IFC in the Agricultural Sector

September 2011

Food

Fin

anci

al C

risi

s

2

SOURCE: World Development Report 2008: Agriculture for Development; World Bank Group Agriculture Action Plan FY10-12

IFC’s Approach in Agriculture is Part of Integrated World Bank Group Action Plan

Differentiated approaches for:

A.Agriculture based countries (mainly SSA and Asia): GDP growth through agriculture

B.Transforming countries (e.g., China, India, Indonesia, Morocco): Higher value products and linkages with the non-farm economy

C.Urbanized countries (e.g., Brazil, Ukraine, Russia): Contribution to global food supply, reduced rural poverty, growth in export crops and increased food safety

World Development Report 2008

WBG Agriculture Action Plan

FY 10-12Five areas of joint focus:

1. Raise agricultural productivity

2. Link farmers to markets and strengthen value chains

3. Reduce risk and vulnerability

4. Facilitate agricultural entry and exit and rural non-farm income

5. Enhance environmental services and sustainability

• Key Elements of the IFC Global Agribusiness Strategic Action Plan (ASAP)

• IFC ASAP a Collaborative WB-IFC Effort with full integration of WB and IFC Agribusiness Teams

3

Agribusiness – IFC’s Strategic PriorityDevelopment Impact• IFC investments made directly in the agricultural sector during

FY11 are expected to:• provide direct employment to 150,000 people, including

60,000 women, • reach 870,000 farmers (equivalent to 4.4 million people

supported) • Reach about 90,000 micro, small, and medium enterprises.

• IFC Development Goal Targets:• FY11: 200,000 farmers reached• FY14: 800,000 farmers reached

Agri Infrastructure4%

Agri Produc-tion and Process-

ing69%

Fertilizers11%

Financial Markets

6%

Food Retail10%

IFC'S AGRIBUSINESS PORTFOLIO BY SECTOR

US$4.5 bln Africa9%

East Asia14%

Europe and Central

Asia23%

Latin America

26%

Middle East/North

Africa20%

South Asia9%

IFC'S AGRIBUSINESS PORTFOLIO BY REGION

US$4.5 bln

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY14

00.5

11.5

22.5

33.5

44.5

IFC's Commitments in Agribusiness,US$ Billions

Target

4

IFC’s Strategic Objectives in Agriculture

Contribute to Enhancing Food Security (e.g. increased investment,

enhanced productivity)

Contribute to Enhancing Economic Development and Inclusiveness (e.g. focus on smallholders, women, risk management)

Make Environmental and Social Sustainability a business driver (e.g., resource utilization and efficiency)

5

Areas of Focus

Enhance productivity through improved access to key agricultural inputs, dissemination of best practices, investment in modern and sustainable farming

Help mitigate price and weather-related shocks

through developing and rolling out risk management products

Support agri SMEs access to finance, access to market

and access to technology and inputs through agricultural and financial intermediaries and service providers

Reduce post harvest waste and losses through

improved agricultural practices, logistics and infrastructure

6

Integrated Agribusiness Value Chain Approach

Consumers

6+ billion

Traders

Input producers and distri-butors

FoodProcessors

Distribu-tors

Retailers

Investment Climate

Advisory/Technical Assistance

Infrastructure, PPPs

Financial/Risk Management Products

Farmers

Environmental and Social Ecosystem Services

7

Enhanced IFC Environmental and Social Framework and Tools

8

Revised Performance Standards & Procedures Introduced requirement to reduce energy/water intensity

Lowered GHG threshold for reporting to 25,000 tons CO2 equivalent per year

Increased attention to supply chain (labor and critical habitats)

Adopted Free Prior Informed Consent for Indigenous Peoples

Changes to Categorization System (both real sector and FIs)

Adopted new regime of information disclosure throughout the project cycle, including ESAP's implementation progress and DOTS.

9

Early E&S Risk Assessment and Screening Tool Country-level

National policy (international conventions, agricultural policy) Legal framework/Enforcement (labor law, environmental regs,

land rights/tenure) Physical and human infrastructure (transport, health, education)

Sector/Project-level Workforce (wages, working conditions, sub-contractor suppliers) Client reputation Land ownership/tenure/disputes Current and previous land use (no primary forest conversion) Environmental assets/services (biodiversity, water, etc)

10

Thank You