Could centering agribusiness be the key to tackling food insecurity?

Agriculture has taken center stage at this year’s World Bank and International Monetary Fund annual meetings — not as a side note on food security, but as a cornerstone of the bank’s new growth strategy. Following its pledge to double agribusiness investments to $9 billion a year by 2030, the institution launched AgriConnect, a platform designed to channel more financing to smallholder farmers and build stronger rural markets. The pivot was long overdue, Anup Jagwani, the International Finance Corporation’s global head of agribusiness, said during a Devex Impact House event on the sidelines of the annual gathering. “There’s urgency in the food system. We’ve seen inflation recently in food prices, but overall, 700 million people go to bed hungry every day,” he said. “We have to do something about it.” AgriConnect is built around three pillars designed to strengthen the ecosystem around smallholder farmers. The first focuses on foundational infrastructure, combining both “hard” infrastructure such as roads and energy with “soft” infrastructure such as skills development and capacity building. The second pillar centers on policy reform, with governments encouraged to work closely with the World Bank Group “to galvanize the sector, make it more commercial, bring in private sector players, because we know money is short on the public sector side,” Jagwani said. The third targets finance, with an emphasis on “building an ecosystem where we de-risk financing for the farmers and supply chains,” he said. This could be transformative for fragile economies, said Abdihakim Ainte, director of climate change and food security in the Office of the Prime Minister of Somalia. “AgriConnect could be sort of a catalytic platform that we can really use as a launchpad for our future economic growth,” he said. For Somalia, AgriConnect represents a chance to move beyond decades of dependence on humanitarian aid, he argued. Somalia’s reality — frequent, complex, and often even concurrent crises — means that there is a major need for urgent humanitarian assistance. At the same time, overreliance on aid is crippling the development of local institutions. “We are in … what I call a humanitarian-development trap,” he said. AgriConnect’s emphasis on the private sector was, therefore, welcome, given the sector’s ability to help pry society out of such traps, Ainte argued. Already, Somalia’s economy was “99.9% dependent on the private sector,” he said, adding that the private sector was nimble, resourceful, and primed for increased investment. “I’m so proud to say that we are leading with pride in the whole of Africa, among the very few countries that have an incredible digital-based economy,” he said. Indeed, technology will be central to efforts to boost agricultural investment and transform rural economies. Technology runs through and underpins all of the aforementioned AgriConnect pillars, Jagwani said: “If you want to make it easier to lend, you get into technology. The data will help you make better decisions, right?” Jagwani added that technology is transforming both how farmers access finance and the range of partnerships emerging in the sector. In one pilot project in sub-Saharan Africa, IFC is linking a technology firm that holds detailed farmer data with a local bank willing to lend against it. “This ag-tech company has data on these farmers. Can we leverage that data? Bring a bank in and say, ‘Bank, lend to this, and we will share the risk with you,’” he said. “So we’re sharing the risk with the bank, we're helping the ag-tech company, providing them some money, and we're pushing the boundaries of what is feasible.”