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 governments from the G8 and the G20 alike 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 investment in agriculture.
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, which 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.
The IAWG also prepared a Plan of Action for a continuous improvement and 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 field-testing principles for responsible agricultural investment and research on foreign investment in developing country agriculture to establish a solid base of evidence on the trends and impacts of investment, using the lessons learned as a basis for refining the principles, and informing various consultation processes. For example, the IAWG actively supported and contributed to the CFS-led inclusive consultation process initiated in 2012 to develop and ensure broad ownership of principles for responsible agricultural investment. The IAWG informs the public debate by sharing its knowledge on responsible agricultural investment through various publications.
Principles and Guidance for Responsible Agricultural Investment
The global efforts of governments, international organizations, civil society organizations and the private sector have resulted in different sets of principles and voluntary guidelines, which should be considered as complementary rather than contradictory instruments. Each of these principles and guidelines defends a similar set of core values, acknowledging for example the potentially beneficial role of private corporate agricultural investment while seeking to protect legitimate tenure rights, but may address different stakeholders, situations or potential conflicts. FAO has significantly contributed to the majority of the most relevant instruments.
The CFS Principles for Responsible Investment in Agriculture and Food Systems (CFS RAI), which were approved by the 41st Session of the Committee on World Food Security on 15October 2014, are the result of an inclusive consultation process, engaging a wide range of different stakeholders. The scope of the CFS-RAI is very broad, as these principles address all kinds of investment and investors, from farmers to multinational companies.
The IAWG Principles for Responsible Agricultural Investment that Respect Rights, Livelihoods and Resources (PRAI) were conceived mainly as 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.
The CFS-RAI and the PRAI may be useful for both private corporate actors desiring to make investments that are financially, socially and environmentally sustainable and governments who want to develop laws and policies that promote responsible investment. They may furthermore help civil society groups advocating responsible business conduct.
The FAO Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security were endorsed by the CFS in 2012. They address all relevant issues about land tenure and contain a chapter on investment.
Currently, FAO and the OECD jointly prepare voluntary guiding principles for responsible business conduct in agricultural supply chains for enterprises, which will be finalized soon.