Full house at #ifadgc side event: Investing in green agriculture, and the role of diaspora

by Daniela Cuneo and Michelle Tang


More investments in agriculture are needed to feed a growing population. Governments, international organizations, civil society and the private sector are often mentioned as key players, but they are not the only ones. What about the diaspora? Have you ever thought of the tremendous potential of diaspora investments in agriculture? Almost 215 million people live outside their countries, but despite the distance, they have an impact on development back home. Through their hard work and individual sacrifices, the migrants of the world save money and send it to their families living in the countries they had to leave. And the amount of money that they remit to their countries is impressive!

 IFAD estimated that migrant workers would be able to send home well over US$350 billion in 2011, according to The FFR Brief: Five Years of the Financing Facility for Remittances. It’s a huge amount that could make a difference if invested in agriculture. But how can diaspora investments be mobilized in agricultural activities of these migrants’ communities of origin? Why should migrants be interested in investing in agriculture? Since investments must be profitable, how can migrants be convinced that investing in agriculture is remunerative?

These were the challenging questions debated during one of yesterday’s regional events at the 35th session of IFAD’s Governing Council. Chaired by Pedro De Vasconcelos, the event was organized by the Financing Facility for Remittances (FFR) in IFAD’s Policy and Technical Advisory Division. In addition to Mr. De Vasconcelos, FFR’s Programme Coordinator, the remarkable panellists at the event included H.E. Ambassador Ibrahim Hagi Abdulkadir, Permanent Representative of the Transitional Federal Government of Somalia to FAO and IFAD; H.E. Ambassador Virgilio A. Reyes, Jr., Permanent Representative of the Republic of the Philippines to FAO, WFP and IFAD; Estrella Mai Dizon-Anonuevo, Executive Director of the Atikha Overseas Workers and Communities Initiatives Inc.; Fatumo Farah, Director of the Himilo Relief and Development Association; and Tawfiq El-Zabri and Rose Thompson-Coon, both of IFAD.

The experience shared by Ms. Dizon-Anonuevo shows that diaspora communities can be engaged in investing in agriculture. As she pointed out, financial education is of utmost importance, because migrants are not always aware of their saving capacity. Once they are aware of their potential to make investments, they can and do invest in agriculture.

FFR’s experience has shown that investing in agriculture can generate both economic and social returns for people in the diaspora. IFAD, thanks to its expertise, can contribute to identifying profitable and sustainable initiatives for them to support.
Read more Financing facility for remittances  The FFR Brief Five years of the Financing Facility for Remittances 

Diaspora Investment in Agriculture - GC PTA side event, 22 February

The immense development potential of diaspora catalysed an animated discussion at the PTA GC side event on 22 February, led by the Financing Facility for Remittances (FFR). Despite the late hour, delegates gathered numerous to learn how two of the most proactive FFR partners – the Atikha Overseas Workers and Communities Initiatives and the Himilo Relief and Development Association (HIRDA) – turned a small group of strong-willed and talented returnees into an investment cooperative.

Remittances reach 10 per cent of the developing world’s population. Approximately 40 countries receive 10 per cent or more of their GDP from remittances. In some countries, such as Tajikistan, remittances account for 30 per cent of GDP, while this number is higher still in Haiti and Somalia, where estimates range from 30 to 50 per cent. Nearly half of these vital flows reach rural areas, where they help purchasing food, building shelters, and funding children education. Yet, just alike each of us, migrants and their families do save up for educating their children or to be able to face unexpected health issues, or simply for rainy days.

“Migrants behave just the same as we do” says Mai Anonuevo, the manager of an FFR-financed project in the Philippines. “They, too, look for saving and investment opportunities, and of course they seek to reduce risk as much as possible”. Most importantly, “Migrants’ investment decisions are always based on family or community ties rather than pure profit seeking. This is why no one is more keen on investing in the home countries than the diaspora actors” adds Fatumo Farah, manager of the FFR-financed project in Somalia. It is indeed remarkable to learn, through Fatumo’s passionate words, how, in a few years, a returnee community in the central region of Somalia managed to take control of a water extraction system established through external donors’ contribution. Returnees decided to invest their own savings in maintenance and water distribution. Now, the locally-managed structure is self-sufficient and fully functioning through the payment of an equitable fare by users covering maintenance costs.

Why do migrants choose investing in agriculture? Just as HIRDA, Atikha, and many of the FFR partners in the field have explained, agriculture offers a relatively safe and stable financial return and the prospect of job creation in the home country. Not to mention the relevance of the “nostalgic goods” market, in which migrants abroad are willing to pay a premium price just to get hold of their home specialties, be it camel milk for the Somali community in the Netherlands or nopal cactus – derived products for the Mexican community in the USA.

How does IFAD, through the FFR, engage migrants into investing in agriculture in their home country? Again, the FFR experience in the Philippines has demonstrated the importance of working together with migrant workers towards goal setting, budgeting and saving, and providing them with the access to the right and equitable instruments to do so. On the other hand, it has brought to light the key role played by local cooperatives as instruments to pool savings and reduce investment risk, through accurate mapping of existing investment opportunities. Working with local governments has also been key to help create an enabling environment for investment and economic development, as well as mobilise public resources to match migrant capital.

So what are the next steps? The FFR-led Diaspora Investment in Agriculture Initiative (DIA) seeks to scale up successful migrant investment examples and to turn them into a profitable, pro-poor mechanism for agricultural development. Through DIA, country-specific value chain of selected agricultural commodities will be mapped, along with investment opportunities and capacity building needs, all in close cooperation with local partners from the private, public, and civil society sectors. Through the launch of a competitive call for proposals, a number of successful initiatives will be identified, that address key priorities emerging from the country analysis. Selected proposals will have to demonstrate how to engage closely with local communities and mobilise matching financial resources to share risk.

As a matter of fact, while migrants become more conscious about their goals and financial options, diaspora investment in agriculture is already happening, and growing fast. “We used to migrate to survive. Now, we migrate smarter. We have one objective – save and return better” told once one of the FFR grant beneficiaries, an Albanian would-be entrepreneur. The next big challenge will thus be on how to capitalise on a growing phenomenon, while building overseas bridges between diasporas abroad and their home communities.

IFAD at the Global Forum on Migration and Development in Puerto Vallarta, Mexico - some considerations

There has been something remarkable about the latest GFMD. Governments are gradually quitting to consider concepts such as migrant rights and mobility as “sylos ideas” and starting to integrate a perspective based on concrete data on migrant flows, remittances, and migrant capital. They are starting considering migrants as integral part of the labor capital of the destination country. They are now discussing broader considerations on the development potential of migrant entrepreneurship and investment initiatives. Since it was created, the Financing Facility for Remittances (FFR) has been striving to convey this simple concept: that the untapped potential of remittances lies in the possibility of giving remittance recipients more options to make use of their money. It is therefore nice to see that head of States, gathered here in Puerto Vallarta, are adopting the same perspective while discussing their future approach to migration and development policies.

I attended today the last session of the Forum, where the future of the initiative was discussed. I was pleased to witness that heads of States are interested in showcase (and be showcased) a set of best practices to foster development through migrant capital. The FFR has initiated a number of pilot programmes dealing with migrant investment and entrepreneurship all across the globe. We are committed to making the best use of this experience and will continue participating in this type of events, which truly represent an excellent occasion for knowledge generation.

On a side note, the Forum was also a good opportunity for the FFR to broaden its relationship network with partner institutions. We are interested in getting more and more familiar with the demand, in terms of technical support, from the small organizations dealing with remittances and development. We consider it essential to build on the feedback we received on our operations to draft our next action plan for the period 2011-2013. In this sense, the Forum constituted a unique opportunity get more concrete elements to define our future strategy and broaden our horizons on our way forward.

IFAD at the Global Forum on Migration and Development in Puerto Vallarta, Mexico - days 3 and 4

Government Representatives gathering in occasion of the third and fourth day of the Global Forum on Migration and Development embarked in a series of technical discussions here in at the International Convention Centre in Puerto Vallarta, Mexico. The IFAD delegation from the Financing Facility for Remittances (FFR) and the Office of the Chief Development Strategist (CDS) attended the several roundtables and found some of the issues addressed of special relevance to IFAD current and future operations.

The roundtable focusing on the “impact of migration on socio-economic development” announced the release of the so-called “migration profile” study developed by the International Migration Organization (IOM) for 26 countries across the globe. The study is meant to address the lack of comprehensive data on the phenomenon of migration and was very well welcomed by all participants. The core point made by the roundtable was the necessity of adopting a national “culture of evaluation” to assess the impact of migration on economic and social development, and address its cause-effect relationship. The United Kingdom representative highlighted how there is scope for a higher-level commitment of Governments in gathering external expertise, champions, think tank institutions, and international organizations, and carry out rigorous analysis based on baseline and impact surveys and what if...? simulations. Moldova provided some very useful practical hints, such as the development of country-specific indicators as well as internationally comparable benchmark indicators. Within this context, the creation of a “clearing house” for sharing national experience on impact assessment was regarded by Switzerland as a useful tool to proceed in a more coordinated fashion among Governments.

Another debate that is especially relevant to IFAD was the one held on the issue of “climate change and its impact on migration”. The discussion focused on the necessity of improving the accuracy of research data on climate change and the applicability of forecasting models developed so far. States were called to notify the audience on their latest studies and research activities. In this regard, France announced the upcoming development of a comprehensive study on climate change and human mobility in Morocco, Egypt, Syria, Yemen and Algeria. From its side, Switzerland proposed that all available and future publications be stored in an online, world accessible virtual library. Finally, the necessity of including adequate measures to tackle the impact of climate change of migration in National Development Plans was stressed by many of the countries attending the roundtable.

The afternoon wrap-up sessions of the Forum will conclude these four-day round of meetings around the topic of migration and development. However, the debate on concrete solutions to foster better partnership among Governments and development actors on the issue of migration will continue. Rumors gathered in the corridors and outside official occasions reveal there is growing expectation towards the approach to be adopted for the next Global Forum on Migration and Development to beheld in Switzerland in 2011. Civil Society Organizations want to make sure that more concrete progress on joint public-private initiatives is made by next year, and that the Forum can be the occasion to showcase some good results rather than formal commitments. From their side, Governments seem to be processing on the path of research and policy development, and hope to gather more consensus across their counterpart. So 2011 will hopefully see the answer to many of the controversial issues raised in this Forum, provided that Governments and Civil Society organizations find common ground for enhanced collaboration and mutual benefit.

IFAD at the Global Forum on Migration and Development in Puerto Vallarta, Mexico - day 2

Civil Society organizations and their partners marked their their eagerness to take part in international negotiations on the issue of migration and development on the second day of the Global Forum on Migration and Development in Puerto Vallarta, Mexico. Discussions held on 8 and 9 November culminated in a declaration on the need for better inclusion of Civil Society organizations in the international debate on migration.

The IFAD delegation joining the Forum, composed of representatives from the Financing Facility for Remittances (FFR) and the Office of the Chief Development Strategist (CDS) attended as observer the various roundtables and regional consultations held in the course of the two Civil Society days, preceding the Government Days to take place on 9 and 10 November. Of special interest were the outcomes of regional consultations held today. Panelists from the Africa and Europe roundtable stated the need for enhanced action from Governments in harmonizing public policies on migration, in order to ensure better compliance with migrant workers' fundamental rights of mobility, health and welfare. Civil Society organizations in the Asia-Pacific and Gulf States roundtables highlighted the necessity for a more proactive engagement of Governments in balancing the role of migrant sponsor agencies (often known as kafila in Gulf countries) and employers, to avoid any possible abuse or violation of migrants rights. The application of more rigorous monitoring directives on migrant employment procedures was regarded by panelists from the Latin America and the Caribbean roundtable as an imperative step towards better and sustainable integration of migrant workers in destination countries.

The final set of recommendations resulting from these two days' discussions among Civil Society representatives is of course still in progress. But the shared conclusion by all regional consultations was the need of a more proactive engagement of migrant diaspora organizations in Government discussions on migration.

A nice and entertaining parenthesis was offered by the ceremony for the award of the Hestia prize by the Onassis Foundation. Each year, the Foundation acknowledges the operate of an NGO based in the Forum's host country with a special prize. The 2010 award went to the Mexican Association of Social Sector Credit Unions (AMUCSS), which works with rural, indigenous and transnational communities to promote better financial inclusion and local development. AMUCSS was also one of the key roundtable speakers in stressing the importance of access to remittances and financial services by smallholder farmers. IFAD has a long history of collaboration with AMUCSS and the award of the Hestia prize represented a moment of shared emotion for staff of both institutions.

Later during the day, the IFAD stand received once more the attention of the delegates visiting the Forum. Embassies of different countries came to look for successful models for migrant investment initiatives based on remittances. A special interest was also devoted by all visitors to the FFR ongoing and future programme on mobile remittance services. The FFR-developed information hub RemittancesGatweway.org also received the plause of visitors.

The main outcomes of all discussions held in these two days are meant to feed the discussions of Governments Delegates in the coming sessions of the Forum. The IFAD delegation will be present at Government roundtables on 10 and 11 November and will report on relevant developments on this blog.

IFAD at the Global Forum on Migration and Development in Puerto Vallarta, Mexico - day 1

The Mexican town of Puerto Vallarta, formerly a fishermen village and nowadays home to a futuristically-designed brand new Convention Center, is hosting the Fourth Meeting of the Global Forum on Migration and Development (GFMD). An IFAD delegation from the Financing Facility for Remittances (FFR) and the Office of the Chief Development Strategist (CDS) is attending all four days of the event, from 8 to 11 November.

The GFMD is a recent initiative of the United Nations Member States to address the migration and development interconnections in practical and action-oriented ways. It is an informal, non-binding, voluntary and government-led process that marks the culmination of more than a decade of international dialogue on the growing importance of the linkages between migration and development. Following the successful meetings held in Bruxelles (2007), Manila (2008) and Athens (2009), the central theme of this year’s event is “Partnerships for migration and human development: shared prosperity – shared responsibility.” The UN system has contributed to t

he setting of the main themes for discussions and roundtables and has been officially invited to follow this years’ Forum. Within this context, IFAD is joining the GFMD 2010 as an observer, but also to showcase its experience with migration, remittances and rural development through a dedicated stand, and get in contact with Government representatives and potential development partner institutions.

A lot of excitement grew upon the whole event since it was announced, as it is demonstrated by the huge affluence in Puerto Vallarta of Government Delegates and representatives from international development institutions, NGOs, and the private sector. In Puerto Vallarta, at the pre-inauguration session in the evening of 7 November, the FFR met some of its grant recipient institutions, now become old friends, such as its partners from Somalia and Sierra Leone. Several new contacts were made as well, by promoting the FFR funding programme dealing with remittances and innovative opportunities for financial inclusion.

Today, Monday 8 November, the GFMD was officially inaugurated, on the first of the two days dedicated to Civil Societies. Participants gathered around simultaneous roundtables to agree on a preliminary draft set of recommendations on the issue of migration and development. Today’s roundtables provided several interesting inputs a set of subjects that are well known to IFAD, such as the past and recent experience in the empowerment of migrant organizations, the impact of migration on economic and social development, the impact of climate change on migration, and the role of gender sensitive migrations policies. The roundtables also offered hints for discussion on some of IFAD’s emerging strategies, such as the building of partnerships with the private sector and the role of inter-regional fora in including the migration and development nexus.

Among the different roundtables held today, the one on “Building Partnership with the Private Sector” was indeed the most animated. It witnessed a non-stop series of interventions from key players from the non-profit and profit sector. Starting with the former, an excellent example of public-private partnership was provided by the Bancomer Foundation. Bancomer has created through the years an impressive network of financial agents operating remittance transfers and managed to re-direct a great portion of funds from the informal transfer channels to the regularized ones. Targeting remittance transfers in the USA-Mexico corridor, “Cuenta Express” is the new product created by Bacomer in collaboration with VISA Inc., allowing remittance transfers through an integrated mobile platform and making transfer services available also from retail “mom & pop” stores. But the partnership process is not being led by the non-profit sector only. Western Union made an excellent showcase of their soon-to-be “support for investment opportunities” initiative, aimed at supporting migrants and their families develop entrepreneurship models for a productive use of remittances. Exploring the wide range of instruments that are or should be made available to migrants willing to start their own business, a special emphasis was put on guarantee instruments and replicable guarantee fund models.

Breaks and pauses were the occasion to promote IFAD’s experience with migration and remittances issues at the IFAD-dedicated stand provided by the Forum’s organizers. Universities, migrants’ associations and financial service providers inquired about the FFR Annual Call for Proposals mechanism and showed concrete interest in submitting grant concepts in the coming months. Most sought areas for future collaboration were the provision of financial instruments to link remittances and micro-insurance and financial literacy initiatives. Representatives from the private sector (including Western Union itself) also came to the IFAD stand seeking opportunities for joint initiatives with the FFR, in countries where the cost of remittance transfers is still too high for the vast majority of rural people.

Tomorrow, Tuesday 9 November, an official set of recommendations on the issue of migration and development will be adopted during the Plenary Session and reported by the IFAD delegation on this blog.

Despite earthquake, Haitian microfinance continues to serve rural poor

Over the past week it has been impossible to ignore the scenes of utter desperation coming out of Haiti. After being ravaged by four storms in 2008, last week’s earthquake once again devastated one of the world’s poorest nations, effectively resetting the clock on its development. Despite this, however, the stepping-stones of the rebuilding process are being laid.

One organization that is rising from the rubble is Fonkoze, a microfinance organization operating predominantly in rural Haiti. With assistance from IFAD’s multi-donor Financing Facility for Remittances, Fonkoze purchased satellite phones and diesel generators in 2007. This equipment was intended to allow Fonkoze to deliver remittance services in rural areas where basic infrastructure is often undependable or lacking. But in the wake of the earthquake, the true value of this investment is coming to light. In spite of a host of difficulties, Fonkoze remains operational only days after the earthquake.

The reason why these services are so vital is due to the massive contribution that remittances make to migrants' families, to their communities and to the country as a whole. More than $1.9 billion dollars was sent to Haiti in 2008 alone, more than official development assistance and foreign direct investment combined. With more than half of these funds going directly into the hands of families in rural areas, remittances are key to meeting short-term needs and to encouraging long-term development.


This short video was produced last year after four successive hurricanes battered Haiti. It tell's the story of two Fonkoze clients and examines the impact the bank has had on their lives.

After ensuring that Fonkoze personnel and their families were safe, Fonkoze director Anne Hastings and her staff set about the process of bringing services back on-line. During a conference call yesterday she laid out the challenges including a destroyed headquarters, security concerns and limited supplies of cash and diesel. Despite this, however, 28 Fonkoze branches are open for business today.

Hastings is sure her institution can play a vital role in making it possible for Haitians abroad help their families rebuild. Partner institutions such as MoneyGram and City National Bank of New Jersey have either eliminated or drastically reduced fees to make sure that the maximum amount of money reaches those who need it most.

Robert W. Meins,
Remittances Specialist,
Financing Facility for Remittances

For more information visit http://www.fonkoze.org/
Recent article on MSNBC: Earthquake disrupts key payments lifeline (MSNBC)