In a significant move to bolster climate resilience in Kerala’s agricultural sector, the World Bank has approved a $200 million loan aimed at equipping farmers with climate-adaptive practices and promoting agro-entrepreneurship. This initiative, titled the Kerala Climate Resilient Agri-Value Chain Modernization (KERA) Project, will support around 400,000 farmers and infuse private investment into agricultural value chains, enhancing Kerala’s resilience to climate challenges.
The loan, granted by the World Bank’s International Bank for Reconstruction and Development (IBRD), has a 23.5-year maturity period with a 6-year grace phase. The project aims to fortify Kerala’s reputation as a leading producer of spices such as cardamom, vanilla, and nutmeg, which contribute to roughly 20% of India’s agro-food exports. However, the sector has faced increasing threats from climate events like floods and wildfires, impeding farmers’ livelihoods and hindering access to broader markets.
“This project will infuse private sector investment and integrate agricultural value chains to benefit farmers and SMEs,” said Auguste Tano Kouame, the World Bank’s Country Director for India. He noted that the project would especially support women-led agro-based SMEs, currently representing only 23% of the state’s MSMEs, by providing training and commercial financing access to enhance business sustainability.
The project will introduce climate-smart practices, such as planting resilient varieties of coffee, cardamom, and rubber, while helping Kerala’s farmers adopt sustainable techniques to protect crop yields. Additionally, staple crops like rice will see increased productivity through these practices, which aim to lower greenhouse gas emissions and drive sustainable growth.
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Beyond agriculture, the project promises economic transformation for Kerala’s agro-sector by leveraging an additional $9 million in commercial finance for small and medium agrofood enterprises, focusing on empowering women entrepreneurs. Task Team Leaders Chris Jackson, Azeb Mekonnen, and Amadou Dem emphasized that the project will strengthen agricultural value chains, bolster Kerala’s agrarian competitiveness, and contribute to job creation and income growth across the sector.
This infusion of support and strategic investment in climate resilience marks a hopeful future for Kerala’s agricultural landscape, aiming to safeguard livelihoods and secure the state’s position as a robust player in India’s agro-export market.