The new project will support 400,000 farmers, foster agri-business growth, and access $9 million in commercial finance. The programme aims to boost climate resilience and commercial finance for SMEs, especially women-led businesses.
The World Bank’s Board of Executive Directors has approved a new $200 million program to help farmers in Kerala adapt to climate change and promote the growth of agri-entrepreneurs in the state. The approved project, named the Kerala Climate Resilient Agri-Value Chain Modernization (KERA) Project will directly benefit 400,000 farmers and aims to raise at least $9 million in commercial finance, particularly for women-led small and medium enterprises (SMEs) in the agriculture sector.
Kerala, known for producing spices like cardamom, vanilla, and nutmeg, is a major contributor to India’s agri-food exports, accounting for about 20 per cent of the country’s total exports in this category. However, the agricultural sector has faced significant challenges in recent years due to climate change, including natural disasters such as floods and forest fires. These impacts, coupled with difficulties in accessing broader markets, have left farmer households vulnerable.
Agricultural Value Chains
The KERA project will focus on building climate resilience in Kerala’s agricultural value chains by helping farmers transition to climate-smart practices. This includes the replanting of climate-resilient varieties of key crops like coffee, cardamom, and rubber. The project will also expand Kerala’s food parks into rural areas, providing essential infrastructure such as water, power, and waste management to support food processing businesses.
“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. “It will also assist agri-based SMEs, particularly those led by women, in gaining access to commercial finance by offering training on business plans and improving their financial viability.”
The program will facilitate productive alliances between farmers and agribusinesses, enhancing the link between producers and buyers. It will also promote the development of agri-tech startups, helping to increase productivity and reduce greenhouse gas emissions.
The $200 million loan, provided by the International Bank for Reconstruction and Development (IBRD), has a 23.5-year maturity, including a six-year grace period, and is expected to play a key role in strengthening Kerala’s agricultural sector while creating jobs and boosting incomes.
Image: World Bank
