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Agrinvest update

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19 March 2019  

New Learning Programme on responsible investment in agriculture for policymakers

Policy makers from Guinea, Mali, Mauritania, and Senegal will gather in Dakar, 25-29 March to participate in the face-to-face phase of the learning programme ”Creating an enabling environment for responsible investment in agriculture and food systems”. Organized by FAO in partnership with the Agricultural and Rural Prospective Initiative (IPAR in its French acronym), the programme aims at building the capacities of key political leaders to foster more and better investments in agriculture, as per the Principles for Responsible Investment in Agriculture and Food Systems (CFS-RAI).

Investing in agriculture and rural development is critical to the achievement of the first two Sustainable Development Goals – ending poverty and hunger. Yet, less than ten percent of government expenditure is dedicated to agriculture, insufficient to eliminate poverty and hunger, especially in rural areas. Likewise, in the past three decades, the share of agriculture in total foreign direct investment and credits at global levels has been below five percent.

With global hunger on the rise over the past three years, an increase in agricultural investments is urgently needed to reverse this trend and achieve the 2030 Agenda.

To support Governments in addressing this pressing matter, FAO has put together the Umbrella Programme Supporting Responsible Investments in Agriculture and Food Systems, which recognizes the importance of creating an environment conducive to responsible investment, including legal, institutional and investment incentive frameworks. While policymakers play a catalytic role in facilitating this process, consultations carried out by FAO have revealed that they often lack the necessary knowledge and skills to do so.

In this context, FAO’s new learning programme aims to strengthen the capacities of policymakers to enhance responsible agricultural investments in their countries by applying key international instruments in their policy and regulatory frameworks, namely the CFS-RAI and the Voluntary Guidelines for Responsible Governance of Tenure.

The learning programme has a blended approach with three phases: a three-week online workshop, followed by face-to-face sessions and then a one-month mentoring phase. The participants are directly involved in the development of legal, institutional and incentive frameworks affecting agricultural investments, or in large-scale investment approval processes. These include senior policymakers and civil servants from key ministries and government agencies

In the second half of the year, FAO and IPAR will launch the second phase of the learning programme to work in depth on specific priorities that will be identified in March.

Investments in new varieties and production techniques can increase the profitability and competitiveness of table grape industries in Georgia, Moldova, and Tajikistan

During 2018, the European Bank for Reconstruction and Development (EBRD) and FAO organized events in Georgia, Moldova, and Tajikistan to discuss ways of supporting producers in various horticulture value chains in the three countries.

One of the conclusions of these events was that the table grape industries in Georgia, Moldova, and Tajikistan could become more profitable and competitive from investment in new varieties and production techniques.

The productivity of table grape production in the three countries are relatively low and links with large importers and retailers are not well developed. Moreover, the quality standards of import countries are often not met. Investments are needed to help producers improving their productivity, increasing their sales, adding value to their products and accessing international markets.

Legal innovations for women in contract farming can encourage responsible investment

Contract farming can be an inclusive business model for agricultural investment. However, women tend to be exempt from the benefits of contract farming. Women often carry out much of the work on the farm while being excluded from contracts between the male head of the household and buyers. Women also often cultivate crops for household consumption that may get displaced with cash crops under contract.

The Farmer and Her Husband: Legal innovations for women in contract farming, a new policy brief from the International Institute for Sustainable Development (IISD), explores whether contractual provisions can be used to rebalance power relations between females and males in contract farming.

The brief proposes contractual provisions and legislation related to four priorities: 1) free and active consent to contracts, 2) incentives for including female farmers as contract parties, 3) contract language ensuring that women have the standing to enforce and benefit from contractual arrangements, and 4) provisions that require that all parties have a clear understanding of what a contract farming relationship entails.

Analysis of climate change mitigation potential of investments by development agencies in different agricultural practices

The International Fund for Agricultural Development (IFAD) has published a study that estimates the Climate change mitigation potential of agricultural practices supported by IFAD investments and investments by other development actors. The study finds that some agricultural practices have considerable mitigation potential while others may have the opposite effect and increase greenhouse gas emissions. The study also discusses uncertainties in mitigation analysis and provide recommendations to improve monitoring of mitigation potential of different agricultural practices.

More investment in climate change adaptation measures for smallholders needed

According to the opinion article “Africa's farmers urgently need climate-proof investment for food security” by Oxfam and the Alliance for a Green Revolution (AGRA), public investment in measures to increase the climate change adaptation capacity of small-scale producers must increase dramatically. It is argued that world leaders have not delivered on promises to help developing countries combat global warming. Small-scale producers in developing countries are particularly vulnerable to unpredictable seasons, droughts, floods, and storms. At the same time, small and medium-sized farms produce a major share of the food consumed in developing regions. Increased investment in their adaptation capacity is therefore needed to avert crisis while building stronger economies and greater food security.

Representatives for families have filed a formal complaint against sugar certification body for breaches against the OECD Guidelines for Multinational Enterprises

According to reports from civil society networks such as the OECD Watch and various media outlets, families in Southeast Asia who were allegedly violently displaced to make way for a sugar plantation have filed a formal complaint with the OECD against the sugar industry’s sustainability certification body for breaches of the OECD Guidelines for Multinational Enterprises. The complainants allege that the certification body has failed to hold a member company accountable of illicitly acquiring land and displacing over 700 families.  Community members that sought to defend their rights were reportedly jailed. It is also stated that a National Human Rights Commission has called upon the company to "correct and remedy the impacts" but that no compensation has been provided to the affected families. 

Project for collaborative selling may help female farmers to invest in the production and marketing of food crops

A group of researchers from the Swedish International Agriculture Network Initiative (SIANI) have made a study on the potential of collaborative purchasing and selling to link urban buyers in Nairobi, Kenya with female farmers in surrounding rural areas. The study found that collaborative selling can help farmers to increase their income and plan their production and sales further ahead.

Collaborative purchasing is an idea that customers will purchase food available for sale on a website together with others to create economies of scale in aggregating and transporting goods. Female smallholders interviewed by the researchers were reluctant to engage in collaborative purchasing projects due to the high transaction costs of focusing on household consumers. However, they indicated an interest in collaborative selling, whereby they would jointly supply large orders by combining their produce. Large buyers, such as exporters and restaurants, also expressed an interest in buying from smallholders, provided that their produce is aggregated.

Based on FAO’s work on collective marketing, the SIANI research team has developed a model that farmer organizations can use to help their members engage in collaborative selling and match producers with buyers. The model includes a digital component where farmers can register their available produce, which is then matched with that of other farmers who have similar products. This would enable them to take part in big orders by large buyers. To function effectively, the model would require investment in training as well as in logistics and infrastructure. However, according to the study, the returns on these investments could be high. In general, the difference between farm gate prices and retail prices in Nairobi are high and intermediaries tend to capture much of the profit. If farmers associations organized collaborative selling, their members could increase their share of the final retail price of food crops.






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