Agriculture is the main driver of economic growth and poverty reduction in the developing world. It is also the key to improved nutrition and food security. The sector revolves around smallholder farming, which supports and feeds around two billion people. However, degraded land and depleted water resources stand in the way of enhanced efficiency and productivity.
The sector is also under pressure from rising biofuel and animal feed production. Increased investment is vital in order to develop new and more sustainable methods of farming, as well as to protect livelihoods and cater for population growth.
As of December 31, 2013, OFID had committed a cumulative US$2,071.9m to agriculture. Representing 13% of total approvals, these resources have supported all aspects of the value chain, such as:
OFID also supports the sector indirectly by sponsoring agricultural research and other activities that foster the exchange of knowledge and best practice.
Agriculture projects approved by OFID in 2013 had a combined value of US$39.5m, or 2.6% of total commitments for the year. The largest share went to the Latin America and Caribbean region (75.5%), with Africa taking 17.6%, Asia 6.1%, and the remainder going to European and multi-regional initiatives.
More than one-half of the funds (51.9%) was given in public sector lending for the following:
One transaction valued at US$15m was approved under the Private Sector Facility for a project to establish a soybean crushing plant in Paraguay. The remaining approvals related to grant financing totaling US$4m for projects in Ethiopia and Lebanon and to support the work of 10 agricultural research centers.