The summit of public development banks in Cartagena cannot greenwash their financing of destructive agriculture

From September 4 to 6, 2023, the "world summit of public development banks" will be held in Cartagena, Colombia, with the presence of more than 500 of these banks. Together, they comprise around 12% of global investment.

These institutions operate mostly with public funds, coming from the taxes and labor of people from various parts of the world. As state-owned institutions, they have an obligation to respect and protect human rights in their policies and operations. And they are supposed to be accountable to the public, through governmental oversight bodies. People generally know very little about these banks, let alone their strategies.

Development banks invest in the private sector for financial returns. They argue that companies drive growth and employment and that, for this to happen, financiers must take risks, for example, through lending and private equity funds.

Development bank loans to the private sector provide corporations with a form of guarantee that they can use to raise additional millions from private lenders or other development banks, often at lower rates. This is how public development banking plays a crucial role in enabling corporations to expand into new markets and territories in the global south.

Public development bank loans often contribute to corporate concentration, especially in the agrifood sector. Loans, for example, are granted to national and transnational companies that concentrate food production, distribution and marketing.[1]

Through their investments, public development banks finance the agro-industrial model for the benefit of transnational corporations. In the last decade alone, the International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD) have already lent more than two billion dollars, mainly for pork and poultry mega-factories.

Since this summit in Cartagena is meant to increase the influence of development banks in the region and to expand their investments, it threatens to exacerbate the region's ecological crisis.

In Latin America, national and regional development banks follow the same global pattern of financing industrial agriculture. They too place much of their investment into the growth of animal factory farming.

In Mexico, one of the largest factory farms is owned by the Keken group. This pork production company receives financing from Mexico's public development banks through Bancomext, which has granted more than US$50 million in loans in recent years. The loans finance the expansion of its farms, which cause serious damage to ecosystems in Yucatan, where social protest has been criminalized.

In Chile, the big factory farming company Agrosuper has received more than 100 million dollars in financing through "green bonds"[2] backed by the Chilean government and promoted by the Inter-American Development Bank (IDB Invest) and international banks such as Rabobank of the Netherlands. The same so-called "green" bonds are financing the expansion of industrial salmon farms in Chile too, causing huge problems of pollution for coastal communities.

Agrosuper was involved in conflicts with peasant communities in Atacama, in the town of Freirina, where the company installed a mega-farm for intensive pig breeding, generating severe impacts from fumes, flies, contamination and environmental poisoning. Community protests eventually succeeded in getting the company to close the intensive breeding farms in this area.

The Brazilian company JBS, one of the world's largest meat producers, received loans from the National Bank for Economic and Social Development (BNDES) and other development banks, but has been embroiled in several corruption scandals.

Another Brazilian company BRF, one of the largest owners of pig and poultry factory farms, issued "green bonds" for more than US$ 500 million to finance its expansion. BRF also received a line of credit from Banco do Brasil (which is public) for up to US$ 288 million. In addition, 22% of the company's shares belong to the pension funds of Banco do Brasil and Petrobras. BRF is one of the largest intensive breeding companies in the world. Like JBS, the company was recently involved in several corruption scandals and was also accused of adulterating laboratory results to conceal the contamination of batches of meat with salmonella.

The expansion of industrial livestock produces serious environmental, economic, social and health effects in indigenous and peasant territories. The farms discharge vast amounts of manure, chemical residues and antibiotics, which leach into the soil and local water sources, contaminating drinking water and aquatic ecosystems.

Factory farming is also an important source of greenhouse gas emissions and other pollutants and a major contributor to soil degradation and the loss of agrobiodiversity.

The model does not provide "development" to local communities. Instead it leads to corporate concentration, the displacement of small-scale meat production, and the loss of local markets and economic diversity.

The companies that own the factory farms and their local allies routinely threaten and intimidate those who protest against their operations. In 2022, for instance, defenders of the aquifers of Homún in Mexico were threatened for demanding that a mega-farm suspend its operations. Factory farming companies also instigate conflicts and divisions within communities, increasing tensions among the population.

It is also crucial to stress the impacts that industrial meat has on women, through the intensification of domestic and sexual violence,, displacement and the loss of livelihoods, as well as the impacts to their health from the climate crisis, which is fueled by factory farming emissions.

Factory farms also facilitate the spread of diseases (through zoonoses), and the emergence of new pandemics, through the concentration of large numbers of animals in small spaces. and the intensive use of antibiotics in these farms contributes to the development of antibiotic resistance, especially for people in surrounding communities. Currently, 73% of the antibiotics used in the world are used in animal husbandry.

In recent decades a large number of viruses have jumped from intensively farmed animals to humans.

Having originated in industrial mega-farms, avian flu (H5N1) and swine flu (H1N1) killed millions of birds and pigs and thousands of people. In La Gloria, Mexico, where the first instance of H1N1 swine flu was detected and where people live surrounded by a factory pig farm owned by the US-based Smithfield Foods, swine flu sickened 60% of the human population.

The Cartagena summit and others like it serve to boost the influence of development banks in Latin America. But this a moment to question the role that these banks play in the multiple crises affecting the continent. It should be a time to push for other forms of public investment that are not destined for corporations.

At a minimum, public development banks must immediately stop financing agribusinesses, especially where it comes to industrial meat. And for the investments that have already been made, mechanisms are needed for communities to pursue reparations for the damages these investments have caused.

We need an urgent shift to fully public and transparent forms of investment to support grassroots efforts to develop food sovereignty and protect and restore ecosystems in the face of the climate crisis.

Source: https://www.statista.com/ and websites of public development banks.