Corporate private investment in agriculture, including both domestic and foreign direct investment (FDI), can have transformative and positive impacts at local and national levels. However, some forms of investment are less likely to generate benefits and may carry significant risks for local communities, governments and investors. In the aftermath of the food price crisis of 2007/8, the risks of a wave of large-scale land acquisitions attracted substantial international concern. The United Nations General Assembly as well as various other, non-governmental stakeholders called for initiatives promoting responsible agricultural investment that mitigate risks and maximize opportunities, such as improved food security. FAO has taken a leading role in efforts to develop principles for responsible agricultural investment and gather empirical evidence on trends and impacts of agricultural investment.
Guidance instruments that promote responsible investment in agriculture
The global efforts of governments, international organizations, civil society organizations and the private sector have resulted in different sets of principles and voluntary guidelines to which FAO contributed significantly. They should be considered as complementary rather than contradictory guidelines. The following principles may be useful for governments who want to develop laws and policies that promote responsible business conduct, or by private corporate actors desiring to make investments that are financially, socially and environmentally sustainable. Civil society groups may also find these principles helpful to advocate responsible business conduct.
The CFS Principles for Responsible Investment in Agriculture and Food Systems (CFS RAI) were approved by the Committee on World Food Security in 2014. They are the result of an inclusive consultation process, engaging a wide range of different stakeholders. The Principles address all types of investment in agriculture and food systems and in the production and processing spheres. They provide a framework that all stakeholders can use when developing national policies, programmes, regulatory frameworks, corporate social responsibility programmes, individual agreements and contracts. FAO is expected to play a leading role in operationalizing the principles.
The FAO Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security (VGGT) were endorsed by the CFS in 2012. They aim to guarantee the protection of legitimate tenure rights and address all relevant issues about land tenure. The VGGT contain a chapter on investment which clarifies the responsibilities of various stakeholders.
The Principles for Responsible Agricultural Investment that Respects Rights, Livelihoods and Resources (PRAI) were developed by the Inter-Agency Working Group (IAWG) composed of FAO, IFAD, UNCTAD and the World Bank in 2009. They are a response to the challenge of large-scale land acquisitions and the need for increased agricultural investment. The PRAI draw attention to rights and livelihoods of rural populations and the need for socially and environmentally sustainable agricultural investments.
Currently, FAO and the OECD are jointly developing voluntary Guidance for Responsible Agricultural Supply Chains This practical summary of existing standards on responsible business conduct (including the above ones) is directed to enterprises. An online public consultation on the first draft guidance was held to ensure broad stakeholder participation and a new version is in preparation.
The contribution of the Inter-Agency Working Group to an ongoing dialogue
The creation of the Inter-Agency Working Group (IAWG), composed of FAO, IFAD, UNCTAD and the World Bank, was one of the first major initiatives promoting responsible agricultural investment. The IAWG jointly developed the Principles for Responsible Agricultural Investment that Respect Rights, Livelihoods and Resources (PRAI) in 2009 and published numerous publications to inform the public debate on responsible investment. The PRAI were conceived as a contribution to an ongoing dialogue and a “living document” to be further refined in the light of empirical evidence. The IAWG held five international consultations and a further 15 other information sharing events on the PRAI between 2010 and 2011 to promote a consensus between all stakeholders about principles for responsible agricultural investment. Furthermore, the IAWG actively supported and contributed to the CFS-led inclusive consultation process initiated in 2012 to develop and ensure broad ownership of the CFS Principles for Responsible Investment in Agriculture and Food Systems.
The IAWG also prepared a Plan of Action for operationalization of the principles, which was endorsed by the G20 in 2011. The G8 has also expressed support to the implementation of principles for responsible agricultural investment in developing countries. The Plan of Action comprises a new research programme that was initiated in January 2015. The programme includes piloting principles for responsible investment in agriculture in a number of African countries. The IAWG continues to inform the public debate by sharing its knowledge on responsible agricultural investment through various publications on trends and impacts of foreign agricultural investment and responsible business conduct.