IFC Agribusiness Investments Hit Record $2 billion amid Financial and Food Crises
Washington, D.C., October 16, 2009—IFC,
a member of the World Bank Group, significantly increased its support for
agribusiness in fiscal 2009 to boost the food supply in developing countries
in response to the global food price hikes and volatility.
Food security was a central issue during
recent G-8 and G-20 Summits that emphasized the need for increased investment
in agriculture. IFC invested a record $2 billion in FY09 across 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. FY09, which ended June 30, was the fifth consecutive year of growth
in IFC’s agribusiness investments and witnessed a 42 percent increase
over FY08.
IFC invested $874 million directly in
agribusiness companies and $362 million more to support fertilizer production,
agricultural infrastructure, and food retail. Through partner banks, IFC
channeled $758 million to support rural farmers and trade finance activities.
Half of IFC’s agribusiness projects were in low-income countries. Investments
in Africa’s agribusiness sector rose 38 percent over the previous year
and reached $160 million for projects in primary farming, distribution
and storage, grain milling, plantation rehabilitation, and trade finance.
“Food availability at affordable prices,
particularly for the poor, remains a top IFC concern,” said Oscar Chemerinski,
IFC Director for Global Agribusiness. “IFC works to address the challenges
by helping the emerging markets grow and develop their agricultural sectors.
This can help increase the food supply and create opportunities for rural
communities.”
Although the prices of agricultural
commodities have declined from their 2008 peaks, major grain prices remain
above their long-term trend. Maize is 50 percent more expensive than its
average price between 2003 and 2006, while rice prices are 100 percent
higher. Food prices remain volatile. The economic crisis compounds the
impact of high food prices on low-income populations. Over a billion people
are chronically hungry.
With food prices expected to remain high
and volatile for some time, IFC is leading World Bank Group efforts to
support private sector to increase production. IFC’s agribusiness strategy
includes supporting intraregional investments to transfer knowledge and
technology, increasing access to credit through wholesale facilities with
traders and financial intermediaries, and bringing land into sustainable
production. IFC also focuses on increasing production in middle-income
countries with strong agribusiness potential; improving logistics, infrastructure,
and water efficiency; and developing modern financial instruments for agriculture.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to
escape poverty and improve their lives. We foster sustainable economic
growth in developing countries by supporting private sector development,
mobilizing private capital, and providing advisory and risk mitigation
services to businesses and governments. Our new investments totaled $14.5
billion in fiscal 2009, helping channel capital into developing countries
during the financial crisis. For more information, visit www.ifc.org.
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