The World Economic Forum in Davos has concluded, but one message delivered to global leaders and business executives continues to resonate: investing in small-scale farmers and rural entrepreneurs is not only sound economics, it is a geostrategic necessity.

During the meeting, Alvaro Lario, President of the International Fund for Agricultural Development, alongside IFAD Goodwill Ambassador Sabrina Dhowre Elba, pressed the case for redirecting capital towards the first mile of global food value chains. Their message was aimed squarely at governments, investors and multinational firms shaping the future of food systems.

Small-scale farmers produce one third of the world’s food, yet remain among the most under-supported actors in the global economy. IFAD warned that neglecting their climate resilience and productivity does not only threaten rural livelihoods. It risks destabilising global commodity markets, pushing up food prices, increasing import bills for food-deficit countries and deepening social instability.

“Investing in small-scale food producers and rural entrepreneurs is a triple win: it drives economic growth and jobs, unlocks business opportunities, and strengthens stability,” Lario said during the forum. He emphasised that resilient rural economies have become a geostrategic imperative in an era defined by climate shocks, environmental stress and geopolitical volatility.

At Davos, IFAD outlined how public and concessional finance can be used more effectively to mobilise private capital at scale. De-risking tools such as investment platforms, guarantee instruments and impact funds with first tranche losses were presented as practical mechanisms to crowd private investment into rural economies. Lario stressed that private sector engagement is no longer optional, but essential to sustainable and inclusive growth.

The economic opportunity is substantial. Transforming food systems could unlock business opportunities worth up to US$4.5 trillion annually by 2030. In Africa alone, food and beverage markets are expected to reach US$1 trillion by the end of the decade, driven by population growth, urbanisation and rising demand.

IFAD’s investment track record reinforces the argument. Across a sample of IFAD-financed projects, participant incomes rose by 34 per cent, while production and market access increased by 35 per cent. Between 2022 and 2024, nearly 390,000 jobs were created through IFAD-supported investments.

Beyond economic returns, the security implications featured prominently in the Davos discussions. IFAD data shows that addressing poverty, climate vulnerability and social exclusion through rural investment can directly reduce instability. In Ethiopia, increases in land productivity linked to IFAD projects were associated with a significant reduction in conflict. In Mali, areas where IFAD invested recorded an eight per cent decline in conflict.

Despite this evidence, small-scale farmers and rural entrepreneurs remain chronically under-invested. Official development assistance to agriculture has hovered at around US$10 billion annually in recent years and is projected to fall further in 2025. Rural small and medium-sized enterprises, despite their capacity to generate employment and value, continue to face limited access to finance.

As the Davos meeting closes, the implications are particularly significant for Africa. Rural economies support the majority of the continent’s population and form the backbone of its food systems. Investing in small-scale farmers is not an act of charity. It is a strategic choice tied to stability, growth and resilience. For Africa’s young nations, the path to shared prosperity may well begin where global markets rarely look first, in rural fields, farms and enterprises that feed both local communities and the world.

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