Among the important tasks of the UNFSS is identifying ways to finance the transformation of the global food system. This Brief analyses options for financing a specific, but crucial, part of the overall food system transformation, namely achieving SDG2 (and in particular “zero hunger”) by 2030 and examines the role of external finance in this effort.

Financing food systems transformation will involve a variety of financial resources, including funds “internal” to food systems (consumer food expenditures and outlays by agrifood actors) and “external” funds (international development flows, public budgets, banking systems, and capital markets). The contributions of the different funding sources are likely to vary across different aspects of the transformation.

Financing of SDG2 and Ending Hunger

The brief reviews cost estimates from several studies and compares these with potential sources of funding. There are significant data limitations for this exercise. With the available data, estimates suggest that, in aggregate, sufficient additional resources are potentially available to finance the costs of ending hunger by 2030 (with “ending hunger” understood as lifting from 870 million to 1 billion people from hunger), including interventions that also contribute to nutritional objectives and to mitigation and adaptation to climate change in agriculture. Institutional mechanisms are needed to support developing countries in the design, financing, and implementation of national programs

Mobilizing Additional Financial Resources

To finance food systems transformation to end hunger and achieve SDG2, the international development funds dedicated to agricultural and rural development, food and nutrition security, and environmental aspects of food systems would need to be increased by about 15 billion dollars annually—this implies doubling current levels.

Recommendations for public budgets:

• Implement public expenditure and tax reviews to increase and reallocate agricultural subsidies in developing countries (about 50 billion dollars, without China) and scale up, better target, and redesign social safety nets using new and evolving cash transfer instruments that combine poverty, productive, nutritional, environmental, and financial inclusion components;
• Increase public expenditures/investments in agriculture and social protection expenditures (to 2% of GDP);
• Strengthen revenues in developing countries through better tax administration.

Recommendation for banking systems:

• Revitalize and modernize public development and agricultural banks to increase credit (supported by central bank discounts) and offer other financial services to small farmers, rural populations, and SMEs in food systems;
• Design, guarantee, and launch a “zero hunger bond”