Agriculture is crucial for the livelihood of millions of people worldwide and is one of the main drivers of deforestation, biodiversity loss and resource degradation. The contribution of agriculture to these environmental problems has been exacerbated by subsidies, which constitute the dominant public policy to support farmers. At the same time, other economic instruments introducing more sustainable land-use practices and incentivizing better environmental and social outcomes are already being applied worldwide.

What are the patterns of funding in agricultural innovation for the Global South1 ? Who are the key funders in this innovation and who are the key recipients? How doesthis funding split between various topics and value chains? What proportion of these funds support Sustainable Agricultural Intensification (SAI)? And how is SAI innovation funding split across different parts of the agriculture sector funding and innovation canvas?

The study was designed to answer the following three key questions:

(1) What types of investment instruments have been tested to support innovation in agri-food systems in the Global South, and how can these be categorized into a working typology?

(2) What is the evidence on how well different instruments have supported SAI's multiple objectives (e.g. social equality and environmental) at scale and what contextual and design factors affect their success or failure in achieving these objectives (e.g. type of value chain, who participates)?

The only specialized multilateral development institution focused exclusively on rural development, IFAD has successfully used agriculture as a means of poverty reduction – contributing ~USD 22 billion in funding to date1. About 90% of IFAD's portfolio is focused on Low to Middle Income (LMI) countries. IFAD stands out with its nutrition and gender-sensitive lenses coupled with investments in climate-resilient agriculture – mainstreaming nutrition, gender, and climate change work in agriculture.

To meet the growing demand for food in the Global South in a sustainable manner, current funding in agricultural innovation will need to be increased exponentially. Some estimates suggest up to USD 320 billion annually is required to help meet the UN SDG Goals for food and agriculture by 2030. Current levels of funding for agriculture and agricultural innovation fall far short of this and hence efforts to induce more funding for these goals, including through the use of new financing instruments1, is critical going forward.