Agriculture and food systems

Agriculture and food systems must become more productive and resilient while reducing emissions, land degradation, biodiversity loss and water pressures. That requires investment not just in farming, but also in processing, supply chains, finance, insurance and services for small-scale producers. National strategies and targeted programs are advancing, but finance remains far below requirements and seldom reaches smallholders, women and rural enterprises at the scale needed for food-system transformation.

Status

Agrifood climate finance and implementation are growing, but investment remains far below what is needed to transform food systems. National pathways and financing initiatives are proliferating, while mainstream agricultural support is still not consistently aligned with resilience and sustainability. Small-scale producers and rural enterprises receive a limited share of climate finance, despite promising results from programs combining affordable capital, technical assistance and market access. Such approaches remain concentrated in individual projects, and evidence of wider productivity, climate and livelihood outcomes is still limited.

Scale

Magnitude relative to the need

Stalled

Climate finance for agriculture and food systems remains far below estimated investment needs for the sector's transition. Global agrifood climate finance reached approximately USD 95 billion annually in 2021/22, compared with an estimated USD 1.1 trillion required annually through 2030 (CLIC, 2025). These figures capture climate-related investment in agrifood systems rather than total agricultural investment. Tracking remains incomplete, particularly for private and cross-sectoral finance, and comparable estimates for EMDEs excluding China are unavailable. Despite emerging financing mechanisms, the scale of investment remains insufficient to support widespread transformation.

Speed

Pace of reform against what's needed

Slow

Climate finance for agriculture and food systems is increasing, but progress remains uneven and insufficient to meet transition objectives. Tracked agrifood climate finance grew 232% between 2019/20 and 2021/22, although part of this increase reflects expanded data coverage and methodological changes rather than additional investment. Growth was geographically concentrated: excluding China and Europe, the increase was 62%. While financing approaches and national investment frameworks are evolving, available evidence does not establish sustained acceleration at the pace required for more productive, resilient and sustainable food systems.

Reach

How far it extends across countries and institutions

Stalled

Agrifood climate finance remains concentrated among larger agribusinesses and established value chains. Only USD 5.53 billion reached small-scale agrifood systems in 2019/20, equivalent to 0.8% of global climate finance and 19% of tracked agrifood climate finance (Chiriac et al., 2023). High transaction costs, limited collateral and weak rural financial infrastructure restrict access for smallholders, women and agrifood SMEs. Some integrated models are expanding their reach: through the IDH Farmfit Fund, more than 66,000 farmers gained access to loans (IDH, 2024). However, program-level results do not establish that finance is reaching underserved rural communities sufficiently.

Action fronts

Climate finance reform advances on five fronts, from replenishing the funds that already exist to reshaping how the whole system works. These are the fronts where Agriculture and food systems is making headway.

Replenishing
Re-channeling
Reshaping

The Path Forward

Food-system finance must scale significantly and reach small-scale producers, women and rural enterprises. Combining affordable capital with services and market access, while redirecting agricultural support towards resilience and sustainability, can turn successful projects into wider transformation.

Countries should connect food-system pathways, agricultural plans, NDCs and nature strategies through costed, prioritized investment programs with clear financing and implementation responsibilities. Expanding affordable public, concessional and blended finance needs to go alongside redirecting environmentally harmful agricultural support and mobilizing private capital where commercially viable. To reach small-scale producers, programs should combine credit and insurance with extension services, producer organizations, market access and support to local financial institutions and agrifood SMEs. Approaches that deliver results in individual projects should be embedded in national programs and delivery systems rather than remaining isolated initiatives. Results tracking needs to move beyond total funding and participation counts to measure who receives finance, on what terms, practices adopted, incomes, productivity, resilience and environmental outcomes, including for women and underserved rural communities.