At a meeting on 19th January in Berlin, Ilse Aigner, Federal Minister of Food, Agriculture and Consumer Protection, and José Graziano da Silva, Director-General of the FAO, appealed for an increase in agricultural investment to eradicate hunger and meet the nutritional requirements of a growing world population. We recommend reading the text1
on the meeting which continues on the theme of the last annual report of the FAO, which highlighted the key issues on agricultural investment2
. It points out how investments in agriculture remain low in the regions of the world that suffer the most from rural poverty and hunger. It also points out that in order to attract investment, it is necessary to have a comprehensive, supportive framework: proper governance, clear incentives and equitable access to the best information, infrastructure and efficient public services. If these conditions are an essential prerequisite to a sustainable increase in productive investment in agriculture, it is important to note also that, more broadly, weak and volatile agricultural prices strongly discourage investment in agriculture. On the one hand, because it is difficult for farmers to invest in their land if their business doesn’t generate enough income to properly feed them, and secondly, because it is unrealistic to hope for long-term investment in an activity with such sudden and significant price fluctuations. Therefore, along with measures to improve governance, infrastructure and access to information, it is essential to implement regulatory mechanisms for agricultural markets, aimed at ensuring stable and sufficiently high prices to attract productive investments.
momagri Editorial Board
The German Minister of Food, Agriculture and Consumer Protection, Ilse Aigner, and the Food and Agriculture Organization Director-General José Graziano da Silva have called for a significant increase in responsible investments in agriculture to eradicate hunger and feed a growing world population.
Investments in agriculture are still too low in those regions where rural poverty and hunger are most severe, Aigner and Graziano da Silva stressed today after meeting ahead of the Agriculture Ministers' Berlin Summit 2013.
"We need to concentrate our efforts on the farmers. Farmers are the key players in the rural environment and here lies the greatest potential for generating added value – both in terms of economic development and in guaranteeing food security in these countries," said Aigner. "The German government spends over 700 million euros each year on food security and rural development in developing countries. One of the goals here is to achieve sustainable yield increases. This is done by promoting locally based training and education, for example, and we have initiated a number of important agricultural training schemes."
"Agricultural investment has long shown itself to be one of the most effective and sustainable means for reducing hunger and poverty. We need to invest more. And, equally as important, we need to invest better," said Graziano da Silva. "It is up to national governments, assisted by the international community, to create conditions where farmers can invest more and to increase their own investments in ways that generate economic and social benefits, as well as environmentally sustainable results."
At present, around 870 million of the world's poorest people, or one in eight, are suffering from hunger and have inadequate access to food. Most of them live in rural areas in developing countries.
Responsible agricultural investments
Aigner and Graziano da Silva called upon governments to contribute to the development of guidance for responsible agricultural investments, an issue that will be discussed by governments, civil society and private sector representatives at the Committee on World Food Security.
Investments in agriculture should target the poor in the rural areas of those countries, the minister and the FAO head said.
Investments should also help to make the agricultural and food systems less vulnerable, more equitable, less wasteful and more environmentally friendly.
The world's more than one billion farmers should be at the centre of new investment strategies, because they are, by far, the largest investors in agriculture, after public and foreign private investors. Farmers in 76 low- and middle-income countries invest almost 170 billion dollars a year in their farms - about $150 per farmer, according to FAO estimates. That represents three times as much as all other sources of investment combined - including public investment, foreign private sector investment and official development assistance.
Special attention should be paid to smallholder farmers, who need support to overcome barriers that prevent them from producing more food, saving and investing, and coping with new challenges and risks related to climate change.
Aigner and Graziano da Silva underlined that farmers need a supportive environment that makes agriculture attractive for investments. They need good governance, clear and fair incentives, and access to good infrastructure, public services and information in rural areas. National governments should ensure that these conditions are in place.
Good governance of large-scale investments, often by international investors, is necessary to ensure that the rights and livelihoods of local communities are protected and the degradation of natural resources is avoided.
2 See momagri article « FAO calls for farmer-centred approach to investment in agriculture », http://momagri.org/UK/articles/La-FAO-appelle-a-replacer-les-agriculteurs-au-centre-des-strategies-d-investissement_1199.html