The World Bank's Board of Executive Directors has approved a new initiative aimed at supporting farmers in Kerala, India, to adapt to climate change while promoting agri-entrepreneurs. The program will also seek to leverage at least $9 million in commercial finance for agri-food small and medium enterprises (SMEs), with a focus on those owned by women.
Kerala, known for its production of spices such as cardamom, vanilla, and nutmeg, contributes about 20 percent of India's total agri-food exports. However, climate change poses significant challenges to these achievements. Natural disasters like floods and forest fires, along with difficulties in accessing broader markets, have affected farmer households.
The $200 million Kerala Climate Resilient Agri-Value Chain Modernization (KERA) Project aims to bolster the resilience of Kerala's agricultural sector against climate change impacts. Approximately 400,000 farmers are expected to benefit from improved access to climate-smart practices. These include replanting climate-resilient varieties of coffee, cardamom, and rubber and expanding Kerala’s "food parks" into rural areas equipped with essential infrastructure like water, power, and waste management.
"This project will further infuse private sector investment and integrate agricultural value chains for the benefit of farmers and SMEs," stated Auguste Tano Kouamé, the World Bank’s Country Director for India. "Moreover, it will support agri-based SMEs—especially women who currently own only 23 percent of MSMEs in the state—to gain access to commercial finance by providing training for business plans and to strengthen their commercial viability."
The project also intends to create productive alliances between farmer groups and agribusinesses. These alliances aim to enhance connections between producers and buyers with the public sector facilitating these efforts. Additionally, the project will incubate agri-tech startups.
"This Project will help increase productivity for staple food crops such as rice while reducing GHG emissions," said Chris Jackson, Azeb Mekonnen, and Amadou Dem, Task Team Leaders for the project. "The increase in productivity and strengthening of agricultural value chains will help maintain the competitiveness of Kerala’s agricultural sector and will help create jobs and increase incomes."
A $200 million loan from the International Bank of Reconstruction and Development (IBRD) supports this initiative with a final maturity period of 23.5 years including a grace period of six years.