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Investment Policy Support

Strengthening the linkages between policy and investment operations is key to achieving impact at scale. FAO assists national governments in creating enabling environments favourable to public and private investment in food security, nutrition, agriculture and rural development − from appropriate legal, policy and institutional frameworks to supportive infrastructure and services, especially for small-scale farmers. It also facilitates public-private policy dialogue through multi-stakeholder platforms and thematic clusters.

FAO supports member countries in becoming more strategic in their investment planning, prioritization and decision-making, promoting knowledge transfer and innovation and strengthening institutional capacity. It assesses the quantity and efficacy of a country's public expenditures for agriculture and rural development. It also carries out pre-investment studies, such as sector analyses or studies on farming systems, natural resources use or rural livelihoods. This is to understand the constraints and opportunities within the sector and how it can be strengthened by changes in public policy and investment.

Market analyses enable FAO to assess the contributions and constraints of all actors in a commodity chain in order to promote more inclusive and better performing value chains. FAO also promotes environmental policy planning and management to analyse the critical nexus between agriculture and the environment and how the sustainable management of both serves national interests.

FAO is working to understand better the relationship between domestic and foreign investment in agriculture, sustainable development and food security. A large proportion of domestic investment comes from farmers themselves, who often use much of their savings to build fixed capital, such as land and machinery, to improve production and productivity. These investments are the engine of economic growth, particularly in rural areas which is why producers must be central to countries' agricultural investment strategies.

Success stories

Public-private policy dialogue

When Ukraine introduced grain export quotas in 2008, most private grain investors started to back away or limit their investment activities in the country. An active and influential grain working group, established with FAO and European Bank for Reconstruction and Development (EBRD) assistance, helped increase transparency in the grain sector through better information exchange between government and private stakeholders. This led to the elimination of export bans. It is estimated that the intervention generated additional grain sector investments of USD 1 billion. This know-how for facilitating policy-making has now been transferred to other countries and sectors.

More efficient and inclusive value chains

FAO has been working closely with the European Bank for Reconstruction and Development (EBRD) to develop more efficient and inclusive value chains. In Serbia, they have introduced the use of geographical indications for horticulture products − a status that assures consumers of a product's quality, origin and reputation. They are working with Nectar, for example, a leading juice drinks company in the Western Balkans, to develop origin-based labels for Serbian fresh and processed fruit products such as the sour cherry. FAO and EBRD are also partnering with the Serbian Ministry of Agriculture and Carnex, Serbia's top meat producing company, to develop public quality labels for Serbian meat and meat products. Having such a status can help producers set their products apart and gain a better foothold in domestic and international markets.

Tunisian olive oil sector

FAO and the European Bank for Reconstruction and Development (EBRD) are helping to grow Tunisia's olive oil sector. Tunisia is the third largest exporter of olive oil, after Spain and Italy, but a number of challenges have slowed the sector's development. To increase competitiveness of Tunisian olive oil, FAO and EBRD are supporting measures to boost productivity, introduce innovative technology and production methods, improve quality and marketing and promote policy dialogue. In November 2014, FAO and EBRD organized a seminar that brought together public and private sector stakeholders. In addition to discussing the findings from a joint study on the country's olive oil sector, carried out in collaboration with the International Olive Oil Council, participants addressed challenges and opportunities and identified priority areas for investment.