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Annual Report 2020

Strengthening Smallholder Farmers' Resilience

Reporting Period: January to December 2020

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Letter from the Chairs

Dear Friends,
2020 was a year like no other. We were confronted with an unprecedented global health crisis, travel restrictions and lockdowns, disrupted supply chains, massive losses in income, and a stark rise in food insecurity – from an already worrying 2019 baseline of acute hunger. We are facing an accelerating race against time to achieve Sustainable Development Goal 2 (SDG2: Zero Hunger) by 2030. 

The ongoing COVID-19 pandemic has laid bare the vulnerabilities of global agriculture and food systems. The shock to these systems is being particularly felt in low-income countries, especially for smallholder farmers –who are already disproportionately impacted by conflict, climate change, and natural disasters– and for small and medium-sized enterprises in agri-food supply chains, which offer job opportunities and are often a vital link between producers and consumers.

Global hunger has been slowly on the rise since 2014, with conflict and climate change driving millions into food insecurity. The SOFI 2021 Report shows that global hunger has accelerated under the shadow of COVID-19. In 2020, between 720 and 811 million people faced hunger –as many as 161 million more than in 2019– and an additional 320 million people did not have access to adequate food. If recent trends continue, it is estimated that 660 million people may still face hunger in 2030.

While humanitarian responses are critical during crises, they are never a long-term solution and it is equally important to plan now to strengthen rural livelihoods, ensure food security, and build resilience in the short, medium, and long term. The Global Agriculture and Food Security Program (GAFSP) is a crucial source of financing for continued investment in agriculture and food security in countries furthest away from achieving SDG2 – starting with work along the humanitarian-development nexus and all the way to inclusive and sustainable food systems.

Last year, we celebrated a decade of operations, having reached more than 16 million smallholder farmers, their families, and communities. As you’ll read in this edition, many ongoing projects were able to pivot to mitigate the impacts of COVID-19. For instance, in Honduras, farming communities were able to have sustained access to food and markets despite country-wide restrictions on movement. And, in September 2020, GAFSP was able to quickly make close to US$60 million in additional funding available for ongoing country and producer organization-led projects to support an immediate response to the global pandemic. 

In 2020, we also celebrated the successful launch of GAFSP’s replenishment period to raise US$1.5 billion between 2020 and 2025. Donors stepped up and contributed over US$300 million, allowing the Program to achieve its yearly goal. With these funds, we were able to launch a new Call for Proposals to support countries and producer organizations in their COVID-19 response efforts and strengthen local agriculture and food systems in a changing climate. This also comes at a critical moment leading up to the UN Food Systems Summit in September 2021. 

Today, we have the opportunity to transform food systems so that they are fit for purpose, and GAFSP has a vital role to play in financing public and private sector investments that do exactly that. But we cannot do it alone – this will require collective action from all stakeholders, and a renewed sense of urgency to build stronger, more inclusive, resilient, and sustainable agriculture and food systems. Will you join us? 

–Dirk Schattschneider, Chair of the GAFSP Steering Committee & Iris Krebber, Chair of the Private Sector Window Donor Committee

What is GAFSP?

A decade ago, the G20 came together to launch the Global Agriculture and Food Security Program (GAFSP) to address a clear need for increased agricultural investment in low-income countries, and to support smallholder farmers and businesses to recover and grow in the medium to long term. In line with Sustainable Development Goal (SDG) 2: End hunger, achieve food security and improved nutrition, and promote sustainable agriculture, GAFSP supports resilient and sustainable agriculture that benefits and empowers poor and vulnerable farmers, their families, and communities.

In the world’s poorest countries, GAFSP provides financial and technical resources to support smallholder farmers to produce, consume, and sell enough safe and nutritious food. The Program does this by investing in a wide range of opportunities that raise agricultural productivity, link farmers to markets, improve non-farm rural livelihoods, reduce risk and vulnerability, and provide technical assistance, institution building, and capacity development. Moreover, over the past 10 years, GAFSP has supported projects that have a strong focus on cross-cutting priorities, such as climate change, nutrition, gender, and income generation—more than half of which are in fragile contexts.

16 million people

million people reached

GAFSP provides support for millions of smallholder farmers. More than 16 million rural people, including approximately 6.3 million women, have received direct support through public sector projects, and 5.9 million people have been reached through private sector support. 

$1.7 billion in financing

billion in financing

GAFSP has channeled US$1.7 billion to fight hunger, malnutrition, and poverty, with US$1.3 billion in grant financing, US$416.5 million in private sector financing, and US$13.2 million to producer organization-led projects. 

65% of projects address climate

of projects address climate

About 65 percent of GAFSP investments directly address climate change, delivering either mitigation or adaptation benefits. And, GAFSP’s portfolio was shown to be an overall net reducer of greenhouse gas emissions.

Bangladesh

Increasing Access to Finance for Farmers’ Organizations

When COVID-19 hit Bangladesh, Sara Bangla Krishak Society (SBKS), a national organization of farmers’ organizations and MMI project partner, established 55 virtual call centers across the country. More than 10,000 producers turn to these virtual call centers as a safe alternative to sell their products, buy inputs, or receive technical advice. On average, 223 producers use them each day; nearly half are women. As a result, farmers have received higher prices on average and have significantly reduced their post-harvest losses.

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Photo: Saikat Mojumder/FAO

Adapting to 2020

COVID-19 Response

The COVID-19 global pandemic underlined the fragility and interdependence of global food systems, with the rise in food insecurity being one of the most tangible symptoms. As with many shocks, the poorest and most vulnerable were hit first and hardest, particularly those involved in growing, producing, processing, storing, transporting, and consuming food.

When COVID-19 hit, GAFSP’s flexible and responsive approach enabled it to move quickly to address the threats of hunger, malnutrition, and disrupted livelihoods that accompanied the pandemic by supporting locally led solutions and existing projects to mitigate impacts and work towards recovery in the short to medium term. In September 2020, the GAFSP Steering Committee allocated nearly US$60 million in additional financing to ongoing public sector and producer organization-led projects that were well positioned to do this work. In addition, to support recovery in the medium to longer term, GAFSP launched a new Call for Proposals in May 2021 to support countries to strengthen the performance, resilience, and sustainability of their agriculture sector and food systems in a changing climate.


Building Climate Resilience

Agriculture is uniquely placed to help solve the climate crisis by reducing the climate footprint, strengthening farmers’ resilience, and maintaining or even increasing food production to meet future demand. GAFSP supports smallholder farmers, countries, and agribusinesses adapt to—and even mitigate—climate change. As of December 2020, close to 62 percent of GAFSP funding (US$563 million) and about 65 percent of public sector projects have elements that contribute to climate change co-benefits, delivering either mitigation or adaptation benefits, while the Private Sector Window projects are well on their way to meeting international climate finance targets.

Kyrgyz Republic

Agriculture Productivity and Nutrition Improvement Project (APNIP)

Gulzat, a resident of Alga village in the Batken region and a mother of three, is one of the 8,000 female farmers now enjoying higher yields, more diverse nutrition for their families, and extra income from selling vegetables because of APNIP’s support. Gulzat’s husband, Altynbek, was a seasonal migrant worker in Moscow and lost his job when he was not able to travel to Russia during the pandemic. Their income now fully depends on a small household plot of 0.05 hectares.

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Photo: World Bank

Focusing on Smallholder Farmers

Even before the outbreak of COVID-19, the world was not on track to meet the SDG2 goal of eliminating hunger and malnutrition. In 2020, more than 2 billion people did not have access to safe, healthy, and sufficient food — an increase of almost 320 million people in just one year. Investing in agriculture and food systems is critical to improving food and nutrition security and to providing livelihoods through increased productivity and better access to markets.

Ensuring Food and Nutrition Security

As of December 2020, close to 60 percent of GAFSP’s public sector projects, totaling US$193 million, include nutrition-related activities. Nutrition-sensitive agriculture activities account for about three-quarters of the Program’s nutrition-related spending, including promoting nutritionally rich foods, dietary diversity, and biofortified crops, and about one-quarter goes to nutrition-specific activities, including distributing micronutrient supplements, implementing behavioral change campaigns, and improving household sanitation and hygiene.


Strengthening Livelihoods

GAFSP’s portfolio promotes remunerative farm and non-farm jobs as a focus area and aims to improve the incomes of 10 million people in rural households in countries furthest from achieving the SDGs by 20 percent. For example, in Bangladesh, income levels for crop farmers increased by 15 percent and for fisherfolk by 37 percent over a two-year period. In Cambodia, the monthly household income increased by 85 percent, compared to only 35 percent in non-project households. GAFSP has been tracking job creation since 2017, and to date, close to 150,000 direct employment opportunities have been created across the public sector portfolio.


Enabling Inclusive Food Systems

Despite food systems being the largest employer of women, they remain more at risk of being food insecure than men. COVID-19 is exacerbating constraints faced by female farmers. GAFSP’s public and private sector projects encompass a range of gender-sensitive good practices related to agricultural technology, extension, and input interventions. As a result, as of December 2020, projects have provided agricultural support to 6.3 million women—close to 40 percent of all people reached. And, almost all GAFSP investments (90 percent) address elements of good gender mainstreaming for public investment projects, including gender analysis during preparation, inclusion of gender actions, and gender-disaggregated monitoring and evaluation.

Program Portfolio Snapshot

As of December 2020, GAFSP's US$1.7 billion portfolio was comprised of US$1.3 billion in grant financing to public sector interventions, US$416.50 million to private sector interventions, and US$13.2 million to producer organization-led projects under the MMI. By the end of 2020, the portfolio grew to 140 public and private sector projects across 47 countries.

Public Sector Grants

As of December 2020, the public sector portfolio financed more than US$1.3 billion and included 62 projects in 39 countries, with 27 projects ongoing in 22 countries in 2020.

Included are some highlighted results (percent of target).

Private Sector Investments

As of June 2020, the Private Sector Window had approved 77 investment projects (IP) in 27 countries totaling US$383 million and 79 complementary advisory service (AS) engagements in 32 countries totaling US$33.5 million.

Financing SDG2 & GAFSP Replenishment

GAFSP’s replenishment comes at a critical moment, as progress towards achieving SDG2 by 2030 is at risk. To this end, the Program is seeking to raise US$1.5 billion over five years (2020–2025). This funding will enable GAFSP to help at least 30 countries build sustainable and resilient food systems, increase yields for at least 10 million farmers, and create more than a million on- and off- farm jobs.

To signal the launch of this replenishment period, GAFSP held a virtual event, hosted by the German Federal Ministry of Economic Cooperation and Development (BMZ), to kick off discussions about how food systems need to be reimagined to meet the new demands brought on by climate, conflict, and now the COVID-19 pandemic and about the critical role that partnerships play in achieving SDG2. 

GAFSP, with its inclusive and participatory governance, was highlighted as one financing instrument that is well-positioned to continue to play this role. Donors, recognizing that the Program adds important value to the global partnerships on SDG2, announced more than US$300 million in new contributions, allowing the Program to meet its 2020 fundraising target and enabling GAFSP to launch a new Call for Proposals to support COVID-19 response and recovery.
Uganda

Grainpulse

Last year, IFC, with support from GAFSP’s Private Sector Window, committed a US$11 million loan to Grainpulse to strengthen the company’s farmer supply chain and support its expansion to become a “one-stop-shop” for farmers, providing them with multiple services, including fertilizer blending that is optimized to popular local crops. Crops have been plentiful in recent months for Kizito Edward, a 29-year-old smallholder who plants maize, coffee, and bananas. The relative bounty has allowed him to finish building his family home, pay his son’s school fees, and even buy a truck—his first-ever piece of farm equipment.

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Photo: Shuttershock

Vision for 2021

GAFSP’s work is more urgent than ever, with climate change, conflict, and COVID-19 further complicating food systems globally. The Program will continue to be a key global financing instrument to support smallholder farmers and countries achieve food security and to promote harmonized public and private sector investments that support the related Sustainable Development Goals on poverty, climate change, health, education, gender equity, fragility, and job creation.

Following a successful replenishment in 2020, GAFSP launched a competitive, open Call for Proposals in May 2021, with an indicative amount of US$150 million in financing available for new projects in the context of the ongoing global pandemic. The Steering Committee is expected to allocate approximately US$125 million to the 5-8 highest-ranked country-led proposals, and approximately US$25 million in funding to 8-10 successful producer organization-led proposals. 

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