Private-Sector Deepening IFAD’s engagement with the private sector

Strategy Deepening IFAD's engagement with the private sector Cover photo: IFAD supports rural business development in Moldova: Women prepare croissants for baking at the Finetia company in Sturzovca village. 3 Abbreviations and acronyms 3 Executive summary 4 Introduction 5 Background 5 Definition of the private sector and public-private partnerships 5 The changing role of the private sector in rural areas 7 IFAD's interest in working with the private sector 9 IFAD's experience to date 11 Lessons learned 16 The strategy 17 Strengthening IFAD's existing instruments 18 Building the capacity of IFAD and its staff 20 Exploring how rural SMEs can be better supported 22 Implementing the strategy, measuring results and managing risks 24 Annex Other development finance institutions and the private sector 28 Contents Abbreviations and acronyms AAF African Agriculture Fund CBOs community-based organizations DFIs development finance institutions IFC International Finance Corporation MDBs multilateral development banks PPPs public-private partnerships 4 This strategy was prepared in response to the recommendations made in the Report of the Consultation on the Eighth Replenishment of IFAD's Resources. It builds upon IFAD's 2005 Private-Sector Development and Partnership Strategy and the corporate-level evaluation of that strategy completed by the Independent Office of Evaluation of IFAD in May 2011. It also incorporates feedback received from Executive Board members at the informal seminar held on 13 September 2011. Global and rural landscapes have changed considerably since 2005, when the previous strategy was prepared. The structural rise in agricultural commodity prices, the ever-increasing role of the private sector in rural economies, the renewed interest of both private and public investors in the agricultural sector, and the growing global awareness about the need for sustainable agriculture have all contributed to creating new opportunities – but also risks – for smallholder farmers and poor rural populations in general. This new IFAD strategy responds to these global developments and calls for IFAD to be more systematic and proactive in engaging with the private sector. The new strategy specifies how IFAD intends to deepen its engagement with the private sector (be it small, medium, or large; domestic, regional, or international companies) with the aim of creating markets for its target groups; 1 improving their access to inputs, services, knowledge and technology; and increasing income-generating or job-creating opportunities for its target populations. The strategy proposes that IFAD continue to replicate and scale up some of its successful achievements in the area of private-sector development …