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FAO Regional Office for Africa

Increase in responsible agricultural investments key to attaining SDGs

FAO, SMAIAS and IISD organise an international symposium on contract farming and other inclusive business models

Wheat grown under contract in Zimbabwe

13 November 2018, Harare - Agriculture and rural development are key to the achievement of the Sustainable Development Goals (SDGs) as the majority of the world’s poor and food insecure live in rural areas of developing countries. Unfortunately, the agricultural sector currently suffers from serious underinvestment, thus threatening the achievement of set development goals by 2030 unless there is a substantial increase in public and private investments in agriculture and food systems.

In this regard, FAO, the Sam Moyo Africa Institute of Agrarian Studies (SMAIAS) and the International Institute of Sustainable Development (IISD) organised a two day international symposium on contract farming and other inclusive business models to discuss pertinent issues related to responsible investment in agriculture. The symposium brought together farmers, researchers, the academia, students, producer organisations and international agribusiness private companies from 17 countries across Africa, Asia, Europe and Latin America.

The FAO Subregional Coordinator for Southern Africa, Patrick Kormawa, while officially opening the symposium, said it was vital to note that not all kinds of investments were equally beneficial as some carried significant risks for all actors involved. Kormawa added that in order to generate sustainable benefits for all, it was essential to ensure not only more but above all, better investments in agriculture and food systems.

“Inclusive business models are a sustainable way of promoting responsible investment by the private sector because in most cases they ensure that the private sector does not compete with smallholders’ land and other natural resources. FAO is analysing contract farming, public purchase programs and collective marketing arrangements as some of the potential inclusive business models. Contract farming is being analysed because it has the potential to improve family farmers' access to markets and boost their incomes while ensuring that agribusinesses have a stable supply of produce that meets their quality standards. Furthermore, analysing collective organization is important because it gives smallholders a stronger negotiation power in the market,” added Kormawa.

SMAIAS chairperson, Joshua Nyoni, said it was important to bear in mind that when talking of responsible investment, focus should be on people’s lives.

“When we talk of inclusivity, we are talking of inclusiveness across gender and enterprises. I am hopeful that we will have a common understanding of the current challenges so that at the end of the day affordable food is available,” said Nyoni.

Speaking during the official opening, Michael Riggs, FAO Capacity Development for Responsible Investment Officer said the eradication of poverty (SDG1) and  hunger (SDG2)
requires a substantial increase in responsible agricultural investments.

“Farmers are the largest investors in production. Strategic public investment and an enabling environment are also critical factors as well as political commitment and more investment needed,” said Riggs.

The first day of the symposium organised by FAO and SMAIAS focused on critical discussions and policy dialogue on contract farming and other inclusive business models, to support the establishment of responsible value chains in line with the Principles for Responsible Investments in Agriculture and Food Systems (CFS-RAI) and OECD-FAO Guidance for Responsible Agricultural Supply Chains. The first day brought together more than sixty participants including researchers, PhD students, representatives of producer organizations, civil society representatives and international organizations.

Day two of the symposium, organized by FAO and IISD, brought together institutions that represent buyers (private sector companies) and that represent farmers (cooperatives/ associations), in order to enhance discussions on how to improve agricultural contracts using the CFS-RAI and the OECD-FAO Guidance for Responsible Agricultural Supply Chains. Over 100 participants attended, including national and international agribusiness companies such as Cotton Ginners Association of Zimbabwe (CGAZ), CJ Cheil Jedang, Ferrero International, Nestlé, and Philip Morris International.  In this context, FAO is promoting Inclusive Business Models (IBMs) as one of the approaches that encourage the sustainable access of smallholders to markets with the underlying principle that there are mutual benefits for farmers and the private sector.

For more information:

Background information on the International Symposium on contract farming and other inclusive business models: http://www.fao.org/africa/events/detail-events/es/c/1145480/

The Principles for Responsible Investment in Agriculture and Food Systems:   http://www.fao.org/3/a-au866e.pdf  

OECD-FAO Guidance for Responsible Agricultural Supply Chains: https://mneguidelines.oecd.org/oecd-fao-guidance.pdf

UNIDROIT/FAO/IFAD Legal Guide on Contract Farming http://www.fao.org/3/a-i4756e.pdf

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