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Accord marks expanded private sector support for investment in agriculture

The UN Food and Agriculture Organization (FAO) Investment Centre and the European Bank for Reconstruction and Development (EBRD) are increasing efforts to promote private sector investment in agribusiness in the southern and eastern Mediterranean region (SEMED), through a series of new technical assistance projects. The projects will contribute to the development of policies and legal frameworks that create a favourable investment climate and foster private sector involvement in agribusiness. The projects, the first under the EBRD’s Private Sector for Food Security initiative, include policy discussions between governments and private agricultural businesses. The initiative was launched in 2011 and is financed by various donors. Improving rural infrastructure, increasing food safety standards and developing local skills through adequate training are among the key issues that need to be addressed to allow private sector agribusinesses to achieve their full potential.

The working partnership between FAO's Investment Centre and the EBRD began in 1994 and since then the two institutions have implemented over 80 technical assistance projects with a total value of about US$ 9.4 million. These projects have helped to address institutional and regulatory bottlenecks, as well as improve transparency and efficiency along the whole food-value chain in the EBRD’s countries of operation. 

Under the new contracts signed today which are valued at approximately US$ 2.2million, the EBRD will contribute US$ 1.5 million funded by the Bank’s SEMED multi-donor account and FAO will provide the remainder of the funding. By joining efforts with the EBRD, FAO is increasing its interaction with the private sector. This follows the decision by the Organization’s Director-General José Graziano da Silva to strengthen partnerships with the private sector and civil society in order to fight against hunger and promote sustainable development.

Together, the UN agency and the Bank focus on areas where they complement each other, combining the EBRD’s banking expertise with FAO’s technical skills and its established working relationships within member countries. “FAO welcomes the expansion of its cooperation with the EBRD to promote private sector investment. Most of the investments needed to tackle food insecurity around the world will come from the private sector, in cooperation with governments and civil society,” FAO Assistant Director-General Laurent Thomas said. “Governments in our region of operation have sometimes reacted to the food crisis through short-term policy measures that discouraged private investment in agriculture. Together with FAO, we can help countries respond in a way that better balances the interests of consumers and producers”, Mr Gilles Mettetal, EBRD Director for Agribusiness, said. “The EBRD is expanding its operations to the countries of the southern and eastern Mediterranean rim, starting with Jordan, Egypt, Morocco and Tunisia. We have seen that food security issues are extremely important in the region, which is a net importer of foodstuffs. As we know, there can be no food security without agriculture, but private agricultural investment requires policies and regulatory frameworks that are stable and investment-friendly,” Heike Harmgart, Senior Economist at EBRD added.

Partners for food security

Building on their successful work together, FAO and the EBRD have intensified their cooperation in recent years. They are focusing cooperation on areas like involvement of the private sector in policy discussions; food chain analysis to support the EBRD’s investment decisions; development of new agricultural financial and risk-management instruments; promotion of fair interactions between the EBRD’s agribusiness clients and their farming suppliers; and coordination of the intervention of International Financing Institutions (IFIs) in the agricultural sector through EastAgri (a network of IFIs investing in agriculture in the EBRD’s current countries of operations).