Washington, DC – On October 23, 2024, World Bank Group President Ajay Banga delivered remarks at the "Agriculture and Food as an Engine of Sustainable Growth and Jobs" event during the 2024 World Bank Group Annual Meetings. Banga outlined a new strategic approach to agribusiness that leverages emerging shifts in agriculture to address global food demand projected to increase by 50 to 60 percent in the coming decades.
Banga highlighted four key shifts that present opportunities for transforming agribusiness. He noted, "First, agriculture is increasingly vulnerable to climate risks and a significant contributor to emissions – yet it only receives 4 percent of climate finance globally." He emphasized the potential of climate-smart agriculture to enhance productivity while reducing emissions.
He also pointed out new financial tools that facilitate private capital investment in agriculture: "Second, new tools for derisking are opening doors for private capital to flow into the agricultural sector." These include credit guarantees and insurance instruments which make lending safer and more commercially viable.
Digital advancements were another focus: "Third, in the past, reaching individual farmers has been difficult for fintechs or commercial banks. Advancements in digitalization and new digital tools have created opportunities to aggregate farmers," allowing them better access to financial services and markets.
Lastly, Banga addressed inefficiencies caused by isolated operations of large food companies: "Fourth, a significant portion of agribusiness financing is sourced from large food companies and traders...However, we have found that with farmer associations and producer organizations we can move beyond the challenges of the past."
The World Bank Group aims to double its agri-finance commitments to $9 billion annually by 2030. This includes integrating public sector regulations with private sector funding solutions through initiatives like the World Bank Group Guarantee Platform. Banga explained how this integration could help smallholder farmers become viable suppliers within supply chains.
Highlighting employment challenges facing young people in developing countries over the next decade, Banga said: "In the next 10 years, 1.2 billion young people...will enter the workforce. Yet only 420 million jobs are projected..." The transformation of agribusiness is seen as crucial not just for food security but also as a jobs initiative aimed at improving quality of life.
"We stand at a crossroads," concluded Banga. By choosing this path now, he believes it will lead towards creating sustainable food systems while enhancing living standards globally.