LARC39: FAO is calling for accelerated financing to strengthen agrifood systems in Latin America and the Caribbean

The region faces the urgent challenge of mobilizing resources to strengthen efficient, inclusive, resilient, and sustainable agrifood systems. This was the central message of the special session, "Scaling Up Financing for Inclusive and Resilient AgriFood Systems in Latin America and the Caribbean Through the Hand-in-Hand Initiative," organized by the Food and Agriculture Organization of the United Nations (FAO). The session took place in Brasília, Brazil, as part of the 39th FAO Regional Conference for Latin America and the Caribbean.

The agricultural sector is a strategic pillar for the region. It represents 5 to 20 percent of national gross domestic product (GDP) and generates over 100 million jobs, equivalent to 22.6 percent of total employment. In Latin America and the Caribbean, family farming accounts for over 50 percent of the cultivated area of basic food crops, such as vegetables, fruits, and cereals, and represents 81 percent of farms (17.8 million holdings).

However, significant structural gaps in financing and investment persist in the sector. In 2023, Latin America and the Caribbean received only $3.4 billion USD in agrifood development financing, which is less than 10 percent of the global total and a 30 percent decline from 2022. From 2001 to 2021, public spending on agriculture averaged just 0.67 percent of GDP, below the global average of 0.75 percent.

FAO Director-General QU Dongyu, emphasized that in Latin America and the Caribbean, agrifood systems remain fundamental to economic growth, employment, food security, environmental sustainability, and climate action throughout the region. "Yet, the financing architecture that supports them is increasingly misaligned with the urgency and scale of today’s challenges. Tackling these challenges requires policy coherence, a stronger enabling environment, and better functioning institutions capable of improving the quality, direction and impact of financial flows."

The FAO highlighted the central role of the Hand-in-Hand Initiative and its geospatial platform, which uses advanced analytics to identify territories where investments can most effectively reduce poverty and hunger.

Since its launch in 2019, the initiative has helped mobilize $1.75 billion in Latin America and the Caribbean by developing investment portfolios aligned with national priorities and the Sustainable Development Goals (SDGs).

FAO Chief Economist Máximo Torero noted that "increasing financing is not only a matter of volume, but also of quality, coherence, and strategic alignment."

FAO Assistant Director-General and Regional Representative for Latin America and "the Caribbean Rene Orellana Halkyer moderated the event and underscored that the Hand in Hand Initiative seeks to accelerate the transformation of agrifood systems by developing investment plans aimed at increasing incomes, improving nutrition and well-being among rural populations living in poverty, and strengthening resilience to climate change".

During the session, participants discussed concrete solutions to close the financing gap. These solutions included promoting innovative mechanisms, such as debt-for-nature swaps and thematic bonds (green, social, or sustainability-linked). Participants also emphasized the importance of blended finance, which uses public and/or philanthropic capital to mobilize private resources and reduce risks. Additionally, speakers emphasized the importance of harmonizing regulatory frameworks, strengthening coordination among the ministries of agriculture, finance, and the environment, and leveraging territorial platforms, such as Hand-in-Hand, to allocate resources to areas with high productive potential and high levels of poverty.

Event speakers included Martha Carvajalino, Colombia's Minister of Agriculture and Rural Development; Rómulo Acurio, Peru's Ambassador Extraordinary and Plenipotentiary to Brazil; Floyd Green, Jamaica's Minister of Agriculture, Fisheries, and Mining; and Shantal Munro-Knight, Barbados' Minister of Agriculture, Food Security, and Nutritional Security.

Others participating included Martin von Hildebrand, Secretary-General of the Amazon Cooperation Treaty Organization (ACTO); Ignacio Lorenzo, Director of Technical Advisory for Biodiversity and Climate at the Development Bank of Latin America and the Caribbean (CAF); Rocío Medina, Regional Director for Latin America and the Caribbean of the International Fund for Agricultural Development (IFAD); Eli Weiss, Senior Agricultural Economist at the World Bank; and Bruno Jacquet, Senior Agriculture and Rural Development Specialist at the Inter-American Development Bank (IDB).

The session concluded with a call to strengthen public-private partnerships, mobilize international resources, and accelerate the implementation of innovative financial instruments to close the financing gap and advance toward more inclusive, resilient, and sustainable agrifood systems in Latin America and the Caribbean.