Inclusive and Sustainable Finance Coalition - Public Development Banks Initiative | #UNFSS2021

Summary

The script emphasizes the crucial role of public development banks (PDBs) in supporting farmers with financial services, including loans, savings, and insurance, to combat the adverse effects of climate variability. It highlights a new coalition formed by IFAD and other agencies to promote inclusive and sustainable food system finance. With over 40 specialized PDBs and 70 with significant agricultural portfolios, the coalition aims to drive a paradigm shift towards strategic partnerships, leveraging PDBs' financial power to address market failures and support small-scale producers. The first initiative is to establish a platform for accelerated learning, innovation, and capital deployment, inviting stakeholders to join in transforming the food system for a greener and more inclusive future.

Takeaways

• 🌱 Farmers require financial services including loans, savings, and insurance to support their operations and mitigate risks from natural disasters.
• 🏦 Public development banks (PDBs) are positioned to provide these services, having the necessary resources, business models, and financial capabilities.
• 🤝 IFAD has partnered with other development agencies to launch a coalition aimed at promoting inclusive and sustainable food system finance.
• 📈 There are over 40 PDBs specialized in agriculture and 70 with significant agricultural portfolios, representing a significant portion of the financial sector for agriculture.
• 🛠️ PDBs can lead transformative change by setting standards, promoting financial inclusion, and encouraging sustainable agriculture investments.
• 💡 They also have the potential to leverage private finance and address market failures, especially during crises like the ongoing pandemic.
• 🔄 The coalition of action champions a strategic partnership approach to drive a paradigm shift towards more sustainable practices.
• 📚 The Financing Common Working Group of PDBs has been enhancing learning and sharing best practices, fostering innovation in agricultural finance.
• 🚧 Public development banks are urged to overcome constraints that have limited their ability to meet the needs of small-scale producers.
• 🌟 The first initiative will be to establish a platform for PDBs to accelerate learning, innovation, and capital mobilization.
• 🤔 An invitation is extended to member states, civil society, producers' organizations, and the private sector to join the coalition for a more inclusive and sustainable transformation.

Q & A

What is the primary need of farmers that is mentioned in the script?

Farmers need financial services, including loans for purchasing seeds, savings, and insurance to mitigate the negative impacts of natural disasters such as droughts and floods.

Why are public development banks (PDBs) crucial in supporting farmers?

PDBs are crucial because they have the resource base, the appropriate business model, and the financial capacity to provide the necessary financial services to farmers.

Which organizations has IFAD partnered with to support inclusive and sustainable food system finance?

IFAD has partnered with the French Development Agency (AFD), the Italian Development Cooperation (not 'Pasadena Positive Impressivity' as mentioned in the transcript, which seems to be a mistranslation or error), and the Finance and Common Coalition on Financing Sustainable Food Systems.

What is the goal of the coalition of action for inclusive and sustainable food system finance?

The goal is to leverage PDBs as strategic actors to achieve qualitative and transformative change in the food system, promoting financial inclusion and sustainable agriculture investments.

How many PDBs are specialized in agriculture according to the script?

There are more than 40 PDBs specialized in agriculture.

What percentage of PDBs does the script suggest are involved in the agricultural sector?

The script suggests that almost two-thirds of the formal financial sector for agriculture is involved.

What role can PDBs play in evolving food systems?

PDBs can play a guiding role by setting up standards, promoting financial inclusion, and leveraging private finance to address market failures, especially during crises.

What is the script's stance on the need for a paradigm shift in the approach to food systems?

The script advocates for a paradigm shift that places greater reliance on strategic partnerships and the involvement of PDBs to drive change in food systems.

What has the Financing Common Working Group of PDBs been doing to benefit its members?

The group has been facilitating learning, sharing best practices, and discovering innovations related to agricultural finance.

What is the first concrete action proposed by the coalition for PDBs?

The first concrete action is to establish a PDB platform that accelerates learning and innovation while also mobilizing and deploying capital.

Who is invited to join the coalition for an inclusive and greenfield system transformation?

The coalition invites member states, civil society, producers organizations, and the private sector who share their vision and ambition for an inclusive and sustainable food system transformation.