World Bank’s USD200 Million Initiative to Boost Climate-Resilient Farming and Agri-Entrepreneurship in Kerala

The World Bank has approved a USD200 million project to help farmers in Kerala adapt to climate change and support agri-entrepreneurs, aiming to modernize the state’s agricultural sector. Named the Kerala Climate Resilient Agri-Value Chain Modernization (KERA) Project, this initiative will bolster climate-smart practices, enhance market opportunities, and strengthen agribusiness networks across the state. The project also aims to leverage at least USD 9 million in commercial finance, with a focus on agri-food small and medium enterprises (SMEs), especially those led by women.

Kerala, one of India’s premier producers of spices like cardamom, vanilla, and nutmeg, contributes about 20% of the country’s total agri-food exports. However, the region’s agricultural progress has been increasingly threatened by climate-related adversities. Frequent floods, forest fires, and other natural disasters have disrupted production, posing challenges to the livelihoods of Kerala’s farmer households.

The KERA Project is set to benefit around 400,000 farmers, offering them access to climate-smart practices tailored to Kerala’s crop diversity. Key measures include the replanting of climate-resilient varieties of crops such as coffee, cardamom, and rubber. In addition, the initiative aims to expand Kerala’s food parks into rural areas, providing crucial infrastructure like water, power, and waste management to support agribusinesses focused on food processing and value-added products.

According to Auguste Tano Kouamé, the World Bank’s Country Director for India, the project will encourage private sector investment and build integrated agricultural value chains, benefiting both farmers and SMEs. With women currently owning only 23% of Kerala’s MSMEs, the KERA Project will offer specific support to female entrepreneurs by providing training on business planning and facilitating access to commercial finance, ultimately strengthening their businesses’ viability.

To promote seamless connections between producers and buyers, the project will form productive alliances between farmer groups and agribusinesses, with support from the public sector. These alliances will enable better market linkages, while the project will also act as an incubator for agri-tech startups, fostering innovation and new opportunities within Kerala’s agriculture sector.

The initiative’s Task Team Leaders—Chris Jackson, Azeb Mekonnen, and Amadou Dem—emphasize that the KERA Project will boost productivity for staple crops like rice while working to reduce greenhouse gas emissions. Enhancing crop productivity and strengthening agricultural value chains are key to sustaining Kerala’s agricultural competitiveness, creating jobs, and raising incomes across rural communities.

The USD200 million loan, provided by the International Bank of Reconstruction and Development (IBRD), has a maturity period of 23.5 years with a 6-year grace period. This investment represents a major step toward a climate-resilient and economically prosperous agricultural landscape in Kerala, positioning the state as a model for sustainable, high-value agri-entrepreneurship in India.

With Kerala’s farmers set to benefit from these comprehensive initiatives, the KERA Project promises to secure the agricultural future of the state against climate risks while boosting incomes and job creation across its rural communities.