The International Fund for Agricultural Development (IFAD) and the Government of Paraguay today signed a financing agreement to promote rural development in the country by strengthening family farmers’ and indigenous peoples’ organizations.
The Project for Improved Family and Indigenous Production in Departments of Eastern Paraguay (PROMAFI) will benefit 14,000 rural households in four departments in the eastern region of Paraguay. The total project investment is US$23.8 million, which includes a $17.4 million IFAD loan and $5.1 million grant for climate change adaptation.
The financial agreement was signed by IFAD President Kanayo F. Nwanze and Paraguay’s Minister of Finance Santiago Peña in Washington, D.C. where both are attending the annual meeting of the World Bank Group.
“PROMAFI targets groups with very low organizational capacity. It aims at strengthening family farmers’ and indigenous peoples’ organizations, allowing them to set up and finance business activities and better adapt to the effects of climate change, which are particularly severe in Paraguay,” said Nwanze.
The new project will build on the lessons learned from the successfully implemented Paraguay Rural Project (completed in 2013), which advanced community-driven development, increased the capacities of family farmers’ organizations and changed the way the Ministry of Agriculture and Livestock previously worked.
PROMAFI will build the capacity of grass-roots organizations to identify and carry out business activities. Participatory appraisals undertaken by the project will culminate in plans to enhance rural organizations’ capacity to participate, organize and market their products.
The project will finance the organizations’ business and community development initiatives, and also give them access to rural financial services by establishing a trust that serves as guarantee against commercial loans.
With regard to climate change adaptation, the project aims to carry out capacity-building to allow family farmers and indigenous peoples to put in place climate-smart agricultural projects. In addition, the project will contribute towards enhancing the country’s weather station network, creating 20 new weather stations within the project area to allow for more accurate weather forecasts.
PROMAFI will also put technological advances in the hands of family farmers and indigenous communities, including a climate information service that will send SMS alerts to mobile phones, and a production and marketing information service, that will send both SMS alerts and audio recordings from different government agencies about prices, market conditions and public purchase biddings.