The UN’s International Fund for Agricultural Development (IFAD) signed a financial agreement with the government of Bhutan recently that will reduce rural poverty and sustainably increase the incomes of over 28,000 smallholder farming households.

IFAD will provide a total of US$14.4 million through a loan and two grants to implement the agricultural development programme which will focus on marketing and climate resilient farming practices in 10 dzongkhags, located in southern and eastern regions of the country, a press release from IFAD stated. Kanayo F. Nwanze, President of IFAD, and the finance minister, Namgay Dorji, signed the financing agreement.

The Commercial Agriculture and Resilient Livelihoods Enhancement Programme is designed to ensure increased returns for smallholder farmers through climate resilient production of crops and livestock products. The programme will help transform the country’s subsistence-based agricultural economy into a more vibrant rural economy with well-established dairy and vegetable value chains that respond to market demand.

Poverty in Bhutan is overwhelmingly a rural phenomenon as nearly 95 per cent of poor people live in rural areas. The programme will benefit 28,975 smallholder households, of which 7,115 households will directly benefit from vegetable and dairy value chains.

IFAD has been working in Bhutan since 1981, investing over $65 million in eight programmes, with a total cost of $111.2 million including co-financing, reaching more than 121,035 households.