Status Report on U.S. Participation in the International Fund for Agricultural Development

The International Fund for Agricultural Development (IFAD) was established as a specialized agency of the United Nations to mobilize an additional $1 billion to attack the problem of world hunger. Contributions to IFAD were to be equitably shared by countries of the Organization for Economic Cooperation and Development and by countries of the Organization of Petroleum Exporting Countries. IFAD is expected to commit its available funds by mid-1981 and is seeking a replenishment to continue its operations. The two groups of donors have been unable to reach an agreement on equitable burden sharing.

IFAD operations have been consistent with its Articles of Agreement and U.S. objectives. Some concern was expressed initially regarding duplication of work of existing multilateral development institutions, thereby becoming another international lending bureaucracy. The Articles provided assurance that this would not occur. To avoid duplication, IFAD has entered into cooperative agreements with several international institutions. These cooperative agreements permit IFAD to draw upon the services and experienced staffs of the organizations to assist in the identification, preparation, and administration of its agricultural project loans. The size of the IFAD staff was originally planned to remain small, with only 25 to 30 professionals. The staff has grown considerably and now exceeds this amount significantly. Congress has expressed concern over the excessive growth resulting from the project cycle involved. Each project goes through four basic stages: (1) identification; (2) preparation; (3) appraisal; and (4) implementation and supervision. IFAD officials indicated that the staff would probably continue to grow at a modest rate as the IFAD loan and grant portfolio grows. IFAD operates with multilateral development banks (MDB), and the Department of the Treasury expects IFAD projects to do well under MDB supervision. Officials of other agencies feel it is too soon to venture an opinion on the outcome of IFAD projects.