Building a Business Case for the Principles for Responsible Investment in Agriculture and Food Systems.

9 May 2016, Rome. How do we ensure that agricultural investment contributes to the eradication of hunger, food insecurity and malnutrition rather than jeopardizing it? The members of the Committee on World Food Security (CFS) intensely negotiated for two years to address this particular question. Their answer came in October 2014: By adopting the Principles for Responsible Investment for Agriculture and Food Systems (CFS-RAI). 

The voluntary CFS-RAI is the first international multi-stakeholder agreement that defines responsible investment in agriculture (including forestry and fisheries) and food systems. Now that the CFS-RAI has been adopted, all stakeholders are called upon to apply its ten principles. 

Private Sector Workshop on Translating Principles to Action

On 9 May in FAO headquarters, the Partnerships, Advocacy and Capacity Development Division (OPC) organized a meeting with private sector representatives, to raise awareness, share knowledge, and begin to identify priority areas for the successful application of CFS-RAI.

The CFS-RAI arrived on the world stage at a timely moment. ‘Investment is the major source of the estimated trillion dollar needed to finance development’ and implement the Sustainable Development Goals, stated J.B. Cordaro representing the private sector membership of CFS. 

Moreover, ‘just as important as the quantity of these investments is the quality of these investments’, highlighted Helena Semedo, FAO’s Deputy Director General in her opening statement.

Why the CFS-RAI Principles?

This is where the CFS-RAI Principles come into place, to provide guidance for more and better investment. They provide a framework to which inter alia national regulators, policymakers, parliamentarians, corporations, farmer or industry associations and civil society can refer to and adhere when dealing with investments. 

‘Investing responsibly is good for society but also for businesses’, remarked Pascal Liu of FAO’s Trade and Markets Division. Moreover, FAO research shows that ‘investments that combine the strengths of the investor with local farmers are shown to have good chances of success’, he added. 

Investments that are not responsible have a high risk of failing due to negative media attention and community grievances. ‘Imagine a local population that now has to walk miles around a newly purchased and fenced piece of land to gather their water and supplies’ OPC Director Marcela Villarreal said.

In addition, more than the content of the principles, their strength is the process of bringing all these different views together in one document. The attending CFS-Chair further elaborated on that issue saying:  

‘Taking all those different opinions, building consensus and making concrete decisions that will improve food security and nutrition globally is challenging. The multi-stakeholder approach which is at the heart of the CFS inclusive-model generated these Principles and is what gives them their broad legitimacy’ 

Addressing Challenges: Case studies

However, this silver cloud also has a dark lining. Given that the CFS-RAI is new and the principles reach broadly and aim high, participants identified challenges in understanding how best to apply the CFS-RAI. 

FAO aims to address these challenges, and one way to create more understanding is by sharing business cases which align with the spirit of the CFS-RAI.

For instance, Duxton Asset Management from Singapore annexed the CFS-RAI in the legal documentation of a financial investment in Sri Lanka. ‘We think of the Principles as a belief system and we expect other parties to understand them’, said John Young Simpson, Duxton’s Vice President. 

Carl Heinrich Bruhn, CEO of Amatheon Agri, a Berlin-based agribusiness and food processing company, showed his company’s policy of sourcing responsibly from smallholder farmers and providing them with free trainings and facilitating access to finance. 

Lastly, Makota Goda, CEO of Nippon Biodiesel Fuel from Japan, explained how his company shares technology with small farmers in Africa so they can access financial systems. 

During the event, other private sector representatives shared their experiences and business cases about responsible investments.  ‘We believe that with this contribution we made the possibility of implementing these principles a reality’, OPC Director Marcela Villarreal concluded. 

What next?

The private sector workshop is part of a series of meetings where FAO engages with key stakeholders on CFS-RAI implementation. An event with Governments was held last December and an event with civil society is planned in July.

Based on the inputs received at these workshops, FAO is designing an “umbrella programme” to support all stakeholders with the application of the CFS-RAI. 

‘FAO aims to use its specialized knowledge, research and experience to provide support to each stakeholder for the implementation of the CFS-RAI Principles’, thus said Helena Semedo, FAO’s Deputy Director General.