The Inter-American Development Bank (IDB) approved a $30 million loan to the Dominican Republic for a program that provides subsidies to smallholder rural producers to adopt farming technologies capable of boosting their productivity and incomes.

Agriculture is a key sector for the Dominican Republic’s economic and social development. One third of its population lives in rural areas, where poverty levels reach 56 percent. A vast majority of Dominican rural producers are smallholders, owning less than 6.3 hectares (15 acres) of land.

Over the past decade the IDB contributed to the Dominican government’s efforts to boost rural output and incomes through a program designed to encourage farmers to use more productive technologies, such as drip irrigation, and to improve animal and plant health services and food safety measures.

The new program draws from lessons learned in recent years, expanding a mechanism that provides subsidies to smallholder rural producers to implement more effective technologies. Under the system farmers choose the technologies best suited to their individual circumstances. The program, which is expected to benefit at least 9,400 farmers, also has a gender component targeting female heads of households.

In addition, the Dominican government and the IDB are preparing another program to bolster animal and plant health services and food safety measures. Another IDB-financed program is helping the Dominican Republic modernize its property registration system, contributing to land tenure security.

The IDB loan is for 25 years, with a five-year grace period and a variable interest rate based on LIBOR. The Dominican government will contribute $4.3 million to the program, which will be executed by its Ministry of Agriculture.