This document discusses opportunities for increasing global food and agricultural production through investment. It notes that food demand is projected to increase 70% by 2050 due to population and income growth. However, land and water resources are scarce. There are high potential gaps between current production levels and capacity in regions like Latin America, the Black Sea Region, and Africa due to favorable natural conditions. The document promotes increasing agricultural investment to $83 billion annually by 2050, a 50% rise from the past decade's average, to boost output and meet rising demand. It provides examples of IFC investment and advisory programs in Ukraine to improve access to finance, production efficiencies, and supply chain development in the agricultural sector.

1. HOW TO INCREASE FOOD AND AGRICULTURAL
PRODUCTION: INVESTMENT OPPORTUNITIES
Elena Voloshina
Head of IFC operations in Ukraine
October 2012

2. Global food demand increasing
2,400
Production Consumption
Food demand is to grow by 70%
2,300 by 2050:
2,200 Population increase and
Global Grains (mmt)
2,100
urbanizations trends
2,000
Rising incomes
Change in consumption patterns:
1,900
1,800
less cereals
1,700
more vegetables, oils, dairy and
meat
Source: USDA/John Deere
Threat: increasing volatility on
FAO estimates the world would need to boost food markets due to shrinking
agricultural investment to USD$ 83 billion a year by global stocks, market speculation,
2050, a 50% increase over the last decade’s average govt interventions (export bans)
investments.
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3. Where is the growth potential?
Land and water are
scarce resources
High gaps between
Black Sea Belt current production and
potential in Latin
America, Black Sea
Region and Africa
Natural conditions are
favorable in Latin
America and Eastern
Europe
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4. IFC Business Solutions for Ukraine Agribusiness
Financial Products
• Loans
• Equity and quasi-equity
• Syndications
• Structured and securitized products
• Risk management products
• Trade finance

5. IFC Business Solutions for Ukraine Agribusiness
Advisory Programs
Policy: Investment Climate for Agribusiness in Ukraine
Improving access to finance: Agri-Insurance and Agri-Finance
programs
Improving efficiencies and increasing production: Food Safety,
Cleaner Production and Supply Chain Development programs
Also a joint initiative with EBRD: crop receipts
• A new instrument based on Brazil pre-harvest finance experience
• The law on the agrarian receipts passed in the 1st reading
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6. Case study: MHP
MHP – one of the first IFC investment clients in Ukraine:
First deal – 2003 ($30 mln loan to expand production)
Repeat deals: 2005 and 2010 (in 2010: $50 mln loan for
expansion and $11.25 mln credit sharing facility to lease
agri machinery with ING Lease)
Also advisory involvement: resource efficiency and food
safety
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7. Case study: MriyaAgroholding
• IFC financing in 2010, 2011 and 2012: a
total of $90 mln
• Advisory support:
Energy audits at sugar plants, also Ukraine’s
first loan under IFC’s Cleaner Production
Lending Facility
Feasibility study: straw to cellulose
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8. Case study: Bayer/Raiffeisen Bank Aval and Credit
Agricole - an innovation on Ukraine’s financial market
Farmer
Farmer
Farmer
Farmer
Farmer
Farmer
50/50 Promissory
RSF note
Bayer-IFC
cooperation 50/50 Farmer
Farmer
Farmer
Farmer
RSF Promissory Farmer
Farmer
note
In 2011 IFC partnered with Bayer and Raiffeisen Bank Aval to develop a
risk-sharing facility to make high-quality crop protection products more
affordable for independent farmers and smaller agricultural companies
In 2012 a new bank Credit Agricole was added to the financing scheme
with Bayer
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