Johannesburg, June 9 - Investment in small-scale farming around the world has grown despite the potentially crippling effects of the global financial crisis and high commodity prices, a U.N. funding agency said on Tuesday.
Kanayo Nwanze, president of the United Nations' International Fund for Agricultural Development (IFAD) said the fund had seen an increase in financial assistance from donors to help some 500 million small farms all over the world.
The trend bucked fears by farmers and aid agencies that soaring food prices and the global financial crisis would hit assistance for small farmers in poor countries, with donor countries battling their own financial woes.
"On the contrary, the food crisis of 2007/08 brought back agriculture on the agenda, and there seems to be a feeling that agriculture is one of the ways out of this economic crisis," Nwanze told Reuters in an interview.
"We've just completed, in December, our replenishment for the 2010-2012 cycle and our members increased their pledges by 67 percent, so we're going to be able to move our portfolio to about $1 billion to $1.2 billion per year from about $700-$750 million per year," he said.
He said due to IFAD's ability to co-finance projects with the World Bank and other multilateral lenders, a total of about $7.5 billion would be available for small-scale farmers over the next three years.
Small subsistence farmers around the world have been hard hit by ballooning prices of seed and fertiliser, threatening billions of people with hunger. IFAD says small farms feed up to 2 billion people, about a third of the global population.
Nwanze said smallholder farms in Africa -- which account for 95 percent of the continent's agricultural output -- are among the worst affected by the price spikes.
"If we are able to increase support for small-scale farmers on this continent, then I think many countries (in Africa) will achieve (economic) growth and get on the road to ending poverty," he said.
"We have statistics from the World Bank to show that investment in agriculture is 2-4 times more effective in reducing poverty than any other sector."
IFAD spends about half its budget in Africa and it aims to eradicate rural poverty by offering loans and grants to support the development of farms, rural infrastructure, crop storage, livestock and fisheries among other things.
Nwanze, who will attend the World Economic Forum meeting on Africa from Wednesday, said he would urge rich countries to stick to their commitments for aid to help poor states end poverty.
"Our message (at the WEF meeting) will be for the G8 not to rescind on its pledges to Africa," Nwanze said.