Grant for agriculture

EU contributes $20 million to Agricultural and Rural Development Programme

A financing agreement signed between the Ministry of Agriculture (MoA) and the European Union (EU) was approved by the cabinet in October. Through the agreement, the EU will contribute €14 million (around $20 million) to the MoA.

The grant is earmarked for the implementation of the Agriculture and Rural Development Programme (ARDP). The project’s implementation period is four years starting July 2011. The Council for Development and Reconstruction (CDR) will undertake the project’s management.

The ARDP will support the MoA’s strategic framework for the years 2011 to 2014.It aims at supporting the ministry in the implementation of its reform policies to enhance the performance of the agriculture sector so as to achieve sustainable food security, and improve the livelihoods of rural communities.

Throughout the programme, the EU will work to facilitate access to credit in the agricultural sector through a joint scheme with Kafalat company.

A grant agreement will be signed, between the MoA and Kafalat, for establishing a Credit and Agriculture and Rural Development (CARD) scheme. Through this scheme, the EU would allocate €3.5 million (around $4.5 million) to Kafalat in order to increase the percentage of guarantees it offers to farmers.

The plan aims at increasing the guarantee ratio offered by Kafalat (75 percent of the loan) by an additional ten percent in order to reach new borrowers.

The objectives of the project include empowering local rural actors (farmers and cooperatives) through increasing their access to credit and to infrastructure.

The project is in line with the Paris II Conference declaration and EU commitments on the aid effectiveness agenda.