Maximizing finance for development in agricultural value chains

Monday, January 14, 2019

15:00 16:00 (Timezone: GMT+1)

The food and agriculture-related UN agencies estimate that ending poverty and hunger requires additional financing in agriculture and rural development of USD140 billion per year. Of this amount, USD 50 billion per year would be needed from the private sector, primarily in on-farm and agro-processing investments, and USD 90 billion per year from the public sector, for goods such as agricultural research and rural infrastructure of a public nature that is economically justified. Achieving development goals beyond ending poverty and hunger would require even more additional financing.

Current levels of investment in agricultural value chains are insufficient to achieve key development goals including ending poverty and hunger, boosting shared prosperity through more and better jobs, and better stewarding the world’s natural resources by 2030. Crowding-in private investment to help achieve these goals and optimising the use of scarce public resources will be needed, as will the continued promotion of good governance and environmental and social sustainability.

The Maximizing finance for development (MFD) approach asks the World Bank Group to help countries maximise their development resources by drawing on private financing and sustainable private sector solutions to provide value for money and meet the highest environmental, social, and fiscal responsibility standards, and to reserve scarce public financing for those areas where private sector engagement is not optimal or available. Increasing private sector investment and associated financing in the agriculture and food value chain will require identifying and understanding market failures currently leading to the sub-optimal private provision of goods and services needed to achieve key development goals. Adopting the MFD approach will:

  • Lead to increased sustainable private sector solutions — private finance (crowding-in) and/or private delivery — for development projects; and/or
  • Address binding constraints (e.g. physical, operational, regulatory or enabling environment) in a way that is expected to unlock private sector solutions where appropriate.

Organized by RAFI-TN and SAFIN teams