IFAD Annual Report 2023 Highlights Rural Resilience and Sustainable Development

Lario highlighted that rural areas bear the brunt of climate change, biodiversity loss, conflicts, economic instability, and widening inequalities.

Alvaro Lario, President of the UN’s International Fund for Agricultural Development (IFAD), emphasized the disproportionate impact of today's global crises on rural populations during the launch of IFAD’s Annual Report 2023: "Investing in Rural Communities for a Sustainable Future."

Lario highlighted that rural areas bear the brunt of climate change, biodiversity loss, conflicts, economic instability, and widening inequalities. He underscored that food insecurity is more prevalent in rural settings compared to urban areas, with 80% of extreme poverty worldwide concentrated in rural regions.

However, Lario also emphasized that rural communities hold the key to addressing these challenges. With targeted investments, they can sustainably manage natural resources and produce nutritious food, contributing significantly to global food security.

IFAD’s Annual Report for 2023 reflects notable progress and initiatives aimed at supporting rural communities worldwide amidst these crises. The report outlines critical developments, highlighting reasons for optimism despite ongoing challenges.

In a significant move, IFAD Member States committed record pledges for its 13th three-year Replenishment, aiming to mobilize US$2 billion in new funding to support a US$10 billion programme from 2025 to 2027, benefiting over 100 million rural people.

With its strong AA+ credit rating, IFAD leveraged its financial capabilities by issuing sustainable bonds worth €180 million under its Sustainable Development Finance Framework. These funds are being deployed to impact approximately 2 million rural households, as detailed in IFAD’s inaugural impact report presented at the London Stock Exchange.

Innovation remains a cornerstone of IFAD’s approach. The introduction of the Africa Rural Climate Adaptation Finance Mechanism (ARCAFIM) at COP 28 aims to provide tailored climate adaptation finance to small-scale food producers and rural microenterprises. This model blends donor resources with commercial funds to mitigate risks associated with loans made to local banks serving small-scale farmers.

IFAD continues to advocate for increased climate finance for adaptation efforts, particularly as the impacts of climate change intensify. The Enhanced Adaptation for Smallholder Agriculture Programme (ASAP+) exemplifies this commitment, blending grants with loans to support climate resilience among vulnerable rural communities across 41 countries.

Throughout 2023, IFAD also pioneered market-based mechanisms to compensate small-scale farmers for ecosystem services, launched an Innovation Lab, and introduced new funding modalities directly supporting rural organizations in climate-focused projects.

IFAD’s organizational strength was further bolstered by decentralization efforts, with 40% of its staff now based in field offices closer to the communities it serves. The organization achieved over 45% female representation in leadership and senior management roles, with 55% representation from developing countries among its workforce spanning 110 nationalities.

“Despite the challenges ahead, IFAD stands prepared to collaborate closely with rural communities, offering sustainable solutions to hunger, poverty, and climate adaptation,” concluded President Lario.

The IFAD Annual Report 2023 underscores IFAD’s commitment to empowering rural populations and advancing sustainable development amidst global challenges.