"Innovation is part of our DNA"

The world is stuck in a series of crises — from conflict to climate change, inflation to inequality — and rural communities are often on the frontlines. The International Fund for Agricultural Development (IFAD) is working hard with international partners, seeking new ways to support smallholder farmers worldwide. To find out more we spoke with Alvaro Lario, President of IFAD, on the sidelines of our third OPEC Fund Development Forum.

What innovative agricultural practices is IFAD promoting? How is climate-smart agriculture increasing productivity while minimizing environmental impacts?

Innovation is part of our DNA. On the one hand we’re exploring the “high end” of innovation, such as artificial intelligence and drones. But on the other hand we need innovation to be directly relevant to small-scale farmers. That means exploring drought-resistant seeds and new methods of harvesting and storage. It can also be about using (or even reintroducing) local crops, which may be more adapted to climate change. Climate-smart agriculture is all about adopting the most efficient use of natural resources. There are three pillars: One, increasing individual yields and incomes; two, improving capacity to adapt to shocks, particularly among small-scale farmers; and three, raising the income of the entire value chain.

What are the most promising financial services for helping smallholder farmers? 

We’re now working on digital remittances as a way of supporting local and rural communities. The upside is that these remittances help communities create more jobs and have higher incomes. However, many of these small-scale farmers do not have access even to basic financial services. That’s why we’re exploring basic insurance for certain crops and simple access to savings accounts. These aspects are important for many communities in terms of meeting their basic financial needs. We’re now working with commercial banks in Africa to de-risk loans and provide many small and medium-sized enterprises (SMEs) and small-scale farmers with zero percent loans — to invest in climate adaptation.

How important are rural infrastructure investments for tackling food insecurity? Beyond irrigation, roads and storage — IFAD’s “bread and butter” — what are your priorities?

The “bread and butter” is key because farming is a business and that ecosystem needs to be created and maintained. If you don't have decent access to markets, then you won’t get a fair price for your crops. You also need the ability to store crops, otherwise you’ll waste or lose them. Basic infrastructure, like small dams, are also key. We see very big dams in many countries, but small-scale farmers can’t connect to them, so they don't have access to irrigation. To thrive, businesses need access to water, roads and finance. That's why it’s key to trickle down big rural infrastructure into smaller communities. That’s what IFAD is all about.

How is climate change exacerbating food insecurity? How important are partnerships and innovation for overcoming these challenges?

Partnerships are essential and that's why we’re delighted to sign a big co-financing agreement with the OPEC Fund. At present 90 percent of our financing goes on climate adaptation. Why? Because many small-scale farmers have no other way of coping with droughts, floods and heatwaves. How can they overcome these shocks? They need water pumps, irrigation systems and drought-resistant seeds. This is what IFAD can do, working with the OPEC Fund and many of the partners that we are seeing here today.