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Issue paper

Public-Private Partnerships for Agribusines Development. A Review of International Experiences

High levels of investments are required to unleash the potential of agriculture for sustainable development and poverty reduction in developing countries, but low public budgetary allocations to the sector have slowed growth. To address this problem, innovative partnerships that bring together business, government and civil society actors are increasingly being promoted as a mechanism for pooling much-needed financing while mitigating some of the risks of doing business in the agriculture sector. Commonly referred to as public–private partnerships (PPPs), these initiatives are expected to contribute to the pursuit of sustainable agricultural development that is inclusive of smallholder farmers. However, there remain many unanswered questions about the types of project that may suitably be governed by PPPs and about the partnerships’ effectiveness in delivering on these objectives. To improve understanding of the potential benefits and challenges of agri-PPPs, this publication provides an analysis of 70 PPP cases gathered from 15 developing countries, together with evidence from FAO’s support to the review of PPP policies for agriculture in Southeast Asia and Central America. Four common project types are identified: i) partnerships that aim to develop agricultural value chains; ii) partnerships for joint agricultural research, innovation and technology transfer; iii) partnerships for building and upgrading market infrastructure; and iv) partnerships for the delivery of business development services to farmers and small and medium enterprises. The main lessons are synthesized, including the public skills and institutions required to enable more effective partnerships with the private sector, and the circumstances under which PPPs are likely to be the best modality for achieving sustainable development outcomes. The conclusion reached is that while there is evidence of positive contributions to sustainable agricultural development objectives, there remain several outstanding issues associated with the impact of PPPs on poverty reduction and inclusion, which still need to be addressed. When deciding whether or not to engage in an agri-PPP, policy-makers should aim to ensure that the partnership will represent value for money and generate public benefits that exceed those that could be achieved through alternative modes of public procurement or through private investment alone.