The World Bank Group announced on Wednesday, October 23, 2024, a strategic pivot in its approach to agribusiness with a goal to create a comprehensive ecosystem for the industry.
Ajay Banga, the World Bank Group President, disclosed this at the Agriculture Flagship Event during the 2024 World Bank Group Annual Meetings in Washington DC.
Banga said the shift would combine a new way of working with a new level of investment by doubling its agri-finance and agribusiness commitments to $9 billion annually by 2030.
According to him, the new approach arrives as four trends are fundamentally reshaping the agribusiness landscapes which are climate change, innovations in finance, digitalisation, and solutions to fragmentation.
Banga said the new approach also aimed to take advantage of the demand for food that was set to increase by 60 per cent in the coming decades and respond to a critical need for jobs in emerging markets.
“We stand at a crossroads, and the path we choose today will determine the future.
“The World Bank’s ecosystem approach moves us beyond fragmented efforts to a constellation of solutions that includes everything from warehousing to logistics to production, but with smallholder farmers and producer organisations at the centre.
“The ecosystem is made possible because of the work the bank has advanced over the past 16 months to become a better, simpler, more coordinated institution.
“The more integrated approach will bring together all the institution’s resources to offer comprehensive support and tailored solutions.”
He said the Bank was developing a continuum with the International Bank for Reconstruction and Development (IBRD) and the International Development Association’s (IDA) experience building capacity and services of the public sector.
“Also, the financing and private sector access of the International Finance Corporation (IFC) and MIGA.
“Ultimately, this contiguous way of working will be seen and felt by business and government partners alike to increase mobilisation to $5 billion in 2030.”
Banga listed three examples of the approach to be adopted.
He said the bank’s public sector arms could help countries develop regulations and standards, like those that ensured products comply with export market requirements.
“In the area of climate finance, they can help governments repurpose some of the $1.25 trillion of fossil fuel, agriculture, and fishery subsidies to incentivise greener practices.
“This will unlock a significant source of financing for the agricultural sector,”
Banga said.
He said another approach was for the bank’s private sector teams to focus on everything from debt and equity funding to mitigate risk with guarantees and overcoming access challenges.
He added that the World Bank together could help smallholder farmers connect to the supply chains.
“IBRD can work with smallholder and producer organisations to improve their productivity and climate resilience, making them viable suppliers that can meet the scale, consistency, and high standards that larger companies need.
“While IFC can come in at later stages to provide financing for equipment and connect these cooperatives with companies seeking reliable sources of production when ready for private investment.”
Banga said the increase in agricultural productivity and incomes would help create jobs, boost revenues, and improve the quality of food and nutrition.
“Climate-smart production practices will mean fewer emissions and cleaner air and water. Overall, a better quality of life,” he said.
By Okeoghene Akubuike
