The Challenge
Rising incomes, changing diets, and increasing populations have made the livestock sector one of the fastest-growing agricultural subsectors in middle- and low-income countries. As the global population increases from 7 billion in 2010 to a projected 9.7 billion in 2050, and incomes rise across the developing world, overall food demand is expected to increase by more than 50 percent and demand for animal-based foods will rise by nearly 70 percent. IFC is committed to supporting the agribusiness sector to improve livelihoods and help people meet their nutritional needs, while taking steps to improve sustainable production by limiting use of resources, protecting the environment, and supporting animal welfare.
Our Approach
Through our investments in the livestock sector, we seek to replace inefficient production processes with targeted and efficient practices, a key step in reducing greenhouse gas emissions. We recognize the importance of the livestock sector to livelihoods in many developing countries, and the role that animal protein plays in helping families, especially low-income households, meet their nutritional needs. Our involvement in this sector, including through our advisory work, provides smallholders with access to training, information, and other support that create new business opportunities, improve resource-efficiency, and enhance animal welfare and biodiversity.
IFC Practices
In a world where the demand for animal protein is expected to grow, and given the challenges in animal husbandry and food production, it is imperative that support for the industry follows a sustainable growth path. IFC understands that livestock companies that incorporate sustainable management practices are likely to achieve a competitive advantage in the global marketplace while minimizing the environmental and social footprint of their operations.
Sustainability
Preserving the environment is a central tenet of IFC’s operations and we have developed policies, guidelines, and technical notes that guide our activities in livestock projects. These help our clients build environmentally sustainable businesses and operations. IFC is selective when considering a new animal protein investment, and we prioritize climate-smart agribusiness and sustainable production practices.
The core IFC framework for assessing livestock operations centers on animal health and biosecurity, animal welfare, antibiotics, and climate (BAWAC). IFC works with companies that commit to meeting our environmental and social performance standards and that employ good governance, human resources, and appropriate management systems. Our efforts are in line with the broader World Bank Group goals and reflect the commitment we have to addressing the many challenges this sector faces in developing countries.
IFC encourages the adoption of best practices in food safety as well as environmental and social standards and seeks to engage with companies that are committed to raising livestock in an environmentally sustainable way. This not only includes animal husbandry, but also focuses on management practices such as energy efficient equipment, precision farming technologies, renewable energy production, water efficient farming methods, and appropriate waste management systems.
In every investment made by IFC, clients need to make a strong commitment to adhere to IFC’s Performance Standards (PS).
Measured Impact and Rural Livelihoods
In 2020, IFC had more than 65 active livestock projects with 48 clients around the world, for a total commitment of about $1.1 billion. IFC’s engagements with 21 of those clients had reached the stage where they could be assessed for project impacts in 2020, and benefitted at least 1.4 million farmers in that year. Through these projects, IFC supports rural communities and livelihoods, and seeks to promote opportunities especially for women farmers and entrepreneurs.
Commitment to Animal Welfare
The companies that IFC works with have to commit to building robust biosecurity and animal-health protocols and management systems, in line with credible international standards. This includes the responsible and prudent use of antibiotics in animal production. When working with clients, we promote a proactive approach to animal husbandry development that is based on our assessments. This can include specific requirements for the company, as outlined in the Environmental and Social Action Plan (ESAP), which is publicly disclosed for each project, or support through IFC Advisory Services, which can provide practical solutions and training to implementing animal welfare improvements. In addition, we work with clients to support their efforts to seek certification and consistency with credible international or regional standards on animal husbandry, where available. This supports transparency and provides a model for others operating in the same industry.
Our Priorities
Improving Smallholder and Rural Livelihoods
We work to build inclusive supply chains that improve rural livelihoods for smallholder farmers, small- and medium-sized enterprises, and women farmers. Our investments span different sizes and types of agribusiness companies, and often include components to strengthen the capabilities and output of smallholder farmers and improve their capabilities and output.
Our inclusive business model aims to improve linkages between large-scale companies—which can provide market access, extension services, and working capital for value chain players, among other things—and rural small- and medium-sized enterprises, smallholder farmers, and women.
Reducing Environmental Impact
We work to reduce greenhouse gas emissions through a variety of approaches. Among these are reducing the amount of waste, improving waste management by turning animal waste into biofertilizers and installing biodigesters to reduce methane emissions, cutting down on feed waste, and other steps. We also work to achieve improved resource utilization, especially savings in energy and water.
In our projects, while there might be a net increase in GHG emissions and in resource use from increased production in absolute terms, we support better livestock-management practices that make meat and dairy production more efficient on a per unit basis.
Promoting Economic Development
A thriving livestock sector is a vehicle for countries to reduce poverty and achieve their Sustainable Development Goals. Engaging in the livestock sector represents a major opportunity to create jobs and generate wealth throughout the livestock supply chain, while advancing climate action, strengthening global health, and putting food systems on a more sustainable footing.
Strengthening Food Security and Nutrition
Food from animals (meat, egg, fish, dairy products) is an important source of nutrients and micronutrients integral to brain development. Nutritionally-rich food can help mitigate chronic malnutrition, which stunts children’s growth and can have an impact on brain development. Through our investments in livestock and our advisory projects, IFC works to improve food security and give people better access to nutritious foods.