The World Bank Group will commit about $9 billion by 2030 to create a comprehensive ecosystem in the agricultural sector globally. The Bank announced this yesterday in Washington DC at the ongoing 2024 World Bank Group yearly meetings.
It stated that the new approach arrives as four trends are fundamentally reshaping the agribusiness landscape – climate change, innovations in finance, digitalisation, and solutions to fragmentation.
It also aimed to take advantage of the demand for food that is set to increase by 60 per cent in the coming decades and respond to a critical need for jobs in emerging markets.
Speaking on the initiative, World Bank Group President Ajay Banga, said: “We stand at a crossroads, and the path we choose today will determine the future. The World Bank’s ecosystem approach moves us beyond fragmented efforts to a constellation of solutions that includes everything from warehousing to logistics to production but with smallholder farmers and producer organizations at the centre.”
The World Bank revealed that the ecosystem is made possible because of the work it has advanced over the past 16 months to become a better, simpler, more coordinated institution.
It argued that the more integrated approach will bring together all the institution’s resources to offer comprehensive support and tailored solutions.The Bank is developing a continuum with IBRD and IDA’s experience building capacity and services of the public sector and IFC and MIGA’s financing and private sector access.
It added that this approach of working will be seen and felt by business and government partners alike – to increase mobilisation to $5 billion in 2030.
Providing more details on the approach, the World Bank noted that the public sector arms can help countries develop regulations and standards, like those that ensure products comply with export market requirements.
They can advise on land tenure solutions or develop national irrigation networks. In the area of climate finance, they can help governments repurpose some of the $1.25 trillion of fossil fuel, agriculture, and fishery subsidies to incentivize greener practices, unlocking a significant source of financing for the agricultural sector.
It added: “The World Bank Group’s private sector teams can focus on everything from debt and equity funding to mitigating risk with guarantees, overcoming access challenges. The new, simplified World Bank Group Guarantee Platform is a key step in this transformation, making it easier to deliver tailored solutions that meet the diverse demands of our partners.”
It maintained that the World Bank Group together can help smallholder farmers connect to the supply chains, adding, “IBRD can work with smallholder and producer organisations to improve their productivity and climate resilience, making them viable suppliers that can meet the scale, consistency, and high standards that larger companies need. While IFC can come in at later stages to provide financing for equipment and connect these cooperatives with companies seeking reliable sources of production when ready for private investment.”
It further disclosed that the increase in agricultural productivity and incomes will help create jobs, boost revenues, and improve the quality of food and nutrition while climate-smart production practices will mean fewer emissions and cleaner air and water.
