World Bank to support 4 lakh farmers in Kerala

The World Bank’s Board of Executive Directors has approved a new program to support farmers in Kerala in adapting to climate change and to promote agri-entrepreneurs in marketing value-added products. The program will also leverage at least $9 million in commercial finance, including for agri-food small and medium enterprises (SMEs), particularly women-owned.

As a leading producer of spices such as cardamom, vanilla, and nutmeg, Kerala accounts for about 20 percent of India’s total agri-food exports. However, climate change is hindering these achievements. Natural disasters like floods, forest fires, and challenges in reaching broader markets have impacted farmer households.

According to a press release issued by the World Bank, the $200 million Kerala Climate Resilient Agri-Value Chain Modernization (KERA) Project will help strengthen the resilience of the state’s agricultural sector to climate change. About 400,000 farmers will benefit from better access to climate-smart practices. These practices include replanting climate-resilient coffee, cardamom, and rubber varieties and expanding Kerala’s “food parks” into rural areas. These parks will provide essential infrastructure such as water, power, and waste management to support agribusinesses in food processing and value-added products.

“This project will further infuse private sector investment and integrate agricultural value chains for the benefit of farmers and SMEs,” said Auguste Tano Kouamé, the World Bank’s Country Director for India. “Moreover, it will support agri-based SMEs—especially those owned by women, who currently own only 23 percent of MSMEs in the state—to gain access to commercial finance by providing training for business plans and strengthening their commercial viability.”

The project also aims to form productive alliances between farmer groups and agribusinesses. These alliances will help strengthen the linkages between producers and buyers, with the public sector playing a facilitating role. In addition, it will incubate agri-tech startups.

“This project will help to increase productivity for staple food crops such as rice while reducing greenhouse gas (GHG) emissions,” said Chris Jackson, Azeb Mekonnen, and Amadou Dem, the Task Team Leaders for the project. “The increase in productivity and strengthening of agricultural value chains will help maintain the competitiveness of Kerala’s agricultural sector and create jobs and increase incomes.”

The $200 million loan from the International Bank for Reconstruction and Development (IBRD) has a final maturity of 23.5 years, including a grace period of 6 years.