Agricultural Finance

The “Liberation Day” tariffs proposed by the United States on April 2 included a blanket 10% increase for countries with which the U.S. runs bilateral trade surpluses or small deficits, and a range of higher tariffs for 56 economies with which the U.S. runs sizeable trade deficits (excluding Canada and Mexico as partners in the U.S-Canada-Mexico free trade agreement; and Cuba, Russia and North Korea).

In the wake of a series of recent crises that drove up global hunger and food insecurity, the world remains far off track in meeting Sustainable Development Goal 2 (SDG2)—ending hunger and malnutrition by 2030. Now, in a chaotic global environment of still more crises and complications, including cuts in official development assistance, what is the best course forward for governments and development organizations to address these urgent problems?

The complex challenge of increasing food production while mitigating carbon dioxide emissions, building resilience to climate change, and reducing the burden of agriculture on natural resources requires innovative approaches. Promising strategies include increasing access to mechanization and adopting modern fertilization processes that contribute to climate change adaptation efforts, or the use of improved seeds.

As the world edges closer to the 2030 Sustainable Development Goal deadline, progress on achieving Zero Hunger has stalled, according to the FAO’s 2024 flagship report, The State of Food Security and Nutrition in the World.

As many as 757 million people may have experienced hunger in 2023, while 2.33 billion experienced moderate or severe food insecurity. In 2022, as many as 2.8 billion were not able to afford a nutritious diet. The situation is particularly dire in low-income countries, especially for rural populations, women, youth, and Indigenous Peoples.

Several constraints limit the ability of smallholder farmers in low and middle income countries (LMICs) to reach their production potential. One such constraint is access to formal finance; smallholders and other agricultural value chain participants frequently cannot access credit necessary to invest in new crops or technologies and deal with risks and shocks and/or savings products necessary to safely carry wealth from harvest to planting.