Quiet Revolution Underway as IFAD’s Innovative Solutions Rise to Global Rural Challenges

By Joyce Chimbi Reprint | | Print |

IFAD President Alvaro Lario and others celebrate as the organization lists its sustainable bonds on the London Stock Exchange. Credit: IFAD

NAIROBI & ROME, Jun 6 2024 (IPS) - Technology and innovation are at the center of the International Fund for Agricultural Development’s strategy to fulfill its global mission to eradicate poverty and hunger in the developing world, IFAD’s President Alvaro Lario told IPS in an exclusive interview.

According to Lario, IFAD‘s work centers around innovation in funding, agriculture, climate change, and development. This mission aims to foster groundbreaking, life-transforming solutions from the forefront of technology and digital innovation, supporting communities in remote rural areas facing a debilitating climate onslaught. The challenges are great, considering small-scale farmers produce one-third of the world’s food and nearly 80 percent of the world’s extremely poor people live in rural areas.

As IFAD is both a UN organization and an International Financial Institution (IFI), Lario, who is a seasoned international development finance leader with a PhD in Financial Economics, has steered the organization to become the first and only United Nations body and specialized agency, other than the World Bank Group, to enter the capital markets and obtain a credit rating. This enabled the UN agency to expand resource mobilization efforts to the private sector. IFAD issued its first Australian Dollar (AUD) private placement on May 9, 2024. An investor, one of Japan’s leading life insurers, bought a 15-year AUD 75 million sustainable bond to support IFAD’s mission to accelerate sustainable growth and inclusive development in developing countries’ rural areas.

“We are now innovatively bringing the private sector on board and are the first UN agency to use its own balance sheet to invest and co-invest with the private sector. Being a financial institution, we incentivize and mobilize private sector investment through an innovative risk-sharing mechanism—the Africa Rural Climate Adaptation Finance Mechanism (ARCAFIM). Launched at COP28, this risk sharing mechanism will support local banks to de-risk some of the loans in Kenya, Uganda, Tanzania, and Rwanda to enable hundreds of thousands of small-scale farmers to access loans for climate adaptation,” he says.

The UN specialized agency has long been at the forefront of AI adoption, even before it was well known, and was one of the first multilateral organizations to leverage AI technology, using Microsoft AI solutions to build Omnidata, a centralized analytics platform that connects data, dashboards, visualizations, and analytics powered by machine learning and AI to address small-scale farmers’ needs through targeted investments. It is essentially a tool that enables the agency to have all the data they need at their fingertips, allowing IFAD to make responsive and evidence-based decisions. For instance, AI can track weather patterns, simulate potential impacts on rural communities, intervene, and build resilience to climate shocks.

IFAD President Alvaro Lario and farmer Gilbert Muriuki harvest healthy cabbages at his farm in Embu County, which benefited from the Karimari Rutune Community Irrigation Project. Credit: IFAD

“Data is key to effective decision-making. In Kenya, for instance, we are investing in and supporting a small start-up called Farmers Lifeline Technologies. They use solar-powered cameras to scan the farms regularly and identify potential threats such as pests and diseases. The data is processed through AI and the results are sent back as a phone message to the respective farmer, providing them with timely, critical advice on how to neutralize the threat. We also use drones and satellites to collect data and make informed, time-sensitive decisions,” says the IFAD President.

“We work with the European Space Agency on geographical information systems to facilitate the use of satellites to support, analyze, and take decisions with regard to, say, how deforestation and climate change affect small-scale farmers and, in turn, using the satellite images to develop much-needed solutions.”

In February 2024, IFAD and the Inter-American Development Bank Group Innovation Lab (IDB LAB) announced a partnership to build AgroWeb 3, a global digital public good infrastructure using blockchain and Web3 technology, enabling rural people to easily receive and make digital payments and protect their data. The collaboration aims to provide access to universal digital wallets tailored to the needs of small-scale farmers.

Ngumbi Ndambuki, a Kenya Cereal Enhancement Programme (KCEP) farmer, packs his cereal storage bags on his motorbike. He purchased the bags from Planet Agrovet, an agro-dealer based in Kathonzweni, Makueni County. IFAD aims to create resilient smallholder farmers. Credit: IFAD/Isaiah Muthuirg

IFAD plans to roll out the initiative globally, accelerating the inclusion and resilience of rural people and vulnerable groups, especially in remote rural areas where poverty and hunger are deepest, so that rural populations are not left behind and can lift themselves out of poverty.

“The complexity and diversity of rural poverty call for new, better solutions. We have a program in the Sahel providing loans to local banks at a zero percent rate so that small-scale farmers have access to funds for climate investments and adaptation to climate change,” says Lario, explaining some of their projects aimed at increasing resilience.

“Further afield, we have been working in Indonesia with a private sector company to train small-scale cocoa farmers to become ‘cocoa doctors’ which is a way of improving the health of the cocoa plant by addressing pressing challenges such as soil health and pests and a practical example for other farmers to emulate.”

The UN agency seeks to collaborate widely in an inclusive process where no one is left behind, including women, as they are a critical pillar of food and nutrition security, while ensuring that their children access an education to break the cycle of vulnerability, risk, and poverty. These objectives are at the heart of IFAD’s application of the latest tools and technologies to design and implement programs that work for rural people.

Looking to the future, IFAD’s goal is to move towards open innovation that transcends sectors and geography. It has already co-founded the Moonshots for Development (M4D) network, which harnesses AI and works collectively to launch ambitious solutions to global development challenges using emerging technologies, as well as holding regular open innovation challenges.

From cutting-edge technology to low-tech solutions, like in Bolivia, where llama farmers are supported through an IFAD partnership with a tractor hailing service. Credit: IFAD

However, it is not only state-of-the-art technology they are proud of—even the humble tractor can make a difference, says Lario, explaining that innovation can manifest in various forms and across various locations.

He recounts a visit to Bolivia, where he recently joined Bolivia’s President in celebrating the International Year of Camelids, considered heroes of deserts and highlands because of the roles they play in the lives of people, particularly Indigenous Peoples, who live in hostile environments.

“It’s not always cutting-edge technology. For decades, we have invested in the value chains of camelids by partnering with a small start-up named Hola Tractor, also known as ‘call a tractor’, to provide these tractors to farmers for hire,” he explains. “As farmers search for greener pastures, they can move and fence in their llamas to graze within a protected area in just two hours, as opposed to the five to seven days it took to build a mobile fence to protect their livestock.”

IPS UN Bureau Report

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