The Asian Development Bank on Tuesday announced a USD 14 billion fund to fight food security crisis in Asia Pacific, threatened by adverse climate and exacerbated by Russia-Ukraine war choking supply lines, triggering soaring food prices.
The multilateral funding agency is hosting its 55th annual meeting at its headquarters in Manila from September 26-30 in a hybrid mode with 45 governors of the member nations attending in person after 2019. Others will join virtually.
“In this meeting, we are discussing our region’s path to recovery as new uncertainties facing our developing member countries. These headwinds include food security, inflation and debt crisis. All these challenges need to be understood in rising threats of climate change,” ADB President Masatsugu Asakawa said in a press conference addressed virtually.
Offering a few reflections of the situation the Asia and the Pacific region is facing, he said the social and economic conditions have changed. “The pandemic was difficult and continues to impact many aspects of life.”
In 2020, developing Asia and Pacific saw its first contraction of economy in nearly six decades, he said.
“We now see economies in recovery but the outlook has started to worsen. This is due to growing challenges such as the impact of the Russian invasion of Ukraine, monetary tightening in the advanced economies and the exchange rate (of currencies) and depreciation and the financial instability that may result from these. We are also scaling up support for climate adaptations,” Asakawa said.
Another pressing issue for ADB is food security in the region.
Many factors are contributing to the worsening situation. Floods, draughts, heat, disease and other factors affected by climate change will impact food production. It will drive more food scarcity compounded by climate induced migration.
“In the face of growing urgency surrounding food security, in our developing member countries to make this issue a top priority, also today I am announcing that ADB will provide USD 14 billion in support from 2022 to 2025 to address food security,” he said.
It is a comprehensive programme to address the worsening food crisis in Asia and the Pacific and improve long-term food security in the region by strengthening food systems against the impacts of climate change and biodiversity loss.
The latest funding announcement compliments ADB’s existing support for food security in the region. Nearly 1.1 billion people lack healthy diets due to poverty and food prices in Asia and the Pacific, which have soared to record highs this year. While, USD 3.3 billion of the total funding is earmarked for 2022, the rest of USD 10.7 billion will be spread over 2023-25.
For 2022, a further funding break-up includes USD 2.5 billion sovereign support towards repurpose and utilisation of existing projects, strengthening of countercyclical support for food security and launch of new projects in agriculture, natural resources and rural development.
Besides, USD 800 million will be utilised in the private sector for trade and supply chain financing, direct agribusiness lending, microfinancing programme and lending to financial institutions.
ADB said it will continue to invest in other activities which contribute to food security such as energy transition, transport, environmental management, health and education.
Asakawa said it is a timely and urgent response to a crisis that is leaving too many poor families in Asia hungry and in deeper poverty.
“We need to act now, before the impacts of climate change worsen and further erode the region’s hard-won development gains. Our support will be targeted, integrated, and impactful to help vulnerable people, particularly vulnerable women, in the near-term, while bolstering food systems to reduce the impact of emerging and future food security risks,” he said in a statement.
The Russian invasion of Ukraine has disrupted supplies of food staples and fertilizer, straining a global food system already weakened by climate change impacts, pandemic-related supply shocks, and unsustainable farming practices, the agency said.
Asia and the Pacific is vulnerable to food shocks, as some of its countries depend on imported staples and fertilizer. Even before the invasion of Ukraine, nutritious food was unaffordable for significant portions of the population in many low-income ADB member countries.
The ADB President said an important part of its long-term approach is to safeguard natural resources and support farmers and agribusinesses, which produce and distribute much of the region’s food, and to promote open trade to ensure it reaches consumers efficiently.
The assistance from the funding programme seeks to leverage an additional USD 5 billion in private sector co-financing for food security.
Last week, ADB lowered the economic growth forecast for Asia and the Pacific for 2022 to 4.3 per cent from its April projection of 5.2 per cent. For 2023, it has been lowered to 4.9 per cent from 5.3 per cent.
ADB said it will apply lessons learned from supporting its members during the global food crisis in 20072008 and through the implementation of its food security operational plan the following year.
Since then, it has provided USD 2 billion in annual investments in food security. In 2018, ADB identified food security as a key operational priority.
Established in 1966, ADB is owned by 68 members of which 49 are from the region.