Source: IFC (International Finance Corporation).
Original press release here.
Washington, D.C., September 18 —IFC (International Finance Corporation), a member of the World Bank Group, is responding to the global rise in food prices with more support for agribusiness and a market-driven, private sector–led strategy to increase the food supply in developing countries.
In fiscal 2008 (ended June 30), IFC invested USD 1.4 billion along the agribusiness supply chain—from farm to retail—to help boost production, increase liquidity, improve logistics and distribution, and expand access to credit for small farmers. IFC invested nearly USD 900 million directly in agribusiness companies and an additional USD 91 million to support agricultural infrastructure, food retail, equity investments, and fertilizer production. Through partner banks, IFC channeled USD 414 million to support rural farmers and trade finance activities. More than 40 percent of IFC’s agribusiness projects were in low-income countries.
“High food prices are causing severe hardship for millions of people. IFC works to address the challenges by helping the emerging markets grow and develop their agricultural sectors,” said Oscar Chemerinski, IFC Director for Global Agribusiness. “This can help increase the food supply and reduce poverty in rural areas while linking local farmers to markets, improving consumer access to competitively priced food, and creating new export sectors. IFC is helping emerging economies capitalize on these opportunities.”
With food prices expected to remain high over the next few years, IFC is leading the World Bank Group’s efforts to support the private sector to find ways to increase production. In the short term, IFC is providing investments and advisory services to firms that can help increase production in middle-income countries that have strong agribusiness potential. These include Argentina, Brazil, Kazakhstan, Russia, Ukraine, and Uruguay. IFC is also offering working capital to help clients prefinance inventories and inputs for farmers, as well as helping improve access to credit. IFC is investing in food retailers that offer competitively priced food products and working to strengthen links between food retailers and local producers.
Over the longer term, IFC will scale up financing for agribusiness and address critical constraints in Africa. Efforts will include bringing unused land into production, improving productivity by transferring technologies to poor countries, and making the best use of water and other resources. IFC will also pursue investments in infrastructure (ports, warehouses, cold storage, telecommunications) that can facilitate and lower the costs of agricultural trade. For more impact on small farmers and rural enterprises, IFC will increase its wholesaling work through trading companies and financial intermediaries, including microfinance lenders, to help channel financing and advisory services.
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