How FAO RuralInvest Software Improves Agriculture Investments

By Günther Feiler, Capacity Development Officer, FAO Rome, and Thomas Muenzel, Investment Support Officer, FAO Bangkok  ( The article was originally published by the ICTworks and we reproduce for our community. All rights acknowledged)

Experience has shown that substantial public investments in agricultural production, transport and storage infrastructure, combined with private on-farm investment are essential for promoting pro-poor economic growth, bringing people out of poverty and ending food insecurity and malnutrition.

The FAO State of Food and Agriculture Report in 2012 found that the investments by millions of small and medium-sized farmers and other rural actors amount to more than three times the investments from other sources combined.

These investments can act as powerful enablers for achieving the Sustainable Development Goals (SDGs), especially SDG 1 No Poverty and SDG 2 Zero Hunger.

How to improve agriculture investment decisions?

It is important to allocate the limited resources to the most promising investments that promote sustainable development. Yet, planning and analytical capacity to guide small and medium-sized investors, including farmers and their enterprises, is still limited. This has led to poorly informed investment decisions, inefficient resource allocation and low performing projects.

One of FAO’s core functions is to “advise and support capacity development at country and regional level to prepare, implement, monitor and evaluate evidence-based policies, investments and programmes”.

An institutional approach to strengthen national capacities to support investment planning is the key for scaling up – FAO cannot meet the demand of required support to investment planning by itself. It is important to strengthen national institutions in support to investment.

In this context, FAO supports member countries in strengthening investment planning capacity through the dissemination and institutionalization of its RuralInvest package.

The RuralInvest software solution

RuralInvest is a free multilingual methodology and software-supported toolkit to prepare investment projects and business plans. It introduces a participatory, iterative and decentralized approach and supports communities, entrepreneurs, government field technicians, projects and financial institutions to prepare sound plans for rural investments and agribusinesses development.

RuralInvest can be used by any organization or project which manages funds or mobilizes resources for small- and medium-scale agricultural and rural investments. It is suited for a wide range of projects, including:

• Income-generating projects in agriculture, livestock, fisheries, fish farming, forestry, agro-industries, tourism, transport services, handicraft manufacturing, retail stores, wholesale services and storage services; and
• Non-income-generating (or social) projects to improve living standards in rural areas, including health centres, schools, environmental protection, roads or water supply.

RuralInvest provides a communication tool to develop sound investment proposals and business plans jointly with small- and medium-sized investors such as farmers. It includes four modules:

• Module 1 deals with participatory identification of local investment needs;
• Module 2 focuses on preparing and using project profiles;
• Module 3 is used for detailed project formulation and analysis; and
• Module 4 is for monitoring and evaluation of RuralInvest projects.

One of the key features of RuralInvest is its systematized and standardized formulation, analysis and results reporting which makes different proposals comparable across projects. Through the process, it also greatly facilitates capacity development and learning for both investors and practitioners to analyze feasibility of proposals, thus fostering ownership and responsibility.

To-date, RuralInvest has been used in 34 countries across Africa, Latin America and Asia. The software and manuals are currently available in English, French, Spanish, Arabic, Kiswahili, Mongolian, Portuguese, Russian and Turkish.

Best Practices in Deploying RuralInvest

Over the past several years, RuralInvest has proven to be a strong capacity development tool, enabling practitioners, including rural investors, to link the pure technical side of a project with the socio-economic aspects of it and thus shedding light on its economic feasibility and sustainability.

However, not every deployment was easy or smooth, and in the process, we’ve learned lessons on what works (and doesn’t) when training investors with the software and developed these best practices:

1. Local networks of practitioners strengthen national capacities

FAO adds members to the global community of RuralInvest practitioners through regular training workshops. These country-specific members will contribute to the institutionalization of RuralInvest at national level.

For instance, following a RuralInvest training in Mongolia, participants founded the RuralInvest Club of Mongolia at the University of Life Sciences in Ulaanbaatar. The club members developed a curriculum for a six-credit RuralInvest course and assisted in translating RuralInvest materials and software into Mongolian.

2. Participatory development planning is required

Project ideas must come from those that are involved in the implementation and are investing their own resources. Yet Module 1 on participatory identification of local investment needs, is not much in demand since Participatory Rural Appraisal (PRA) capacities are usually available in member countries and participatory village or community planning processes have been in use for many areas.

3. Participatory assessment fosters ownership

Preparing a profile with RuralInvest is the core initial activity once project ideas have been identified. This step helps investors to differentiate promising from less attractive ideas. Module 2 of RuralInvest is in high demand since results assessment for small investments is often missing and the simple visual approach of the profile step used in RuralInvest is very appealing.

4. Detailed project preparation improves business plans

Module 3, RuralInvest’s core planning tool for detailed project formulation and analysis, is very much appreciated by planners but often not fully adopted. There is a trade-off between universal applications (e.g. MS-Excel) which generate independent project files and guided applications (e.g. RuralInvest) which build a project portfolio data-base that can operate on the web and generate multiple business plans that make investment plans comparable, based on standard indicators generated.

5. Practice, practice, practice

Training of RuralInvest needs to be followed by application of the newly learnt skills. Course participants need to have the possibility to formulate business plans that will at the end receive funding and can be implemented.

Looking ahead In the long-term, we expect that the use of RuralInvest will contribute to transforming rural economies by empowering small and medium-sized investors, including farmers, to think and act in a more entrepreneurial manner through better-informed small-scale investment proposals and business plans. .