G20 Joint Finance and Agriculture Ministers’ Meeting

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Your Excellencies,

I would like to thank Minister Indrawati and Minister Syahrul for this invitation.

I congratulate the Indonesian Presidency for bringing together ministers of Finance and Agriculture. Over more than four decades working at the intersection of finance, agriculture and rural development, we at IFAD have seen clearly that these two spheres need to align and work together.

Context

Ladies and gentlemen,

The current sharp increase in hunger, malnutrition and poverty is a warning to us all.  Immediate humanitarian assistance is necessary to save lives but we must recognize that other solutions are needed to solve the crisis.

Food systems are failing people and planet. Instability, conflicts and migration will continue to increase unless we change how our food systems function and how they are financed. 

This is why it is so important to bring together finance and agriculture to address the world’s most pressing problems. You, the G20 finance and agriculture ministers can make real change happen – and I want to draw your attention to some solutions.

One, there is an urgent need to scale up investments throughout the food system – from the farm through food processing, storage, and transport.

This comes at a cost – an estimated US$300 to 400 billion is needed annually to transform food systems by 2030.

This is less than 0.5% of global GDP.

It also much less than annual agricultural subsidies and just a fraction of the $10 trillion market value of the world’s food systems.

I know it may seem unrealistic to stand here proposing more financing at such a challenging point in time. But food security is national security – and until we improve local food production and value chains, we will pay an even higher bill in emergency assistance.

Let me be clear – I am not asking for additional public finance alone. There must be a global partnership that brings together governments, the private sector, IFIs, climate funds, UN agencies--and rural people themselves. We must multiply impact of public finance, and innovate.

Two, we need new and innovative partnerships, such as the coalition of Public Agriculture Development Banks that IFAD is leading, to unlock more financing for food systems through domestic finance. We also working hard with other IFIs to explore opportunities to reallocate SDRs to support food security.

Three, we also need to provide more climate financing for poor and vulnerable farmers, because climate change is the biggest long-term threat to food systems and our planet.

Currently small farms receive LESS than 2 per cent of global climate finance though they produce a third of food.^[1] 

The Food track of COP 27 is one of the innovative ways to close this financing gap.

Four, we must unlock the potential of private sector investments in the middle segment of supply chains, and of regional markets. This would decrease dependence on food imports and benefit rural SMEs, who play a crucial role in driving agricultural transformation and economic growth in developing countries. In fact, about 80% of the midstream of the value chains is SMEs. You can help by better focusing investments, by designing enabling policy environments and financing SME programs.

Conclusion

Ladies and Gentlemen,

Today's food crisis is not only the result of the war in Ukraine, or of the COVID pandemic, or of climate change. It is primarily the result of long-standing weaknesses in the overall structure of food systems.

These are the reasons why we at IFAD are impatient to scale up. I am pushing IFAD to be a more ambitious assembler of development finance for agriculture and rural development. Currently, each dollar of core contributions to IFAD delivers $6 to $8 of investment through cofinancing and partnerships.

To have the biggest possible impact, IFAD has reformed its financial architecture to increase borrowing capacity, and diversified sources of finance. We were the first non-bank UN agency to receive a credit rating. And in June, we issued our first Sustainable Development Bonds.

We are committed to continue to work with our G20 member states, our Rome based sister agencies and other partners to sustainably transform food systems for all.

Please count on us for the proposed mapping exercise and for the next steps on this G20 initiative – and to transform commitment to action on the ground.

Thank you.