Ethiopia and the International Fund for Agricultural Development (IFAD) have signed an agreement for a 27.2 million US-dollar loan to help minimise the effects of fluctuation in commodity prices on the incomes of poor smallholder farmers towards boosting food security in Ethiopia. .
The UN specialised agency said in a release Tuesday the programme estimated to 35.1 million dollars would be largely financed by the loan. .
The loan agreement was signed at the IFAD headquarters in Rome Friday by Mengistu Hulluka, Ethiopian envoy to Italy and IFAD`s President Lennart Båge. .
Ethiopia`s economy is agriculture-based with coffee, the largest export commodity, accounting for between 65 percent and 75 percent of the country`s foreign exchange earnings. .
The country is also a great producer of grains: namely teff (native to Ethiopia), wheat, barley, sorghum, millet and maize. .
But famine remains a frequent threat, with adverse climatic effects, particularly drought, reducing Ethiopia`s agricultural crops production. .
The fluctuation in agricultural outputs and commodity farming prices also has telling effects on smallholder farmers. .
The IFAD programme is expected to strengthen national capacity for market research, intelligence, policy analysis and planning. .
"Specifically, it will strengthen capacity to develop and implement support the Ethiopian government to develop appropriate national strategies and policies to stabilize commodity prices as well as improve develop linkages between smallholder producers, rural traders, artisans and the marketing chains," the UN agency said. .
The programme will also support the development of improved post-harvest technologies for processing, storage and transportation of agricultural outputs in a manner consistent with a liberalised market economy. .
With the latest loan, IFAD will have provided funds for 12 development projects in Ethiopia, totalling 190 million dollars, the release added.