The World Bank Group has announced a significant shift in its approach to agribusiness, aiming to establish a comprehensive ecosystem for the industry. This strategic pivot involves doubling its financial commitments to $9 billion annually by 2030.
The decision comes in response to four major trends reshaping the agribusiness landscape: climate change, financial innovations, digitalization, and solutions addressing fragmentation. The initiative also seeks to meet the rising demand for food, projected to increase by 60% in the coming decades, and address job needs in emerging markets.
Ajay Banga, President of the World Bank Group, stated, “We stand at a crossroads, and the path we choose today will determine the future.” He emphasized that the new ecosystem approach moves beyond fragmented efforts towards a more integrated constellation of solutions centered around smallholder farmers and producer organizations.
This ecosystem is supported by efforts over the past 16 months to make the World Bank Group a more coordinated institution. The approach will unify resources across different arms of the organization to provide comprehensive support and tailored solutions.
The strategy includes developing a continuum with IBRD and IDA's public sector capacity building and services alongside IFC and MIGA's private sector financing access. The goal is to mobilize $5 billion by 2030.
Three examples illustrate this approach:
1. Public sector arms can assist countries in developing regulations and standards for export compliance, advise on land tenure solutions, or develop national irrigation networks. They can also help repurpose subsidies towards greener practices.
2. Private sector teams will focus on debt and equity funding while mitigating risks with guarantees. The simplified World Bank Group Guarantee Platform aims to deliver tailored solutions efficiently.
3. Together, they can help smallholder farmers integrate into supply chains by improving productivity and climate resilience through IBRD’s initiatives while IFC provides later-stage financing for equipment.
The anticipated outcomes include increased agricultural productivity, job creation, revenue growth, improved food quality and nutrition, reduced emissions, cleaner air and water, ultimately enhancing quality of life.