World Bank to double agricultural commitments to $9b/year by ’30

The World Bank plans to double its annual investments in agricultural financing and businesses to $9 billion by 2030, its President Ajay Banga said on Wednesday.

Banga stated that the institution has thoroughly examined the challenges facing the agricultural sector, including increasing food production, boosting productivity, and addressing issues related to water scarcity, fertilisers, infrastructure, and financing. He emphasised the need for a new approach and increased investment to tackle these challenges effectively.

The World Bank highlighted several factors that will enable it to ramp up agricultural funding, including increased access to climate finance, the use of de-risking tools, and advancements in digitalization.

Currently, the agricultural sector receives only 4 per cent of global climate finance, despite its vulnerability to climate risks and significant contribution to emissions. The World Bank aims to increase this allocation.

By utilising de-risking tools like credit guarantees, first-loss facilities, and insurance, the World Bank can make lending safer and more attractive to private investors, encouraging their participation in the agricultural sector.

Digitalisation has also played a crucial role in facilitating the aggregation of farming businesses and connecting them to buyers and financial service providers, further enhancing the sector’s efficiency.

Attribution: Reuters