Supporting Responsible Investments in Agriculture and Food Systems (RAI)

Engaging the private sector

The Challenge

Private sector companies can generate much-needed investment in agriculture and ensure responsible supply chains that benefit small-scale producers, workers and consumers. However, irresponsible business operations can undermine this potential.

Our Response

The Bigger Picture

Learning programmes for the private sector

FAO is developing an e-learning programme for the private sector to support the design and implementation of responsible investment projects. This programme provides hands-on guidance from project development (feasibility studies, due diligence, consultations and impact assessments) to implementation (on production, processing and retail, as well as human resources policies).

Developing a Legal Guide on Agricultural Land Investment Contracts

FAO is supporting the International Institute for the Unification of Private Law (UNIDROIT) in the development of the UNIDROIT-FAO-IFAD Legal Guide on Agricultural Land Investment Contracts. The Guide provides detailed guidance to promote respect for legitimate tenure rights and responsible agricultural investment. The guidance provided is consistent with, and elaborates upon, the international consensus reflected in the CFS-RAI Principles, the Voluntary Guidelines on the Responsible Governance of Tenure and the UN Guiding Principles on Business and Human Rights. The Guide is designed to be a resource for legal professionals involved in the preparation, negotiation, implementation and review of agricultural land investment contracts for investors, governments, legitimate tenure right holders and local communities.

Promoting national dialogue on responsible agricultural investment with private sector companies

In December 2018, FAO and the Government of Ghana, in collaboration with the Alliance for a Green Revolution in Africa (AGRA), organized a national dialogue in Accra, Ghana titled Promoting investment in food and agriculture: Recognizing the gains made and the future perspectives by government and private sector. The dialogue promoted responsible agricultural investment, and deepened the understanding of the challenges and opportunities in the agricultural sector. It brought together more than 100 participants who represented farmer organizations, the private sector and the government.

FAO continues organizing similar national dialogues on responsible agricultural investment with private sector companies, and particularly with small- and medium-size enterprises around the globe.

Supporting responsible agricultural supply chains with OECD

OECD and FAO developed the Guidance for Responsible Agricultural Supply Chains to help enterprises observe standards of responsible business conduct, including the CFS-RAI Principles, and undertake due diligence along agricultural supply chains in order to ensure that their operations contribute to sustainable development. The Guidance covers a broad range of issues including human rights, labour rights, health and safety, food security and nutrition, tenure rights, animal welfare, governance, natural resources and technology and innovation.

The Guidance was approved by the OECD Investment Committee, the OECD Committee for Agriculture, and the Cabinet of FAO Director-General. A Recommendation on the Guidance was adopted by the OECD Council on 13 July 2016. While not legally binding, the Recommendation reflects the common position and political commitment of OECD members and non-member adherents.

From February 2018 to October 2019 FAO and OECD operated a pilot project to road test the Guidance with a group of selected enterprises and industry initiatives. Participants included global consumer brands, retailers, producers, financial enterprises investing in land and agricultural projects, as well as industry programmes, associations, and cooperatives seeking to support their membership base in strengthening their responsible business practices. 

The findings of the pilot project have been set out in the report Responsible business conduct Pilot project on the implementation of the OECD-FAO Guidance for Responsible Agricultural Supply Chains. This report also summarizes key recommendations for companies and policy makers, in particular countries who have adhered to the OECD-FAO Guidance.

Engaging the private sector through promoting responsible contract farming

Contract farming is a business model that engages small-scale producers with high-value agribusiness chains (private sector). Evidence shows that under a ‘favorable environment’, contract farming can sustainably increase investments in agriculture whilst also safeguarding the livelihoods and incomes of smallholders.

For private sector companies, contract farming enables them to have a steady and reliable supply of required volumes and qualities of produce from farmers at required delivery. However, in order to ensure that contract farming is conducted in a responsible manner, it needs to be supported by relevant policy, regulatory and legal frameworks.

FAO promotes policy dialogue, capacity development and knowledge sharing on responsible contract farming with a view of encouraging the establishment of responsible value chains in-line with the CFS-RAI Principles and the OECD-FAO Guidance for Responsible Agricultural Supply Chains. Through this work, FAO brings together the private sector and small-scale producers in order to enhance discussions on how to improve contracts using both the CFS-RAI Principles and the Model agreement for responsible contract farming.

In November 2018, FAO, the Sam Moyo African Institute for Agrarian Studies (SMAIAS) and the International Institute for Sustainable Development (IISD) organized the International Symposium on Contract Farming and other Inclusive Business Models in Harare, Zimbabwe.

FAO continues to engage the private sector on responsible contract farming through multi-stakeholder capacity development workshops, policy discussions and publishing briefs/guides.