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), as he heads to the Finance in Common Summit taking place between 26 and 28 February in Cape Town, South Africa.

"PDBs' financial heft - up to US$1.4 trillion 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 US$23.2 trillion 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 US$300-400 billion 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 US$10.5 billion 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.