* [Reproduced from I.F.A.D. Document GC 1/L.9 of October 28, 1977.

[Upon recommendation of the Executive Board, the Governing Council gave its provisional approval to the lending policies and criteria, with the understanding that the Executive Board would review them further and report to the Governing Council at its second session at the end of 1978.]

1 In determining the list of food priority countries, the Fund will take into account the work of other international agencies. For instance, the World Food Council has been considering the criteria by which to identify countries whose food situation warranted priority. The criteria, on the basis of which an initial list of 43 countries was formulated, propose the following guidelines: (a) low per capita income of under $500,- a year (in 1975 prices) with special emphasis on even lower-income countries; (b) a projected cereal deficit'by 1985 of 500 000 tons or more and/or a cereal deficit of 20 percent or more as a proportion of estimated cereal consumption; (c) degree of protein-calorie malnutrition in terms of the proportion of population which is malnourished or in terms of the average availability of calories in relation to minimum requirements; (d) insufficient average increase in food production, total and per capita, during the last decade; (e) potential for rapid, efficient and socioeconomically well-distributed increase in food production, including the availability of under-utilized resources to produce food; (f) serious balance-of-payments constraints.

2 For this purpose, the Committee felt that countries with a per capita income of US$ 5°°»- °r less (in 1975 prices) should be covered by this term, and that the absolute poorest among them should furthermore receive special attention.

3 The Fund may finance industrial activities related to agriculture and fishery resources only to the extent that it is thereby likely to achieve substantially greater incomes for small farmers or landless labourers . and small fishermen. While concentrating on small scale processing facilities in rural areas and small towns, the Fund may, in appropriate cases, provide technical assistance and financing (normally in cooperation with other agencies) so that chemical fertilizer plants and related infrastructure, already functioning or proposed, produce or deliver fertilizers suitable for the small farmers. IFAD will also help other agencies in planning and promotional activities, to ensure- the adequate availability Of fertilizer to developing countries at reasonable prices.

4 A country will be treated as a food deficit country if, in a climatically typical year, its food output, MINUS the value of food exports required to purchase imported inputs for food production, could not meet the minimum FAO/WHO calorie requirements of its population without net food imports.

5 The sense in which the Fund will use these terms is explained below: (i) Identification means delineating activities that are physically feasible and seem to be in lino with the Fund's criteria and rules; .(ii) preparation means, specifying the anticipated size, timing and distribution of physical work and the financial, nutritional and socioeconomic costs and benefits of the project or programme, including any . feasibility studies that may be required; (iii) appraisal means an assessment presented to the Executive Board analyzing the expected costs and benefits of the project or programme and a specific recommendation whether or not to proceed with the project; (iv) supervision of implementation means overseeing the timely and economical progress of physical work and of corresponding financial outlays and inflows to ensure that funds are spent for the purpose for which they are provided and that there are no delays or bottlenecks in implementation, but also to identify any changes or adjustments that may be necessary to achievo the objectives of the project; (v) monitoring means the assessment and contingency analysis of the actual size and distribution of ongoing project benefits relative to cost3 during implementation and the feedback to project management of results during project build-up; (vi) follow-up means the continuation (normally on a smaller scale) of the assessment and feedback procedures, established during monitoring, after the project is in full operation; (vii) evaluation means the assessment, once the project is in full operation, of the size and distribution of achieved benefits and costs, and of the reasons for any differences from the results expected at the appraisal stage.