Monrovia, (PMU,MOA)-November 21, 2019 :The Liberian government through the Ministry of Finance and Development Planning has attracted development finance in an amount of USD 32 million from the International Fund for Agriculture Development (IFAD) to support the Tree Crop Extension Project (TCEP) and Smallholder Transformation and Agribusiness Revitalization Project (STAR-P) implemented by the Ministry of Agriculture.
23-Million of the amount is to increase agricultural productivity and commercialization on the part of smallholder farmers in the vegetable, rice and oil palm value chains in Bomi, Gbarpolu, Grand Cape Mount, Grand Gedeh, Lofa, Margibi, Maryland, Nimba and Sinoe counties under the STAR-P. This amount is in addition to a $25 Million United States Dollars loan agreement previously signed between the Liberian government and the World Bank.
With the IFAD funding, direct beneficiaries are approximately Thirty-Eight Thousand (38,000) smallholder farmers of whom at least 30 percent will be women and young farmers. Intermediate beneficiaries will include agribusinesses and business development services enterprises that have that have business links to smallholder farmers in the targeted value chains.
The remaining 9 Million United States Dollars which is in addition to 17.5-Million received originally from IFAD, will support the rehabilitation of rural roads in the Tree Crop Extension Project (TCEP) area in Nimba County. The TCEP is intended to improve the incomes and climate change resilience of smallholder cocoa producers in Nimba County targeting Eleven Thousand (11,000) stakeholders of the cocoa value chain including 8,000 cocoa smallholder members of the Kuu groups and farmer field school (FFS), approximately 2,400 additional farmers will benefit from the rehabilitation of roads, input supply and market linkages; and 600 people through job creation along the value chain. The additional financing is composed of 27% grant and 73% highly concessional loan.
The Minister of Finance and Development Planning, Mr. Samuel Tweah signed on behalf of the Liberian government while IFAD was represented by its Country Manager for Liberia, Mr. Jakob Tuborgh.
Speaking during the program at the Ministry of Finance and Development Planning on Thursday November 21, 2019, the Assistant Minister of Agriculture Mr. Ernest Clarke thanked IFAD for the initiative he said the initiative will help in building the capacity of farmers and boost economic growth in the nine counties. Deputy Minister Clarke assured that the Ministry of Agriculture is committed to the projects and will ensure that the goals are achieved.
The Country Manager of IFAD, Mr. Jakob Tuborgh described the signing ceremony as a critical juncture in boosting the agriculture sector with the projects that are starting up adding “I think we have managed to respond to the request of the government to set-up a partnership to have a larger project and work in synergy to really see impact in these projects”.
Mr. Tuborgh noted that his organization’s expectation in the cocoa project is high as there are prospects in the sector over the next ten years for producers and the country. He disclosed that IFAD’s investment in the cocoa sector in Liberia is intended to lead to an increased production of approximately 10,000 metric tons as compared to current production levels in the project area, which will have a value of approximately USD 25 million on an annual basis subject to price variations.
Speaking about the STAR-P project, the IFAD Boss indicated that the project will increase production in the value chains in rice, oil palm and horticulture with a strong private sector link which is expected to address many of the constraints ranging from boosting production to enhanced regulatory frameworks as well as bridging the gap between smallholder farmers and large concessions.
The World Bank Country Manager also speaking at the signing ceremony, Khwima Nthara said the event was timely as the Bank was responding to calls from the Liberian government to do more in the agriculture sector. He disclosed that this is one of the largest support packages in the sector which is intended to scale up the gaps and the Bank looks forward to its implementation.
Responding on behalf of the Liberian government, the Minister of Finance and Development Planning, Mr. Samuel Tweah Commended the World Bank and IFAD for the additional support to the agriculture sector.
Minister Tweah said the government has agreed to take a system sector wide approach to agriculture instead of a project approach which will provide a broader scope which will solve the constraints in the value chain.
He said the Smallholder Agriculture model is a mechanism that is widely used around the world and the STAR-P is strategic in this sector. He noted that with the necessary support provided smallholder farmers, food production will increase.
Commenting on the provision of loans to farmers from the banks, Minister Tweah indicated that the banks could make huge investments in the agriculture sector but unfortunately that is not the case. He explained that the banks have said that it is risky to loan money to farmers because the government has not organized the financing flow. According to him, this is posing serious challenge to the sector as the process of accessing funds from the bank is complicated. He disclosed that the government has allotted 1.7 Million dollars in the current budget, part of which is to deal with risk of lending in the sector.
The Finance and Development Planning Minister reiterated appeals for the IFC and the World Bank to assist the government to derisk lending to the agriculture sector so that the banks will see agriculture as a place to make returns.
The program was witnessed by the coordinators of the TCEP and STAR-P programs along with 3 lawmakers from Nimba County.