High Level Special Event (Ministerial Meeting)

Background

Agrifood systems in Latin America and the Caribbean face persistent financing constraints that hinder progress toward greater productivity, resilience and inclusion. Public agricultural expenditure has declined over the past decade, while private capital now represents a substantial share of financing in the region. However, access to these resources remains uneven, particularly for countries with higher debt burdens and for rural actors facing persistent structural barriers. While sustainable and climate-related financial instruments are gaining prominence, their uptake within agrifood systems remains limited and is often hindered by data gaps, insufficient risk-mitigation mechanisms and a shortage of investment-ready projects.

Climate finance represents a significant opportunity, yet many countries face institutional and fiscal challenges that limit their ability to mobilize and deploy these resources effectively. Innovative financing mechanisms can help expand fiscal space and direct investment toward resilience and sustainability; however, their feasibility varies widely across the region, reflecting differences in risk profiles and institutional capacities.

Overall, improving the quality and scale of financing for agrifood systems transformation will require more efficient and better aligned public spending, stronger institutional coordination, enhanced access to climate and blended finance, and the development of robust pipelines of bankable, climate-aligned agrifood investments that reflect the region’s diversity.

The Hand-in-Hand Initiative was launched in 2019 as a tool to accelerate the transformation of agrifood systems through the development of investment plans aimed at increasing incomes, improving nutrition and well-being among rural populations living in poverty, and strengthening resilience to climate change.

Led by national governments and supported by FAO, the initiative uses advanced geospatial analysis and modelling to identify and prioritise territories that combine high levels of poverty with significant agricultural potential. This evidence-based approach guides investment decisions and provides a platform for presenting prioritized investment opportunities to financing institutions through targeted matchmaking. By coupling rigorous spatial analytics with partnership-driven processes, the Hand-in-Hand Initiative fosters strategic alliances and mobilizes science- and innovation-based solutions to maximize positive impacts in participating communities.

In LAC, the FAO Hand-in-Hand Initiative has emerged as a key vehicle for translating investment opportunities into concrete financing outcomes. By combining evidence-based territorial targeting, tailored investment strategies, multi-stakeholder coordination, and investment facilitation, the initiative enables countries to identify where and how financing can deliver the greatest social, economic, and environmental impact.

LAC stands at a pivotal moment in the transformation of its agrifood systems. The agrifood sector remains central to economic development, employment creation, food security, environmental sustainability and climate mitigation across the region. Yet, despite this strategic importance, the financing architecture that underpins agrifood systems is increasingly misaligned with the scale and urgency of current challenges. At the same time, the region faces significant opportunities to strengthen and mobilize financial resources for agrifood systems transformation. Emerging blended finance models, thematic and sustainability-linked bonds, innovative risk-sharing mechanisms, and territorial investment platforms, such as the Hand-in-Hand Initiative, demonstrate the potential to crowd in private capital, diversify financing sources and better align investment decisions with inclusive and climate-smart development pathways. Harnessing these opportunities, however, requires policy coherence, a stronger enabling environment, and a more articulated institutional architecture capable of improving the quality, direction and impact of financial flows.

In addition, over recent years, FAO has encouraged the development of a strategic platform to mobilize financing and investment in support of more efficient, inclusive, resilient and sustainable agrifood systems, integrating youth leadership and innovation as key drivers of change. Latin America and the Caribbean combines sustained progress in reducing hunger with growing potential to structure and channel impact investment in the sector. Against this backdrop, this special event offers governments a key space to share strategic visions and strengthen partnerships aimed at mobilizing increased financing for agrifood systems.

Objective of the session

Showcase innovative experiences, financial instruments and approaches that have successfully supported the scaling up of financing for inclusive, resilient and sustainable agrifood systems.

Foster dialogue among governments and development banks on key challenges and opportunities to create enabling conditions for sustainable and inclusive investment in agrifood systems.

Build consensus on pathways to scale financing for agrifood systems transformations, while reinforcing FAO's role as a facilitator of investment mobilization and partnership building