External development financing for food systems
CONTEXT
Post-UNFSS+4, the urgency of financing food systems transformation remains firmly in focus. While some low- and middle-income countries have made progress in mobilizing domestic resources, current levels of funding fall far short of what is needed. For 48 least developed countries – 33 of them in Africa – the cost of transforming food systems is estimated at around 40% of GDP, underscoring the scale of the challenge amid economic slowdown, rising debt, and multiple crises.
At the same time, shifts in the global food finance landscape – combined with trade disruptions, conflict, and climate shocks – are placing additional pressure on countries’ ability to invest in transformation. In this context, unlocking, scaling, and better aligning financial flows is more critical than ever.
Food systems financing in these countries relies on three core sources:
- Domestic public resources - anchors national strategies
- External development financing - supports structural investments and vulnerable populations
- Private investment - drives growth, jobs, and innovation across value chains
Aligning and scaling these flows is critical to accelerating food systems transformation.
KEY FIGURES [2018–2023]
76% of external development finance comes from Official Development Assistance (ODA).
US$48.3 billion per year in development finance for food systems.
+14% increase in development finance for food systems since UNFSS in 2021, reflecting donor commitment to scaling up support.
1/5 of development finance for food systems goes to social assistance, with 98% of this allocated to emergency food aid, highlighting the focus on crisis response.
30% of bilateral financing goes to social assistance, demonstrating a commitment to meeting urgent needs, with UN organizations playing a key role in delivery.
90% of multilateral financing supports transformational investments, largely driven by International Financial Institutions (IFIs).
21% decline in 2023 in development finance for social assistance, following a peak at US$9.6 billion in 2022, with sharper declines expected in 2025 and beyond.
Widening financing gap projected for 2025 , risking both immediate humanitarian response and long-term structural investments.
WHAT THIS MEANS
Since 2021, progress on financing food systems transformation has been mixed. External development finance increased by 14% between 2021 and 2023, signalling renewed commitment. However, its share within total development finance has declined, suggesting a reduced relative priority compared to other sectors. At the same time, the balance between immediate humanitarian needs and long-term structural investments remains unresolved.
Different actors continue to play complementary roles:
- Bilateral partners largely focus on urgent food needs and humanitarian support
- Multilateral institutions prioritize long-term investments to address structural constraints and build more sustainable food systems
Yet the financing ecosystem is under growing pressure. Fiscal tightening among major donors is constraining both humanitarian response and long-term investments, contributing to a widening financing gap.
Looking ahead, greater efforts are needed to mobilize, align, and optimize financing flows. This includes scaling innovative approaches that crowd in private investment and better support small-scale actors.
Empowering countries with stronger financial intelligence will be key. Understanding how different partners operate – and how to strategically combine their resources – can help governments design more effective financing strategies, strengthen ownership, and accelerate food systems transformation.
DOWNLOAD THE REPORT
External Development Financial Flows to Food Systems (2018-2023)
This report uses the 3FS Framework to present a comprehensive overview of external development finance for food systems, capturing trends before and after the 2021 Summit.
It answers three critical questions:
- How much external development finance is flowing into food systems?
- What areas and interventions are being financed?
- Which financial instruments are being used?
