Good afternoon colleagues, ladies and gentlemen.
I would like to thank you for your participation at this event despite the fact that it is being held on a Friday afternoon. But the topic to be discussed here is surely one of the most important issues facing the world today – how to increase the quantity and quality of investment in agriculture.
According to FAO’s most recent analysis, farmers are the biggest investors in agriculture. New data show that farmers in low- and middle-income countries invest more than $170 billion a year in their farms - about $150 per farmer. This is three times as much as all other sources of investment combined, four times more than contributions by the public sector, and more than 50 times higher than official development assistance (ODA) to these countries. Thus, Asia’s hundreds of millions of farmers must be central to any agricultural investment strategy.
In some parts of this region, we have seen growth in agricultural investment, especially in East and Southeast Asia. However, investment during the past 30 years has declined in South Asia, where the largest proportion of the world’s hungry population lives. What does this mean? Farmers are no more interested in investing in agriculture for better production? If so, why? Because of losses resulted from climate changes or natural disasters or diseases, or poor profit or production cost increase or lack of access to loans? There should be reasons behind which should be analyzed and this trend must be reversed if we are to make faster progress towards the eradication of hunger, in line with the UN Secretary General’s Zero Hunger Challenge.
Making more and better investments in agriculture is one of the most effective ways to reduce hunger and poverty while safeguarding the environment. Governments have the responsibility to create an enabling environment for agricultural investment by promoting good governance, secure property rights, low levels of corruption and making it easy to do business. Ensuring appropriate incentives for investment in agriculture is also important.
But for many small farmers, these steps are only necessary, not sufficient. Governments must also help small farmers overcome barriers to investment by supporting the formation of social capital in the form of effective producers’ organizations and well-targeted social assistance programs. Large-scale investments must be governed by inclusive business models in order to ensure that the investments benefit local populations.
Finally, governments must invest in public goods with high social returns, such as agricultural research and development, rural infrastructure and education. The evidence from a large number of countries over a period of past 50 years is clear: investing in public goods yields much higher returns for agricultural growth and poverty reduction than input subsidies.
Thank you for your kind attention, and I look forward to the discussion that will follow the presentation of the report.