FAO recommends: Special facility for ‘win-win’ agricultural investment

A small-holder farmer in Nicaragua. The Food and Agriculture Organization says foreign direct investment in agriculture can create jobs as well as enable technology transfer and better access to capital markets. Photo by : CIAT International Center for Tropical Agriculture / CC BY-SA

The Food and Agriculture Organization has a proposal for the aid community: create a special facility and set up training programs to help governments in developing countries make informed decisions on foreign direct investment in agriculture.

FAO estimates that annual global agriculture investment needs are at excess of $80 billion. In a recent report, the U.N. agency argues FDI can help bridge the gap created by insufficient donor funding for agriculture projects, as a result of the economic crisis besetting some industrialized nations. FDI, it says, can generate employment as well as enable technology transfer and better access to capital markets.

The challenge: how to maximize the benefits and minimize the risks of FDI in agriculture like land grabbing, as past experiences of some countries show. This therefore requires recipient governments to have the capacity to “orient foreign investments towards the right type of projects” or those that will allow farmers to play an active role and remain in control of their land.

“It is important that any international investment should bring development benefits to the receiving country … if these investments are to be ‘win-win’ rather than ‘neo-colonialism,’” David Hallam, director of FAO’s trade and markets division, says in the report.

FAO says the specialized technical assistance facility could build that capacity by training local consultants who would then help their governments craft policies promoting investment in small-holder family farms and livelihoods as well as national food security, and support talks between governments and stakeholders such as small-scale producers for designing such policies.

Also according to the report, the intergovernmental Committee on World Food Security will be launching a consultation process to develop principles that will serve as a global guide for agricultural investment. The report did not say when the consultations will commence or whether they will be open to the public.

Read more development aid news online, and subscribe to The Development Newswire to receive top international development headlines from the world’s leading donors, news sources and opinion leaders — emailed to you FREE every business day.

About the author

  • Eliza Villarino

    Eliza Villarino currently manages one of today’s leading publications on humanitarian aid, global health and international development, the weekly GDB. At Devex, she has helped grow a global newsroom, with talented journalists from major development hubs such as Washington, D.C, London and Brussels. She regularly writes about innovations in global development.