THE FOOD FINANCE NEXUS
“How can global finance be shaped to support the transition to an inclusive, effective, sustainable food system”
This is the core question of our Food- Finance Nexus work.
Today’s global food system is unsustainable, wasteful, unhealthy, and exclusive. The financial system is a significant determinant of these outcomes. It exacerbates market concentration, promotes volume over resilience and diversity, reinforces small farmer vulnerability, and fails to consider nature a material risk.
Transforming the system to be inclusive, environmentally sound, and able to deliver affordable food for all is likely to require technical, political, economic, and also financial disruptions. It will need to marginalise or transform many incumbent interests and practices both in agriculture and in finance, including illicit finance.
Actors invested in these systems will resist change while others will accelerate it through technology-based disruption, supporting new forms of ownership of food-related assets, and investing in regenerative agriculture.
F4B’s core perspective is that finance needs to be understood as a system, rather than the more familiar approach of viewing it in terms of financial flows. As a system, the actions of public and private actors in global finance are shaped by a complex set of rules and governing institutions, and diverse interests and approaches.
Finance can be shaped to accelerate the transition to sustainable food, through financial risk management tools and accountability, extended environmental financial liability and action to expose illicit finance, regulation to dampen commodity speculation, the development of blended financing to bring forward soilless agri-tech deployment and regenerative agriculture investment funds.
We are working to test this narrative and the underlying hypothesis through a review of current knowledge, quantitative analysis and case work. The aim is to advance analysis and recommendations on how best to align global finance with the needs of the transition to an inclusive, effective, sustainable food system.
This effort is part of a collaboration with the Food System Economics Commission (FSEC), in the context of the UN Food Systems Summit taking place in September 2021.