World Bank Pledges $9 Bln Annually for Agriculture by 2030

The World Bank Group has announced a significant financial commitment to agriculture, planning to double its support to $9 billion annually by 2030.

This initiative, led by World Bank Group President Ajay Banga, aims not only to secure the future of global food systems but also to generate job opportunities, especially in developing countries where an estimated 1.2 billion young people will enter the workforce in the next decade, while only 420 million jobs will be available.

Speaking at the flagship agriculture event during the World Bank Group’s annual meetings, Banga emphasized the need for a new strategic approach to the agricultural business sector.

He highlighted the longstanding challenges faced by agriculture, such as increasing productivity, addressing water and fertilizer issues, improving infrastructure, and securing financing.

However, he noted that now is the right time for transformative changes in the sector.

Banga outlined four major shifts currently reshaping the agricultural landscape. The first is the increasing vulnerability of agriculture to climate risks.

While agriculture is a significant contributor to greenhouse gas emissions, it receives only 4% of climate finance.

Banga pointed out the opportunity to tap into this funding to promote climate-smart agriculture, which can boost productivity while reducing emissions.

The second shift involves the emergence of new financial tools to mitigate risks, making it easier for private capital to flow into agriculture.

By leveraging credit guarantees, first-loss facilities, and insurance instruments, lending to the sector has become more secure, attracting greater investment.

Banga stressed that these financial tools, combined with public policy reforms, can create a favorable investment environment.

The third transformation is the advancement in digital technology, which is revolutionizing access to markets and financial services for farmers.

Improvements in digitization have enabled fintech companies and commercial banks to reach farmers more efficiently, providing better financial services.

The fourth and final shift concerns the dominance of major food corporations in financing a significant portion of agricultural activities, which has diverted capital away from small-scale farmers.

Banga proposed the formation of cooperatives and farmer organizations as a solution to integrate smaller farmers into global supply chains.