Ifad, which has extended loans to Cambodia worth US$180m since 1996, will fund this project to the tune of US$36.3m, with the remaining millions coming from Cambodia’s government and private businesses.
Interestingly, the beneficiaries themselves have pledged over US$8m to the “Accelerating Inclusive Markets for Smallholders” project.
“Our goal is to enable poor smallholders to take advantage of market opportunities by working with others in the agribusiness sector to identify areas of potential growth,” said Benoit Thierry, Ifad’s programme manager for Cambodia, explaining that the fund would help improve smallholders’ access to financing, and aid their ability to tap into new markets within the Asean economic community.
“We also make it a point to include opportunities for women and young adults in all activities,” he added.
Though the proportion of Cambodia’s poor has dropped from over the last decade from 53% to 17.5% in the eight years to 2012, rural areas’s economies have become stagnant.
Ifad insists that livelihoods can be improved if high-value agriculture in particular were developed in the country for domestic and export markets.
But first it must address challenges that include fractured supply links between farmers and markets, and the difficulty smallholders face in securing proper finance.
“The project aims to organise and guide farmers and small and medium businesses to intensify and diversify production and boost the market value of agricultural products by improving on the quality of production and processing,” Ifad said.
It will also develop and promote value chains through an “innovation fund” established with rural banks to provide direct finance to innovative business proposals by stakeholders across the 15 provinces that will initially feature in the project.