FAO Report Promotes Food Security Green Bonds to Support Climate-Resilient Agriculture

The Food and Agriculture Organization of the United Nations (FAO) has released a new report outlining how public-led green bonds can mobilize private investment to build climate-resilient agrifood systems and support smallholder farmers.

According to the FAO, current financing remains insufficient to implement national climate actions in agriculture, leaving smallholder farmers, small-scale producers, and agricultural small and medium-sized enterprises (agri-SMEs) facing significant barriers to accessing capital for climate-smart practices.

The report highlights that public-led financial instruments can help bridge this funding gap by leveraging growing demand in green bond markets to draw private and institutional investment. These instruments are intended to complement existing climate finance mechanisms, such as the Global Environment Facility and the Green Climate Fund, by generating additional capital for agricultural initiatives that offer environmental and climate benefits.

Working alongside countries, banks, and other partners, the FAO has developed models for "Food Security Green Bonds." The publication offers guidance for governments and financial institutions on structuring and issuing these bonds, with specific strategies aimed at directing sustainable finance to smallholders and agri-SMEs to scale up climate-smart technologies.

Alue Dohong, Assistant Director-General and Regional Representative of the FAO Regional Office for Asia and the Pacific, stated that the report aims to support nations in closing the agricultural financing gap based on regional experiences and global expertise.

In connection with the report, the FAO and the Climate Bonds Initiative held a webinar to showcase these bond models and present design criteria for eligible investments. The event included contributions from governments and financial institutions exploring or currently issuing agricultural green bonds to enhance food security.

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