investing in agriculture to feed asia securely

INVESTING IN AGRICULTURETO FEED ASIA SAFELY AND

SECURELYHIGH LEVEL POLICY DIALOGUE ON INVESTMENT IN AGRICULTURE RESEARCH FOR SUSTAINABLE

DEVELOPMENT IN THE ASIA-PACIFIC REGIONBangkok, Thailand8‒9 December 2015

Mahfuz AhmedAsian Development Bank

Outline1. Complexity of Food Security in Asia

2. Ways to Address Food Security: ADB

Priorities

3. Investment Highlights

4. Business Development and Innovation

1. Complexity of Food Security in Asia

• Growing demand for food and persisting food insecurity despite impressive economic growth and increasing wealth.

• Highest number of hungry people

• High micronutrient deficiency

• Uptrend in malnutrition-related diseases in urban areas (overweight, obesity, diabetes)

Food Insecurity in Asia

• Population growth and urbanization

• Declining natural resources and degraded environment

• Climate change and disaster risks

• Feminization of agriculture and ageing population, especially in rural areas

Key Challenges

2. Ways to Address Food Security:ADB Priorities

Priority Areas

• Increasing the productivity and reducing pre-

and post-harvest losses of food

• Improving market connectivity and value

chain linkage

• Enhancing food safety, quality, and nutrition

• Enhancing management and climate

resilience of natural resources

ADB Food Security Investmenta multi-sector approach

Food Security Investment($2 billion annually)

Public Sector Operations

Agriculture and Natural Resources

• Productivity• Market• Food Safety, Quality, and

Nutrition• Natural Resources

Agribusiness and Value-Chain

Financial Intermediary

Private Sector Operations Cross sectoral:

• Education• Transport• Finance, etc.

Inclusive Finance and SMEs

Growing Trend in ADB Agriculture and Natural Resources Operations

2012‒2014$3.2 billionSovereign: $2.5 billionNon-sovereign: $726 million

2015‒2017$6.3 billionSovereign: $5.7 billionNon-sovereign: $600 million

2009‒2011Sovereign: $1.6 billion

ANR Investment Areas to 2020 Core Areas Investment Areas Links with Other

Sectors/Themes

Productivity • Sustainable infrastructure• Commercialization and private service

delivery• Climate-smart agriculture• Policy reforms

- Water- Energy- Finance- Social- Gender- Climate change

Market 

• Logistics and market infrastructure• Agribusiness and value chains • ICT and rural-urban-market linkages• Policy reforms

- Public-private partnership

- Transport- Finance

Food Safety, Quality, and Nutrition

• Infrastructure for safety and standards• Policy, regulation, and capacity • Outreach and education• Policy reforms

- Health- Social- Gender - Education

Natural Resources

• Climate resilience• Land, soil, forest, river basin management

- Water- Social- Gender- Climate change- Environment

Learning from Ongoing Innovation• Enhancing productivity — crop diversification

and smallholder market linkages

• Delivering sustainable resource use

• Building climate resilience — technology, infrastructure and resource use efficiency

• Financial inclusion for agribusiness development — small and medium enterprise and value chain financing

• Promoting inclusive business — agribusiness value chain and logistics

3. Investment Highlights

Enhancing ProductivityPolicy Reform and Crop Diversification• Nepal: Agriculture Sector Development Program

(2016 grant of $50 million)

Upgrade of logistics and services

Policy reforms to increase competitiveness and promote

commercial agriculture

• Bangladesh: Crop Diversification and Value Chain Infrastructure Development (2018 loan of $200 million)

Improved capacity of farmers and enterprises to produce and

market safe food and high value products

Access to micro finance by farmers and agro-enterprises

Delivering Sustainable Resource UseWater Saving TechnologyPRC: Shanxi Integrated Agricultural Development (2009 loan of $100 million)

• Water-saving farming technologies, such as drip irrigation

• Credit to 40,000 farmers and agro-processing enterprises

• Supply high value agricultural produce that meets food safety and quality standards

• To date, 39,000 farmers have benefited from significantly increased productivity and farm income

• Vegetation coverage in the project area has also increased

Building Climate ResilienceFood-Water-Energy NexusClimate-Friendly Agribusiness Value Chains (2017, Cambodia: $100 million, Lao PDR and Myanmar: $50 million each)

Improved critical production and post-harvest infrastructure

Reduced energy cost by promoting bio-energy use and

sustainable biomass management

Targeted agribusiness support services

Regional cooperation and integration

Potential to receive GCF funding

Financial Inclusion forAgribusiness Development

SME Financing to Support Agribusiness• Sri Lanka: SME Line of Credit Project (2016 loan of $100

million) Auction mechanism Financial training Cluster lending

• Bangladesh: SME Line of Credit (2015 loan of $200 million) 2/3 of the credit line will cater to the smaller companies Cluster lending and promoting backward and forward

linkages

Promoting Inclusive BusinessSmallholder AgribusinessIndia and Cambodia: Spice Value Chain Development (2010 equity of $10 million, loan of $6.5 million, and grant of $5 million)

• ADB is investing $16.5 million in Akay, an Indian spice company that engages directly with farmers and buyers, opening up income opportunities for poor farmers.

• Akay Flavours & Aromatics tried a new approach by engaging directly with farmers and buyers, cutting out the middlemen and opening up income opportunities for poor farmers.

• With headquarters in Cochin, Kerala, the company operates 5 processing plants across the country and exports its spice products to 70 countries.

Pakistan: Financial Inclusion and Dairy Growth Facility (2013 partial credit guarantee of up to $35 million) • Availing formal credit from a local bank by 6,000 unbanked dairy farmers• Disseminating technologies and linking to urban markets

4. Business Development and Innovation

Business Development

and Innovation

PARTNERSHIP

THEMATIC GROUP SECRETARIAT

SUPPORT

ADB PRIVATE SECTOR OPERATIONS AND

REGIONAL DEPARTMENTS

SYNERGIES WITH OTHER SECTORS AND

THEMES

Strategic Approach

PartnershipsType of Partnerships Partners

1. Co-financing European Union, KfW, Netherlands, Swiss Development Corporation, International Fund for Agricultural Development, and the Global Agriculture and Food Security Program

2. Knowledge Partnership Food and Agriculture Organization, International Fund for Agricultural Development, CGIAR, ASEAN Secretariat; Organization for Economic Cooperation and Development, Regional Centers of Excellence, Asia Pacific Association of Agricultural Research Institutions, Global Forum on Agricultural Research, World Economic Forum (Agriculture and Food Security Agenda)

3. Private Sector and Civil Society

Private companies and foundations (Syngenta, Rabobank), impact investors (Althelia), civil society organizations (WWF, Oxfam, Asian Farmers Association)

Knowledge Management Plan(2015–2020)

• Asia-Pacific Food Security Knowledge Forum (2016)

• Research collaboration on climate-resilient rice

(International Rice Research Institute and DMCs); and

value chain financing (International Food Policy Research

Institute and DMCs)

• Expanding knowledge networks and partnerships with

private companies and foundations (Syngenta, Rabobank)

• Engaging in South-South and North-South knowledge and

technology transfer

Thank you!