USAID to provide small loans to thousands of farmers

An estimated US $80 million will be distributed over a three-year period in the form of small loans to some 60,000 people across Afghanistan to boost rural development and livelihoods, the United States Agency for International Development (USAID) said on Tuesday.

“USAID is extremely pleased to embark on this new initiative to bring financial services to rural Afghans,” said Leon Waskin, USAID mission director in Afghanistan.

“The programme will create a strong private-sector foundation for an incipient rural finance system that is capable of providing a full spectrum of financial services on a sustainable basis,” Waskin noted.

The USAID director said the purpose of the project is to provide expanded access to rural financial services in key areas of Afghanistan.

The goal of the new programme is also to establish 50 new credit unions providing services to 50,000 clients, and to establish 30 farmers’ cooperatives to provide services to 20,000 clients, USAID officials said.

The USAID programme comes after the United Nations and the Afghan government announced last month that the country’s opium harvest was set to increase by nearly 60 percent this year - mainly due to a massive jump in cultivation of the crop in the insurgency-hit south.

Easier access to credit is designed to assist those previously engaged in growing poppy to make the switch to other, legal, means of making a living.

The idea is that farmers will no longer be strictly dependent on opium producers and middlemen for access to inputs such as agricultural equipment and seeds, USAID officials said.

“We recognise the difficulties facing rural communities and we feel our strong partnership with the government of Afghanistan will help us overcome the challenges, spark economic activities and improve the livelihoods of the people of Afghanistan,” Waskin maintained.

Lack of alternative livelihoods for farmers in the impoverished country - where some half of the population of over 25 million lives below the poverty line and 85 percent rely on agriculture - has been one of the key causes of the continued high opium production.

Afghanistan now produces some 92 percent of the world’s opium, officials say.

Said Mohammad Azam, director of communications at the Ministry of Counter Narcotics (MCN), said that every initiative which could help Afghan farmers, including those who grow poppies, was essential to the development of the country.

The United Nations Office on Drugs and Crime (UNODC) has found the area under opium cultivation in Afghanistan has reached a record 165,000 ha in 2006 compared to 104,000 in 2005.

sm/sc/jl