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IFAD-FAO Knowledge for Investment series: policy dialogue

23/02/2017

In December, the FAO Investment Centre and IFAD co-hosted an event to foster agricultural investment through policy dialogue, the latest in the IFAD-FAO Knowledge for Investment series. Members of the London-based European Bank for Reconstruction and Development (EBRD) agribusiness team joined the conversation via Skype.

The event was an opportunity for the three organizations to share knowledge, experiences and best practices on policy engagement with the public and private sectors, and to draw from one another’s expertise.

Creating a culture of dialogue

FAO opened the conversation by highlighting lessons learned from facilitating public-private policy dialogue in transition and Mediterranean countries under its cooperation with the EBRD.

Many countries benefit from policy dialogue, which typically requires external assistance in the form of facilitation and technical inputs. With limited assistance, governments can achieve considerable impact in terms of facilitating private investment in agriculture.

One approach that has worked well in the framework of FAO’s partnership with the EBRD is to engage diverse public and private sector stakeholders, including farmer and industry representatives, in dialogue over concrete value chain bottlenecks – identifying root problems and putting practical issues on the table. Reliability of information is often an issue when starting a process of dialogue, but once the stakeholders agree on the data they can work together to negotiate and solve the problems, building mutual trust through results.

“Agreeing on data on which policy decisions are made is a good starting point, as was the case for grain balances in Ukraine and production costs in Tunisia’s olive oil sector,” said Emmanuel Hidier, FAO Senior Economist.

“Building trust and consensus takes time,” Hidier said. “It is valuable to build intermediary goals with the agribusiness industry when facilitating value chain development while keeping the bigger picture of policy improvements in mind.”

Lauren Michelle Phillips, Senior Technical Adviser at IFAD, added that “with many elements out of one’s control, the challenge is to keep a consistent approach when government and staff are changing.”

“Through trust and time you can influence policy change, but you need a good facilitated approach. You can’t come from the outside and impose your own agenda,” she said. 

Ukraine and Serbia: strengthening industry associations key to success

Building that level of trust among industry players, coupled with technical knowledge and guidance, can yield impressive results. In Ukraine, for example, the country’s dairy industry associations, with support from the Government, FAO and the EBRD, created a working group to encourage greater dialogue on important dairy sector issues and transparent policy-making.

Despite complex challenges due to changing structural and international trading conditions and political turbulence, the working group has helped advance important legislative and regulatory changes, opening up new export opportunities for producers. This, in turn, has encouraged more investment to modernize and diversify the sector.

“Working with partners, when external factors are in crisis, can actually have a positive effect because it challenges people to seek out opportunities and innovate,” FAO Economist Andriy Yarmak said.

Iride Ceccacci, Principal Economist of the EBRD, added that uniting “different voices across the sector and strengthening these relationships is core to our work and helps us make companies sustainable and commercially viable.”

In Serbia, which is preparing to join the European Union, FAO and the EBRD have been supporting the country to upgrade food safety and quality standards in its dairy and meat sectors by facilitating dialogue between policy-makers and the private sector. A working group for the meat sector was set up to look at issues such as cost competitiveness, quality and export development. A dairy working group was also created to deal with sector development and the problem of aflatoxin, toxic fungi found on certain crops that can affect livestock and humans.

Among other things, these efforts resulted in the introduction of a Serbian quality label, the removal of specific export barriers, the development of a risk communication protocol and guidelines to cope with aflatoxin and increased Government capacity to negotiate accession into the World Trade Organization.

Pushing joint initiatives forward

In closing, Périn Saint-Ange, Associate Vice President of IFAD, underscored the importance of partnerships in pushing initiatives forward and of “leaving space for policy interaction in any investment.”

“Even a large partner like the EBRD focuses on partnerships with a third party to get results and impact. It is important to partner with others for services and expertise that can help our own work,” he said.

Topics for upcoming IFAD-FAO Knowledge for Investment events include youth employment, forests and climate change and the role of information and communication technology for rural development.