize irrigation infrastructure

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:

• International Center for Agricultural Research in the Dry Areas. US$240,000. Food security program to help around 10,000 people living in rural communities in Nepal and Bangladesh
• Institute for University Co-operation Onlus. US$600,000. An artisanal fishery and aquaculture resources project, benefitting nearly 22,000 artisanal fishermen on the southern coast of Peru
• Multi-dimensional Resource Center, Nepal. US$350,000. To introduce improved cultivation methods to some 12,000 people in rural communities in Nepal
• Tagore Society for Rural Development. US$45,000.Agricultural development and women's empowerment project in Kolkata, India; benefitting around 500 families in two districts in West Bengal