World Bank says will double agribusiness financing to $9bn yearly by 2030
Benjamin Orisemeke
With global food demand set to increase by 50 to 60 percent in the coming decades, the World Bank says it would double its agri-finance and agribusiness commitments to $9 billion annually by 2030.
In his remarks at the agriculture flagship event at the ongoing 2024 World Bank Group Annual Meetings Wednesday in Washington, DC, World Bank Group President Ajay Banga, the new focus is borne out of the need to tackle the rise in global food demand.
According to the World Bank President, the global development financial institute hopes to make changes that will be seen and felt by business and government partners alike – with a goal to increase mobilization to $5 billion in 2030.
While noting that agriculture is increasingly vulnerable to climate risks and a significant contributor to emissions – yet it only receives 4 percent of climate finance globally; has become new tools for derisking are opening doors for private capital to flow into the agricultural sector; in the past, reaching individual farmers has been difficult for fintechs or commercial banks; and significant portion of agribusiness financing is sourced from large food companies and traders, who often operate in isolation.
Banga said that these challenges have often been roadblocks to realizing the full potential of the industry.
“For decades, we’ve spoken about the potential of agribusiness and the role agriculture plays in shaping the future of food security, nutrition, growth and employment.
“We’ve examined the challenges from every angle—how to increase food production, boost productivity, and resolve issues around water scarcity, fertilizers, infrastructure, and financing.
Going forward, the World Bank head said “Our 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.
“But, where we see the greatest potential is by integrating the link between our public sector work and our private sector support to help smallholder farmers connect into the supply chains. IBRD has expertise in working closely with smallholder and producer organizations to improve their productivity and climate resilience, making them viable suppliers that can meet the scale, consistency, and high standards that larger companies need. Once established, IFC will step in not only to provide financing for equipment, but also to connect these cooperatives with companies seeking reliable sources of production.”
Banga further noted that agriculture will be crucial to addressing global unemployment.
In the next 10 years, 1.2 billion young people in developing countries will enter the workforce. Yet, only 420 million jobs are projected to be available, leaving nearly 800 million without a clear path to employment.
“Our strategic shift in agribusiness is aimed at unlocking the path to a brighter future – delivering quality of life and job opportunities.
“For young people, the rise of a thriving agriculture industry brings the promise of a better life. With more jobs in rural areas and higher incomes, they no longer face the same limitations as previous generations. They have the opportunity to pursue fulfilling careers, whether in agriculture with their families or to pursue a new generation of job, which would require skilling and education of a different type. The chance for a brighter future becomes more attainable, creating a cycle of prosperity and progress.
“We stand at a crossroads, and the path we choose today will determine the future. By transforming agriculture and agribusiness, we can create the food system of tomorrow, raise living standards, and create jobs,” Banga added.
