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What was heard about private sector and inclusive agribusiness in CFS45

Partnerships with the private sector or the development of agricultural business by small farmers have become a well-established theme in most meetings dealing with the challenge of alleviating hunger and poverty in a sustainable manner. And this is not by chance. Estimates show that it will cost an extra USD 11 billion per year from now until 2030 to eradicate hunger. The private sector – even more if we see small farmers also as a private business in their own right – are the very beneficiaries of the Agenda 2030 and key catalysers (through finance, investments etc.) to achieve the SDGs.

The 45th Committee on World Food Security provided once again ample space for sessions and side events covering topics like inclusive agribusiness, sustainable finance for small and medium-size enterprises (SMEs), diversifying markets for small-scale farmers, public-private partnerships and others. The secretariat of the Global Donor Platform was present in a various side events and captured some interesting experiences and recurring messages that seem to translate how the international food security community is increasingly working with the private sector – the very focus of the Platform’s inclusive agribusiness and trade work stream.

Visited side events were "Towards sustainable food systems: diversifying markets for small-scale farmers" (convened by ECDPM, OFOAM and FAO), "Inclusive partnerships to scale positive outcomes across the supply chain" (convened by GAA, GAFSP, ITC and FAO), "Let's get down to business: public-private partnerships for achieving the SDGs (convened by the Swedish government) and "Concrete example of multi-stakeholder platform for investment towards SDG2: SAFIN (convened by IFAD/SAFIN, FAO, ITC and USAID).

1. Making money to do things or doing things to make money?

(copyright FAO)

 

There is need for a paradigm shift in the way the development community support the work of small farmers. This shift means seeing small farmers as running a business in their own right with need of business support (in accessing inputs, infrastructure, markets, developing capacities etc.). It is a shift towards ‘doing things to make money’.

The Swedish government has a long tradition in working with the private sector and applies this model throughout their development cooperation (Sida), which had a budget of EUR 4 billion in 2017. The same trend is observed in multilateral mechanisms like the USD 1.4 billion Global Agriculture and Food Security Program (GAFSP), which combines public and private investments to projects that help farmers to achieve substantial income gains, to be food-secure and, ultimately, to be "market-ready".

In Laos and in Kenya, agroforestry initiatives in partnership with Swedish companies are supporting communities to improve sustainable farming. In Laos, the targeted area includes 50 villages severely affected by bombing from former war mines, which strongly correlates with poverty. In Kenya, a Swedish private company invests in a fund that helps 15 cooperatives to improve their productivity of crops, milk and timber in exchange for carbon sequestration credits.

 

2. The food systems perspective

(copyright: FAO)

 

While the pragmatic business way of addressing challenges proves helpful in the case of the Swedish interventions and many others, it still needs to be embedded in the food systems perspective. This was a point made repeatedly in the side events, particularly by FAO and by participants in the session led by GAFSP.

“We need to understand the actors, their benefits, their inputs, the conditions of the system, how these actors are making decisions and being affected by them, who’s bearing which risks. For example, the level of obesity in the world today shows that something is wrong somewhere in the food system”, argued Marcela Villareal, director of FAO’s division of Partnerships and South-South Cooperation.

A pilot initiative in Lake Naivasha, Kenya, is combining the food systems perspective with business solutions to support markets for indigenous vegetables. Amongst other areas, the Sustainable Agrifood Systems Strategies (SASS) project is investing in marketing to encourage people to buy indigenous vegetables. Labelling and certification through voluntary standards systems (e.g. utz, Rainforest and Fairtrade etc.) is helping to increase consumer awareness in local markets to the social, economic and environmental cyclic benefits of indigenous vegetables.

3. Leverage points and partnerships

David Hegwood, USAID (copyright: FAO)

 

All the attended side events discussed leverage points which are still key to develop the farming business of smallholders, namely, sustainable policies and finance. The project on indigenous vegetables in Kenya is in discussions with the Agricultural Ministry to implement policies to support the production of high nutritious crops and mixing these in maize and flour mixes. Beyond labelling and raising consumer awareness, this would be a way to secure markets for indigenous vegetables.

The Smallholder and Agri-SME Finance and Investment Network (SAFIN) is converging multiple development actors around the topic of finance, providing a space to share lessons and build partnerships. The network just held its Annual Plenary and a workshop, where members approved their plans for 2019. It includes the development of roadmaps for aligning partners' activities based on Investment Prospectuses, i.e. an analysis of market and investment opportunities in specific countries.

Above all, the key message emerging from side events was that none of these efforts will deliver more food security without more and more inclusive partnerships. People need to be involved both as producers and as consumers. The agricultural industry needs to be more frequent and active in these meetings, to discuss the risks, costs and benefits of doing business in an inclusive and sustainable way. Even the companies which are not behaving responsibly need to be involved as they hold significant power in the system and should be encouraged to follow a due diligence set of principles.

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