What are the challenges?

Despite ODA reaching an all-time high of US$223.3 billion in 2023, the world remains off track in achieving the Sustainable Development Goals.[1]

Climate change, conflict, and political and economic instability are exacerbating hunger, malnutrition and poverty.

Governments are facing escalating costs due to rising inflation, growing income inequality, and the spin-off effects of domestic and international conflict, natural disasters and increased migration.

Food systems transformation is critical to tackle climate change, alleviate poverty and protect biodiversity. Yet ODA for the agriculture, forestry and fishery sectors remains insufficient.

Meanwhile, the hidden annual costs of global food and land use systems, including their negative impacts on society, health, and the environment, are estimated at US$12 trillion. This amounts to more than the market value of the global food system, estimated at US$10 trillion.[2]

Both the scale of the challenge and the financing needed require a fundamental rethink of how limited ODA can be more effectively and catalytically deployed by governments, donors, the private sector and other stakeholders.

Stand-alone and fragmented pilot projects simply cannot deliver the kind of systemic change needed to bring about transformation in rural areas.

[1] Organisation for Economic Co-operation and Development, “Official development assistance (ODA)”.
[2] Calculated in Trillions USD in 2018 prices. The Food and Land Use Coalition, Growing Better: Ten critical transitions to transform food and land use, 2019.

What are the opportunities?

Every dollar invested in agriculture can yield a substantial return in terms of development impact, while also providing great value for money to investors.

Shifting the narrative to highlight the investment and financing opportunities in agriculture and food systems is key to rural revitalization.

To turn these opportunities into concrete investments in food systems, especially in fragile countries and contexts, donors must examine how they can deliver aid more efficiently and effectively, harmonizing their policies and strategies to ensure that each dollar spent has a catalytic effect.

Alongside traditional ODA, innovative approaches to financing must be leveraged to deliver catalytic financing to critical sectors and fragile regions.

The most urgent need is for catalytic development financing, especially for small and medium-sized enterprises (SMEs). Increasing private sector investment in rural areas is vital, with the public sector playing a key role in reducing investment risks. The public and private sectors must work jointly on tackling existing structural and policy constraints on financing.

Ultimately, better alignment between public, private and international development financing will be key to increasing the scale and impact of investments in food systems and rural development.