Public Development Banks for food systems transformation

Representing two-thirds of formal financing to agriculture, Public Development Banks (PDBs) investing in agriculture around the world can play a key role in transforming food systems that are currently unsustainable and leave millions hungry, said Alvaro Lario, President of the UN’s International Fund for Agricultural Development (IFAD), on the way to  the Finance in Common Summit, which took place in February 2025.

"PDBs' financial heft – up to 1.4 trillion US dollars of annual investments – is more than the micro-finance sector or all official development assistance,” said Lario. “They are the backbone of the global financial architecture and efforts to make food systems more sustainable, resilient and equitable.”

PDBs have a significant financial power. The world’s 522 PDBs hold 23.2 trillion USD in assets and account for 10-12 per cent of global financing.

Today’s food systems have a heavy environmental footprint and fail to make nutritious diets accessible to all, with over three billion people unable to afford a healthy diet in 2021. The small-scale food producers who are the backbone of food production often live in poverty and the imminent threat of hunger. About 730 million people suffer from hunger today.

Transforming food systems requires an additional 300-400 billion USD annually until 2030. However, official development assistance (ODA) for agriculture has remained stagnant at 4-6 per cent of total ODA for two decades, and reached about 10.5 billion USD in 2022, far below necessary levels. Small-scale producers receive only 0.8 per cent of global climate finance, despite their crucial role in food security.

Agricultural investments are underrepresented in PDB portfolios in many low- and middle-income countries in comparison to the amount that the agricultural sector continues to contribute to their GDP.

To scale up investments in sustainable and equitable agriculture and food systems, IFAD and the French Development Agency (AFD) led the creation of a coalition of PDBs investing in agriculture in 2020. Members of the coalition created the PDB Platform for Green and Inclusive Food Systems, which is currently hosted by IFAD. Established in 2021, the platform has gained momentum and brings together about 140 national PDBs investing in agriculture, four regional PDBs and eight regional networks across more than 95 countries from the Global South today.

The platform is an important instrument to support PDBs as they seek to expand their investments and better align to global development and climate objectives. It fosters knowledge exchanges, capacity building, peer-to-peer learning and technical support.

Furthermore, the platform provides trainings in agroecology and resilience building. It equips PDBs with strategies to integrate environmental assessment tools to better assess the risks and impacts of their green investments.

(IFAD/ile)

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