EBRD and donors boost agribusiness and promote sustainable food value chains

By Katarzyna Kukula

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Private sector key for fostering competitiveness and resilience

In the EBRD regions agribusiness has huge potential to advance economic growth, sustainable value chains and global food security. It is vital, however, to involve the private sector and promote its competitiveness in order to foster the sector’s resilience and economic diversification.

The EBRD, with support from donors, mobilises finance for agribusiness companies, assists them with technical advice and works with governments on policy reform to help create an environment in which the sector can thrive.

The Bank also aims to minimise the environmental footprint of agribusiness firms through better use of energy and water, reduced food waste and more recycling of agricultural by-products.

Moreover, the EBRD supports agricultural innovation through research as well as transfers of knowledge and technology. It achieves this by partnering with universities and global experts such as the Food and Agriculture Organization of the United Nations (FAO).

Ukraine has the potential to feed much more of the world's growing population. The EBRD is working with FAO and the Central European Initiative to mobilise the private sector and help the country's farmers increase their skills and knowledge of best practices.

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To facilitate this work, the EBRD established a dedicated advisory team to provide financial and technical support for agribusiness companies, with the overall aim of scaling up private sector participation and making food production more efficient and sustainable.

In 2016 alone, the EBRD invested €817 million in agribusiness projects. Donors including the European Union (EU), the TaiwanBusiness-EBRD Technical Cooperation Fund, Luxembourg, Italy, Korea and the EBRD southern and eastern Mediterranean Multi-Donor Account have contributed an additional €41.2 million for these activities.

The projects have a concrete impact along the value chain, from farmers to producers to food retailers. They help introduce higher standards for food quality and safety, promote increased animal welfare, make businesses more competitive and also more inclusive, as well as expand opportunities for trade and boost exports.

For example, the EU contributed in 2016 €25.6 million for the Trade and Competitiveness programme to support the development of value chains in industries such as agribusiness, manufacturing and services, property and information and communication technologies in Morocco and Tunisia.

The programme links small and medium sized enterprises (SMEs) to larger, export-oriented companies to create value chains that are more competitive and more sustainable.

Also in 2016, the TaiwanBusiness-EBRD Technical Cooperation Fund provided an additional US$ 15 million to a co-financing facility for investments in agribusiness SMEs in early transition countries, where development challenges are significant.

In Ukraine, for the past three years the EBRD teamed up with FAO, the Central European Initiative and a local university to help local grain farmers increase their skills.

Vadym Svietlov and his partner Anna, owners of a small grain farm in Sumy, a large town in Ukraine’s north-east, are among the beneficiaries of this project. They received training on sustainable farming that combined theory and practice.

Mr Svietlov participated in a course in France to see first-hand how farmers apply best practices there. This has had a tangible impact on his work.

“We updated our farming techniques and also looked into new crops,” he said. “I started to plant spelt on my farm, which is a very popular and profitable crop, especially on the European market.”

Furthermore, last year Luxembourg supported the development and promotion of a new law on agricultural cooperatives in Serbia under a joint project by the EBRD and FAO.

Drawing on international experience, this work is meant to encourage better governance in cooperatives as well as provide training to local suppliers and small agribusinesses.

 In Albania, the agriculture sector provides employment for almost 50 per cent of people living in rural areas and accounts for around 20 per cent of the country’s GDP - yet it remains underserviced by financial institutions.

That is why the EBRD, together with the government of Albania, launched in 2016 an innovative facility to increase access to finance for agribusinesses by providing dedicated credit lines to banks and by sharing with them the risk of lending.

The credit line is combined with technical assistance funded by the government for capacity-building and training of the participating financial institutions.

The EBRD and its donors continue to promote a competitive and inclusive agribusiness sector across its regions, while ensuring that local consumers have access to high-quality, well-priced food and beverages, produced sustainably.

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