Development Challenge
Natural capital is closely tied to poverty in Mexico, as the rural poverty rate is twice as high as the urban poverty rate and around 12 million people live in Mexico’s forested areas. The per capita value of agricultural natural capital - a key indicator of soil health - fell from US $880 to a projected US $790 in 2024, indicating falling productivity and growing pressure on agricultural ecosystems. On top of these natural capital declines, Mexico displays significant gaps in financial access for women and rural populations.
WBG Approach
The World Bank is collaborating at all levels to promote productive, sustainable landscapes in Mexico. In this project, the World Bank mobilized funding from the GEF. Local communities played a central role in designing appropriate solutions, based on their knowledge and experience, and supported by a network that included the Ministry of Environment and Natural Resources, the Ministry of Agriculture and Rural Development, and local NGOs.
In addition to providing producer organizations with grants and technical assistance, the project attracted private credit for sustainable investments. The producers participating in the TPS project are located in regions classified as high-risk by financial institutions. The TPS includes a partial credit guarantee, managed by Trust Funds for Rural Development (FIRA, Fideicomisos Instiuidos en Relacion con la Agricultura), which was key to bridging the financial inclusion gap and incentivizing lending to viable small businesses.
Results and Outcomes
- The project directly benefited nearly 50,000 people across 15 Mexican states, of whom 40 percent were women (surpassing the original target of 30 percent female participation) and 62 percent identified as belonging to indigenous communities.
- Forty-two percent of leadership positions in the producer organizations supported by the project were held by women, well above the national rural average of 24 percent.
- The project contributed to the sustainable management of 2.4 million hectares - more than 10 percent of Mexico's total arable land - with specific sustainable landscape practices deployed over 450,000 hectares.
- Producer organizations increased their sales of sustainable goods and services by 27 percent. Targeted markets were both domestic and international.
- The project's partial credit guarantee benefited more than 8,000 small producers with a total of US $10.2 million credit volume. The leverage ratio was 1:5, meaning that every peso invested in the guarantee fund mobilized 5 pesos of private credit. These credit resources allowed small producers to access sustainable technologies such as solar energy, bioinputs and pressurized irrigation systems.
Contribution to WBG Targets and Jobs
The project contributed to the World Bank Group (WBG) target on Gender Equality, supporting 18,150 women or women-led businesses in accessing capital. It also contributed to the WBG target on Agri-finance, mobilizing and additional $10.2 million in private credit.
Ana Rosa Parra Campo is a beekeper in Quintana Roo, Mexico. She said, "TPS has permitted us to maintain apiculture production in the region. One of the areas we are working on is to differentiate our honey to give it added value. Now we have ten differentiated honies where we know the exact floral origin of the nectar that the bees use to make honey. Separating the honey is what will allow beekeepers to receive higher incomes. It contributes to employment in the community. Seeing producers succeed is always satisfying."
Lessons Learned
Mexico's Sustainable Productive Landscapes project demonstrates how investments in conservation and biodiversity can be sustained through simultaneous investments in access to finance and new markets that reward producers for their sustainable production practices. Ecosystem conservation, social inclusion, and economic profitability can be successfully combined so that small producers, through relatively small investments, have a big impact on making our planet livable. The impact on jobs can be generational. Seeing their communities' success in sustainable agriculture, young farmers expressed interest in continuing innovating and working in the rural sector.
Nexts Steps
The World Bank Group will double its yearly investment in agribusiness to $9 billion worldwide. In Mexico, based on the success of the TPS project, the World Bank plans to scale up funding for smallholder farmers and promote financial inclusion in the agri-food sector. The Word Bank Group is discussing with the Government of Mexico the establishment of a Financial Intermediary Investment, leveraging IBRD finance to boost productive credit in the agri-food sector, creating jobs, raising incomes, and strengthening food security.
Additional Information:
WB Sustainable Productive Landscapes Mexico project
Sustainable Productive Landscapes Project site