MANILA, PHILIPPINES (24 February 2005) - ADB has approved a US$1 million grant, from its Japan Fund for Poverty Reduction (JFPR), financed by the Government of Japan, to help improve the livelihoods of poor households in the Chui and Osh regions of the Kyrgyz Republic.

The project will improve and expand economic livelihood opportunities on small private farms and household plots, which have traditionally been neglected in development activities, by addressing problems related to poor farming practices, low productivity, limited access to agricultural inputs, and poor marketing.

The project will lead to better farm practices through increased crop diversification, improved crop and livestock integration, increased livestock and milk production, and the adoption of new farming technology.

The project will also establish partnerships with nongovernment organizations (NGOs), create self-help groups in targeted villages, and increase access to microcredit through existing or new microcredit agencies.

"The project will enable farmers to easily meet their own consumption needs and, consequently, to increasingly diversify into other cash crops and integrate crop and livestock activities," says John Whittle, an ADB Principal Project Economist.

"By mobilizing community groups, the project will also give people more opportunities to purchase better-quality inputs, market a larger volume of produce, and move into non-agricultural activities."

The Kyrgyz Republic is predominantly agricultural and poor, with about 44% of its people living in absolute poverty. While rural poverty has been on the decline in recent years, largely due to the better performance of the agriculture sector, it is still significantly higher than urban poverty, with about three quarters of the poor living in rural areas.

The transition from a centrally-controlled to a market-oriented economy in the early 1990s, with its accompanying privatization of the former state and collective farms and enterprises, has resulted in the dismantling of services to support agriculture.

As such, most rural people engage in barter and subsistence agriculture, particularly the poor, who generally have less experience in farming, are older, live in remote areas, have few alternative income-earning activities, and have difficulty accessing credit.

The 2002 Agricultural Census shows that Osh has the second largest proportion of peasant and individual farms and the largest proportion of household plots. Chui has the fourth largest number of peasant and individual farms and the second largest number of household plots.

The project will focus on villages in Chui and Osh where ADB's Agriculture Area Development Project and the World Bank's Village Investment Project are operating or expected to operate. It will coordinate with other external funding projects to avoid duplication and ensure common approaches to livelihood development.

The project aims to increase the real income of direct household beneficiaries by an average of 20%, and to reduce poverty incidence in the target villages by 15%.

The Government, other sources, and beneficiaries will contribute $123,200 equivalent toward the project's total cost of $1,123,200. The Community Development and Investment Agency is the executing agency for the project, which will be implemented over three years through local NGOs.

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