The Global Agriculture and Food Security Program (GAFSP) has launched a USD 75 million Business Investment Financing Track (BIFT) to enhance financial innovations for smallholder farmers and micro, small, and medium-sized enterprises (MSMEs) in low-income countries. This initiative seeks to boost food security by encouraging private investors to mobilize funds in traditionally underserved segments of the agrofood sector.
The Global Agriculture and Food Security Program (GAFSP) is a multilateral financing platform aimed at enhancing global food and nutrition security. Established by the G20 in response to the 2007–2008 food price crisis, GAFSP focuses on strengthening resilient and sustainable agriculture and food systems in the world’s most vulnerable countries.
The move is aimed at transforming the global agricultural sector by empowering smallholder farmers and agro-startups, particularly in low-income and developing countries, to improve their resilience and productivity amidst the growing challenges posed by climate change, food insecurity, and global market disruptions.
Addressing Critical Agricultural Challenges
The new GAFSP fund is a strategic response to several pressing issues that have intensified over recent years. Launched in response to challenges such as climate change and supply chain disruptions, BIFT is part of GAFSP’s broader strategy to promote inclusive, climate-smart food systems. It focuses on blended finance solutions, attracting private investment to underfunded regions and value chains in the agriculture sector. GAFSP, founded by the G20 in 2010, has already deployed over $2.5 billion to strengthen global food and nutrition security.
The on-going impact of climate change, soil degradation, erratic weather patterns, and supply chain disruptions have exacerbated vulnerabilities in the agriculture sector, particularly for smallholder farmers. According to GAFSP, these farmers account for over 80% of the world’s food production but often lack access to critical resources such as financing, technology, and infrastructure.
BIFT aims to foster public-private partnerships and engage civil society to pool resources from impact investors, banks, and asset managers. By leveraging financial instruments like concessional debt and equity, the initiative will encourage private investment in strategic areas, particularly nutritious food value chains, and partnerships with non-governmental organizations.
Running until June 2026, BIFT will collaborate with institutions like the African Development Bank and International Finance Corporation. Its focus will be on smallholder farmers, MSMEs, and agrobusiness startups involved in nutritious food production, helping them scale up and access mainstream financing despite perceived risks.
The $75 million fund will focus on addressing these gaps, channelling investments into key areas like sustainable farming practices, modern farming technologies, and access to markets. By targeting smallholders and agro-startups, the initiative aims to promote agricultural innovations that increase yields, enhance food security, and improve livelihoods.
Key Areas of Investment
- Sustainable Farming Practices: A significant portion of the fund will be directed towards promoting environmentally friendly agricultural practices. These include organic farming, agroforestry, crop diversification, and regenerative agriculture techniques aimed at improving soil health and water conservation.
- Climate-Smart Technologies: The GAFSP fund will prioritize innovations that can help farmers mitigate and adapt to the impacts of climate change. This includes precision farming tools, irrigation systems, drought-resistant seeds, and renewable energy solutions for farms.
- Capacity Building and Training: Empowering farmers through knowledge sharing and capacity building will be a central pillar of this initiative. GAFSP plans to work closely with local governments, NGOs, and agricultural cooperatives to provide training on best farming practices, efficient resource management, and the use of modern technologies.
- Access to Markets and Financing: The fund will help smallholder farmers and agro-startups gain access to domestic and international markets, improve value chains, and develop financial resilience. By connecting farmers to markets, the initiative will help reduce post-harvest losses and increase their incomes. Additionally, providing access to low-interest loans and insurance products will enable farmers to invest in their businesses and safeguard against risks.
Supporting Agro-Startups
Recognizing the growing role of startups in driving innovation in agriculture, the GAFSP fund is also dedicated to supporting early-stage agrotech companies. These startups are expected to be at the forefront of bringing digital tools, analytics, and new technologies to farmers, enabling more efficient farm management and higher productivity.
The fund will encourage public-private partnerships, giving startups the necessary financial backing and support to scale their operations. These investments are expected to create a ripple effect across the agricultural ecosystem, with agrotech startups bringing disruptive solutions to the sector.
“BIFT is a significant step forward in addressing the smallholder financing gap by unlocking much-needed private capital. This is not just about financing projects; it is about working with a range of partners, from government to civil society to the private sector, to create long-lasting solutions that improve food security, climate resilience, and economic opportunities across some of the world’s most vulnerable regions.”
Global Impact and Long-Term Vision
The GAFSP $75 million fund aligns with global efforts to achieve the United Nations’ Sustainable Development Goals (SDGs), particularly SDG 2 (Zero Hunger), SDG 12 (Responsible Consumption and Production), and SDG 13 (Climate Action). By empowering smallholder farmers and fostering agrotech innovation, the initiative seeks to contribute to long-term food security, economic growth, and environmental sustainability.
GAFSP has a strong track record in implementing agricultural projects that have benefited millions of smallholder farmers worldwide. Since its inception, GAFSP has mobilized over USD 1.9 billion in grants and financing for agricultural development, making it a key player in the global fight against hunger and poverty. James Catto, Director of International Development Policy at the United States Department of the Treasury and Chair of the GAFSP Steering Committee
“High-potential agri-MSMEs in lower-income countries are being left behind by financial markets and have no way of breaking into regional or global markets. The BIFT will deploy systemic solutions tailored to the needs of small producers and early-stage agribusinesses so they can achieve scale and tap into conventional financing.”
The launch of this USD 75 million fund marks a pivotal step in the global effort to transform agriculture and improve food security. By supporting smallholder farmers and fostering agrotech innovation, GAFSP is taking a forward-looking approach to tackle the challenges facing the agriculture sector, ensuring a more sustainable and prosperous future for millions of farmers worldwide.