The Concept of the IFAD - Assignment Example

IFAD has had a significant impact on doing business globally. IFAD gives grants to rural farmers to fund innovative agricultural initiatives. Such initiatives include the mechanization of agriculture and the introduction of different technologies in farming. These initiatives help rural farmers increase their production. Increased agricultural production helps increase food security and leaves enough to sell for profit.

This way, communities that provide only for subsistence start earning a living from farming. The surplus produce provides goods for sale both locally and internationally (IFAD & OPEC, 2005). IFAD recognizes the need to facilitate access to markets because many of these farmers farm on a small scale and are cut off from markets. As such, it contributes to efforts of reducing barriers to market accessibility. One of the barriers to market accessibility especially for remote rural communities is poor infrastructure.

The concept of agricultural infrastructure embodies several elements that affect agriculture. IFAD supports initiatives that help communities to access water for irrigation including drilling boreholes and making dams. After helping communities produce, IFAD recognizes the role of the transportation infrastructure. It collaborates with local governments and organizations to make good roads and upgrade poor roads in rural communities. Lack of an efficient transport infrastructure reduces the value of goods so that people from without these communities come to buy them cheaply.

IFAD has been involved in educating communities about the importance of having an efficient processing infrastructure. Putting up factories and industries that process goods locally helps add value to farmers’ produce (IFAD, 2002). IFAD encourages the provision of agricultural extension and research services. This helps provide local communities with quality information that helps them maximize production. Agricultural research helps detect best practices in farming and document the things that impend agricultural development.

Perhaps the most profound contribution of IFAD to international trade is linking communities to financial and credit institutions (Linn & IFPRI, 2012). Access to loans that charge low interests and getting grants to help communities produce more and supply more to the market. It also helps connect small-scale farmers to international markets where they would otherwise be exploited. Besides the many ways in which IFAD affects global business, it has had a profound impact on ethical decision making on funding.

IFAD conducts research and surveys in different places in the world to assess the need for financial assistance. In conducting the research and surveys, it prioritizes people’s levels of vulnerability. IFAD uses the outcomes of these enquiries to make and affect decisions on funding. Since there are partners who fund its activities, these partners find the outcomes of these enquiries valuable in deciding how much to contribute and what initiatives to fund. IFAD conducts regular monitoring and evaluation on the projects it funds to assess for success and sustainability while at the same time encouraging accountability.

These outcomes inform IFAD’s partners and other organizations on the need to raise or maintain their funding. IFAD helps funders to assess the feasibility of different agricultural initiatives and rural development projects so as not to invest in projects that fail and waste donor funds (IFAD & OPEC, 2005).