1. BACKGROUND
   
   The United Nations Conference on Trade and Development (UNCTAD) and the International Federation of Agricultural Producers (IFAP) which represents the national groupings of farmers' associations of more than sixty countries, wish to enter into a partnership with the aim of Preparing Farmers for the 21st century.
   
   Their complementary structures, networks and common interest in promoting the well-being of farmers, women and men, in developing countries and economies in transition are the justification for seeking a closer partnership.
   
   UNCTAD and IFAP believe that their respective missions can be reinforced by the development and implementation of a partnership between the two institutions.
   
   
2. PERSPECTIVES FOR FUTURE CO-OPERATION
   
   The overall theme for this partnership agreement is : Preparing Farmers for the 21st century : How modern risk management and finance tools can be put to use.
   
   The principal areas identified as having the most potential for exploring a closer UNCTAD-IFAP collaboration include:
   
   

   	Development of a co-ordinated action programme;
   	Dissemination of findings, recommendations, guidelines and action plans among farmers’ associations; and
   	Concrete country-level activities focused on farmers’ associations. These activities will generally bring further partners into play: national Governments, international, regional and local banks, warehousing and inspection companies, international trade houses.

   
   

3. PARTNERSHIP INITIATIVES
   
   In the context of developing countries and economies in transition, farmers are generally faced with the following major problems:
   
   

   	Extremely expensive credit : In most countries, smaller farmers pay 70 per cent or more for short-term credits, and find it very difficult to get longer-term credits.
   	Extreme exposure to price risk : Farmers’ direct exposure to price fluctuations makes it too risky for many farmers to invest in otherwise profitable activities

   
   IFAP and UNCTAD believe that a significant contribution can be made in solving these problems through their partnership. In this context, both institutions recognise the possibilities and opportunities which exist through the use of modern risk management instruments and finance tools.
   
   With the appropriate application of these methods, farmers can expect, for example:
   
   

   	Credit at a considerably lower cost : Credit can be provided at a considerably lower cost in the 10-15% range.
   	Inputs on credit terms : Access to inputs on credit terms, which has virtually disappeared with the withdrawal of governments from the provision of inputs, can be restarted.
   	Protection against extreme price volatility : Through the use of insurance-type products, farmers can be protected against extreme price volatility. They can know, for instance, the (minimum) price they will receive for their product, at the moment they decide to choose, plant, maintain or harvest a crop.

   In this field, UNCTAD and IFAP, however, do not have the means for a fast and widespread action plan, to ensure access by all farmers. Equally, as a precondition for the successful application of the above instruments, farmers need to be part of an effective farmers' association, and furthermore, meet certain requirements in terms of their commodity production. Thus, UNCTAD and IFAP agree on an approach which would focus on pilot undertakings in a limited number of countries (e.g. Uganda, Tanzania, Cameroon), and which would then use IFAP's network to ensure an optimal dissemination of results obtained and lessons learnt. Should an activity not be possible in a designated country, UNCTAD and IFAP will select a suitable alternative.
   
   UNCTAD and IFAP agree that the areas expounded above will provide the focus of their partnership initiatives. This does not however preclude collaboration in additional fields or countries where opportunity and circumstances may give rise to such collaborative initiatives.
   
   

4. PERIODIC REVIEWS
   
   UNCTAD and IFAP will name a focal point in each institution to be responsible for ensuring that the partnership agreement is being implemented as planned. The focal points will be responsible for establishing a plan of implementation in each of the elements of the partnership. The focal points will be responsible for calling periodic joint meetings of the organisations for review. These meetings will take place at least twice a year, and be hosted reciprocally.
   
   

   Rubens Ricupero,  Secretary General, United Nations Conference on Trade and Development

   Noel Devish Member of the International Federation of Agricultural Producers and President of the Belgian Farmers' Union

9th November, 1998