ReliefWeb

News article | April 21, 2012

Strengthening the agriculture sector and food security is crucial to developing countries becoming self-sufficient. This is why the Netherlands is donating €100 million to the private food sector in these countries over the next five years. International cooperation minister Ben Knapen signed an agreement to this effect with the International Finance Corporation (IFC) in Washington last Saturday.

‘The private sector is key to the food security of people who face hunger on a regular basis. The agri-food industry also creates jobs and, in turn, buying power for many millions of people,’ said Mr Knapen.

The IFC's Global Agriculture and Food Security Program (GAFSP) was set up in response to the food crisis of 2008. Because farmers and food companies are often regarded by commercial banks as uncreditworthy, they cannot get loans to upgrade their professional skills or develop their businesses. The GAFSP will use the Netherlands’ financial contribution to guarantee commercial loans, thus reducing the risks for banks. This will allow local entrepreneurs to show that they are creditworthy and will give local banks opportunities to invest in agriculture and food security. It is forecast that the Netherlands’ input will increase investments tenfold, to the tune of €1 billion.

Besides financial support, the Netherlands also brings a large network of expertise to its partnership with the IFC, including the FMO entrepreneurial development bank, Rabobank and others from the business community and civil society. While in Washington, Mr Knapen also announced that the Netherlands will hold an international networking conference this autumn for experts on food security in developing countries.