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Poverty eradication is a top priority for the Chinese Government, whose strategy focuses on value chain development, training, job creation, access to finance, safety nets for poor people unable to work and voluntary resettlement of rural dwellers living in marginal and deprived areas. 

Against this backdrop, FAO and IFAD aim to bring poor smallholder farmers into commercial agricultureby promoting fair arrangements between farmer cooperatives, medium-sized enterprises and local government, whereby capacity and governance are enhanced, market access is ensured and risks are mitigated.

The two agencies are focusing their interventions around public-private business plans in three provinces of China – Ningxia, Sichuan and Shaanxi. Their activities include: capacity development for farmer cooperatives and, to a lesser extent, private sector actors; support and advice on technical matters along the value chain; improved access to rural finance, including the use of equity financing; private sector investments in productive assets and services; and a good dose of innovation on market access by bringing in food safety, e-commerce linkages from producers to consumers, Geographical Indications and different types of certification. 

FAO has been involved in this process from the start – from contributing to the elaboration of the IFAD Country Programme Strategy to developing the concept and later the full investment proposal. FAO provided expertise in mission leadership, poverty reduction strategies, infrastructure design, financial and economic analysis, environmental safeguards and food safety. 

FAO was also instrumental in involving the largest e-commerce operator in the world, ALIBABA, in the investment proposal. This online global trade giant will develop the capacity of cooperatives and small and medium-sized enterprises for enhanced access to e-commerce platforms, screen business plans according to their investment readiness and co-finance value chain investments through its private equity branch. 

Matteo Marchisio, IFAD Country Programme Manager for China and Mongolia, said that the design process set a new record “as it only took eight months for the full cycle to be completed. That has to be attributed to the excellent collaboration between the Government, FAO and IFAD.”