The World Bank Group has announced a significant shift in its approach to agribusiness, aiming to create a comprehensive ecosystem for the industry. This new strategy will see the institution double its agri-finance and agribusiness commitments to $9 billion annually by 2030. The announcement comes as four key trends—climate change, financial innovations, digitalization, and solutions to fragmentation—are reshaping the agribusiness landscape.
World Bank Group President Ajay Banga highlighted the importance of this new direction: “We stand at a crossroads, and the path we choose today will determine the future.” He emphasized that this ecosystem approach is designed to move beyond fragmented efforts towards an integrated set of solutions centered on smallholder farmers and producer organizations.
The new strategy is built on efforts made over the past 16 months to make the World Bank Group a more coordinated institution. This integrated approach aims to combine resources from various arms of the institution to provide comprehensive support and tailored solutions. The goal is also to increase mobilization to $5 billion by 2030.
Three examples illustrate how this approach will work:
1. The public sector arms of the World Bank Group can assist countries in developing regulations and standards for export markets, advise on land tenure solutions, or develop national irrigation networks. In climate finance, they can help governments redirect some of the $1.25 trillion in subsidies from fossil fuels, agriculture, and fisheries toward greener practices.
2. The private sector teams within the World Bank Group will focus on providing debt and equity funding while mitigating risks through guarantees. The newly simplified World Bank Group Guarantee Platform plays a crucial role in delivering tailored solutions that meet diverse partner demands.
3. Together with other parts of the organization, they can help smallholder farmers connect with supply chains. IBRD can improve productivity and climate resilience among smallholders, making them viable suppliers for larger companies. IFC can later offer financing for equipment and connect cooperatives with companies ready for private investment.
The anticipated outcomes include increased agricultural productivity and incomes leading to job creation, revenue growth, improved food quality and nutrition, reduced emissions through climate-smart practices, cleaner air and water, contributing overall to a better quality of life.