Every year, the Food and Agriculture Organization of the United Nations (FAO) produces a report on the State of Food and Agriculture (SOFA). This year the theme, Investing in Agriculture for a Better Future, follows closely with the elevated level of discussion recently surrounding funding levels and finance mechanisms for agricultural development. With a growing global population, unsustainable use of land and resources, and increasing threats from climate change, improved agricultural investments offer an opportunity to address some of these challenges, reduce vulnerabilities to shocks, and promote stability. Yet while there is a general acknowledgement that more investment must go toward to agriculture, that discussion has not often focused on investments that include environmental impacts.
Much of the SOFA report focused on the finding that farmers are by far the largest source of investment in agriculture, and as such must be at the center of any agricultural investment strategy. Roles of other actors in the sector discussed in the report reflected this finding. Government, for example, can serve the function of leveling the playing field between smallholders and larger investors, as well as increasing equity considerations for women and other marginalized farmers. Producer organizations and social safety nets can help overcome some challenges often faced by smallholders, but other institutions and policies that encourage stable governance, transparent trade policies, accessible markets, and clear property rights are also critical. The Principles for Responsible Agricultural Investment is one tool recently developed to help protect small scale farmers.
Public goods, such as research in agriculture, education and rural infrastructure, are shown as critical to both improving agricultural productivity and reducing poverty. Governments and donors have the task of helping farmers overcome barriers and support these public goods, whereas the authors really saw the majority of financial resources coming from the private sector.
So what about environmental sustainability? As a a factor to consider for investments, sustainability underpinned many of the recommendations offered in the report, although in very general terms. The report discussed how a transition to sustainable production systems can be beneficial in terms of increasing returns to producers and improving the environment. However, the barriers to this transition are many: high start-up and opportunity costs, particularly in the restoration of degraded ecosystems; delayed benefits where temporal scales don’t align; lack of information and experience with techniques. And while research and development needs to underpin sustainable agriculture approaches, it will be important to get government support to overcome these initial barriers – such as in the case of Malawi’s conservation agriculture program and Viet Nam’s systems of rice intensification work. Additional recommendations involve linking climate change finance to sustainable agricultural investment plans, and implementing payment for ecosystem services schemes as part of wider rural development and conservation programs.
This report lays important groundwork for navigating the potential sources of finance and investment for agricultural development. With this information, a next step is to consider how to best utilize available resources to take a holistic approach to sustainable production, people’s livelihoods, and environmental considerations all interconnected within a landscape.
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