Convened by the Farm Animal Investment Risk & Return (FAIRR) Initiative and Food Systems for the Future (FSF) Institute
AMBITION STATEMENT
The Public Finance Working Group aims to drive awareness, understanding and commitments of academics and policy makers on the true cost of food and the ability of policy changes in food sustainability to reduce fiscal spending on public health.
Current subsidies are not effectively supporting sustainable commodity production; the risk reward distortion between farmers and food retailers needs to be recognized. The private sector’s power and magnitude of capital can play an important role in achieving the necessary changes in our food system, accelerating the sustainable transition in the food and land-use sector.
Summary
For example, finance ministries can provide fiscal incentives in the form of tax incentives, research funding and concessional finance to encourage capital investments in developing infrastructure and capacity development for good food financing.
The Public Finance Working Group
is working to engage and mobilize good food financing within the public sector through collecting and sharing relevant knowledge and data with finance ministries.
Solutions that the Public Finance Catalyst Group is working to promote include:
- Refining and standardizing key messages on the true cost of existing fiscal policies, public expenditure and development plans;
- Promoting policy changes that align with preserving biodiversity, enhancing nutrition, fostering long-term growth, and improving country-specific fiscal positions.
The Public Finance group has been researching the true cost of existing food production practices, dietary choices, and food wastage; aimed towards finding innovative ways to fund the ‘Good Food Transformation’. The blog demonstrates the importance of such a transition, showing that current agricultural practices, public policies, and diets are projected to have a several-trillion-dollar impact globally and it risks making countries sick and impoverished.
To address these concerns effectively and efficiently, it proposes the following funding options for finance ministries across the globe that do not require a large capital outlay, preserve nature, de-risk investing in good food transformation, and mitigate the fiscal risk of doing nothing outlined:
- An innovative collaborative funding model (ICFM) as an investment case for the good food transformation that goes beyond the existing blended finance solution by bringing a multitude of players and innovation together to foster good food finance optimizing investment cost & risk sharing with climate & soil friendly best practices fostering productivity.
- Reallocation of public expenditure to reduce poverty and make nutritious food affordable and accessible.
ICFM provides a strategic framework for implementing the 6th financial imperative action point, “use catalytic capital to de-risk investments in innovative sustainable business models” in the ‘Food Finance Architecture: Financing a Healthy, Equitable and Sustainable Food System’. It provides a roadmap for finance ministries to catalyze good food transformation through partnerships. The ICFM:
- Convenes financial, non-financial, public, and private sector stakeholders to collaborate on systems change.
- Delineates the assets and value each brings, whether expertise, technology, financing instruments (such as concessional and catalytic finance), or sustainable infrastructure.
- Unlocks blended financing, asset monetization, and other innovative tools to fund the transition.
- Distributes risks and returns equitably across partners.
- Generates social, environmental, and economic benefits for all.
The ICFM provides a way forward for establishing an ecosystem aligning the interests of stakeholders and reducing investors’ and lenders’ risk for funding the good food system transition. It is an integral part of the Good Food Finance Facility.
The Innovative Collaborative Funding Model: a role for each actor
Featured Blog Post:
Good Food System Transition: Repurposing agricultural support to promote fiscal resilience, human and planetary health
Current agricultural practices and consumption of unhealthy food are harming fiscal stability. This is happening as a result of rising health costs, food waste, decreased soil health, land degradation and climate change. In this GFFN blog, members of the Public Finance Catalyst Group highlight the huge fiscal savings that healthier diets can have in both high and low-income countries.
Good Food Finance Network 