Transforming agrifood systems is one of the smartest investments the world can make—for prosperity, security, sustainability, and resilience.

Despite being under pressure, development assistance needs to remain the bedrock instrument for catalysing global action on agrifood systems transformation, supporting action in middle and lower-income countries, responding to crises and building resilience.

Development resources targeted towards agrifood systems must be maintained and increased. They must also be used in far more catalytic and coordinated ways to leverage other sources of financing and to drive reforms at global and national scales.

Reform of national policies, regulations and expenditure, along with the global financial architecture, must be accelerated to create the necessary incentives for investment in the agrifood sector. This includes strengthening the role of rules-based multilateral trade institutions to ensure open, fair and transparent trade flows.

The need for and nature of such reforms is well documented – this includes infrastructure, improving the ease of doing business, repurposing agricultural support, creating the conditions for efficient and fair trade (including removing trade barriers and improving trade facilitation), addressing the debt crisis of low-income countries, increasing risk tolerance of IFIs and tackling disincentives and barriers to investment
including currency fluctuation.

A dedicated stream of concessional and technical assistance financing should target institutional and state capability at the national and sub-national levels. This includes strengthening agricultural policy units, improving planning and coordination capacity within ministries of agriculture and finance and enabling local governments to engage with and absorb investments.

Leveraging investment for agrifood systems transformation requires an entire financing ecosystem. This must include the assembling of finance and the creation of funds, establishing effective intermediary financial services, value chain coordination and the provision of technical support. Innovative public-private (and philanthropy) partnerships are needed, along with increased engagement in blended finance and responsible financing relations between larger agrifood enterprises and smaller scale suppliers.

Comprehensive, de-risking strategies are needed to enable the integration of multiple streams of financing (including climate financing) with much greater investment in the sector by national financial institutions and banks.

Innovations and technology of all forms can be huge enablers of investment. But their development and use must be inclusive and targeted. For instance, AI and other digital technologies have massive potential for increasing access to financial services and lowering the costs of dealing with large numbers of small enterprises. They also improve coordination and efficiency along value chains.

Meanwhile, a raft of production and processing technologies can reduce waste, create investable ecosystem services and improve nutrition, all of which can reduce the hidden costs of food, while creating new and higher value markets. However, coordinated packages of technology developments that specifically service the needs of small-scale producers and the SME sector are needed.

Better data is needed to demonstrate potential investment returns, track trade-offs across the entire economy, assess investment risks and monitor investment flows by different actors. Such data is vital for generating the evidence to underpin investment decisions by governments and the private sector.

This data should translate into clear, outcome-focused metrics that allow for clearer communication of return on investment in relation to social, environmental and economic outcomes, while avoiding the burden of overly complex monitoring and evaluation (M&E) systems.

Collaborative Agrifood Financing Agreements would:

Build a shared understanding by clearly identifying and communicating the innovations and actions needed to scale up agrifood financing.

Enable complementary contributions by showing how different stakeholders can work together, leveraging their unique strengths to reinforce one another.

Establish frameworks for national agreements by identifying country-specific frameworks for how different actors can contribute to accelerate financing.

Promote voluntary commitments by encouraging stakeholders to pledge actionable steps to enhance food systems financing.

Facilitate networking and peer learning by serving as a global hub for sharing experiences and lessons from different actors and financing models.

Build a knowledge base by collating, synthesising and sharing insights and lessons on innovative and financing initiatives to accelerate uptake and impact.