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Agricultural investment

Investment in agriculture, including agro-industry, rural infrastructure, agricultural science, technology and support services such as financial institutions and extension programs,  has been critically important to past growth performance.  It is likely to be even more important for achieving future global development priorities, especially the Millennium Development Goals (MDGs) of halving poverty and hunger by 2015. Investment into all areas is important. Yet priorities based must be set according to the needs, risks and returns.

A challenge in deciding future investments is to understand and project the future needs such as changing consumer needs and urbanization and what that means in terms of investment in food processing and logistics. In agricultural research and development, the challenge is to maintain past productivity gains, while investing into technological innovation in more diverse agricultural systems that will differentiate products and add value by processing or quality improvements which will enable rural producers to capture a larger share of the gains.

Investors are expecting to increasingly benefit from investments in the agricultural sector, not only in the short term, but more importantly  in the medium and long term since demand for food and other agricultural products is projected to continue to increase. Particularly high population growth, longer life expectancies as well as increases of the purchasing power of the population in some emerging economies and renewable energy consumption will contribute to the increasing demand. At the same time, constraints on the supply side of agricultural products such as resource scarcity and growing urbanization exist. Additionally, the impact of environmental degradation on agricultural production leading to supply constraints is expected to further contribute to an increased interest of investors in the agricultural sector.

The Rural Infrastructure and Agro-industries Division program addresses agricultural investment from technical, financial and policy aspects. Investment assessments are carried out such as technical work on post-harvest investment needs and quality and safety investment. On the financial side, investment promotion and investment mechanisms, such as investment funds, guarantees and financial mechanisms are analyzed and supported. Governments are assisted with policy support, investment assessments and capacity building.

 

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