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Growth forecast as FAO Investment Centre releases 2019 Annual Review

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24/09/2020

Given the tremendous uncertainty in today’s world – from the global COVID-19 pandemic to climate change – transforming our food systems to be more inclusive, green, resilient and equitable is more urgent than ever. 

Making more and better investments in agriculture is one of the most effective ways to reduce hunger and poverty while also safeguarding the environment.  

That is where the FAO Investment Centre comes into play. The Centre along with its partners – international financing institutions (IFIs) and others – continues to advance this agenda, as detailed in its new Annual Review for 2019.

And that role is set to increase. FAO members have recently agreed to inject significantly more resources into the Centre – enabling it to expand, provide more in-depth investment support to its members and strengthen its collaboration with its partners.

As FAO Director-General QU Dongyu said, “together, we are transforming agriculture and food systems through targeted investment, innovation, knowledge and strengthened capacities.”

In action

In 2019, the Centre contributed to the design of 32 new IFI-financed projects in 26 countries for a total investment of USD 5.7 billion.

On the policy front, the Centre developed 13 agricultural strategies, 9 policy and analytical studies and 27 sector studies, and facilitated 13 public-private policy dialogue processes in various countries.

Implementation support (technical assistance, supervision, evaluation) made up 58 percent of the Centre’s services, while investment design and policy support accounted for 30 and 12 percent, respectively.

Julian Lampietti, Manager of the Global Agriculture Practice at the World Bank, one of the Centre’s oldest partners, appreciates that the Bank is “able to draw on the Centre’s broad range of technical resources for investment that are not immediately available elsewhere.”

“That, along with FAO’s vast field network, is a tremendous resource for us,” he said, adding that it will be important to make the collaboration even more strategic to “turbocharge our approach to transforming agrifood systems.” 

Emerging areas

One exciting trend in 2019 was digital agriculture.

Digital technologies are changing the game, helping farmers make better decisions to increase productivity, adapt to climate change and manage natural resources more efficiently. The Centre prepared large investment projects and analytical studies to advance the digitization of agriculture. 

The Centre also increased its support to private investments in food and agriculture that generate social and environmental impacts alongside financial returns, most notably through the AgrIntel and AgrInvest initiatives.

FAO Investment Centre Director Mohamed Manssouri noted the Centre’s effort in 2019 to enhance the knowledge and innovation content of its investment solutions.

“We allocated more resources to boost our existing portfolio of sector and policy studies and toolkits. And we partnered with research centres to gather evidence and analyse specific investment areas like farmers and rural people’s human capital, low carbon agrifood systems and carbon neutrality, water resource management and digital solutions,” he said.

Resilience and sustainability 

The Centre assisted several countries in accessing available resources for large-scale climate projects, including from the Green Climate Fund.

And new FAO tools like the Global Livestock Environmental Assessment Model (GLEAM-i) and the Livestock Sector Investment and Policy Toolkit (LSIPT) are now being used to design climate-smart livestock policies and projects. 

In 2019, the Centre led the preparation of nine of the ten approved application proposals submitted to the Global Agriculture and Food Security Program (GAFSP) via its competitive grant funding for fragile and conflict-affected countries, for financing totalling USD 126.6 million. 

Future Perspectives 

At the pandemic’s outset, the Centre began adjusting its work programme to address COVID-19 challenges, partnering with IFIs to ensure agrifood chains are well-functioning, resilient and inclusive. 

Looking ahead, it will continue to leverage more responsible private sector investment and improve the quality of blended finance operations in the agrifood sector.

The Centre will also support FAO’s new Hand-in-Hand initiative covering more than 40 countries.

The initiative identifies opportunities to raise rural incomes through agricultural transformation, matching global resources with needs in recipient countries and boosting public and private investments in sustainable food and agriculture.

Galvanizing global efforts for such transformative action will lead to affordable healthy diets, reduced food loss and waste, climate-smart agriculture, decent jobs for vulnerable small-scale producers, greater resilience and the well-being of people and the planet.

“Together, we are on the right track for a better future,” Director-General QU Dongyu said.