The International Finance Corporation (IFC) has increased its support for agribusiness in 2009 to boost food supply in developing countries, the News Agency of Nigeria reported on Tuesday.
The World Bank subsidiary's response to global food price increases and volatility was contained in a statement issued on Monday.
According to the statement, food security was a central issue during the recent G-8 and G-20 summits that emphasized the need for increased investments in agriculture.
The statement added that the IFC invested a record 2 billion U.S. dollars in 2009 across the agribusiness supply chain from farm to retail.
The investments are also to help boost production, increase liquidity, improve logistics and distribution, and expand access to credit for small farmers, it said.
Its 2009 fiscal year, which ended on June 30, was the fifth consecutive year of growth in the agribusiness investments and witnessed a 42 percent increase over the 2008 year.
According to the statement, IFC invested 874 million dollars directly in agribusiness companies and 362 million dollars more to support fertilizer production, agricultural infrastructure and food retail.
The World Bank subsidiary also said it channeled through partner banks 758 million dollars to support rural farmers and trade finance activities, adding that half of IFC's agribusiness projects were in low-income countries.
The statement said its investments in Africa's agribusiness sector rose by 38 percent to 160 million dollars for projects in primary farming, distribution and storage, grain milling, plantation rehabilitation, and trade finance.
"Food availability at affordable prices, particularly for the poor, remains a top IFC concern," the statement quoted Oscar Chemerinski, IFC Director for Global Agribusiness as saying.
"IFC works to address the challenges by helping emerging markets to grow and develop their agricultural sectors," he said.
"This can help increase the food supply and create opportunities for rural communities," he added.
Although the prices of agricultural commodities have declined from their 2008 peaks, major grain prices remain above their long-term trend.
Maize is 50 percent more expensive than its average price between 2003 and 2006, while rice prices are 100 percent higher. Food prices remain volatile.
The economic crisis compounds the impact of high food prices on low-income populations. Over a billion people are chronically hungry.
With food prices expected to remain high and volatile for some time, the IFC is leading World Bank Group efforts to support the private sector to increase production.
IFC's agribusiness strategy includes supporting intraregional investments to transfer knowledge and technology and increasing access to credit through wholesale facilities with traders and financial intermediaries.
It also aims at bringing land into sustainable production.
IFC also focuses on increasing production in middle-income countries with strong agribusiness potential, improving logistics, infrastructure, and water efficiency.
The corporation is also involved in developing modern financial instruments for agriculture./.