Agriculture and Food Security
ADB scales up nature-based solutions and support for climate-smart agriculture across the entire agriculture and food value chains, including the blue economy.
Qingfeng Zhang, Senior Director of ADB’s Agriculture, Food, Nature, and Rural Development, discusses agriculture and food security challenges in developing Asia and how ADB is helping through financing and knowledge sharing.
Nearly 1.1 billion people still do not have secure access to food in the region. ADB recently announced a program worth at least $14 to improve regional food security. The program will cover agricultural value chains, climate-smart agriculture, irrigation, water, and natural resources management. The program will also consider supporting green recovery, energy transition, logistics, transport, rural financing, nutrition, health, and education.
Transforming food supply chains is critical to making them more climate-resilient, accessible, and affordable to farmers. This must be complemented with climate early warning systems, better weather forecasting, efficient logistics, and better land use.
Agriculture is a key source of global methane emissions (more than 30%), so integrating natural resource management into agri-food systems can help reduce this. Of importance also, is addressing inefficient farming, fishing, value chains, agricultural inputs, water use, and harvesting. This can help balance productivity and improve climate change adaptation and mitigation.
Nature-based solutions can deliver benefits for the individual, environment, and society as a whole. An example is community-based agroforestry which balances crop resilience and livelihood opportunities, while improving soil health and maximizing water and fertilizer use.
The Russian invasion of Ukraine has worsened the state of food insecurity in Asia and the Pacific. The COVID-19 pandemic restricted trade, disrupted food supply chains, and increased unemployment in the sector. The Russian invasion of Ukraine has further reduced supplies of vital foods, often as a result of inconsistent trade restrictions.
Fuel price hikes have created a chain reaction: more expensive food distribution; high global food inflation; fertilizer shortage; and reduced crop yields. This combination has impacting on farmers’ incomes. Finally, macroeconomic conditions and currency depreciation have limited countries’ capacity to import food and other critical commodities.
In Asia, 75% of farmers are dependent on agriculture. Climate change is projected to reduce crop productivity by 15% to 20% (or even 50% in some crops) by 2050 in the business-as-usual scenario. Enhancing adaptation and resilience in agriculture and food production is thus critical.
ADB aims to increase its climate financing to $100 billion until 2030. This means aligning 75% of its operations to support climate action.
ADB’s focus will increasingly be on where and how food is produced, processed, and transported to consumers. The bank also supports changes in dietary patterns, along with reducing food loss in supply chains. Agriculture is responsible for more than 30% of global methane emissions. ADB aims to decrease this by working to transform agri-food systems, maximizing the use of water and agricultural inputs, and increasing the efficiency of value chains.
ADB also continuous to explore emerging technologies, such as plant-based food that produces less emissions and biofortification to increase nutrition security. ADB also promotes policy dialogue, policy reform, and improved climate action plans.
Agriculture uses 70% of the world’s water resources and is thus highly vulnerable to water risks. Water shortages impact not only on food production but also the whole value chain, including food security. High levels of wastewater and animal excretion mean agriculture creates the greatest amount of water pollution.
ADB promotes the efficient use of water resources to help increase the climate resilience of agri-food systems. As of 2021, irrigation ($2 billion), water-based natural resources management ($1 billion), and rural flood protection ($477 million) are among ADB’s top investments in agriculture and natural resources.
Aiming to invest $100 billion in climate financing up to 2030, ADB is further aligning its agriculture and natural resources work with the Paris Agreement. This includes integrating technologies that save water, the use of drought tolerant crops, irrigation scheduling, and improved farming practices.
ADB is supporting India’s infrastructure and health services in line with the government’s drive to recover from the COVID-19 pandemic. By early 2022, ADB had committed $2 billion for projects and technical assistance to support agriculture and natural resources.
ADB is providing a $100 million loan in Maharashtra to boost agribusiness and increase farmers’ incomes while reducing food waste and improving food quality and accessibility. Maharashtra accounts for 11% of India’s fruit supply, 6% of vegetable production, and 8% of floriculture exports.
The project will provide working capital to farm producers and value chain operators to expand and connect with high-value markets.
A $30 million loan to Smartchem Technologies is financing specialized fertilizers, along with promoting energy efficiency, health, and safety. The fertilizers are customized according to crops and soil type, with added disease-control features. Their use can reduce water pollution from fertilizer runoff by 60% and hasten the transition to sustainable farming.
Aside from exempting food supply chains from mobility restrictions and providing short-term financing, ADB also advocates for open trade and the availability of systems and processes to ensure transparency of information on food availability.
Diversification in agricultural production, food generated from sustainable aquaculture and fisheries, and promotion of healthy diets all help stabilize food prices in the region. Equally important is the need to accelerate rural development, especially market infrastructure and logistics. These improvements help ensure efficient food distribution from producer to consumer and stabilize food markets while promoting rural-urban connectivity.
The region needs around $350 billion annually to make food systems greener and more resilient. Most of this money will need to come from the private sector. ADB provides nonsovereign financing for plants, machinery, and infrastructure when private companies cannot access this from commercial banks. Short-term working capital is available to farmers to promote agribusinesses, with ADB often partnering with commercial banks.
An example is the $100-million loan to Louis Dreyfus Company (LDC). The loan supports LDC’s operations in India, Indonesia, Pakistan, Thailand, and Viet Nam by financing coffee, cotton, and rice inventories for over 50,000 smallholder farmers. The project helps secure food supply chains and ensures reliable incomes for small farmers recovering from COVID-19 losses.
ADB is helping Olam in Indonesia, Papua New Guinea, Timor-Leste, and Viet Nam to roll out the Olam Farmer Information System (OFIS) to 20,000 coffee farmers. OFIS uses mobile technology to collect data and provide tailored support to farmers, including farm management plans to allow them to track farming inputs and outputs.
Pakistan faces major challenges in reaching most SDGs, including SDGs 1 and 2. A positive note is Pakistan’s achievement of SDG 13 on climate action, a result of the country’s low carbon footprint, along with Afghanistan, Bangladesh, India, Nepal, Sri Lanka, and Myanmar.
The extensive flooding in Pakistan in August 2022 created widespread damage, loss of life, and devastated the health system. Food stocks, farmlands, and crops were washed away, including cotton, a key export crop. The floods will reduce global cotton supply and impact the country’s economy.
ADB is working with Pakistan to improve economic management, build resilience, and boost the private sector. As of early 2022, ADB had committed $4.55 billion to support agriculture and natural resources in Pakistan. The latest $1.5-billion project supports the government’s response to the destructive floods, the impact of COVID-19, the Russian invasion of Ukraine, and other external shocks.
Senior Director, Agriculture, Food, Nature, and Rural Development