GMS Officials Discuss Priorities for Climate-smart Agri-food Value Chains and Green Financing

The 20th Annual Meeting of the Greater Mekong Subregion (GMS) Working Group on Agriculture (WGA) was held on 10–12 May 2023 in Siem Reap, Cambodia. The meeting underscored the need to enhance (i) subregional cooperation on green and climate resilient agri-food value chains, and (ii) green financing of small and medium agribusinesses. The meeting also confirmed four priority action points by the WGA, and discussed the planned new agriculture sector strategy.

Key points highlighted in the meeting:

• There is an increasing demand for safe and high quality agrifood products within and outside the GMS. A growing number of consumers are prepared to pay a “green premium” for lower carbon and green agrifood products.
• GMS countries have a high potential to produce and market green, safe, and nutritious agrifood products. However, reduction of energy, carbon, and waste footprint of agrifood value chains is critical. Deepening cooperation and collaboration on cross-border agrifood trade protocols will help further promote GMS’ capacity to become a leading producer of safe and green agrifood products and strengthen agrifood production and value chain activities in the subregion. Digitalization of value chain transactions and development of digital agrifood traceability systems are vital to improving efficiency in cross-border trade.
• Women are pivotal in the development of green and resilient agribusinesses. However, women entrepreneurs face many challenges in the development of their agribusinesses. Policies to remove bias against women and provide fair and equal access to credit and other services are needed.
• The private sector is essential in the development of green and resilient agribusiness value chains in the GMS. However, there is perception that returns from investing in green business are not commensurate with risks. Thus, a more enabling policy environment for promoting bio-circular-green economy in the GMS is needed to encourage private sector participation, as well as awareness raising and more mechanisms to reduce risks. The Asian Development Bank (ADB)’s ADB Ventures and the ADB Frontier Partnership Funding Facility support the development of private agribusinesses.
• Green finance is crucial in developing low carbon, resilient and inclusive agri-food value chains in the subregion. GMS countries need to (i) develop enabling policy frameworks, including transparent reporting, measurement, and disclosure requirements; (ii) enhance capacity of stakeholders to develop bankable green agriculture sector investment projects; and (iii) increase institutional capacity on greening the lending practices with appropriate policies, products, and processes to accelerate green finance flows to the agribusinesses and smallholder farmers.

The WGA confirmed four priorities that must be pursued and sustained:

1. Development of innovative strategies and actions for greening and building resilience in priority agrifood value chains.
2. Support for the development of agrifood value chains that supply green products to high value domestic and export markets.
3. Creation of opportunities for women agri-entrepreneurs and a more enabling policy environment for mobilizing the private sector investments in low carbon and climate resilient agriculture.
4. Promotion of policies and actions on green finance, including digital applications, that will facilitate access to finance for smallholder farmers, micro and small agribusinesses for the green transformation of their farms and agribusinesses.

Furthermore, the meeting discussed planned activities to implement the GMS 2030 strategy, which includes developing new strategic frameworks for various sectors, including the agriculture sector, with support by the GMS Secretariat. The planned new agriculture sector strategy will be a follow-up to the “Strategy for Safe and Environment-friendly Agro-based Value Chains in the GMS and Siem Reap Action Plan 2018-2022” endorsed by the ministers in 2017 and will focus on transformation of agri-food systems in the GMS.