The Future of Food: Maximizing Finance for Development in Agricultural Value Chains

17 May, 2018

Original source: The World Bank

"Future of Food : Maximizing Finance for Development in Agricultural Value Chains" provides details on maximizing finance for development in agricultural value chains.

It highlights financing gaps, identifies a range of potential funding sources, and suggests possible actions to help crowd-in more private investment, while optimizing the use of public resources.

The recommended actions are aligned with the aim to address the market failures that lead to inadequate levels of privately provided goods and services to achieve global development goals. Implementation of MFD in agricultural value chains will require an approach to diagnostics that is more oriented to the private sector, as well as structured, inclusive public-private dialogue to help inform the design of a robust reform and investment program.

Main Messages:

• Current levels of investment in agricultural value chains are insufficient to achieve key development goals including ending poverty and hunger and boosting shared prosperity through more and better jobs.

• Crowding-in private investment in the agriculture sector can help achieve development goals and optimize the use of scarce public resources

• Sources of finance for private sector investments in agricultural value chains are expanding. Sources include own-savings, local and international banks, value chains actors, impact investors, development financing institutions, private sector foundations, and agricultural investment funds.

• Factors that can help maximize finance for agricultural development include: Improving the enabling environment for the private sector, promoting responsible investment, improving the policy and regulatory environment; using public financing to improve private incentives and to reduce transaction costs and risks—including through blended finance.

• There is still a critical need for public resources to finance essential public goods and services such as human capital, agricultural research, and complementary public infrastructure.

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