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The International Fund for Agricultural Development (IFAD) and the Federal Democratic Republic of Ethiopia, on 8 May, signed the Participatory Agriculture and Climate Transformation Programme (PACT) grant agreement for US$106.54mn, supporting rural households to sustainably improve their incomes, boost food and nutrition security and help them build resilience

7e906e6a be33 48ec 992f ee7584ed447dThe grant will support community-led, climate-smart initiatives that aim to improve productivity. (Image source: IFAD)

The agriculture sector in Ethiopia accounts for about 45% of the country’s GDP and 90% of its exports, providing employment to approximately 80% of the population, the majority of whom live in rural areas.

The country’s vulnerability to food insecurity is strongly linked to climate change. Small-scale farmers, who produce the bulk of the country’s food, depend on rainfall to grow their crops. Unfortunately, due to increasingly unreliable rainfall and the escalating cost of inputs, their production capacity has been reduced significantly, with the situation made worse by their low coping capacities.

“The grant comes at a critical time for the country, to build the resilience of smallholder farmers to multiple shocks and safeguard food and nutrition security. This grant offers us the opportunity to build on IFAD’s previous work in the country to facilitate farmers’ access to rural finance, technologies and markets, and to scale up these interventions that have a multiplier effect on building resilience of food systems in Ethiopia,” said Sara Mbago-Bhunu, IFAD regional director, East and Southern Africa division.

PACT will be implemented over a seven-year period and aims to benefit 750,000 rural people in six regional states – Amhara; Oromia; Southern Nations, Nationalities and Peoples’ Region; Sidama; Somali; and South western Ethiopia – with a focus on women (50% of project participants), youth (40%) and people with disabilities (5%). Additional financing, to expand the geographic area to the rest of the country, is being negotiated with other financiers.

To achieve its goal, the grant, which is funded by IFAD, the European Union and ASAP will support community-led, climate-smart initiatives that aim to improve productivity through equitable and sustainable access to natural resources and market-led production. The project will also promote agribusiness development to strengthen farmers’ and pastoralists’ capacity to access remunerative markets and rural finance.