Background
Why rural development is a global priority
Rural communities are often geographically isolated, living and working in remote and marginalized regions far removed from urban centres – but rural development is far from a peripheral issue. In fact, financing the first mile of our planet’s food systems is central to building a more stable and prosperous world.
At a time of expanding global uncertainty, rural development is an especially efficient way to drive change – and a high-impact investment opportunity. Growth in agriculture is two to three times more effective in reducing poverty than growth in any other sector. Yet a major financing gap persists: official development assistance is falling, while private investors are too often discouraged by high risk.
As the UN’s specialized agency for investing in rural people, the International Fund for Agricultural Development (IFAD) works to close this gap. IFAD is the only international financial institution exclusively focused on rural transformation, reaching over 200 million people through ongoing investments totaling US$22.8 billion.
When rural communities thrive, the whole world benefits. As we mark the second World Rural Development Day, we look at some of the ways investment can unlock rural communities' economic potential.
A strategic lever for resilience
At a time of growing global uncertainty, advancing long-term resilience has become even more critical – and rural communities, who are often on the front lines of current crises, are central to the solution. When they are able to withstand shocks, food systems are stronger, supply chains are more stable and the effects are felt far beyond the communities themselves.
Because rural areas are at the heart of our planet’s food systems, resilient rural economies support a resilient world. They allow small-scale farmers and producers not only to recover after crises hit, but to sustain their nations’ food production and protect natural resources during shocks.
Investing in rural resilience before the next shock arrives can therefore preserve development gains and mitigate future crises. Every dollar spent on resilience today can save up to 10 dollars in emergency aid in the future – protecting livelihoods, preventing displacement, and reducing the drivers of conflict and fragility.
In the Pacific Islands, for example, the IFAD-funded PIRAS initiative – co-financed with the Government of Australia – is continuing to reap benefits after its conclusion. Originally designed to minimize the impact of COVID-19, the programme distributed over one million seedlings, established more than 200 community plant nurseries and trained farmers in sustainable techniques across six countries. The result is a legacy of strengthened food sovereignty – and resilience to future shocks.
A more connected world
Far from major population centres, small-scale producers in rural areas often struggle to get their produce to customers beyond their communities. Investing in greater market access offers significant opportunities for economic growth, while stronger regional, national and global agricultural value chains benefit the wider world.
Market access can transform rural livelihoods at scale. When producers can reliably reach markets, they can sell more, earn better prices and reduce their dependence on intermediaries, resulting in higher income that they can then reinvest in their businesses.
Value chain development is also a key way to engage the private sector, making rural production more commercially viable and less risky for investors. From developing local infrastructure to increasing collective bargaining power and strengthening value chain links, targeted investment aims to address the constraints that prevent rural people from accessing crucial wider markets.
Just look at Cambodia, where the ASPIRE-AT programme – financed by IFAD, the Government of Cambodia and other partners – is enhancing Cambodia’s capacity to produce Kampot pepper for export. By supporting the creation and strengthening of agricultural cooperatives, the programme enables farmers to operate collectively, negotiate directly with buyers and access high-value markets.
More opportunities at home
In many developing countries, large numbers of young people enter the labour market each year, but rural economies often do not generate enough productive opportunities to absorb them. This can deepen instability and increase migratory pressures that extend far beyond the communities where those young people live.
When rural economies grow and thrive, opportunities for rural people to build their futures at home also grow. Raising investment in rural development by the equivalent of 1 per cent of a country’s GDP reduces out-migration by nearly one percentage point, and creation of rural jobs is a key part of this.
In Cameroon, the IFAD-funded AEP-Youth programme took an innovative approach to boosting youth employment: tailored business incubators. From poultry farming to snail slime production, more than 30,000 young people benefitted from the start-up kits these incubators provided, including interest-free loans, productive grants and tailored financial products.
Rural development isn’t just important for rural people; it’s a central part of building a stable, prosperous future for the entire planet. From profitable value chains to boosted production and resilience to a wide variety of shocks, rural empowerment has global impact.
Learn more about the International Fund for Agricultural Development and get to know its priorities for the coming years.