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Info Service on Sustainable Agriculture Public Finance for Agroecology Leads to Just Transformation of Food Systems This report (Item 1) examines how public development banks (PDBs) intersect with growing calls to transform food systems toward sustainability and equity. It highlights instances in which PDB investments align with agroecological principles, particularly among institutions that have deliberately integrated agroecology into their broader investment portfolios. The report found that currently, however, the majority of private-focused PDBs prioritize “bankable” projects—typically large-scale, industrial, profit-driven agribusiness (Item 2). This orientation reinforces systems that prioritize scale, speed, growth, and financial returns over diversified, resilient, and locally-rooted agroecological systems. Nonetheless, PDBs have an opportunity to join a growing number of organizations, scientists, funders, and governments that are developing an agroecological approach to advance the Sustainable Development Goals, confront climate change, reverse declines in biodiversity and ecological integrity, and provide good, healthy food for all. Towards this end, PDBs should mobilize policy support and significant capital investment into agroecology. With
best wishes, ______________________________________________________________________ Item 1 AGROECOLOGY AND PUBLIC DEVELOPMENT BANKS TRANSFORMING DEVELOPMENT FINANCE FOR EQUITY AND RESILIENCE Scoping
Study Report Food systems are deeply implicated in contemporary polycrisis, contributing to ecological deterioration, climate change, declining public health, and persistent food insecurity. Calls for food system transformation urge us to step back, critically examine business-as-usual, and embrace bold alternatives. This report examines how public development banks (PDBs) intersect with growing calls to transform food systems toward sustainability and equity. PDBs are government-backed financial institutions that are mandated to advance public policy goals by financing projects in sectors such as infrastructure, agriculture, and small businesses. Globally, more than 500 PDBs operate, collectively accounting for about 10% of global finance or roughly USD 2.2 trillion annually. Beyond their financial weight, PDBs shape development norms and agendas through “soft power,” including loan conditionality, technical support, and institutional and policy influence. Given this influence, PDBs have the potential to play a critical role in addressing climate change, food security challenges, global inequity, and advancing the Sustainable Development Goals (SDGs). In agriculture and food systems, PDBs have increasingly sought to align their operations with sustainability agendas while supporting productivity, food access, and economic growth. Investment in agriculture has tended to prioritize modernizing infrastructure, market-led development, and expanding food production. This growth-driven paradigm generates structural pressures that favor large-scale monocultures, high-intensity livestock production, and agriculture geared primarily toward export markets. This approach is based on the assumption that economic growth equates to prosperity and that hunger stems primarily from an insufficient food supply. However, decades of this development paradigm, grounded in a narrow economic logic, have been found to undermine ecological integrity and community well-being while reinforcing the structural roots of food insecurity and inequity. Further, as food insecurity and rural poverty are increasingly viewed as issues that can be solved through the market, notions of which agricultural models are best for achieving public goals become overshadowed by which approaches can attract capital. As demands for just food system transformation intensify, the shortcomings of the status quo are increasingly evident. Alternative models that prioritize human rights, equitably transformative resilience, and community-centered approaches to self-determination are urgently needed. PDBs are public institutions with extensive reach and substantial fiscal capacity to shape the trajectory of agricultural and rural development. Their central position within the architecture of development finance raises pressing questions about whether, and how, these institutions could be oriented toward creating more equitable, participatory, and ecologically grounded approaches to food system transformation. In this report, we join a growing international effort to use the United Nations High-Level Panel of Experts’ agroecological framework as a guiding reference for financing agricultural and food-system development. These principles provide a framework to consider how PDBs can advance equitable food systems transformation. Our scoping study combines multiple methods, including 12 expert interviews, three focus groups, and a comprehensive literature review. We present a series of PDB case studies that exemplify different ways these institutions are operationalizing agroecological principles. Readers should note that PDBs differ significantly in their structure and operation. This report is a scoping study intended to open discussion and points to areas where more detailed research is needed to better understand current links between PDBs and agroecology, and to explore new ways PDBs can more effectively support principles-based agroecological development. Principal Findings: Our analysis highlights instances in which PDB investments align with agroecological principles, particularly among institutions that have deliberately integrated agroecology into their broader investment portfolios. Organizations such as the International Fund for Agricultural Development (IFAD) and Agence Française de Développement (AFD) have explicitly engaged with agroecology as an orienting framework, helping to shape and deepen their strategic alignment with sustainable food systems. Several case studies, including those from Brazil, IFAD and the Global Agriculture and Food Security Program (GAFSP), showcase promising mechanisms and approaches that offer valuable lessons for how PDBs can more effectively support agroecology in practice. The case studies featured in this report showcase several PDB-funded projects that have resonance with agroecological principles. In addition, several communities of practice, including the Agroecology Coalitions Finance and Investment working group and the Agri-PBD platform, are actively supporting PDBs in engaging with agroecology. However, our report also discusses persistent challenges that arise from the structural and institutional logics underpinning PDBs that present significant barriers to advancing agroecology. The most fundamental of these are the “lock-ins” of the dominant economic development model and limited political will to move beyond productivism and growth-centered paradigms. These challenges are compounded by weak accountability systems, ecological and social safe guard frameworks, and enforcement mechanisms. PDB financing remains heavily concentrated in global value chains, with investments favoring commodity sectors and export markets. This orientation reinforces systems that prioritize scale, speed, growth, and financial returns over diversified, resilient, and locally rooted agroecological systems. Once funds are disbursed, it is often difficult to determine whether they genuinely benefit smallholder farmers or instead exacerbate inequality and ecological degradation. The prevailing approaches to PDB investment in food systems are grounded in a narrow economic logic that treats growth and job creation as the primary pathways to achieving the SDGs, meeting climate commitments, and reducing rural poverty. Food production is often considered in isolation from other dimensions of sustainability and justice. This reflects a entrenched “business-as-usual” mindset that needs to be directly confronted to enable a just transition at scale. More fundamentally, rethinking PDBs’ role requires confronting their contribution to broader systemic and structural issues: rising sovereign indebtedness, the continued industrialization of agriculture, the promotion of extractive investments that degrade ecosystems and marginalize agroecological farmers, the violation of human rights, and the entrenchment of a narrow vision of modernization and progress. Together, these dynamics undermine efforts to realize the SDGs and the right to food in socially and ecologically just ways. Despite these constraints, our analysis identifies meaningful opportunities, articulated through six overarching recommendations. Agroecological principles can inform a transformative pathway for investment, technical assistance, and policy engagement. In doing so, they could meaningfully reshape how PDBs finance infrastructure, rural development, and sustainable food systems. Though still largely untapped within PDB financing, these opportunities can help PDBs meet their public-good mandate by realigning their financial tools and commitments with broader efforts to tackle the poly-crisis and advance just food-system transitions. Recommendations The recommendations suggest pathways for reform and transformation that range from improving existing mechanisms to provide incremental improvements in support for agroecology, to recommendations that would require tackling more deeply rooted assumptions and lock-ins.
Take Away Message: By centering their public mandate, PDBs have an opportunity to join a growing number of organizations, scientists, funders, and governments that are developing an agroecological approach to advance the Sustainable Development Goals (SDGs), confront climate change, reverse declines in biodiversity and ecological integrity, and provide good, healthy food for all. Our aim in this report is to illuminate ways PDBs can better align with this effort. Agroecological principles provide a framework for PDBs to fulfill their commitments to the SDGs and advance the social, cultural, economic, and ecological objectives of their public-good mandates. Doing so will require a shift in logic and a reversal of the standard approach of making agroecology a “bankable solution.” Instead, the focus should be on how PDBs themselves can become more agroecological in their operations and food system-related priorities, enabling them to support just transformations in food systems. —————————————————————————————— Item 2 HOW PUBLIC FINANCE FOR AGRICULTURE CAN IMPROVE FOOD SECURITY, HEALTH, AND CLIMATE By
Lizah Makombore & Ladd Connell Agriculture is essential to human life. How we feed ourselves matters for nutrition, health, climate, biodiversity, and livelihoods. Nearly 928 million people are employed in farming globally, and food systems are responsible for one-third of global greenhouse gas emissions and most new deforestation. Multilateral development banks (MDBs), like the World Bank Group (WBG), play a critical role. The WBG has committed to double its agricultural financing to $9 billion a year by 2030. In October it launched AgriConnect, an initiative seeking to transform small-scale farming into an engine of sustainable growth, jobs, and food security. However, while some MDB investments support equitable and sustainable transformation, too many still fuel environmental destruction and inequity. The World Bank’s private sector arm, IFC, recently invested $47 million in a multi-story pig factory farm in China, for example. A new report from the University of Vermont Institute for Agroecology analyses MDB agricultural investments and sets out a road map for how banks can support, rather than hinder, sustainable farming. The research finds that the World Bank and other public-sector lenders can drive systemic change by supporting governments with policy reforms, rural extension services, and enabling environments. For example, a $70 million Inter-American Development Bank project in Paraíba, Brazil is promoting inclusive, low-carbon agriculture, and strengthening family farmers and traditional communities through technical assistance and climate-resilient infrastructure. MDBs are better placed than other financial institutions to take long-term, lower-return investments aligned with climate and food security goals. Agroecological farming, a holistic, community-based approach to food systems that applies ecological and social food sovereignty concepts, along with long-term productivity, provides a channel for public sector arms of MDBs to support needed agricultural transformation. MDBs and other public banks therefore, should seek to become the enablers of agroecology. The International Fund for Agricultural Development (IFAD) and the Agence Française de Développement (AFD) are already leading efforts in this direction. MDB Private Sector Operations: Profit-Driven Harms In contrast to the IFAD and AFD models, the University of Vermont’s Institute for Agroecology’s report found that the majority of private-focused MDBs prioritize “bankable” projects—typically large-scale, industrial, profit-driven agribusiness. This model steers money toward factory farms that use human-edible food as feed, pollute nearby communities, raise the risks of zoonotic disease and antimicrobial resistance, and engage in animal cruelty. In 2023, a report by Stop Financing Factory Farming found that public finance institutions invested US$2.27 billion in factory farming, 68% of the total investment in animal agriculture projects that year. As evidenced by multiple complaints from impacted communities, these investments undermine poverty reduction, Sustainable Development Goals (SDGs), and Paris Agreement climate goals. MDBs’ private sector operations must reform their lending criteria and stop financing destructive projects. The opportunity: Public Sector Banks Can Pave the Way for Private-Sector Transformation Rich country governments currently subsidize agriculture, mostly industrial, at a level of $842 billion per year. According to the IMF, only a quarter is dedicated to support for public goods in the sector. Shifting this support to incentivize investments in agroecology is crucial to sustain the agricultural transformation that public banks themselves have called for. Public banks have the opportunity to join a growing number of organisations already advancing an ecological approach to meet the SDGs and wider social, cultural, and economic, and environmental objectives. To do so, they must shift from treating agroecology as merely a niche solution and instead invest in it as a priority means for achieving food systems transformation. By taking this approach, public banks can better support just transitions in food systems, something that is already beginning to take shape. Earlier this year, for example, the World Bank backed an $800 million loan to the Colombian government to advance a greener and more resilient economic transformation. The private-sector arms of MDBs, such as IFC and IDB Invest, also have a role to play in aligning with the transition. Most importantly, they can support governments with policy advice and financing criteria that break from entrenched models and exclude industrial animal agriculture from eligibility for finance. While MDBs have taken steps to make agricultural production and rural incomes less vulnerable to climate change, they have yet to commit to agroecological farming as the most effective pathway. In contrast, IFAD is already demonstrating what this can look like, driving agroecological transitions through private-sector incentives in Ethiopia, Peru, and Vietnam. Similarly, AFD is applying agroecology to support family farming in Ethiopia, Haiti, Madagascar, Malawi, and Sierra Leone. Agroecology as the Future of Sustainable Farming—and Public Agricultural Finance? If MDBs are looking to advance the SDGs and solve the polycrisis (climate, biodiversity, pandemic risk, and food security), one of the most effective ways in which this can be done is for the public sector to mobilize policy support and significant capital investment into agroecology. Meanwhile, MDB private sector arms can enable this transition by providing policy advice and finance for interventions that break from entrenched models. Agroecology puts an end to costly and harmful practices, replacing animal cruelty with humane, safe, and fair standards. But it’s not just about farming practices. It also helps transform food systems, building resilient, reparative, low-emission economies and improves livelihoods in line with the 2030 SDGs. By supporting agroecology, MDBs can stop fueling harm and start financing a just and sustainable food systems transition. If they are serious about the SDGs, food security, and climate goals, the road map is clear—MDBs’ public sector operations must enable, their private sector operations must reform, and both must support a transition away from industrial agriculture toward a more just and sustainable food system.
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