January 28, 2002—The World Bank last week approved a $32 million project to support Colombia's efforts to reactivate the rural economy, reduce poverty and foster peace, through a productive partnership scheme between rural communities and the private sector.

"About 80 percent of the people living in Colombia's rural areas are poor," said Olivier Lafourcade, World Bank Director for Colombia, Mexico and Venezuela. "This project will help fight poverty by creating jobs and new sources of income, and thereby promote social cohesion in rural communities."

Under the Productive Partnerships Support Project, with a total cost of $52.32 million, small farmers' producer organizations will gain access to relevant markets by entering into a productive partnership with private sector companies, with the support of financial institutions, government and civil society. At the same time, agribusiness firms will be able to expand food processing activities by securing supplies from small producers.

The project will emphasize creating and strengthening production cooperatives by providing training that meets local needs. It will also finance productive partnership sub-projects to improve farm infrastructure, including irrigation canals, aquaculture facilities, greenhouses, machinery, equipment and special studies. On the environmental side, the project will promote diversified farm systems to mitigate economic and environmental risks associated with mono-cultures.

While farmers and their families participating in the partnerships are the direct beneficiaries of the project, rural, landless day-laborers and displaced families will also benefit from jobs created in the sub-projects. By expanding employment options for the rural poor, the project seeks to reduce violence and strengthen social cohesion in the Colombian countryside.