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Contents

Message from FAO Director-General

Dr QU Dongyu

Message from FAO Investment Centre Director

Mr Mohamed Manssouri

Abbreviations and acronyms

Who we are

Facts and figures

Emerging areas of focus

Partnerships to support public investment

Partnerships to support private investment

Collaborating for greater impact

Programme and project support for investment

Innovation the name of the game for Peru’s fisheries (The World Bank)

Investing in Mali’s future (IFAD)

Buy local, eat local focus of GAFSP proposal for Pacific Island nations (IFAD)

Earth Map, a cost-effective tool for investment design (FAO)

Promoting rural entrepreneurship among Senegalese youth (IFAD)

Greater uptake of technologies in Honduras (IDB)

Policy support for investment

Egypt continues to upgrade its grain sector (EBRD)

Montenegro’s farmers see opportunities to promote high quality local food (EBRD)

Capacity development for investment

A push for sustainable agricultural mechanization in Africa (African Union)

Breaking down access barriers for Bangladeshi farmers (GAFSP)

Investing in knowledge sharing and innovation

Future perspectives

Annexes

Annex 1 – List of public sector investment projects supported and financed

Annex 2 – List of policy support, analytical studies and other policy-related activities

Annex 3 – List of capacity development activities

Annex 4 – List of publications

Annex 5 – AgrIntel private sector investment projects reviewed – at a glance

Message from FAO Director-General

Dr QU Dongyu

The global COVID-19 pandemic of 2020 has created tremendous uncertainty and could threaten the already fragile food security of the world’s most vulnerable people. According to The State of Food Security and Nutrition in ùthe World for 2020, recent estimates show that almost 690 million people were undernourished prior to the COVID-19 pandemic, and that figure could increase by an additional 83 to 132 million people in 2020.

FAO’s first commitment is to ensure the sustainability of food systems – now and in the future. We need to work extra hard to prevent the global health crisis from becoming a food crisis. At the same time, we need to transform our food systems so they are more inclusive, green, healthy and resilient.

From the pandemic’s outset, we have responded swiftly to the needs of our Members through the COVID-19 Response and Recovery Programme, mobilizing resources and partnerships at country, regional and global level. We have provided decision-makers with reliable and timely information and ramped up our field programme to safeguard the food security and livelihoods of the world’s most vulnerable people. And, we are ensuring a united One Health approach.

I am happy to see many of our recommendations already finding their way into global policy processes. At the UN Security Council, and other international venues, I called for urgent, strategic and coordinated action to ensure that food supply chain disruptions were minimized in the short term. I also called for comprehensive measures to address the underlying drivers perpetuating food crises. I am pleased to see that leaders have reaffirmed their commitment to ensure that all people, including the poorest, have access to sufficient, safe, affordable and nutritious food.

Although today’s challenges paint a bleak picture for the future of food security, it is in times like these that we rely on our strengths and do what we know works well; while also innovating to build a better future. By combining the new with the old, we can and must invest responsibly.

The many notable achievements the FAO Investment Centre and partners made in 2019, detailed in this Annual Review, give me hope that we are moving in the right direction. Together, we are transforming agriculture and food systems through targeted investment, policies, innovation, knowledge and strengthened capacities.

Since my appointment as Director-General in August 2019, I have set out to increase FAO’s efficiency, transparency and agility and have advocated for greater collaboration for greater results. Drawing on FAO’s vast knowledge and convening power, we have taken a fresh approach to achieving impact at scale by focusing on matching global resources with country needs. To this end, I launched FAO’s Hand-in-Hand Initiative to support stronger investment, enabling policies, innovative approaches, including access to geospatial data, and capacity building of Members. Central to this model is the need to enhance partnerships between FAO, its Members and the public and private financial institutions.

The FAO Investment Centre plays a pivotal role in this, thanks to its strong footprint at country level, its 56 years of partnerships with investors and its track record of scaling-up investment. In 2019 alone, the Investment Centre helped to leverage 32 new projects financed by International Financing Institutions (IFIs) in 26 countries, for a total investment of USD 5.7 billion. The Centre provided extensive policy and analytical advice to countries as well as public and private investors, including the World Bank, IFAD, the Green Climate Fund, the European Bank for Reconstruction and Development and the European Union. It was active in 42 of the 44 Hand-in-Hand priority countries, providing a range of services from investment design and implementation support to policy analysis and public-private dialogue.

The Centre also supports countries to leverage blended finance that encourages private investments in socially and environmentally responsible food systems to reach impact at scale. We already see encouraging trends – from greater uptake of digital agriculture technologies to the use of new financing models for better inclusion. This alignment of public and private resources is essential for achieving the Sustainable Development Goals (SDGs), particularly the eradication of poverty and hunger.

I firmly believe that investment, innovation and partnerships can make a huge difference, and FAO Members do too. That is why we have allocated additional budgetary resources to the Investment Centre to expand its investment support services. In doing so, I expect these commitments to be matched by our partners so that together we can maximize our impact.

The COVID-19 pandemic has further exposed the vulnerability of our food systems. Our commitment to building more resilient and sustainable food systems remains resolute. We need to galvanize global efforts for transformative action – action that will lead to affordable healthy diets, reduced food loss and waste, climate-smart agriculture, decent jobs for vulnerable small-scale producers, greater resilience and the well-being of people and the planet.

Together, we are on the right track for a better future.

Sustainable food systems are key to tackling our most pressing challenges – from ending hunger and poverty to preserving the health and well-being of people and the planet. Making food systems more sustainable is not just about reducing carbon footprints. It is also about creating jobs, reducing inequalities, improving efficiencies along supply chains and strengthening people’s ability to cope with climate change. Given that many low-income households spend up to 70 percent of their income on food, it is also about ensuring all people have access to safe, affordable, nutritious and healthy food.

Mohamed Manssouri,
FAO Investment Centre

Message from FAO Investment Centre Director

Mr Mohamed Manssouri

As we finalize this Annual Review, the COVID-19 crisis is creating new challenges to global food and nutrition security. Beyond the crisis response, this unprecedented situation, affecting food supply and demand, offers unique opportunities. Making the right investments today, whether in infrastructure, human capital, capacity or technology, will help build more resilient and inclusive food systems in the future.

In the Investment Centre, we continue to provide sharp investment expertise to better serve our member countries in partnership with major IFIs and regional banks. I am pleased to share with you a snapshot of our work from 2019. One growing and exciting trend is digital agriculture. Digital technologies are transforming the world at breakneck speed. Through project design, analysis and studies, we identified opportunities for greater uptake of digital technologies that can help policy-makers and farmers make better decisions, adapt to climate change and manage natural resources more efficiently. We also promoted the use of mobile banking and geodata-based financial tools so banks can better assess credit risks associated with farmers’ performance.

In 2019, we increased our support to private investments in food and agriculture, promoting responsible investments that generate social and environmental impacts alongside financial returns. We provided strategic and technical advice to impact investment funds and blended finance operations, most notably with the European Union.

We continued to promote inclusive, efficient agrifood systems. For example, we helped various countries develop geographical indications (GIs) for unique food products. Successful GIs can breathe new life into local economies by stimulating rural development, protecting local biodiversity and creating new jobs.

We also made a concerted effort to enhance the knowledge and innovation content of our investment solutions. We allocated more resources to boost our existing portfolio of sector and policy studies and toolkits. We partnered with research centres to analyse the investment angle around themes like agricultural human capital and institutions, low carbon agrifood systems and carbon neutrality, water resource management and digital solutions.

We continued our work on climate resilience, helping countries access available resources for large-scale climate projects, like Green Climate Fund (GCF) funding. And we helped develop the Global Livestock Environmental Assessment Model (GLEAM-i) and the Livestock Sector Investment and Policy Toolkit (LSIPT), now being used to design climate-smart livestock policies and projects.

Last year, the Global Agriculture and Food Security Program (GAFSP) offered competitive grant funding for fragile and conflict-affected countries. We led the preparation of nine of the ten approved application proposals submitted for financing, totalling USD 126.6 million.

2019 marked a milestone – the 10th anniversary of Investment Days, our annual knowledge-sharing event. It was considered one of the most successful Investment Days yet, with robust discussions around the importance of investing in climate-smart food systems.

I cannot thank my Investment Centre colleagues enough for the commitment and skills they bring to their work every day, and the results we have achieved together. Six of our staff were recognized for their professionalism and teamwork by our new Director-General’s employee recognition initiative.

With all of the uncertainty and hardship caused by COVID-19, our work takes on new urgency. We look forward to contributing to the Hand-in-Hand Initiative jointly with our partner IFIs and other development partners to accelerate agricultural transformation and sustainable rural development through more and better investments to achieve impact at scale.

Abbreviations and acronyms

AATIF Africa Agriculture and Trade Investment Fund

ABC Agri-Business Capital Fund

ACPZ Agro-commodity procurement zone

AfDB African Development Bank

AGRIFI Agriculture Finance Facility

AP Asia and the Pacific region

B2B Business-to-business

BMC Borrowing member country

CAADP Comprehensive Africa Agriculture Development Programme

CABEI Central American Bank for Economic Integration

CDB Caribbean Development Bank

CIAT International Centre for Tropical Agriculture

CIRAD French Agricultural Research Centre for International Development

COSOP Country Strategic Opportunities Programme

EBRD European Bank for Reconstruction and Development

ECA Europe and Central Asia Region

EDFIMC European Development Finance Institutions Management Company

FAO Food and Agriculture Organization of the United Nations

GAFSP Global Agriculture and Food Security Program

GCF Green Climate Fund

GI Geographical Indication

GLEAM-i Global Livestock Environmental Assessment Model

GPS Global Positioning System

ICT Information and communication technology

IDB Inter-American Development Bank

IFAD International Fund for Agricultural Development

IFI International Financing Institution

IFPRI International Food Policy Research Institute

ILRI International Livestock Research Institute

IWMI International Water Management Institute

LAC Latin America and the Caribbean region

MMI Missing Middle Initiative

NAIP National Agricultural Investment Plan

NENA Near East and North Africa region

NGO Non-governmental organization

NIP National Investment Plan

PIM Policies, Institutions and Markets

SDG Sustainable Development Goal

SME Small and medium enterprise

SP Strategic Programme

SSA Sub-Saharan Africa region

UDB Uganda Development Bank

UTF Unilateral Trust Fund

Who we are

Founded in 1964, the Centre helps countries make more and better investments in agriculture to reduce poverty and hunger, improve rural livelihoods and protect the environment.

Facts and figures from 2019

Supporting the design of new public sector investment projects approved by partner IFIs in member countries

Total amount of investment mobilized during 2019

Investment Centre assignments by type of activity

Data based on a total of 904 missions in 133 countries

Policy support & analytical studies

Communication & knowledge products

Emerging areas of focus

We are diversifying and expanding our investment support services to respond to the needs of our member countries.

Leveraging private sector finance and maximizing blended finance impact

Public funding alone is not enough to achieve the SDGs. To bridge this gap, resource partners are increasingly using Official Development Assistance funding to create de-risking and blended finance instruments to leverage private investments. Blended finance creates investment opportunities in developing countries, leading to greater impact.

The Investment Centre is developing tailored financial instruments to improve private sector access to finance, and is working to improve the quality of blended finance operations in the agrifood sector. For more, go to page 18.

Strategic advisory role on investment: AgrIntel

Through the AgrIntel initiative, launched by FAO and the European Union in 2018, the Centre provides technical advisory services to impact funds and blended finance operations investing in small and medium agribusinesses through equity and loans. Through value chain analyses and targeted technical assistance, the Centre helps the European Union improve its investments in food and agriculture and ensure SDG alignment. To learn more, see page 18.

Supporting private investments with national financial institutions: AgrInvest in Uganda

FAO and the European Union also launched the AgrInvest Initiative in 2018 to promote enabling policies for greater and more responsible private investment in food and agriculture. In 2019, the Investment Centre designed the AgrInvest Initiative to support the Uganda Development Bank (UDB) to increase its lending portfolio to the agriculture sector. For more, see page 18.

Digital technology shaping the future of public and private agrifood investment

Digital disruption has transformed every sector of the global economy. In agriculture, the surge in digital technologies is changing the game, making agrifood systems more productive, profitable and sustainable. But there are also major risks, such as the widening of the digital divide (with smallholder adoption coming too little, too late), market concentration and data governance.

We are working with partners through AgrInvest to transfer digital financial solutions (known as FinTech) to the UDB and to strengthen the Bank’s capacity to use big data analytics. For more, see page 20.

We are also partnering with the European Bank for Reconstruction and Development (EBRD) to assess investment opportunities and constraints in using digital agriculture in specific value chains (for more, see page 16), and with the World Bank on key studies to help countries digitize their operations.

Partnerships to support public investment

The Centre’s unique business model is based on longstanding partnerships with global and regional financing institutions, as well as a culture of delivering results for our members.

The lion’s share of our work is in support to public investment in collaboration with the World Bank and the International Fund for Agricultural Development (IFAD), often with co-financing from governments and other partners. That said, there is a positive and steady increase in work with other IFIs.

The World Bank

Over the last five years, the Centre supported the design of 127 World Bank-financed investment projects for a total value of USD 21 billion.

In 2019, the Investment Centre helped prepare 20 projects approved by the World Bank for financing. This equates to 62 percent of all projects designed by the Centre. Although some of the largest projects are in the Asia and Pacific region, we are participating in innovative solutions around the world (see graph below).

One interesting example is a USD 100 million project designed to help farmer organizations in Paraguay tap into markets and manage climate risks more efficiently. Three Investment Centre economists worked with a World Bank-led team to design the market access component as well as the results framework and monitoring and evaluation aspects. Our team also prepared the project’s budget and financing, conducted a financial and economic analysis and estimated greenhouse gas emission reductions.

Building on trends from 2018, we expanded our joint activities in key areas, including digital agriculture and climate-smart approaches.

We supported implementation of some 195 projects and programmes financed by the World Bank in 80 countries. Building on trends from 2018, we expanded our joint activities in key areas, including digital agriculture and climate-smart approaches. We have continued to work on two large regional initiatives. One helps countries in the Sahel manage irrigation better, including in Burkina Faso, Chad, Mali and the Niger (USD 197 million), while another focuses on improving fishery management and growth at regional, country and community levels in the South West Indian Ocean region (USD 91 million).

We helped prepare digital agricultural profiles in five countries, with the World Bank, EBRD and the International Centre for Tropical Agriculture.

Our joint work on policy support resulted in six agricultural strategies, 20 sector studies and eight policy studies. The Centre organized two training sessions in Asia – one on monitoring and evaluation and another on the new Livestock Sector Investment and Policy Toolkit (LSIPT) for staff working on World Bank-funded projects.

We helped prepare digital agricultural profiles in five countries (Argentina, Grenada, Kenya, Turkey and Viet Nam) with the World Bank, EBRD and the International Centre for Tropical Agriculture (CIAT). At the request of and with funding from the African Development Bank (AfDB), the Investment Centre expanded this analysis to include Rwanda, Côte d’Ivoire and South Africa. The profiles look at the readiness and potential of digital infrastructure, the regulatory framework, access to digital production and financial services for agriculture sector transformation (broken down into inputs, production, distribution and consumer hubs). Work is ongoing, and we expect results in 2020.

Over the last two years, we have been designing a large climate-smart agricultural investment programme in Morocco to support the Ministry of Agriculture to digitize their operations. We also carried out a similar study on the potential for digital investment solutions in Tunisia.

The Voice of a Partner

Mr Julian Lampietti

Manager, Global Agriculture Practice – The World Bank

Digital technology was one of the most exciting trends of our joint work in 2019. The FAO Investment Centre supported our work on the flagship report “The Digital Acceleration of Agricultural Transformation”.

The publication focuses on the roles of public and private sectors in identifying and seizing opportunities in digital agricultural technologies, markets and platforms, and it features digital agricultural profiles for five countries. This report should help us improve the quality of our advice, enabling our clients to better target their investments. Of course, there are risks associated with digital technology, like privacy issues, that governments need to consider.

Another exciting development is FAO’s leadership of the international Digital Council for Food and Agriculture, decided at the Global Forum for Food and Agriculture in Berlin. The Digital Council is still a work in progress, but we look forward to supporting FAO under their leadership in this space.

One area where I see FAO’s expertise really making a difference is with our rapidly growing animal health and livestock portfolio. As people throughout the world get wealthier, they are consuming more protein. The challenge is how to grow that sector sustainably without destroying the planet. At the World Bank, we believe that it is possible to improve animal production in terms of its environmental impact. In this regard, we rely on FAO instruments such as the LSIPT, which helps us quantify the carbon emissions of our livestock projects and do a better job of making our investments climate neutral.

We are able to draw on the Investment Centre’s broad range of technical resources for investment support that are not immediately available elsewhere. That, along with FAO’s vast field network, is a tremendous resource for us. For example, we worked closely on a new USD 500 million project to create a more vibrant and competitive livestock sector in Kazakhstan that will help the country meet its own needs and eventually export. With China next door, one of the biggest consumers of beef, there is excellent potential for growth. This project is a classic example of how the World Bank was able to bring in the financing by building on FAO’s longstanding technical relationship with Kazakhstan’s Ministry of Agriculture.

Going forward, I think it will be important to make our collaboration more strategic. We need to turbocharge our approach to transforming agrifood systems so they are more sustainable for people and the planet.

If we want to influence government expenditures in agriculture and mobilize private sector investment, we need to increase our activities on the policy front, giving agricultural ministers a better understanding of the trade-offs. That is an area where we have a tremendous opportunity to work more closely with FAO and its Investment Centre.

International Fund for Agricultural Development

The Investment Centre has long partnered with IFAD to deliver on rural development projects. Most of our collaboration focuses on value chain development, climate resilience, improved access to finance, youth employment, community development, fisheries and livestock development.

Over the last five years, the Centre supported the design of 48 IFAD-financed investment projects for a total value of USD 4.3 billion.

Over the last five years, the Centre supported the design of 48 IFAD-financed investment projects for a total value of USD 4.3 billion. In 2019 alone, the Centre helped design seven projects – five in sub-Saharan Africa, one in Cuba and another in Indonesia – for a total value of over USD 1.3 billion.

IFAD boasts one of the largest rural investment portfolios among FAO’s IFI partners. The Centre supports approximately 40 percent of IFAD’s operations on average, counting for about 30 percent of the value of all IFAD operations.

A new agreement signed to strengthen the partnership: At the end of 2019, FAO and IFAD signed a cooperation agreement to strengthen their partnership, drawing on each agency’s comparative advantages.

Through this agreement, new and more structured working arrangements will enable the two agencies to plan the use of staff time better and manage resources in a more programmatic way. A closely monitored performance assessment under the principle of mutual accountability is designed to enhance the overall quality of delivery.

Country strategic opportunities programme (COSOP): The Investment Centre regularly contributes to the design of some of IFAD’s two-year COSOPs, which enable IFAD to make strategic choices in a country, including opportunities for financing. Over the last two years, we supported IFAD to develop nine COSOPs – eight in sub-Saharan Africa alone.

We consulted with many local stakeholders and worked closely with government counterparts and IFAD colleagues to prepare the frameworks. In 2019, we helped design COSOPs for the Republic of Congo, Eritrea, Burkina Faso and Mexico.

The Centre supported a new IFAD-funded USD 93.3 million project that seeks to create decent, sustainable jobs along agricultural, livestock and fishery supply chains by developing entrepreneurship skills and activities.

Rural youth employment: In Senegal, creating opportunities for youth in agriculture is a priority. The Centre supported a new IFAD-funded USD 93.3 million project that seeks to create decent, sustainable jobs along agricultural, livestock and fishery supply chains by developing entrepreneurship skills and activities. The project aims to reach 150 000 rural young people, 50 percent of them women.

The Voice of a Partner

Mr Donal Brown

Associate Vice-President, Programme Management Department – IFAD

Having FAO next door with its depth of technical expertise is a tremendous resource for IFAD. Our longstanding partnership with the Investment Centre has been extremely fruitful. We have effectively collaborated on project design and implementation for many years. However, our joint activities often felt ad hoc. We wanted to strengthen our partnership by making it more formal and proactive. Last December, we signed a new technical partnership agreement that provides a clearer process for working together on projects, greater predictability for better planning and the possibility for IFAD to bring in specific Investment Centre expertise before starting a new project. I believe this new arrangement will improve the quality and timeliness of our operations. We have also introduced a stronger two-way performance assessment process for mutual accountability. I am quite excited about these new developments.

IFAD has changed a lot in recent years in terms of priorities and financing modalities. In 2019, we organized a knowledge-sharing day with the Investment Centre to discuss these changes and provide them with a better understanding of our new priorities.

As partners, we definitely need to do more of that to ensure we are speaking the same language.

There are many good examples of our joint work. Our flagship Rural Financial Intermediation programme in Ethiopia is moving into its third phase. The Investment Centre helped formulate the new project implementation manual, giving us a much stronger implementation readiness. We have also been able to leverage work FAO is already doing in this area in Ethiopia, independent of ours, to improve our programme’s design. Thanks to the partnership and co-financing aspects, we are much more focused on the Government’s agricultural priorities than we would have been had we just been doing this by ourselves.

The Cuba Agroforestry Cooperative Development Programme is an excellent example of how the Investment Centre provided critical technical expertise in the design of the programme’s value chain components while also introducing an innovative results-based lending instrument. Since then, we have been doing more joint work on such instruments, including training and learning together.

Looking forward, I see us working more closely on climate change adaptation, mitigation and resilience. We want to build on the success of our supplementary fund ASAP (Adaptation for Smallholder Agriculture Programme) by launching a new version that takes a climate lens to the food insecurity angle. Given the size of FAO’s expertise on climate change and its global reach, coupled with IFAD’s financing, it is a natural partnership. Related to this, I see us working together more on strategies for small island developing states.

IFAD recently changed its articles of agreement, allowing us to invest directly with the private sector. We are still building our private sector expertise. It will be interesting to see how we can tap into the Investment Centre’s pool of private sector knowledge to ensure that small agro-processing enterprises are really serving rural communities through job opportunities, value addition and so on. Lastly, I see us working together more on new instruments, including reimbursable technical assistance.

What I find exciting is that we are moving beyond just relying on the Investment Centre’s project design and supervision expertise and more into true strategic partnership, working to each other’s comparative advantage and improving knowledge-sharing and institutional development. We hope to incorporate a lesson-learning component in our formal review of our new partnership next year so we can see what is working well and what needs improvement.

“What I find exciting is that we are moving beyond just relying on the Investment Centre’s project design and supervision expertise and more into true strategic partnership, working to each other’s comparative advantage and improving knowledge-sharing and institutional development.”

Regional Development Banks

African Development Bank (AfDB)

The collaborative agreement – signed with AfDB in 2018 to improve joint programming and boost the quality and quantity of investment – resulted in the Centre providing technical support on one project in Congo (Euro 85 million) to develop agricultural entrepreneurship, improve value chain productivity and resilience, and promote institutional development and policy dialogue. The six-year project stands to benefit around 125 000 people directly (355 000 people indirectly, including women and youth) along the cassava, maize, poultry and fish farming value chains.

The six-year project in Congo stands to benefit around 125 000 people directly (355 000 people indirectly, including women and youth).

Inter-American Development Bank (IDB)

The IDB is working to advance the digitalization of agriculture throughout the region, promoting innovation to improve the sector’s productivity and competitiveness. In 2019, the Centre supported the design and implementation of three digital agriculture initiatives in two Latin American countries.

Often upstream analytical work can lead to larger investment projects. This was the case in Honduras, where we analysed the application of digital technologies in the country’s agriculture sector, including the information and communication technology ecosystem (institutions, legal framework, private providers and telecommunication infrastructure). This analysis fed into a study on the use of information technology in agriculture. Building on the results of this study, the IDB organized the International Congress of Technological Innovation in the Agriculture Sector, featuring FAO staff as keynote speakers to promote investments in digital agriculture. The event brought together over 2 000 people to meet with enterprises (mostly start-ups) active in digital technologies in the region.

In Honduras we analysed the application of digital technologies in the country’s agriculture sector.

The analysis and policy efforts culminated in IDB requesting technical assistance from the Investment Centre in designing the Integral Rural Development and Productivity Project in the Dry Corridor of Honduras. The USD 90 million project will benefit around 30 000 households. We carried out a detailed feasibility study to evaluate the scalability and adoption of specific digital tools by small-scale farmers and public institutions. The investment operation, approved in 2019, proposes concrete steps for generating, adopting and transferring digital technologies to improve agricultural innovation, productivity and competitiveness. Digitizing agriculture can create interesting new jobs along the supply chain, reducing the flight of rural youth, and also improve watershed management in the country’s Dry Corridor.

Digitizing agriculture can create interesting new jobs along the supply chain, reducing the flight of rural youth, and also improve watershed management in Honduras’ Dry Corridor.

Following the preparation of the second phase of the Productive Rural Development Program in Uruguay (USD 27 million) – carried out in 2018 – the Centre conducted a feasibility analysis on digital technology uptake by family farmers and rural extension services in Uruguay. We identified the specific digital tools that can be scaled up to improve the productivity and competitiveness of family farming in the country.

The Centre also supported the IDB to prepare a sector study assessing Jamaica’s plant health system, under the IDB Agricultural Competitiveness Programme (USD 15 million investment loan for the preparation stage). Based on interviews, stakeholder consultations and available literature, the study identified 15 potential areas for investment to improve the country’s plant health system, including the expansion and renovation of export complexes and the development and implementation of a comprehensive Integrated Pest Management programme.

Caribbean Development Bank (CDB)

One significant achievement in 2019 was the completion of the “Study of the State of Agriculture in the Caribbean”. Requested by and co-funded with the CDB, the study drew on decades of research on drivers affecting the agriculture and agribusiness sectors in the CDB’s Borrowing Member Countries (BMCs), including international trade, institutional policies and climate change. It follows 40 years of structural change in the BMCs’ agriculture sectors. According to the study, agriculture can drive economic growth and contribute to reducing poverty, especially among households that are profiting less from growth in other sectors. By identifying key agricultural trends and related investment opportunities, the study is helping guide the preparation of the Bank’s new agricultural strategy. The Centre worked closely with other FAO divisions, including the Agricultural Development Economics Division, the Subregional Office for the Caribbean and FAO Strategic Programme One to produce this work, which was greatly appreciated by financing institutions in the region, including The World Bank, IDB, European Union and IFAD. The findings will help the CDB support its members to meet their SDG targets, particularly those related to socio-economic and environmental challenges.

Central American Bank for Economic Integration (CABEI)

During 2019, the Centre prepared Green Climate Fund (GCF) financing proposals for Nicaragua, Honduras and Panama, in partnership with the FAO Subregional Office for Meso-America and the three FAO Representations, with financing from CABEI. CABEI is the accredited entity responsible for submitting GCF proposals on behalf of the governments, while the Investment Centre leads the proposals’ technical preparation.

In Nicaragua, the blended financed Bio-CLIMA project (the Government proposed preliminary financing of USD 115 million, with 70 million from GCF, 20 million from CABEI, 10 million from GEF and 15 million from the Forest Carbon Partnership Facility) focuses on reducing deforestation and strengthening the livelihood resilience of vulnerable households in the Bosawas and Rio San Juan Biospheres. The GCF Secretariat is currently reviewing the financing proposal submitted at the end of 2019.

The impact of climate change is affecting agriculture and the health and well-being of vulnerable farmers in Honduras’ Dry Corridor. The financing proposal under preparation (preliminary financing of USD 130 million, with USD 40 million from GCF) aims to increase the resilience of small-scale farmers and their families by facilitating greater uptake of climate-resilient agricultural approaches and by climate-proofing their housing. The project will address other important barriers to adaptation, such as water scarcity and the inefficient conservation and use of plant genetic resources.

The impact of climate change is affecting agriculture and the health and well-being of vulnerable farmers in Honduras’ Dry Corridor. The financing proposal under preparation aims to increase the resilience of small-scale farmers and their families.

In Panama, the project aims to restore productive ecosystems and to strengthen the resilience of vulnerable communities in priority basins by promoting climate-smart knowledge, approaches, technologies and investments. It will strengthen capacity around climate action for greater green and blue economy investments and institutional transformation towards clean and resilient development. Following a change in government in June 2019, a newly established technical working group is reviewing the concept note. CABEI will likely submit it to the GCF Secretariat around mid-2020. Its tentative budget is expected to reach USD 60 million, with USD 40 million approximately from the GCF.

In all three cases, the final amounts have yet to be confirmed by the GCF and endorsed by their Board.

European Union

With financial assistance from the European Union, the Investment Centre, along with the FAO country office and Monitoring and Analyzing Food and Agricultural Policies programme team, supported the Government of Ethiopia to formulate an investment plan to develop four agro-commodity procurement zones (ACPZs). The goal is for the ACPZs to supply agricultural raw materials that meet processors’ standards (marketable surplus) in the integrated agro-industrial parks under construction in four different regions of the country.

We developed two other studies, more global in scope. The “Food systems at risk: new trends and challenges” report, published jointly with the French Agricultural Research Centre for International Development (CIRAD), was presented at the High-Level Event of the Global Network Against Food Crises in Brussels. The study suggests that as things currently stand, food systems are under several simultaneous threats and food crises could become increasingly common. The second study – to be published in 2020 – focuses on the international cocoa value chain, providing a breakdown of costs and value addition at different stages, from farmer to final consumer.

Green Climate Fund (GCF)

In 2019, the GCF approved two project proposals designed by an Investment Centre-led team – one for Pakistan (USD 47.7 million) and the other for the Kyrgyz Republic (USD 50 million). We also led the design of new GCF projects for Armenia, the Gambia, Honduras, Nicaragua, Panama, the Philippines and Sudan.

In 2019, the GCF approved two project proposals designed by an Investment Centre-led team – one for Pakistan (USD 47.7 million) and the other for the Kyrgyz Republic (USD 50 million). We also led the design of new GCF projects for Armenia, the Gambia, Honduras, Nicaragua, Panama, the Philippines and Sudan.

The carbon sequestration project in the Kyrgyz Republic, for example, seeks to reverse forest and rangeland degradation, increase forest coverage and rangeland productivity and strengthen the resilience of more than 430 000 people. The Centre worked closely with other FAO divisions and the FAO Representation in the country to design the project, approved in November 2019. The design team used several FAO-developed tools, including Ex-ACT and GLEAM-i for carbon accounting; Earth Map and geospatial information for the climate analysis; and RIMA-II for the resilience analysis. By providing incentives and credit for climate-sensitive entrepreneurial activities, the project is expected to sequester about 19.8 million tonnes of CO2 equivalent greenhouse gas emissions.

Another promising project proposal submitted to the GCF is in Sudan. Efforts will be made to promote the production of gum Arabic trees to strengthen the livelihoods and climate resilience of drought-prone small-scale farmers in Sudan’s North, South and West Kordofan states. The project proposal followed the Simplified Approval Process for a USD 10 million grant.

Efforts will be made to promote the production of gum Arabic trees to strengthen the livelihoods and climate resilience of drought-prone small-scale farmers in Sudan’s North, South and West Kordofan states. The project proposal followed the Simplified Approval Process for a USD 10 million grant.

Global Agriculture and Food Security Program (GAFSP)

In 2019, 18 countries requested FAO assistance to prepare their project proposal applications for submission to the GAFSP, part of the special call for proposals for fragile and conflict-affected countries: seven in Africa; seven in Asia and the Pacific; and four in other regions.

For the first time, the GAFSP made over USD 1 billion available to fragile and conflict-affected countries interested in receiving technical support from supervising entities, like FAO and the World Food Programme, to prepare their proposals. The Centre worked closely with FAO’s Emergency and Rehabilitation Division and FAO country and regional offices to prepare 15 project proposals, including a regional project involving four northern Pacific countries. Investment Centre staff led the preparation of 10 of these 15 proposals, namely for Burundi, Comoros, Côte d’Ivoire, Democratic Republic of Congo, Liberia, Central African Republic, Northern Pacific Islands, Solomon Islands, Haiti and Kosovo. The respective Governments and Centre staff met with key stakeholders to identify and agree on the proposals’ key features before drafting the core proposals and carrying out quality reviews. Themes ranged from improving food security, nutrition and resilience, to boosting incomes and livelihoods among vulnerable populations. The GAFSP approved nine projects at concept note stage prepared by FAO, to be developed in 2020. National Investment Plans will also be prepared in the context of these projects in 2020.

FAO – through its Investment Centre – is also the supervising entity of two Missing Middle Initiative (MMI) projects in Bangladesh and Senegal, designed to close the financing gap of small enterprises and cooperatives. In Senegal, we are collaborating with IFAD on this work.

Iftikhar Mostafa, Senior Agriculture Economist in the GAFSP Coordination Unit at the World Bank

“I am delighted to see the MMI-Bangladesh project take a truly inclusive approach in enabling small-scale farmers to strengthen their producer organizations, to create economy of scale through market linkages, and to pioneer a revolving loan fund managed by producer organizations.”

Partnerships to support private investment

The Centre partners with IFIs and other actors to promote responsible and sustainable private sector investment in food and agriculture.

We work with farmers and agribusiness companies – from small enterprises to larger corporations – semi-public organizations, cooperatives, financial service providers, agribusiness consultancy firms, impact investors and other financiers.

Our support to private sector investment is wide ranging – from encouraging sovereign lending operations targeting private sector development to promoting public-private dialogue, among others. We work to maximize the impact of blended finance and regularly share knowledge and innovation to strengthen and support private sector investment.

European Bank for Reconstruction and Development (EBRD)

Strengthening value chains

The EBRD is our main private sector investment partner. Through targeted technical assistance assignments, the Centre facilitates public-private policy dialogue and provides technical solutions for the creation of a better environment for private investment in EBRD’s countries of operation.

In 2019, the Centre supported the implementation of 37 assignments under the FAO/EBRD cooperation, 12 of which were new ones formulated during the same year.

In 2019, the Centre supported the implementation of 37 assignments under the FAO/EBRD cooperation, 12 of which were new ones formulated during the same year.

Our work usually begins with an analysis of investment constraints and private sector engagement along specific value chains. We often facilitate public-private policy dialogue and contribute to regulatory and other policy improvements for increased investments. We also provide sector intelligence and develop capacity of industry associations on market access and export logistics. Through this approach, we aim to create enabling conditions not only for our IFI partner – the EBRD – but also for private investors at large, from producers and agrifood SMEs to larger players.

Over the past year, we contributed to a series of sector studies, including on cotton in Azerbaijan, tea in Georgia and Azerbaijan, and fruits and vegetables in Montenegro; a global policy study on food loss and waste; another one on low carbon agrifood systems and carbon neutrality (yet to be finalized); and assessments on digital agriculture in specific countries. We supported 12 public-private policy dialogue processes in different countries. In addition, we held trainings, conferences and study tours on various topics including trade promotion, modern production, storage and marketing technologies and techniques (See Annex 3).

Highlights from our joint work in 2019:

We helped Morocco and Tunisia build more sustainable, inclusive and competitive olive oil industries by raising quality standards and responding to changing consumer demand. In Morocco, we also helped strengthen the horticulture sector.

We helped Morocco and Tunisia build more sustainable, inclusive and competitive olive oil industries. In Morocco, we also helped strengthen the horticulture sector.

We continued improving quality standards and introducing origin-linked labels for unique food products in Georgia, Montenegro, Serbia and Turkey. In Montenegro, we are working closely with the Government to develop sustainable agritourism in the country’s less-visited northern mountainous regions, a move designed to increase rural incomes, create jobs and preserve the country’s unique food heritage. In Serbia and Ukraine, we strengthened capacities of agribusiness associations to access export markets.

A regional initiative is supporting fruit and vegetable producers in Georgia, Moldova, Tajikistan and Uzbekistan to upgrade their operations and tap into more lucrative markets at home and abroad, including through market analysis, tracking and export promotion activities.

Croatia has made impressive strides in upgrading its dairy industry to meet high European Union quality and food safety standards, and Kazakhstan is seeking to do the same with Eurasian Economic Union standards. In light of that, we organized a study tour to Croatia for a delegation of Kazakh dairy producers and government officials. And in Ukraine, we are working closely with pork producers and the Government to raise awareness on food safety and quality standards in the pork industry.

The Investment Centre is working with EBRD to assess investment opportunities and constraints in the use of digital agriculture in specific value chains. A survey carried out in Ukraine, for example, showed that nearly one-third of farmers in the country are already using digital technologies (to varying degrees). This is considerable given Ukraine’s 32 million hectares of arable land. Most farmers are interested in innovation and digital technologies in agriculture; however, only 38 percent of smaller farmers seem ready to invest in these technologies. Surveys among several leading Serbian agrifood players identified the drivers and constraints behind the uptake of digital agriculture technologies. We plan a similar assessment for Turkey next year.

The Investment Centre is working with EBRD to assess investment opportunities and constraints in the use of digital agriculture in specific value chains.

These studies will inform the EBRD on where to increase their lending on digital solutions – whether on the supply side (e.g. start-ups and/or bigger companies) or the demand side (e.g. greater adoption by producers).

In 2019, we worked for the first time with EBRD on a sovereign EUR 30 million loan under the Serbian Climate Resilience and Irrigation Programme, approved in July 2019. Serbia is modernizing its irrigation infrastructure to strengthen its climate resilience. In parallel, FAO will continue its dialogue with Serbia’s Ministry of Agriculture, Forestry and Water Management, and assist in preparing the country’s first Irrigation Strategy and five-year Action Plan.

Greater public-private policy dialogue around Egypt’s grain sector is leading to better practices for discharging bulk grains and reducing handling times and storage costs.

European Union

Technical advisory services in support of blended finance

In recent years, the European Union has developed blended instruments to leverage private investments in key sectors of developing economies, including agrifood systems, to stimulate growth and create jobs. The aim is to de-risk the investment operations of recipient financial institutions. The European Union’s current External Investment Plan and other blending operations make available around EUR 2 billion for private sector development.

FAO launched the AgrIntel initiative with the European Union in 2018 to support its efforts to address the general lack of private investment financing available to micro-enterprises, small and medium enterprises (SMEs) and smallholders. The initiative, aimed at strengthening the European Union’s investment decision-making, builds on lessons learned from innovative financing instruments to improve targeting, efficiency and SDG alignment.

Through AgrIntel, the Investment Centre provides technical advisory services to the European Union in raising the sustainability and development impact of some of its blended finance investments supporting global and regional funds and facilities targeting the agrifood sector. These include the Africa Agriculture and Trade Investment Fund (AATIF), the Agriculture Finance Initiative (AgriFI) and the Agri-Business Capital (ABC) Fund, which invest directly in private sector entities such as agribusiness companies, funds, banks and microfinance institutions active in the agrifood sector in Africa, Latin America and Asia.

The three-year project in Uganda, co-financed by a technical assistance grant from the European Union (EUR 2 million) and FAO (EUR 0.2 million), also promotes greater public-private policy dialogue around selected value chains.

2019 marked the first full year of implementation for this line of work: the Investment Centre’s advisory team supported the European Union’s positioning and dialogue on blended finance investments, including on the additionality and development impact of 50 investment proposals submitted by European Union-supported funds and facilities financing private agrifood sector entities, for a cumulative investment of about USD 336 million (for more see Annex 5).

In addition to pre-investment support, we are providing technical assistance on blended finance interventions at a later stage – from evaluating ongoing investments and adherence to strict environmental and social safeguards to maximizing developmental results and mitigating risks. One exciting development was the preparation of an agreement with the European Development Finance Institutions Management Company (EDFI MC) for three years. EDFI MC manages the AgriFI Facility, a blended instrument launched by the European Union in 2018 focusing on agricultural and forestry value chains. AgriFI provides financial solutions to private sector companies active in agribusiness value chains in developing countries, with a view to raising smallholder farmers’ incomes and creating jobs. It supports “missing middle” companies that have difficulty obtaining financing from local commercial banks and international investors. Through this agreement, the Centre provides technical support to AgriFI’s clients on a demand-driven basis and exclusively to agribusiness/agriculture-related investment operations already approved by the AgriFI Investment Committee. Such technical support will help increase the quality, efficiency and sustainability of the AgriFI investments.

Through AgrIntel, the Centre provides technical advisory services to the European Union in raising the sustainability and development impact of some of its blended finance investments supporting global and regional funds and facilities targeting the agrifood sector.

The Centre designed one of the first AgrInvest initiatives at FAO in 2019 to strengthen the capacity of the Uganda Development Bank (UDB) on digital finance, environmental, climate and social risk management and impact assessment, among others. The three-year project, co-financed by a technical assistance grant from the European Union (EUR 2 million) and FAO (EUR 0.2 million), also promotes greater public-private policy dialogue around selected value chains. This support will help de-risk UDB’s agricultural lending (including through digital solutions) and improve the quality, sustainability, scope, operational efficiency and size of its portfolio.

The project represents a promising area of working with national development institutions on de-risking their agriculture lending. It builds on FAO’s technical capacity and institutional partnerships with other UN Agencies (e.g. UN Capital Development Fund [UNCDF]), IFIs, farmer organizations and private sector representatives. It also explores South-South partnerships, particularly with other development banks.

Under this initiative, the Centre is partnering with the UNCDF, which pursues innovative (mostly digital) solutions for public and private financing for the poor. Together we are working to transfer FinTech solutions to UDB, as it seeks to embrace digital technologies, like mobile banking or geospatial financial tools. Big data analytics is another innovative tool the UDB can use to improve operations and lower costs when monitoring impact. Big data analytics will help the UDB comply better with its recently approved environmental, social and governance strategy and increase the accuracy of its impact measurements.

The Centre is partnering with the UNCDF, which pursues innovative solutions for public and private financing for the poor. Together we are working to transfer digital financial solutions to UDB, as it seeks to embrace digital technologies.

International Fund for Agricultural Development

Putting our private sector knowledge to use to support small rural agro-enterprises

IFAD has recently opened a private sector window to mobilize private funding and investments in rural micro-enterprises, SMEs and small-scale agriculture to increase incomes and job opportunities. Examples of the Centre’s support to this new window include:

IFAD has recently opened a private sector window to mobilize private funding and investments in rural micro-enterprises.

Blended finance. Four out of five rural Malians do not have access to financial capital. An IFAD-funded and Investment Centre-supported financial inclusion project (now in its second phase) has enabled 500 000 low-income rural Malians to be in a better position to invest in and grow their small businesses (for more, see page 24).

Value chain development. We provided substantial technical support to value chain development projects in Benin, Burkina Faso and the Kyrgyz Republic. In Benin, a combination of policies and public and private sector investment aim to boost the country’s access to export markets for pineapple, cashew, maize, rice and layer poultry. Actors along the targeted supply chains, including farmers, small and medium agribusinesses, and input and service providers, stand to benefit.

In Burkina Faso, the focus is on creating a more competitive livestock sector that is better able to respond to domestic and regional demand for animal products. By improving access to services and inputs and further developing livestock value chains, the project aims to increase incomes and create jobs.

In the Kyrgyz Republic, the Centre helped design a project for better market access and integration of small-scale livestock farmers as well as economic growth in pastoralist communities.

In the Kyrgyz Republic, the Investment Centre helped design and is now assisting in supervising and implementing a project for better market access and integration of small-scale livestock farmers as well as economic growth in pastoralist communities.

This involves linkages and partnerships among livestock value chain actors; improved access to financing for investment; and stronger public and private sector arms of the Kyrgyz Veterinary Authority, which facilitates livestock commodity trade and ensures food safety.

Collaborating for greater impact

Strong internal FAO collaboration – including 46 secondments from FAO technical departments and decentralized offices – helped us translate normative work and knowledge products into tangible project proposals, policy and investment operations. At the same time, we enhanced the investment focus of FAO’s normative work.

In 2019, we collaborated with FAO decentralized offices and the FAO Subregional Office for the Pacific Islands to develop ten project proposals in response to the GAFSP’s special call for proposals from fragile and conflict-affected countries. With the FAO Subregional Office for Meso-America, we prepared three GCF financing proposals in partnership with CABEI. We also worked with other FAO experts, notably from the Climate, Biodiversity, Land and Water Department and FAO Representations, to design seven additional GCF projects.

Three interesting projects in Bangladesh benefitted from our work with the FAO Representation in Bangladesh and key IFI partners. For the USD 110 million IFAD project supporting smallholder agricultural competitiveness, we will strengthen the capacity of implementing agencies on the production, processing and marketing of high-value crops and improved water management. The World Bank has funded a USD 12.5 million project to promote sustainable economic growth from coastal and marine fisheries and aquaculture, and another for nearly USD 4 million to improve the production and marketing of safe dairy and meat products and to strengthen the resilience of livestock systems.

In response to government requests, the Centre supported the FAO country office in Suriname to design and implement the USD 15 million Agriculture Market Access Project, advising on the use of small and large matching grants. In Guyana, the Centre worked with the FAO country office on the USD 14 million Mainstreaming Sustainable Land Development and Management project, including technical assistance in designing the methodology and developing a business plan for the Guyana Lands and Surveys Commission, the national cadaster authority.

Over 30 of the 46 secondments came from technical departments. We collaborated on normative and knowledge work as well as country level investment operations. For example, we worked with the Agriculture and Consumer Protection Department on agro-ecology, farmer field schools, African Swine Fever management, the development and application of tools such as LSIPT, GLEAM-i, RuralInvest and Collect Mobile, and joint studies on sustainable mechanization and pastoral rangeland systems.

Similarly, with the Climate, Biodiversity, Land and Water Department, we launched studies on irrigation systems, remote sensing and geo-referenced data, and collaborated on the promotion of tools such Earth Map, AquaCrop and CropWat models in IFI and GCF projects. We worked with the Fisheries and Aquaculture Department to design and implement a large-scale IFI-financed investment in fisheries involving various countries.

As part of our contribution to FAO’s normative work, we also strengthened collaboration with the Economic and Social Department. We are currently enhancing investment perspectives in some of the Organization’s flagship publications on food and water.

Programme and project support for investment

In 2019, the Centre delivered support services in around 130 countries. Delivery covered the full project cycle – from identification, design and appraisal, to implementation support, including technical assistance, supervision and evaluation – depending on the needs of the countries and financing partners.

Investment design accounted for 30 percent of our work. Thirty-two projects in 26 countries were approved for financing by IFIs for a total value of over USD 5.7 billion. Most were in Asia and the Pacific (12), followed by sub-Saharan Africa (9), Latin America and the Caribbean (7) and Europe and Central Asia (4).

Most of our staff time – 58 percent – was spent on supporting project implementation. The bulk of that work involved technical assistance and supervision activities.

Our assignments covered a variety of sectors and areas. Although our IFI partners continued to seek our support mainly on agriculture and agribusiness development, many of our assignments centred around specialized sectors like livestock and fisheries, irrigation/water management and climate change adaptation and mitigation.

Assignment by type of activity (2019) (based on total number of missions, 904)

Innovation the name of the game for Peru’s fisheries (World Bank)

Peru is using innovation to transform its fisheries and aquaculture sector – a move designed to boost productivity, open up new markets and safeguard the country’s natural resources.

With World Bank funding and FAO investment expertise, the Peruvian Government is supporting more than 300 initiatives via its national programme on fisheries innovation.

In Lake Arapa, high in the Peruvian Andes, for example, a group of mostly indigenous women are managing an innovative trout farm. By adding a natural dye to the fish feed, they are able to boost protein levels while giving the trout its distinctive red colour. High-end restaurants throughout Peru serve this unique Arapa trout.

Peruvian fisher Karin Abensur has spearheaded another initiative. Given the low market value of abundant captured species like spiny dogfish and angelshark, Karin realized she would have to offer new products and services to become more competitive.

She founded a company that trains women in the Peruvian port of Pucusana to clean and gut locally caught fish and make intricate cuts that appeal to consumers – from sushi-ready cuts to fish fingers for children and grill-friendly cuts for family gatherings.

The national programme first took shape in 2015, when the Government requested FAO assistance to help address technical gaps in its fisheries and aquaculture sector and halt the depletion of the environment, hastened by climate change.

A multidisciplinary FAO team has supported the programme from the beginning, including in the negotiation, preparation, implementation and supervision of the investment operation. It has promoted a participatory, bottom-up approach in which the communities come up with innovative solutions in response to real needs along supply chains.

The Investment Centre provided regular technical assistance in 2019, from developing a digital platform for the programme’s management, monitoring and evaluation system, to identifying and evaluating technological innovations in the sector like modern hatchery systems to produce fingerlings or the use of fish waste as organic fertilizer, to name a few.

The programme’s co-financing element has led to greater involvement and ownership among the communities. The programme expects to support more than 2 000 initiatives during its first phase, slated to end in 2022.

Investing in Mali’s future (IFAD)

Four out of five Malians living in rural communities do not have access to financial capital to develop economic activities. This can result in food shortages, reliance on a subsistence economy and no financial safety net.

FAO is providing technical assistance to an IFAD-funded rural microfinance programme helping the Malian Government improve the access of around 500 000 low-income rural Malians to financial services.

Under way since 2011, the programme’s approach for financial inclusion supports income-generating activities and community savings groups. Local NGOs have trained community groups on financial literacy, business plan preparation, networking with financial institutions, loan application and repayment and management support.

Thanks to the programme, more rural Malians are now bankable, including women and young people. In fact, about 105 000 rural poor women – roughly 4 000 groups – are now among the microfinance institutions’ solvent clients. One is the Djekafo women’s group in Dioro. With financial support and training, the group has diversified its business activities. Members are now transforming millet into a nutritional supplement to fight against child malnutrition, while saving money for unexpected expenses.

The programme has helped 15 participating microfinance institutions become more professional by adopting adapted management information systems, improving governance, reporting and internal controls and learning new agricultural and rural finance methodologies. The programme has also helped the institutions diversify and tailor their products to fit smallholders’ needs, like micro-leasing, warehouse receipts and ‘saving credit with education’, a tool incorporating education on topics such as nutrition, good hygiene and sanitation and functional literacy.

The Centre assisted the Government in creating a viable refinancing mechanism to strengthen the sustainability of the microfinance institutions. This major innovation facilitates the institutions’ access to concessional loans. It also provides a long-term response to the inadequacy and volatility of rural savings, and a sustainable alternative to the challenges faced by rural microfinance institutions in accessing the financial market.

More reliable access to financing will help rural Malians grow their businesses, which in turn can open up jobs attractive to young people along the agricultural supply chain.

Buy local, eat local focus of GAFSP proposal for Pacific Island nations (IFAD)

The GAFSP awarded USD 12 million to Kiribati, Tuvalu, the Marshall Islands and the Federated States of Micronesia in 2019 as part of a multi-country funding proposal prepared by FAO and IFAD.

GAFSP offered USD 100 million in competitive grant funding, calling for proposals from 24 fragile countries – fragility being defined by climate risk and/or conflict.

The proposal for the northern Pacific Island nations explored ways to revive local food customs and to reduce imports like rice, sugar and soft drinks by replacing them with healthier, more nutritious local foods. Improved diets and nutrition will also reduce non-communicable diseases, such as diabetes, strokes and heart disease.

The FAO/IFAD team carried out an initial scoping mission to identify agricultural priorities in the region. They followed that with multi-stakeholder workshops in each country to develop agricultural strategies and frameworks for national agricultural investment plans – the latter a prerequisite for GAFSP funding.

The workshops brought together traditional authorities and representatives from the private sector, civil society and various government ministries to pitch their ideas for priority areas for agricultural investment.

These workshops helped the team pinpoint common entry points. The four countries are composed mostly of coral atoll islands, where it is difficult to grow crops, and salinity in the water and soil increasingly becomes a problem. It is difficult to access nutritious foods on these islands, and rates of non-communicable disease and adult obesity are high.

After drafting the proposal, the FAO/IFAD team organized a validation workshop to garner approval from all four countries – a process that deepened the nations’ sense of ownership.

The success of the proposal was due in part to the excellent collaboration not only between FAO, IFAD and the countries, but also within FAO, including its Subregional Office for the Pacific Islands.

FAO, as supervising entity for technical assistance, will develop national agricultural investment plans with each country and detailed proposals for the GAFSP financing.

Earth Map, a cost-effective tool for investment design (FAO)

FAO teamed up with Google to develop Earth Map, a free, easy-to-use tool that accesses and analyses geospatial data. It provides unprecedented access for visualizing and interacting with earth observation datasets and overcomes big data limitations for use in real-time monitoring and quick historical analyses.

The team behind Earth Map had developed Collect Earth earlier, an application that produces detailed statistics on land use, land use change and forests through a point sampling approach and readily available remote sensing data.

With Earth Map, they saw an opportunity to bridge this huge source of continuously updated data – including on temperatures, precipitation, fires, population, vegetation, water, elevation – with the numerous requests for environmental analyses of FAO projects.

Featuring a simple interface with drop-down menus, users can run environmental and climate analyses in their areas of interest in a matter of seconds. Those without prior GIS or remote sensing experience, but with knowledge of the land to be analysed, can be trained quickly to produce images, tables and statistics describing the environmental and climatic context and history of an area.

A cost-effective tool, Earth Map can guide the design of investment projects. It can also assess the suitability of project activities and monitor their progress.

Earth Map was used to design GCF projects in Armenia, Georgia, Pakistan, Uzbekistan and the Kyrgyz Republic, and the World Bank projects in Kazakhstan, Kosovo, the Philippines and Myanmar. The tool is also used to develop and support projects with the EBRD and the CDB.

The GCF granted the Kyrgyz Republic USD 50 million in 2019. The Kyrgyz Government had requested FAO’s assistance in producing empirical data via a climate risk mapping and vulnerability analysis. Using Earth Map, the FAO team was able to check on annual precipitation anomalies in the country since 1981, understanding where rainfall was decreasing and increasing. They could also track trends in vegetation changes, assess land productivity dynamics and pinpoint trouble spots and districts.

Earth Map is cloud-based, requiring very low bandwidth. It can be further customized to meet project requests and is a much faster and more efficient option over traditional data collection, analysis and reporting.

Promoting rural entrepreneurship among Senegalese youth (IFAD)

In sub-Saharan Africa, the working age population will likely double by 2050 – even sooner in some parts.

In Senegal, where youth are a majority, rural unemployment and underemployment rates are high. As a result, many young people are fleeing to cities or abroad in search of work. For them, agriculture is not lucrative enough to earn a decent living. But many young Senegalese are eager to become agricultural entrepreneurs.

With this in mind, a new IFAD-funded project is promoting the social and professional inclusion of young people by creating decent job opportunities for 150 000 rural Senegalese youth, half of them women, along agro-sylvo-pastoral and fishery value chains.

The Investment Centre helped design the six-year USD 93.2 million project and is providing technical assistance in its implementation. The project supports the Government of Senegal’s priority of tackling youth unemployment, poverty and rural migration while also strengthening those value chains to generate economic growth, added value and wealth.

The project seeks to make agriculture more profitable and attractive to young people. That means creating opportunities in modern agriculture – from production and processing to marketing and service provision – that not only feed and employ rural youth but also enrich their lives.

The project will help improve their access to installation capital and productive credit to create or expand businesses. And it will help them, through apprenticeships, tutorships and business development services, acquire the relevant skills to sustainably manage their activities.

Innovative facilities will introduce modern production and processing tools and techniques, including digital agriculture, and encourage greater uptake of new information and communication technologies. The project will also support beneficiaries to tap into niche markets, like local markets, organic farming and subregional and international export markets.

The project is promoting pro-youth agribusiness partnerships with farmer organizations and with inter-professional organizations and other private sector operators.

Helping young rural agricultural entrepreneurs invest in and diversify their businesses will contribute to more inclusive and sustainable growth in the country and to achieving the SDGs.

Greater uptake of technologies in Honduras (IDB)

In 2019, the IDB requested the Centre’s technical assistance in the design of the Bank’s USD 90 million Comprehensive Rural Development and Productivity Project in Honduras. This was thanks largely to the Centre’s earlier study and policy efforts on the use of digital technologies in Honduras’ agriculture sector.

The project seeks to sustainably increase the incomes of rural farming households in the country’s Dry Corridor by boosting agricultural productivity, competitiveness and access to financing.

Poverty and malnutrition rates are high in the region, and climate challenges, including recurring drought, hinder agricultural production. Many men migrate to cities in search of employment. Young people account for more than one-third of the population.

Promoting greater uptake of information and communication technologies (ICTs) and digital agriculture among small-scale farmers, especially women and young people, is key.

Technologies – from smartphones and precision agriculture to e-commerce, blockchains and drones – can help farmers make better decisions, boost agricultural productivity, manage resources more efficiently and increase competitiveness.

In the Dry Corridor, for example, the use of climate-smart digital solutions can help reduce greenhouse gas emissions and increase the region’s climate resilience by improving its watershed management. Digital technologies can also drive agricultural innovation and entrepreneurship, creating attractive job opportunities, especially for young people, along value chains.

The FAO Representation in Honduras envisions being involved in implementation of the project’s ICT component, with the Centre providing technical assistance. This would entail, among others, formalizing the systematic use of ICTs, providing incentives for ICT development for priority value chains and conducting trainings to improve digital literacy. The successful scaling up of ICTs must take into consideration the specific value chains, the profile of potential users, existing institutional structure and telecommunications infrastructure.

The Centre is also looking at how to leverage synergies between this IDB-financed project and other IFI-financed projects in Honduras, like the CABEI-financed GCF project that promotes the adoption of climate-resilient agricultural approaches in the Dry Corridor, and a World Bank-financed water security project.

Policy support for investment

Policy support accounts for 12 percent of the Centre’s work. In 2019, we contributed to producing 13 agricultural strategies, 9 policy and analytical studies and 27 sector studies, and facilitated 13 public-private policy dialogue processes.

The Investment Centre provides policy support to governments – in partnership with IFIs – by identifying and tackling bottlenecks that hinder investment in agriculture and by proposing sustainable solutions.

Some of the Centre’s most interesting policy work included the Agriculture Policy and Sector Study for the CDB (see page 13), and a study on agricultural water in the Arab region. The former identifies key agricultural trends and investment opportunities in the CDB’s BMCs. The latter, developed in partnership with the International Water Management Institute, a non-profit, scientific research organization, provides broad strategic guidance to policy-makers, IFIs, development partners and the private sector. It advocates for a new generation of policies and investments in agricultural water, built on the principles of coherence, sustainability, innovation, inclusiveness and private sector engagement. It underscores the importance of accelerating the region’s agricultural transformation, given the sector’s relevance in supporting employment and gross domestic product.

Some of the Centre’s most interesting policy work included a study on agricultural water in the Arab region that advocates for a new generation of policies and investments in agricultural water, built on the principles of coherence, sustainability, innovation, inclusiveness and private sector engagement.

A team of economists, irrigation and natural resources experts from the Centre identified priority areas for irrigation and drainage investment projects in Belize. Their analysis – supporting the country’s national strategy for sustainable irrigation and drainage – made use of geospatial data available via digital platforms like FAO Earth Map and other FAO-developed tools such as AquaCrop. The study will be published in 2020.

The Centre prepared papers on digital agriculture for the Maghreb region and the Gulf States. These studies show that the private sector can drive greater adoption of digital technologies, while the public sector can make sure adequate policies, regulatory frameworks, rural infrastructure and an enabling environment for private investment are in place.

The Centre worked closely with the EBRD to publish studies on developing agricultural cooperatives in Egypt, Tunisia and Morocco. We also conducted studies on carbon neutrality; greening value chains; food systems; and digital technologies, including geospatial developments.

Assignment by type of activity (2019) (based on total number of missions, 904)

Supporting National Agriculture Investment Plans

The Investment Centre has supported countries in preparing national investment plans (NIPs) over the last several decades, based on consultations with public and private stakeholders.

NIPs are strategic tools to carry out policy and to map the investment needed to achieve national development targets. NIPs usually address strategies for the agriculture sector but can also be wider in scope. Our engagement is most prominent in Africa, in the context of the Comprehensive Africa Agriculture Development Programme (CAADP), the continent’s policy framework for agricultural transformation, economic growth, food security and nutrition. In 2019, we supported the preparation of a national agriculture investment plan (NAIP) in Zambia to support climate-smart agriculture. We also started developing NAIPs in Mozambique and Comoros, which we expect to finalize in 2020.

One important driver for NIP development is the GAFSP, which makes incremental funding available based on the existence of these strategic documents. Another is the need for more efficient public spending and better coordinated and aligned contributions from development partners toward achieving the SDGs.

Within this context, the Centre supported the Palestinian Authority to develop its NIP for food and nutrition and sustainable agriculture (SDG 2, zero hunger). We worked with the FAO Office for the West Bank and Gaza on the design, under the European Union-FAO Food and Nutrition Security Impact, Resilience, Sustainability and Transformation project. The three-year NIP is an innovative tool and the first of its kind in the country. It sets the stage for greater coordination, effectiveness and efficiency in the use of development financing. The design benefited from broad-based consultation and the systematic involvement of government, civil society and donors. The design team identified priority public investments centred around SDG 2, namely strengthening the humanitarian, development and peace nexus and unlocking private investments in the nutrition and agrifood sector.

Egypt continues to upgrade its grain sector (EBRD)

The Egyptian Government has long subsidized baladi bread – a mainstay in the Egyptian diet – made from 82 percent wheat flour extraction, with wheat purchased domestically and abroad.

To keep this guarantee and feed its vast and growing population, Egypt has become one of the world’s leading wheat importers. It imports over 12 million tonnes of wheat – a figure likely to increase to more than 15 million tonnes by 2028.

With support from FAO and the EBRD, the Egyptian Government continues to upgrade operations across its grain sector, from regular health inspections and quality controls to proper storage and transportation. And it works to resolve bottlenecks throughout the entire supply chain. This allows the country to manage the large volumes of wheat imports more efficiently and cost-effectively while also safeguarding basic food security and consumer safety.

In 2019, FAO and the EBRD continued working as neutral brokers with the Egyptian Government and private sector in promoting greater public-private dialogue around Egypt’s grain sector.

This dialogue has resulted in important regulatory and policy changes over the years, like greater reliance on private sector inspection companies in the port of exports and a transition to more targeted consumer subsidies.

Engagement with public and private partners has resulted in better coordination on plant quarantine, product sampling on grain quality and safety and other issues, leading to improved grain sector performance and increased investment in Egypt. For example, investments have increased public and private grain storage capacity – from around 4.3 million tonnes in 2014 to 6.1 million tonnes in 2019.

FAO and the EBRD are looking to reduce transaction costs by introducing e-phytosanitary certificates into the Egyptian grain trade. Going paperless will ease the administrative burden of processing grain cargos. It will also help Egypt boost agricultural exports by replacing roughly 200 000 paper certificates with electronic ones.

Discussions are also ongoing on reducing trade finance costs and improving efficiency on wheat import tenders based on the experiences of other Arab countries.

Montenegro’s farmers see opportunities to promote high quality local food (EBRD)

Montenegro’s biodiversity, breathtaking landscapes and untapped local gastronomic culture are creating interesting opportunities for rural communities in the northern region.

With support from the EBRD and the Investment Centre, Montenegrin farmers have begun looking into selling their products directly to tourists and supplying hotels and restaurants with high-quality local foods to shorten food supply chains and raise their incomes.

Before the COVID-19 pandemic, the EBRD and FAO worked closely with Montenegro’s Ministry of Sustainable Development and Tourism, Ministry of Agriculture, farmers and other partners to improve competitiveness through the quality and promotion of traditional agrifood products and sustainable tourism in the country’s less-visited northern regions.

This work led to improved regulations on agritourism, stronger cooperation between small-scale producers and better coordination in marketing their traditional agrifood products to tourists. It also created stronger links between producers and the hotel, restaurant and catering segment, thanks to a B2B web page, and a better understanding of how to build tourism around authentic local gastronomy. Montenegro is a culinary treasure trove, boasting an array of traditional foods and dishes that are unique to the country. In recent years, FAO and the EBRD have worked with farmers and local authorities to upgrade food safety and quality standards in the country’s meat sector. This has led to the registration of several traditional food products, including Stelja and Govedja cured meats, as GIs.

An Atlas of typical Montenegrin food, a product of the EBRD/FAO initiative, features these and other unique foods. The initiative has also helped set up a gastronomy route in the northern region. Chefs and rural households along the route have been trained on how to store and cook local products in line with hygienic standards and to adapt traditional recipes for today’s consumers. This work has led to the identification of five other destinations for gastrotourism development.

Together these efforts are strengthening livelihoods, preserving biodiversity, safeguarding traditions and bringing more women and young people into the supply chain.

Capacity development for investment

Through on-the-job training and peer learning, the Centre offers diverse learning resources to FAO member countries.

In 2019, we organized trainings, awareness raising events, international and regional conferences and study tours on various themes, including to promote modern production, storage and marketing technologies and practices for greater productivity and market access, reaching over 6 000 beneficiaries (for a complete list, see Annex 3).

Our work also includes close collaboration with other FAO technical divisions to develop investment support tools. In 2019, we held workshops to introduce some of these tools and learning resources, with a view to mainstreaming them in projects.

LSIPT:

The improved LSIPT, developed by FAO, the World Bank, the International Livestock Research Institute (ILRI) and CIRAD, gives decision-makers the evidence they need to make strategic choices and attract public and private investment. Practitioners can use the toolkit to conduct technical, social, financial, economic and environmental analyses in order to design more efficient climate-smart livestock policies and projects. The Centre is now using the tool extensively, also with the World Bank, on livestock investment projects and sector studies. The toolkit has helped shift the livestock sector’s traditional focus on livestock performance to one that focuses on the livelihoods and well-being of households. The Centre organized a workshop in 2019 with the World Bank, ILRI, CIRAD and FAO staff in Bangkok to introduce LSIPT and the GLEAM-i toolkit, which assesses greenhouse gas emissions, to more than 50 senior decision-makers from 17 countries in Asia and the Pacific. The region’s countries need to modernize their livestock sectors to meet the rising demand for milk, eggs and meat while also improving sustainability and reducing the sector’s environmental footprint.

The improved LSIPT, developed by FAO, the World Bank, ILRI and CIRAD, gives decision-makers the evidence they need to make strategic choices and attract public and private investment.

RuralInvest training:

In 2019, we conducted RuralInvest training in Egypt, Burkina Faso, the Niger, Rwanda, Kenya, Mozambique, Bangladesh, the Philippines and Suriname to strengthen national investment planning and monitoring capacities. All told, we welcomed 320 participants from universities and national development banks, project staff, service providers and FAO staff. Trainees learned how to assess financial feasibility, risks and the overall sustainability of investments and also prepare viable business plans. In Rwanda, we relied exclusively on national trainers – trained earlier on RuralInvest – to deliver the courses.

Following the training in Bangladesh, local counterparts from government agencies, project staff and other actors developed more than 100 business proposals to access financing through matching grants. The country is making a big push to mainstream the use of RuralInvest. The Bangladesh Agricultural University, for example, is using the tool in its master’s and Ph.D. projects and economic analyses. FAO introduced RuralInvest in the MMI for Bangladesh, resulting in profitable enterprises for users (for more, see page 36).

The Department of Agrarian Reform in the Philippines asked us to deliver additional trainings to help them institutionalize the RuralInvest package – all planned for 2020. As testimony to the trainings’ success, the Asian Farmers Association asked for more workshops for the coming years in order to build their own RuralInvest training hub. The Centre also organized two RuralInvest trainings at FAO headquarters and expects to hold more given the positive feedback.

Sustainable agricultural mechanization in Africa:

FAO developed a comprehensive framework to promote greater uptake of sustainable mechanization across the African continent, following a request from the African Union and FAO member countries. The Centre is using this framework, in partnership with IFIs, to identify opportunities and guide future investment. To carry out the framework’s recommendations, the FAO Investment Centre and the Plant Production and Protection Division jointly organized a regional workshop in Côte d’Ivoire and another one in Uganda. (for more on this, see page 36).

FAO developed a comprehensive framework to promote greater uptake of sustainable mechanization across the African continent, following a request from the African Union and FAO member countries.

Monitoring and evaluation training:

In November 2019, the Centre conducted a monitoring and evaluation (M&E) training for FAO staff in Bangkok involved in the World Bank- and IFAD- financed investment projects. Given the success of this training, which will help staff ensure investment projects achieve their intended impact, the Centre will conduct similar trainings in China and India in 2020 (with the Foreign Economic Cooperation Centre of the Ministry of Agriculture and Rural Affairs of China, and the India International Crop Research Institute for the Semi-arid Tropics, respectively).

We also developed with the World Bank an M&E tool for land administration programmes in Latin America.

In 2019, we conducted RuralInvest training in Egypt, Burkina Faso, the Niger, Rwanda, Kenya, Mozambique, Bangladesh, the Philippines and Suriname to strengthen national investment planning and monitoring capacities. Trainees learned how to assess financial feasibility, risks and the overall sustainability of investments, and also prepare viable business plans.

A push for sustainable agricultural mechanization in Africa (African Union)

FAO is supporting the African Union to promote sustainable agricultural mechanization across the continent to boost agricultural production and productivity to feed a growing and rapidly urbanizing population.

Sustainable mechanization – from simple hand tools to motorized equipment – improves productivity along the agrifood value chain and reduces harvest and post-harvest losses. It can ease the burden of hard physical work, reduce labour shortages and improve market access. Technologies should be climate-smart, appropriate, readily available and affordable, targeting women, young farmers and rural entrepreneurs.

At the request of the African Union and FAO member countries, FAO developed the Sustainable Agricultural Mechanization: A Framework for Africa with the Department of Rural Economy and Agriculture of the African Union Commission.

The comprehensive framework provides guidance on tackling challenges and promoting greater uptake of sustainable mechanization. To carry out the framework’s recommendations, FAO’s Investment Centre and Plant Production and Protection divisions jointly organized regional workshops in Côte d’Ivoire (Benin, Senegal, Morocco, Burkina Faso, Côte d’Ivoire) for around 30 people, and in Uganda (Ethiopia, Kenya, Tanzania, Zambia, Ghana, Uganda) for more than 60.

The workshops brought together a wide range of stakeholders, including service providers, to share experiences and explore ways to link good agronomic practices, like conservation agriculture, with sustainable mechanization options.

Public-private dialogue, including with farmers’ organizations, is key for creating an enabling policy environment and building trust. Mobile phone technologies combined with GPS tractor trackers have become new business models. The powerful TROTRO Tractor Limited platform (in Ghana and Zimbabwe and soon in Kenya) is connecting farmers and tractor operators and helping to improve accountability and reduce equipment loss and misuse.

The framework serves as a common long-term vision for African countries on policy and strategy, creating a foundation for regional cooperation, networking and partnerships.

Breaking down access barriers for Bangladeshi farmers (GAFSP)

Improving Bangladeshi farmers’ access to markets, technical knowledge and finance is the focus of a three-year USD 2.5 million project funded through the GAFSP’s MMI.

The Centre, which supported the project’s design, is its supervising entity. The project builds on the Government of Bangladesh’s earlier GAFSP-funded, FAO-supported initiative that, among others, strengthened farmer organizations.

MMI channels GAFSP funds to farmer organizations to reach small-scale farmers more directly. Most of the organizations’ members – around 8 000 women and men – are small and marginal farmers living in remote communities.

The farmer organizations elect and pay for their own business facilitators. The project team trains these business facilitators on governance, financial literacy and management, leadership, negotiation and communication skills. The facilitators then train and support three organizations in their respective vicinities.

The project introduced RuralInvest to help the organizations prepare bankable business plans, and is assisting them in accessing technical advisory services to carry out those plans.

FAO, Sara Bangla Krishak Society and the Bangladesh Potato Exporters’ Association also organized a buyer-seller meeting for small-scale potato farmers to meet exporters for the first time, with exporters then communicating orders to the farmers. FAO trained 60 potato farmers from three cooperatives on pre-production, inspection and post-harvest practices. Recently, those cooperatives sold their first consignments of high-quality potatoes to exporters.

The project is also developing the capacity of farmer organizations to help their members access financial services. Some banks are now using farmer organizations as soft collateral on loans made to members. Thanks to high repayment rates during the first round, the banks are adding more farmer organizations.

The project boasts a strong participatory M&E system, using Collect Mobile to assess farmer organizations’ performance every six months. The idea is to create sustainable organizations that can help their members tap into financial services, technical knowledge and profitable markets.

Investing in knowledge sharing and innovation

In 2019, the Centre produced 13 publications, 11 videos, 40 articles and seven multimedia campaigns. We also initiated a systematic knowledge programme to boost our portfolio of existing studies.

At the Investment Centre, we aim to provide quality investment solutions based on strong evidence, best practices and sound analytical work. With our IFI partners, we continue to foster innovation and information exchange through the EastAgri and MedAgri regional networks, with special emphasis on private sector investment support. We communicate our work through key studies and other publications.

Knowledge for better investments in food and agriculture

The Centre offers a unique platform for creating and sharing knowledge and innovation on investment. A broad network of key global and national IFIs and international research centres sees us as a valued partner in this regard. Our collaboration with other FAO technical units plus the localized knowledge from our regional and country offices enrich this work. The practical, applied knowledge generated through analytical and sector studies and technical tools, for example, directly contributes to improving and increasing investments.

Our goal is to provide a strong evidence-based voice on investment in food and agriculture; advocate for responsible and sustainable public and private investments; and bring qualified opinions to international fora.

Our goal is to provide a strong evidence-based voice on investment in food and agriculture; advocate for responsible and sustainable public and private investments; and bring qualified opinions to international fora. We also want to support the adoption of innovations in food and agriculture, including opportunities offered by disruptive technologies such as digital agriculture.

We contribute to FAO’s normative work, including its flagship publications, and enhance the investment focus of other FAO knowledge products. For example, we are contributing directly to FAO’s 2020 edition of the “The State of Food and Agriculture” by bringing in the field experience of colleagues who are working with IFIs to provide investment support. Similarly, we partnered with colleagues in the FAO Climate, Biodiversity, Land and Water Department to analyse promising investment strategies in the land and water sector and highlight them in the FAO’s State of Land and Water report.

We are partnering with key research centres, like IFPRI, the African Forum for Agricultural Advisory Services and CIAT, to do joint research and combine academic thinking with practical field experience by taking stock of success stories, lessons learned, project and programme impact evaluations, and normative and analytical knowledge. We are also analysing disruptive technologies, low carbon agrifood systems and new approaches for sustainable mechanization, which we plan to publish in 2020.

Towards the end of 2019, we agreed to revamp the visual identity of our core publications series – Directions in Investment, Country Investment Highlights, Investment Toolkits – and introduce a short investment brief and factsheet series.

Climate-smart food systems theme of tenth annual Investment Days

FAO celebrated the tenth anniversary of its annual knowledge-sharing event Investment Days. More than 160 FAO staff and partners from IFIs, the public and private sectors, farmer organizations and academia gathered at FAO headquarters to share the latest thinking on investing in climate-smart food systems.

Panelists weighed in on how consumers, digital technologies, innovations and investment are helping to drive the shift toward healthier, greener and safer food systems. Demand for local, seasonal and organic foods continues to grow, opening up new opportunities for small-scale farmers and fishers and encouraging people to eat healthier, fresh and unprocessed foods.

The impact of accelerated climate change is affecting food safety, increasing the threat of aflatoxin contamination, for example, on staple foods in East Africa. Participants discussed the implications of this for agricultural and trade policy, public health, private sector investment and the agricultural economy.

Investment Days also explored climate-smart financing, including the role of agricultural insurance to strengthen farmers’ climate resilience and adaptation, as well as new financial products that support sustainable investment in climate mitigation.

Livestock is an important source of food and income for millions of people worldwide. But the sector is also a major greenhouse gas emitter. A roundtable of experts from academia, finance, development, health and nutrition discussed the challenges and opportunities for sustainable low carbon livestock development. An innovative ‘information marketplace’ introduced participants to tools, investment projects and best practices for improving livestock productivity while also reducing emissions and integrating livestock into the circular economy. Another session explored the world of alternative proteins – cultured meat grown in a lab, edible insects – which is attracting the interest of investors, researchers, the media and consumers alike.

Healthier, more sustainable food systems are key to addressing the world’s most pressing development challenges. Transforming these systems means getting the ingredients right – from more public and private investment, effective institutions and stronger partnerships to better data and policies, innovation, digital technologies and social initiatives.

Future perspectives

At the time of writing, the COVID-19 pandemic has been dominating international headlines, causing loss of life, suffering and economic hardship. Massive disruptions caused by this health crisis will likely lead to a global economic recession.

The Centre is already adjusting its work programme to address the pandemic’s challenges on agrifood systems. For example, we are stepping up our collaboration with IFIs and supporting the response packages announced by our key partners under the overall theme of “Making agrifood value chains work under COVID-19”.

Against this backdrop, the Centre will focus its efforts on the following key areas.

Strengthening our approach to ensuring well-functioning agrifood systems

Interest in food systems is not just growing because of the COVID-19 pandemic but also in view of the 2021 Food Systems Summit, to be convened by the UN Secretary General. The Summit’s overarching goal is to help stakeholders better understand and manage the complex choices that affect the future of food systems and to accelerate progress toward the SDGs. Improving a diverse sector like food systems, however, requires multiple interventions involving all actors along the food supply chain, from producers to consumers. The Investment Centre’s IFI partners are addressing the huge complexities surrounding food systems by integrating them within their emerging programmes, including in response to the current crisis. The Investment Centre will support its partners to operationalize these programmes into investment and policy outcomes.

Boosting support to private investment in sustainable food and agriculture

Recognizing the enormous challenges in achieving the SDGs, and the growing demand from countries and partners, we will step up our support to private sector investment. As a public sector organization we will remain neutral and manage potential risks that may arise in dealing with private sector actors. We will continue providing technical assistance to countries in designing and implementing private sector development programmes financed by our IFI partners, focusing on investments in global public goods for private sector development. We also intend to expand our work with national financial institutions to support the local private sector and other economic entities. In this regard, the Centre will focus on improving the offer of financial products by local financial institutions and by supporting adoption of disruptive technologies for better de-risking of agrifood sector lending. Lastly, we plan to expand our technical advisory services to support blended finance operations.

We will continue providing technical assistance to countries in designing and implementing private sector development programmes financed by our IFI partners, focusing on investments in global public goods for private sector development.

Expanding our support to climate change adaptation and resilience

Our efforts to end hunger, improve nutrition and eradicate extreme poverty are made all the more difficult by the impact of climate change. Strengthening climate resilience, especially among vulnerable communities, is becoming a central element in our project design. In response to growing demand from our IFI partners, we expect to dedicate more time to designing climate adaptation and resilience projects for countries. Similarly, our contribution to the development of GCF funding proposals is expanding. We will continue helping countries access available resources for large-scale climate projects.

The Centre also plans to further develop and mainstream innovative instruments for environmental and climate analysis, like Earth Map, building on the successful application of climate assessment tools in various projects in 2019.

Contributing to FAO’s Hand-in-Hand Initiative

This Initiative encourages partners across public, private and other sectors to work together to end poverty and hunger and build prosperity in developing countries by increasing agricultural productivity and improving rural livelihoods. It matches donors with countries and provides access to a GIS data platform that countries and donors can use to target investments.

The Investment Centre will help countries identify opportunities to drive transformation, linking financial and development partners, and also develop Investment Action Plans to address major constraints. The Centre will support the Initiative’s roll-out, working with its IFI partners, and drawing on lessons from its experiences with similar initiatives, like CAADP, the Intergovernmental Authority on Development Drought Disaster Resilience and Sustainability Initiative in the Horn of Africa, and Zero Hunger. It will also contribute to priority policy developments and investment programmes championed by countries, based on initial strategic mapping, analysis and stocktaking, to catalyse action for greater impact.

The Investment Centre will help countries identify opportunities to drive transformation, linking financial and development partners, and also develop Investment Action Plans to address major constraints.

Annex 1
List of public sector investment projects supported and financed

Annex 2
List of policy support, analytical studies and other policy-related activities

Annex 3
Capacity development activities

Annex 4
List of publications

Annex 5
AgrIntel private sector investment projects reviewed – at a glance