Greater investment in agriculture essential to achieve Millennium Development Goals
FAO Investment Centre celebrates 40 years of promoting investment in agriculture
14 December 2004, Rome - Greater investment in agriculture and rural development is essential to spur economic growth in developing countries and to achieve the Millennium Development Goals, the UN Food and Agriculture Organization (FAO) said today on the 40th anniversary of its Investment Centre, established in 1964 in partnership with the World Bank to increase support to agriculture.
FAO is marking the occasion with a two-day seminar at its Rome headquarters that will address issues concerning the future of investment in agriculture and rural development, the role of the Investment Centre and its work with other FAO divisions, and views from the international financing institutions.
Catalyst and partner
For the past four decades, the Investment Centre has been doing its part to promote greater investment in agriculture and rural development by assisting developing countries in identifying and formulating effective and sustainable investment policies, programmes and projects. It does this with funding from multilateral institutions such as the World Bank, regional development banks and international funds as well as FAO resources.
To date, FAO and its financing partners have approved more than 1 400 projects prepared by the Centre for over 140 developing countries at a total value of around US$76 billion.
"We assist in mobilizing funding and act both as a catalyst and a partner, working with governments, international financing institutions and bilateral donors," says Tesfai Tecle, Director of the Investment Centre. "The Centre also serves as a gateway to the vast technical expertise within FAO in agriculture and rural development, fisheries, forestry, post-emergency recovery and rural rehabilitation. It draws on skills that make investment projects and programmes technically and institutionally viable."
The Centre gives special attention to Africa, where the most intractable development challenges are to be found and where the majority of people survive on agriculture. As well as formulating investment projects in Africa with its partner financing institutions, the Investment Centre has recently provided support, with FAO funds, to the formulation of national medium-term investment programmes in 49 African countries, under the auspices of the African Union's New Partnership for Africa's Development (NEPAD).
The way ahead
The Centre's mission has always been to increase agricultural investment and promote rural development. However, there has been a major change in thinking within the development community about how best to target poverty reduction through development assistance.
At the FAO seminar, a keynote address on "The future of development assistance and investment in agriculture" by Lawrence Haddad, Director of the Institute of Development Studies at the University of Sussex in the United Kingdom, will address this issue.
According to Tecle, there has been a shift away from individual projects towards more comprehensive approaches to addressing the problems of the agricultural sector. These sector-wide approaches, so-called SWAps, which employ a range of mechanisms, including conventional project investments and technical assistance, aim at greater harmonization of donor assistance.
This shift away from project finance has necessitated a shift in direction for the Investment Centre. There is an increasing preference among donors for direct budget support. In this case, funds go not to a specific project, but are instead managed by the Ministry of Finance. The Ministry of Agriculture must decide how the money should be spent, and it needs support in designing successful investment programmes.
"We already play a central role in helping governments coordinate assistance from a range of donors in a common programme," says Tecle. "Now, we will be working even more closely with governments than in the past, helping the ministries of agriculture to develop strategies that make sense and formulate their own investment proposals."
The Investment Centre works with banks and governments in the formulation of the agricultural sector components of their Poverty Reduction Strategy Papers. PRSPs have become a prerequisite for countries seeking World Bank concessional loans and grants and International Monetary Fund assistance and shape the portfolios of all financing institutions and donors.
"With the wealth of FAO's technical expertise in all areas of agricultural activity at its disposal, the Investment Centre is well placed to assist governments in assessing the constraints and opportunities within the agricultural sector, identifying individual investment opportunities and shaping the way they fit together and complement institutional reforms and changes in public policy," says Tecle.
Seminar participants, including senior representatives of the World Bank, the African Development Bank, the International Fund for Agricultural Development and other financing institutions, as well as the World Food Programme, Permanent Representatives to FAO of member countries, and senior FAO management and staff, will discuss these trends and the way forward.
Redesigned Web site
As part of the anniversary celebrations, the Investment Centre has redesigned its Web site. In the coming months a section will be added highlighting flagship exercises being undertaken by the Centre which will allow readers to submit their comments. The site is currently available in English, French and Spanish. Arabic and Chinese versions will follow.
Information Officer, FAO
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