Striving for Sustainability: IFC’s Role in the Livestock Sector

Myth: Industrial-scale production systems undermine the socio-economic potential of small-scale farmers in the developing world and threaten rural livelihoods. 

Fact: By building business alliances with the private sector, smallholders can be more productive and develop profitable farms that can grow into small and medium-sized enterprises (SMEs).

More than 800 million people lack access to sufficient nutritious food to live productive and active lives. Most of these people are in developing countries around the world. Many depend on small-scale agriculture for their livelihoods with more than three billion farmers relying on their own production capacities to eat a nutritious diet.  

The global food crisis is primarily the result of long-standing weaknesses in the way our food systems are structured. Glaring inequalities have left too many small-scale producers in abject poverty, yet they provide one-third of our food on only 11% of the world’s agricultural land.  

As well as helping food systems function smoothly, agri-food producers are a vital source of jobs, and they fuel growth in the rural economy that benefits local communities. 

Over the past decade, IFC’s clients have reached over 10 million small-scale farmers in the livestock sector in developing countries by providing farmer extension services to improve productivity and quality, leading to higher incomes. In FY23 alone, close to 1.2 million small-scale livestock farmers were reached by IFC’s livestock clients.

By joining forces with some of the biggest industrial-scale agribusiness, IFC invests and innovates so that small-scale farmers gain the knowledge and techniques they need to introduce modern mechanisms such as high-yield seeds, new breeds of stock, fertilizers, and practices that enable them to increase output despite climate change and input constraints. 

IFC provides development finance to forge partnerships between smallholders and the private sector as an engine for more equitable growth and development. By investing in some of the poorest people, IFC builds resilient food systems to end extreme poverty and extend shared prosperity.  

Case Studies

• In Uganda, IFC has invested in Pearl Dairy which is the East-African nation’s largest milk processing plant. Pearl buys raw milk from some 25,000 small-scale farmers in rural areas and sells processed products to marginalized communities. Over the past ten years, Pearl’s small-scale supplier farmers have adopted IFC’s trainings to produce better quality milk. As a result, productivity increased by 63% and incomes of small-scale farmers have risen by 44%, providing affordable, high-quality dairy products to a growing regional population in need of better nutrition 
• IFC has been Suguna’s primary investor and partner for the past 25 years. In this time, it has become the largest poultry company in India and has established the biggest inclusive business model in the poultry sector. The company contracts over 40,000 small-scale farmers, from more than 15,000 villages across 20 states in India through its contract farming model, which holds a record of working well in low-income settings where farmers have a labor surplus but do not have the capital to invest in their farms. In 2021, Suguna’s farmers earned average net incomes of US $1,600 per farm, over six times the average earnings in small-scale poultry farming in India.

Myth: Industrial-scale livestock production and factory farming result in poor animal welfare and are bad for food security and the environment. 

Fact: By financing large-scale efficient farming projects that increase productivity sustainably, businesses are adopting more productive, safe, and environmentally friendly practices.

Over the next two decades the demand for food is expected to increase by more than 50% and the need for animal-based foods will rise by nearly 70%.  

Climate change is threatening global efforts to provide safe nutrition to a surging global population, especially in developing countries. The way we produce and distribute our food can be part of the solution to tackling challenges and moving from ambition to action.  

Efficient production systems combine better productivity and lower emissions by employing appropriate genetics, better animal husbandry, improved feeding and waste management. By mobilizing finance to ensure companies in developing countries maintain sound business strategies the entire food value chain can reduce adverse impacts. 

By investing in efficient production systems in emerging markets, IFC is spearheading the livestock sector’s contribution to sustainable development be overseeing structural reforms. It assists clients across its business portfolio to adhere to environmental, social and governance (ESG) policies.  

By following responsible feeding programs that give livestock animals the right intake of vital vitamins, promoting better animal husbandry, safeguarding animal welfare, and streamlining digital technologies across operations – IFC’s client companies can achieve competitive advantages in the global marketplace while advancing productivity and food security.

Case Studies

• IFC has invested in Nyva Pereyaslavshchyny, a leading pork producer in Ukraine, which is giving consumers better access to high protein foods. The partnership is helping to expand pig breeding operations in compliance with European Union (EU) animal welfare standards and use renewable energy and bio-fertilizers to cut carbon emissions.
• Pearl Dairy, a Ugandan milk producing company, and the largest dairy exporter in East Africa, is at the forefront of sourcing new markets while ensuring production methods implement robust animal health management and biosecurity protocols. Pearl is expanding in keeping with IFC advisory services’ guidance on equipping smallholder dairy farmers with the tools to enjoy better livelihoods and make sure the animals they trade benefit from humane treatment.
• IFC invests in the Zambian retail giant, Zambeef to shape the company's plan to source more key inputs from local smallholders. Zambeef is introducing a new health and biosecurity system across its animal production chain to promote growth and combat malnutrition. It has adopted a policy for the responsible use of antimicrobials in food-producing animals to enhance safety and is building animal housing which adheres to international guidelines.