• Improve farm-level decision-making through soil intelligence, productivity analysis and sustainable resource management.
• Strengthen market linkages between farmers, agribusinesses and processors through value chain analysis, contract farming and public–private partnerships.
• Promote sustainable and inclusive value chains by integrating environmental and social sustainability considerations, including living income approaches.
• Assess how consumer preferences and market incentives can drive the adoption of more sustainable production practices.
• Design and evaluate investments and business models that enhance value addition, competitiveness and resilience.
• Prioritize agrifood investments across value chains and territories.
• Support governments, investors and development partners in identifying and prioritizing high-impact agrifood investments.
• Develop investment-ready strategies and programmes through Hand-in-Hand Initiative, the Analytical Support Mechanism for Country Programming and Evidence (SCOPE) and related analytical frameworks.
• Generate evidence and build capacities to align investments, institutions and financing with sustainable agrifood systems transformation.

This area combines applied microeconomics, value chain analysis, investment diagnostics, meso-level modelling and market intelligence to identify opportunities for sustainable agrifood transformation.

Our analytical toolkit includes quantitative value chain analysis, contract farming assessments, stochastic frontier analysis, spatial typologies, investment diagnostics, cost-benefit analysis, partial equilibrium modelling, living income methodologies, environmental accounting, farm-level profitability analysis, impact evaluation, consumer preference analysis and experimental economics, combined with a lab-in-the-field approach.

We also employ geospatial tools, survey data, business analytics, stakeholder interviews and the Environmental eXternalities ACcounting Tool (EX-ACT) to assess greenhouse gas emissions and other externalities in investment decisions.

By connecting analysis from the farm level to markets, consumers and investment systems, we help decision-makers identify where resources can generate the greatest economic, social and environmental returns.

This work directly supports the FAO Reviewed Strategic Framework 2022-31 by improving the quality, targeting and effectiveness of public and private investments in agrifood systems. The work supports all FAO’s Four Betters by linking evidence, value-chain analysis and investment prioritization to better production, better nutrition, a better environment and a better life.

For Better Production, it advances programme priority areas on small-scale producers’ equitable access to resources, innovation for sustainable agricultural production and digital agriculture. Under Better Nutrition, it supports healthy diets for all and efforts to reduce food loss and waste. For Better Environment, it contributes to climate change-mitigated and adapted agrifood systems, biodiversity and ecosystem services for food and agriculture, particularly through the EX-ACT suite of tools. Finally, under Better Life, it supports inclusive rural transformation and scaled-up investment through the Hand-in-Hand Initiative, the Analytical Support Mechanism for Country Programming and Evidence (SCOPE) and living income analysis.

This pillar contributes directly to Sustainable Development Goals (SDG) 1, SDG 2, SDG 12 and SDG 13 by promoting inclusive agribusiness development, sustainable value chains, responsible investments and climate-resilient market transformation, while also supporting progress towards SDG 5, SDG 9, SDG 10, SDG 15 and SDG 17 through innovation, partnerships and sustainable rural development.

This area of work contributes critically to FAO’s corporate initiatives, including the Hand-in-Hand Initiative and SCOPE, by providing analytical support to identify investment opportunities, design value-chain interventions and mobilize public and private finance for sustainable agrifood systems transformation.

This work is implemented in close partnership with several FAO units. Collaboration with the Office of the Chief Economist strengthens the economic evidence base supporting investment prioritization and agrifood systems transformation. Joint work with the FAO Investment Centre (CFI) helps translate analytical findings into investment strategies, programmes and operations. Collaboration with the Land and Water Division (NSL) underpins the Soil Mapping for Resilient Agrifood Systems (SoilFER) programme, connecting soil intelligence with investment planning and sustainable land management. Work with the Legal Office (LEG) supports the development of policy and legal frameworks for contract farming and responsible agribusiness relations.

Finally, our growing work on living income represents a tangible example of how public and private actors can work together to operationalize sustainability objectives and contributes to the implementation of the Organization’s private sector strategy.

Our work adopts an integrated approach that combines territorial analytics, environmental accounting, and country-level programming support to strengthen investment design and policy decisions.

Through the Hand-in-Hand (HiH) Initiative, FAO contributes to the identification of priority territories with the highest potential for agrifood systems transformation. Using geospatial, biophysical and socioeconomic data, HIH supports governments and partners in jointly developing investment plans and mobilizing resources through coordinated matchmaking among public and private stakeholders. This ensures strong national ownership, targeted investments and enhanced accountability.

To improve the sustainability and quality of investments, we leverage the Environmental eXternalities ACcounting Tool (EX-ACT), which integrates environmental and socioeconomic externalities into project and policy analysis. By capturing impacts such as greenhouse gas emissions, ecosystem services, and long-term economic effects, EX-ACT complements conventional valuation methods and supports more informed, climate-resilient, and equitable decision-making.

At the country level, the Analytical Support Mechanism for Agrifood System Country Programming and Evidence (SCOPE) strengthens evidence-based programming by aligning FAO’s technical expertise, data and analytical tools with United Nations planning processes. Through tailored analytical support linked to national priorities and Sustainable Development Goals, SCOPE helps governments shape policies, prioritize investments, and accelerate agrifood systems transformation.

Together, these initiatives enable FAO to connect robust economic analysis with territorial targeting, environmental sustainability and country programming, ensuring that investments are de-risked, evidence-based and transformative.

RELEVANT LINKS

• WEBSITE: Hand-in-Hand Initiative
• WEBSITE: Analytical Support Mechanism for Agrifood System Country Programming and Evidence (SCOPE)
• TOOL: The State of Agrifood Systems Data Platform
• TOOL: Environmental eXternalities ACcounting Tool (EX-ACT)

Our work strengthens farmer decision-making by combining high-quality soil data with behavioural and economic analysis under the Soil mapping for resilient agrifood systems (SoilFER) programme. This programme supports countries in generating detailed soil information and translating it into practical, farmer-centred recommendations that enhance soil fertility, productivity and climate resilience.

Using a farmer-centred approach, we apply tools such as discrete choice experiments and lab-in-the-field trials to identify the soil information farmers value most and the most effective ways to deliver it. Cost-effectiveness analysis and impact evaluations then assess which recommendations and communication channels lead to measurable improvements in sustainable soil management, productivity and incomes.

This evidence-based process ensures that soil data translates into better on-farm decisions, stronger resilience and improved livelihoods.

RELEVANT LINK

• WEBSITE: Soil mapping for resilient agrifood systems (SoilFER) programme

Our work strengthens linkages among producers, agribusinesses and markets to improve inclusion, efficiency and sustainability across agrifood value chains. Through support to contract farming, it promotes fair and transparent agreements that connect smallholders to reliable buyers, facilitate access to inputs, finance and technical assistance, and help manage market and production risks.

Contract farming is a pre-arranged agreement between producers and buyers that sets the terms and conditions for the production and marketing of agrifood products. It is an innovative business model with the potential to benefit agrifood systems by helping to:

• link smallholder producers with buyers and markets;
• facilitate access to technology, training, technical support, inputs, finance or other resources for producers;
• help manage market, production and environmental risks;
• boost productivity, profitability and livelihoods for smallholders;
• enable agribusinesses including micro-, small- and medium-sized enterprises (MSMEs) to secure consistent, quality supplies;
• support value chain upgrading and commercialization;
• foster inclusive growth and sustainable development.

In parallel, FAO addresses food loss and waste through economic and value chain analysis, identifying cost-effective interventions that improve efficiency, reduce losses and increase returns for value chain actors. Together, these efforts foster stronger coordination, upgraded value chains and more inclusive commercialization.

RELEVANT LINKS

• WEBSITE: Contract Farming Resource Centre

FAO’s work promotes collaboration between governments, private investors and value chain actors to mobilize resources, share risks and drive inclusive agrifood systems transformation. Through support to agribusiness public–private partnerships (agri-PPPs), it helps design enabling policy frameworks, strengthen institutions and develop value chain financing mechanisms that crowd in responsible investment while safeguarding public goods.

At the same time, we advance the living income approach to ensure that agrifood investments translate into fair and dignified livelihoods for smallholders. According to the Living Income Community of Practice, living income is defined as “the net annual income required to afford a decent standard of living, including housing, healthcare, education, nutritious food, water, clothing, transportation, and other essential needs”. This concept extends efforts to define decent, or living, wages for workers in agrifood value chains to rural households engaged in agrifood systems.

The approach goes beyond poverty reduction, aiming to ensure fairness and dignity for farmers, and is increasingly recognized in global sustainability frameworks and due diligence legislation.

By supporting income gap analysis, multi-stakeholder dialogue, and the integration of living income benchmarks into policies and business strategies, our work helps align public and private action around measurable improvements in farmer incomes. It also ensures that investments are commercially viable, socially inclusive, environmentally sustainable.

RELEVANT LINKS

• MANUAL: Guide for the design and implementation of public–private partnerships for agribusiness development in Africa
• TECHNICAL REPORT: Brief assessment of the living income concept
• WORKING PAPER: Living Income measurement methods – A comparative study and application to cocoa farmers in Cameroon