By Panagrimedia Correspondent, October 26, 2023, As Brazil redoubles its efforts to combat poverty and hunger, the United Nations’ International Fund for Agricultural Development (IFAD) and the Brazilian Development Bank (BNDES) signed a new financing agreement on Tuesday to strengthen the resilience of one million people in rural areas of the Sertão, Brazil’s semi-arid and highly vulnerable region in the Northeast of the country.
The signing at the Presidential Palace in Brasília seals the deal on the largest project supported by IFAD in Latin America and the Caribbean and IFAD’s first project ever with a National Development Bank.
“With climate change hitting so hard in Brazil, it is essential to support small-scale food producers and family farmers to adapt: family farming produces most of the food consumed by Brazilians and employs three quarters of farm labour, playing a key role to reduce hunger and poverty”, said Claus Reiner, IFAD Country Director, Brazil, at the signing ceremony. Luiz Inácio Lula da Silva, President of Brazil, Geraldo Alckmin, Vice-President of Brazil and Aloizio Mercadante, President of BNDES, attended the event.
The new agreement comes at a critical moment for Brazil with regards to food security. According to Rede PENSSAN, a Brazilian academic network, over half of the country’s population has experienced food insecurity at some point in 2022, with this figure rising to 63 per cent among the rural population. In the North and Northeast regions, four out of ten families expressed concerns about short-term access to food and the quality of available food.
The support to four states of the Sertão will focus on ecosystem-based solutions, using natural systems and biodiversity to intensify small-scale production sustainably, and address environmental challenges. It will also help build or restore small-scale infrastructure, such as cisterns, which have been proven to work well over time in the IFAD-supported projects in the Northeast region.
The project will promote the creation of integrated agroforestry systems that increase soil fertility and carbon content; and promote water harvesting, storage and use practices that sustain crops and livestock to withstand irregular rainfall patterns and prolonged droughts. This will reduce carbon dioxide emissions by 11 million metric tons (equivalent to roughly 339,000 flights from São Paulo to Manaus, Brazil).
The project will also enable the sustainable management of 85,000 hectares of land. Women, youth and traditional communities’ involvement and participation in project activities will be prioritized.
Actions will be bundled together by the Planting Climate Resilience Project, to which IFAD provides a US$30 million loan; the Green Climate Fund provides a US$65 million loan alongside a US$34.5 million grant; and the Brazilian Development Bank (BNDES) provides US$73 million. Through in-kind non-monetary contributions valued at US$14.5 million, project participants are expected to bring the total investment package up to US$217 million.
Project funds will be channelled to four Northeastern states through BNDES. States will in turn provide technical assistance and funds to rural member-based organizations. This innovative financial mechanism will be backed by a guarantee from the Government of Brazil.
For IFAD, the project represents a new operating model, assembling finance at scale with investments that place great emphasis on the environment and combating climate change as a means of reducing rural poverty.
IFAD has been investing in Brazil since 1980, working through facilitated loan agreements and grants aimed at increasing the income of small-scale farmers, strengthening cooperatives, promoting group development, and cultivating new markets for family farming and socio-biodiversity products. To date, 13 projects have been implemented with an overall US$1.18 billion total investment, of which US$297 million was funded by IFAD, to support 615,400 families.
