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Investing in agriculture for a better future

Investing in agriculture is essential for reducing hunger and promoting sustainable agricultural production. Those parts of the world where agricultural capital per worker and public investments in agriculture have stagnated are the epicentres of poverty and hunger today. Demand growth over the coming decades will place increasing pressure on the natural resource base. Eradicating hunger sustainably will require a significant increase in agricultural investments, but also an improvement in their effectiveness.

Farmers are the largest investors in developing country agriculture and must be central to any strategy for increasing investment in the sector, but if they are to invest more in agriculture they need a favourable climate for agricultural investment based on economic incentives and an enabling environment. Governments also have a special responsibility to help smallholders overcome the constraints they face in expanding their productive assets and to ensure that large-scale investments in agriculture are socially beneficial and environmentally sustainable. Government investment in agriculture is a crucial component of providing an enabling environment for private investments in the sector. Governments need to channel scarce public funds towards the provision of essential public goods with high economic and social returns.

About the series

The State of Food and Agriculture, FAO’s major annual flagship publication, aims at bringing to a wider audience balanced science-based assessments of important issues in the field of food and agriculture. Each edition of the report contains a comprehensive, yet easily accessible, overview of a selected topic of major relevance for rural and agricultural development and for global food security. This is supplemented by a synthetic overview of the current global agricultural situation.

For more information contact Terri Raney

Key messages

  • Investing in agriculture is one of the most effective strategies for reducing poverty and hunger and promoting sustainability.

  • Farmers are by far the largest source of investment in agriculture.

  • Farmers must be central to any strategy for increasing investment in the sector, but they will not invest adequately unless the public sector fosters an appropriate climate for agricultural investment.

  • A favourable investment climate is indispensable for investment in agriculture, but it is not sufficient to allow many smallholders to invest and to ensure that large-scale investment meets socially desirable goals.

  • Governments and donors have a special responsibility to help smallholders overcome barriers to savings and investment.

  • Governments, international organizations, civil society and corporate investors must ensure that large-scale investments in agriculture are socially beneficial and environmentally sustainable.

  • Governments and donors need to channel their limited public funds towards the provision of essential public goods with high economic and social returns.

Interview with Jakob Skoet, editor of The State of Food and Agriculture 2012