PR 96/32 - FAO URGES INCREASE IN INVESTMENT IN AGRICULTURE
PR 96/32
FAO URGES US$31 BILLION A YEAR INCREASE IN
INVESTMENT IN AGRICULTURE, MAINLY FROM THE PRIVATE SECTOR
ROME, 4 August -- The private and public sectors combined will have
to invest an additional US$31 billion a year in agriculture over the next
two decades in order to keep up with increasing demand for food in
developing countries, the UN Food and Agriculture Organization said
today.
FAO said that US$19 billion a year in incremental investments will be
needed at the farm level and for post-harvest storage and processing and
the remaining US$12 billion for expanded rural infrastructure and rural
social services.
The Organization made the estimates in "Investment in Agriculture:
Evolution and Prospects," one of a series of provisional technical papers
prepared for the World Food Summit to be held 13-17 November at FAO
headquarters.
Leaders of close to 200 countries attending the Summit are expected
to renew their commitment to the goal of poverty alleviation and
universal food security and agree on a plan of action to be implemented in
partnership with international and non-governmental organizations and
other sectors of civil society.
The report on investment called farmers and other private investors
"the key to rising food output."
"Nearly three-quarters of the future investment needed in the
developing countries would, as in the past, consist of private commitments
by farmers for land improvement, new equipment, expansion of livestock
herds and plantations, often in the form of family labour, and for private
investment in the post-production chain," the report said.
"The remaining quarter, representing about US$41 billion per year,
will consist of complementary public investment to create and maintain the
conditions for profitable private sector agricultural investment.
"If external multilateral and bilateral financial support for these
public investments were to provide the same share as in the past, i.e.,
around one third overall, external commitments would need to rise by some
US$5 billion per year, from presently US$10 billion to US$15 billion
annually, i.e., to the level already attained in the late 1980s."
The report said that government institutions may have to be
restructured to play a new role of "as facilitators and partners in an
agricultural sector dominated by private investment."
Explaining the need for increased investment, the report said new
approaches to food production will have to be found because global
reserves of still unused arable land are dwindling, the gains achieved by
green revolution technology are reaching a plateau and degradation is
rising on both good and marginal land.
The report called for "substantial investment" in irrigation, land
improvement, new machines, livestock breeds and labor to allow farmers to
apply new technology being developed by research establishments.
Further investment will be necessary, it said, to supply farmers with
new types of inputs, crop or animal breeds and machines and for
processing, markets and storage, to build infrastructure linking producers
to the cities and to provide social services that will allow rural people
to make use of the new opportunities to produce and earn.
Noting that agriculture is the main employer in most low-income food-
deficit countries, the report urged policies "to remove disincentives to
farmers and other rural investors, favour job creation, slow unmanageable
urban migration and improve rural financial markets."
It called for "a sharper demarcation between public and private
tasks" with government expenditure reserved for public goods, essential
social services, targeted poverty reduction and food assistance.
The report also urged governments to strengthen their commitments to
regional cooperation in resource management, new technologies and trade.
It said action at the global level is required to avert the potential
threat to food security posed by the narrowing of plant and animal genetic
diversity, global warming, ozone depletion, deforestation and
desertification and to find "desperately needed" new forms of sustainable
agricultural intenstification.
Reviewing the pattern of investment priorities by area, the report
said:
- Asia needs investment in research to overcome micro-nutrient
deficiencies in its populations, irrigation rehabilitation coupled with
more efficient, decentralised water management and possibly the creation
of tradeable water rights is a high priority. Environmental rehabilitation
and protection and investment in marketing infrastructure for growing
urban areas are also needed.
- Africa needs heavy investment in rural communications,
infrastructure such as irrigation and rural roads, simple water capture
and on-site harvesting facilities to exploit rainfall, land management and
improvement, education and health services. High potential areas can make
use of already available research results, but systematic research is
still needed to create new, sustainable farming systems for the
predominant small, resource-poor farms.
- Latin America, with land reserves still available, can expand
agriculture through the use of mechanised farming. It needs rural finance
markets, market-based land reform and substantial investment in marketing
and processing infrastructure for a population expected to become 80
percent urban.
The report said that rural areas in all regions are under-equipped
with the social infrastructure needed to enhance the most important
productive resources, human capital."
The full document is available on the World Wide Webb by clicking on:
http://www.fao.org - then click on World Food Summit, next click on Summit
Countdown, then on Documentation. There you will find all WFS documents.