Responsible investment in agriculture and food systems

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Currently, half of undernourished persons are small farmers or poor agricultural workers, and 80% of undernourished persons live in rural areas, with below-average access to social services. Despite urbanization, given the demographic growth in the poorest regions, particularly Sub-Saharan Africa, for several more years most poor people will still be living in rural areas.

The challenges

The sustainability of growth and the reduction of inequalities in rural areas require populations to play a greater role in their own development, with increased participation in decentralization and local development processes. Support for family farmers, who comprise 40% of the world’s working population, provide 70% of the world’s food production and are essential investors in agriculture, must provide a solution to these challenges.

The government has an important role to play in developing the agricultural and rural sector by developing investment in rural infrastructure, research and access to the market for farmers as well as setting up a suitable environment. Suitable political frameworks enable help to:

• Promote the development of local small- and medium-sized enterprises,
• Ensure the implementation of responsible investment and the application of principles adopted by the Committee on World Food Security (Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security (VGGT) and the Principles for responsible investment in agriculture and food systems (RAI).
• Provide the government with an intermediary role between companies and agricultural producers (e.g. by supporting contractualization).

The private sector also plays an important role in fighting hunger and poverty by making responsible agricultural investments combining economic, social and environmental benefits and which do not undermine small local producers or family farming.

Family farmers in particular are private investors who are essential to the sector. Thus France has made supporting family farmers one of its development policy priorities. Their investments must be facilitated by setting up instruments to secure their means of production (including access to land and water, in accordance with the Voluntary Guidelines on the Responsible Governance of Tenure) or their production against risks (from climate, the market, etc.).

Local small and medium-sized enterprises whose activity is linked to agricultural production (equipment manufacturing, processing, transporters, retailers) are also major private actors in this rural transformation which help generate local wealth and employment. And yet suitable financial services for such enterprises (meso-finance, mutual guarantees, pledging of stocks) remain underdeveloped. Public policies which incentivize the growth of local small and medium-sized enterprises should be encouraged.

Multinationals are very interested in investing in the rural and agricultural sector in particular. They can generate development (job creation, spread of technologies and services, etc.). Their investments must adhere to the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security (VGGT) and the Principles for Responsible Investment in Agriculture and Food Systems (RAI) adopted by the Committee on World Food Security (CFS).

France’s position

For France, private investment can be a lever for food security if it observes a number of rules and does not undermine local family farming.

France promotes the operationalization of VGGTs and RAIs adopted by the CFS in 2012 and 2014. The AFD has drawn up a “Guide to due diligence of agribusiness projects that affect land and property rights” which is available to all. This guide can help change internal project appraisal procedures within public or private institutions. The World Bank has published notes on considering RAIs in programme design.

France supports initiatives which take an inclusive approach and help bring together all rural development and food security stakeholders (States, private sector, NGOs, international organizations), such as local territory-level conventions, inter-branch organizations, etc. France is committed to greater links between responsible public and private investment.

Following on from these voluntary directives (VGGT, RAI), new negotiations are underway at the Committee on World Food Security on nutrition and food security which should lead to new voluntary directives for decision-makers and development institutions.

Learn more:

· Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security(VGGT)
· Principles for Responsible Investment in Agriculture and Food Systems (RAI)
· Website of the Land Tenure and Development Technical CommitteeFR, co-chaired by the MEAE and the AFD, which addresses land tenure issues

Updated June 2018