As ships carrying critical agricultural inputs remain blocked in the Strait of Hormuz and development aid faces its steepest decline on record, investing in smallholder farmers has never been more urgent. In this interview, Shobha Shetty, Head of the Global Agriculture and Food Security Program (GAFSP), explains how the Program is making good on its commitments under the Family Farming Sprint of the Global Alliance, through tailored financing for national programmes and producer organizations.

Global uncertainty is putting pressure on low-income countries from multiple directions. How is GAFSP responding to the needs of the small-scale farmers who live there?

The Global Agriculture and Food Security Program, or GAFSP, is a multilateral financing platform hosted by the World Bank. It was launched by the G20 in 2010 and since then, we have channelled more than US$2.4 billion to support food and nutrition security through resilient and inclusive agrifood systems in low-income countries throughout the world.

On May 13, we opened a new Call for Proposals for country-led projects. We aim to award national projects that increase agricultural productivity and farm-to-market linkages, reduce risk and vulnerability, improve rural livelihoods and entrepreneurship, and strengthen institutions in eligible low-income countries. We are particularly proud to support projects that advance our cross-cutting priorities in climate resilience, women’s and girls’ empowerment, and improved nutrition. Successful proposals will focus on at least two of these three priorities.

This Ninth Call for Proposals comes at a critical moment for global food security. New and recurring conflicts, climate shocks, economic instability and rising food and fertilizer costs are driving up hunger and malnutrition worldwide. At the same time, overseas development assistance has shrunk by almost 25 percent. We believe that coordinated, country-led responses are essential to face these great challenges.

GAFSP’s country grant financing helps governments implement their national and multilateral agriculture and food-systems commitments, reinforces the efforts of development partners, and improves alignment with nationally-defined priorities. I am proud to share that we are well on our way to fulfilling the commitment we made in 2024 as part of the Global Alliance Family Farming Sprint. Our latest Call is fully aligned with the objectives and opportunities of the Global Alliance, and we made this message clear to eligible countries.

We envision GAFSP grants as seed investment to foster stronger country ownership and align multiple partners around country programmes, in that way supporting the catalytic process of the Alliance-supported country plans.

Alongside country-led efforts, GAFSP invests in small-scale farming through producer organizations. Why is this channel so important?

Like the Global Alliance, GAFSP is committed to increasing the income and productivity of agricultural producers, particularly smallholder farmers, and we know that one of the best ways to do this is through strong producer organizations (POs).Producer organizations harness the collective power of their members to strengthen value chains, cut costs, and improve livelihoods — connecting farmers to credit, markets and financial tools. They are especially critical to help farmers manage shocks and crises.

For example, right now, shipping disruption due to the conflict in the Strait of Hormuz has caused prices for fertilizer to jump sharply. An individual smallholder facing a 50% rise in fertilizer costs cannot negotiate with a supplier, purchase in bulk, or draw on an institutional credit line. His or her options are limited: use less fertilizer, lowering yields — or take on debt.

A farmer embedded in a well-functioning producer organization can benefit from its power to negotiate collectively, stockpile resources, and access credit on behalf of its members. A strong PO can make the difference between surviving the price hike or losing an entire season’s income – or the farm entirely.

Support for producer organizations is at the heart of our mission. Three of our nine funding allocations have targeted producer organization-led projects, resulting in a total of US$80 million awarded to 32 PO-led projects. In April this year, we announced awards of US$ 38.75 million to support 16 producer organizations — 14 national and two regional projects — to directly benefit an estimated 175,000 smallholder farmers through investments that strengthen farmer institutions.

What comes next for GAFSP as part of broader efforts to fight hunger and poverty?

We have a lot coming up! In early 2027, we will be awarding around US$163 million in grant resources for country-led projects emerging from the current Call for Proposals, which will add six to 10 projects to our ongoing work. We also expect to issue at least one more Call for Proposals in the coming year for producer organization-led projects.

In the meantime, we are rolling out our pilot Business Investment Financing Track, or BIFT, which offers US$ 75 million in concessional financing to catalyse affordable finance for smallholder farmers, producer organizations, innovative startups, and micro-, small-, and medium-enterprises in the agrifood sector of low-income countries.

More broadly, over the next 5 years, we are also implementing our new Vision 2030 strategy – a new phase that builds on our 15 years of experience, while adapting to today’s urgent global challenges. Under this strategy, we are focusing on maximizing co-benefits across food security, climate resilience, nutrition, and nature; empowering smallholder men and women as key actors; and catalysing additional public and private financing to scale high-impact innovations and investments.

To do this we are underscoring the role of our programme as an incentive-setter for more integrated approaches to agrifood system transformation, as a connector defragmenting and supporting multilateral initiatives and processes, and as a de-risker to unlock larger-scale public and private investments.

Our membership in the Global Alliance is a perfect opportunity to put these roles and these objectives into action.

About the Speaker

Shobha Shetty, Head of the Global Agriculture and Food Security Program and Senior Adviser, Agriculture at the World Bank Group.

Shobha Shetty is GAFSP Head and Senior Advisor, Agriculture at the World Bank Group. Before joining GAFSP, Shobha Shetty was World Bank Global Director of Agriculture and previously served as Agriculture and Food Practice Manager in the Africa region as well as South Asia. She also served as Practice Manager for Global Partnerships and Resource Mobilization in the World Bank’s Social, Urban, Rural, Resilience Global Practice. Prior to this, Ms. Shetty worked in the East Asia & Pacific and Middle East and North Africa regions. Ms. Shetty holds a Bachelor’s degree in electrical engineering from Anna University, Madras, India. She obtained her Master’s and Ph.D. degrees in agricultural economics from Cornell University.