Presentation by Mahfuz Ahmed (ADB) at the APAARI High Level Policy Dialogue, 8 Dec 2015

1. INVESTING IN AGRICULTURE
TO FEED ASIA SAFELY AND
SECURELY
HIGH LEVEL POLICY DIALOGUE ON INVESTMENT
IN AGRICULTURE RESEARCH FOR SUSTAINABLE
DEVELOPMENT IN THE ASIA-PACIFIC REGION
Bangkok, Thailand
8‒9 December 2015
Mahfuz Ahmed
Asian Development Bank

2. Outline
1. Complexity of Food Security in Asia
2. Ways to Address Food Security: ADB
Priorities
3. Investment Highlights
4. Business Development and Innovation

3. 1. Complexity of Food
Security in Asia

4. • Growing demand for food and persisting
food insecurity despite impressive
economic growth and increasing wealth.
• Highest number of hungry people
• High micronutrient deficiency
• Uptrend in malnutrition-related diseases in
urban areas (overweight, obesity,
diabetes)
Food Insecurity in Asia

5. • Population growth and urbanization
• Declining natural resources and degraded
environment
• Climate change and disaster risks
• Feminization of agriculture and ageing
population, especially in rural areas
Key Challenges

6. 2. Ways to Address
Food Security:
ADB Priorities

7. Priority Areas
• Increasing the productivity and reducing pre-
and post-harvest losses of food
• Improving market connectivity and value
chain linkage
• Enhancing food safety, quality, and nutrition
• Enhancing management and climate
resilience of natural resources

8. ADB Food Security Investment
a multi-sector approach
Food Security
Investment
($2 billion
annually)
Public Sector
Operations
Agriculture and Natural
Resources
• Productivity
• Market
• Food Safety, Quality, and
Nutrition
• Natural Resources
Agribusiness and Value-
Chain
Financial Intermediary
Private Sector
Operations
Cross sectoral:
• Education
• Transport
• Finance, etc.
Inclusive Finance and
SMEs

9. Growing Trend in ADB Agriculture
and Natural Resources Operations
2012‒2014
$3.2 billion
Sovereign: $2.5 billion
Non-sovereign: $726 million
2015‒2017
$6.3 billion
Sovereign: $5.7 billion
Non-sovereign: $600
million
2009‒2011
Sovereign: $1.6 billion

10. ANR Investment Areas to 2020
Core Areas Investment Areas Links with Other
Sectors/Themes
Productivity • Sustainable infrastructure
• Commercialization and private service
delivery
• Climate-smart agriculture
• Policy reforms
- Water
- Energy
- Finance
- Social
- Gender
- Climate change
Market • Logistics and market infrastructure
• Agribusiness and value chains
• ICT and rural-urban-market linkages
• Policy reforms
- Public-private
partnership
- Transport
- Finance
Food Safety,
Quality, and
Nutrition
• Infrastructure for safety and standards
• Policy, regulation, and capacity
• Outreach and education
• Policy reforms
- Health
- Social
- Gender
- Education
Natural
Resources
• Climate resilience
• Land, soil, forest, river basin management
- Water
- Social
- Gender
- Climate change
- Environment

11. Learning from Ongoing Innovation
• Enhancing productivity — crop diversification
and smallholder market linkages
• Delivering sustainable resource use
• Building climate resilience — technology,
infrastructure and resource use efficiency
• Financial inclusion for agribusiness development
— small and medium enterprise and value chain
financing
• Promoting inclusive business — agribusiness
value chain and logistics

12. 3. Investment Highlights

14. Enhancing Productivity
Policy Reform and Crop Diversification
• Nepal: Agriculture Sector Development Program
(2016 grant of $50 million)
 Upgrade of logistics and services
 Policy reforms to increase competitiveness and promote
commercial agriculture
• Bangladesh: Crop Diversification and Value Chain
Infrastructure Development (2018 loan of $200 million)
 Improved capacity of farmers and enterprises to produce
and market safe food and high value products
 Access to micro finance by farmers and agro-enterprises

15. Delivering Sustainable Resource Use
Water Saving Technology
PRC: Shanxi Integrated Agricultural Development (2009
loan of $100 million)
• Water-saving farming technologies, such as drip irrigation
• Credit to 40,000 farmers and agro-processing enterprises
• Supply high value agricultural produce that meets food
safety and quality standards
• To date, 39,000 farmers have benefited from significantly
increased productivity and farm income
• Vegetation coverage in the project area has also
increased

16. Building Climate Resilience
Food-Water-Energy Nexus
Climate-Friendly Agribusiness Value Chains (2017,
Cambodia: $100 million, Lao PDR and Myanmar: $50
million each)
 Improved critical production and post-harvest infrastructure
 Reduced energy cost by promoting bio-energy use and
sustainable biomass management
 Targeted agribusiness support services
 Regional cooperation and integration
 Potential to receive GCF funding

17. Financial Inclusion for
Agribusiness Development
SME Financing to Support Agribusiness
• Sri Lanka: SME Line of Credit Project (2016 loan of $100
million)
 Auction mechanism
 Financial training
 Cluster lending
• Bangladesh: SME Line of Credit (2015 loan of $200
million)
 2/3 of the credit line will cater to the smaller companies
 Cluster lending and promoting backward and forward
linkages

18. Promoting Inclusive Business
Smallholder Agribusiness
India and Cambodia: Spice Value Chain Development (2010 equity of $10
million, loan of $6.5 million, and grant of $5 million)
• ADB is investing $16.5 million in Akay, an Indian spice company that
engages directly with farmers and buyers, opening up income opportunities
for poor farmers.
• Akay Flavours & Aromatics tried a new approach by engaging directly with
farmers and buyers, cutting out the middlemen and opening up income
opportunities for poor farmers.
• With headquarters in Cochin, Kerala, the company operates 5 processing
plants across the country and exports its spice products to 70 countries.
Pakistan: Financial Inclusion and Dairy Growth Facility (2013 partial credit
guarantee of up to $35 million)
• Availing formal credit from a local bank by 6,000 unbanked dairy farmers
• Disseminating technologies and linking to urban markets

19. 4. Business Development
and Innovation

20. Business
Development
and Innovation
PARTNERSHIP
THEMATIC GROUP
SECRETARIAT
SUPPORT
ADB PRIVATE SECTOR
OPERATIONS AND
REGIONAL
DEPARTMENTS
SYNERGIES WITH
OTHER SECTORS AND
THEMES
Strategic Approach

21. Partnerships
Type of Partnerships Partners
1. Co-financing European Union, KfW, Netherlands, Swiss
Development Corporation, International Fund
for Agricultural Development, and the Global
Agriculture and Food Security Program
2. Knowledge Partnership Food and Agriculture Organization,
International Fund for Agricultural Development,
CGIAR, ASEAN Secretariat; Organization for
Economic Cooperation and Development,
Regional Centers of Excellence, Asia Pacific
Association of Agricultural Research
Institutions, Global Forum on Agricultural
Research, World Economic Forum (Agriculture
and Food Security Agenda)
3. Private Sector and Civil
Society
Private companies and foundations (Syngenta,
Rabobank), impact investors (Althelia), civil
society organizations (WWF, Oxfam, Asian
Farmers Association)

22. Knowledge Management Plan
(2015–2020)
• Asia-Pacific Food Security Knowledge Forum (2016)
• Research collaboration on climate-resilient rice
(International Rice Research Institute and DMCs); and
value chain financing (International Food Policy Research
Institute and DMCs)
• Expanding knowledge networks and partnerships with
private companies and foundations (Syngenta, Rabobank)
• Engaging in South-South and North-South knowledge and
technology transfer

23. Thank you!