April 13, 2016 | By

Growing Food for Growing Cities: Engaging the Private Sector

On March 2, the Chicago Council on Global Affairs launched a new campaign, “Growing Food for Growing Cities,” to explore the challenges posed to global food security by urbanization and the opportunities it creates for small-scale farmers to connect with burgeoning urban markets. We will publish one blog post each week addressing these issues, and our series will culminate with the release of a new Council report at the Global Food Security Symposium 2016. Look for a new post each Wednesday, join the discussion using #GlobalAg, and tune in to the Symposium live stream on April 26. 

Each post in this series has made clear that for supply chain actors to deliver the vast amounts of food demanded by growing cities, the investment community must help them to access, use, and maintain new technologies effectively. The investments required to feed the future are manifold, from the empowerment of female smallholders to the dissemination of updated accounting, shipping, and food marketing techniques.

While the development community has long provided essential support to help rural actors scale up their agricultural production, there remains a $90 billion investment gap in the agricultural sectors of developing countries. To fill this gap, the international community is turning its attention towards the investment capacities of the private sector.

Leveraging the Private Sector to Develop Food Systems  

The private sector is well-positioned to provide the funding necessary to scale up agricultural production and supply throughout the developing world. Agri-food industries are extremely attractive to the private sector, in that they provide huge investment opportunities for a wide range of companies with the potential for huge revenue. The global food and vegetable market, for example, is projected to be valued at $2.3 trillion by 2017—more than double its worth in 2012. Several other industries, such as cold storage, fertilizer, machinery, seed, vaccines, and packaging, will see similar growth as a result of increasing food demand in developing countries.

Farmers and other rural entrepreneurs, in turn, stand to gain a great deal from private sector interaction. Private companies may offer for-profit technical assistance, knowledge transfer, and other services that development organizations cannot provide. And, agri-food enterprises in developing countries are often lacking in financial capacity. Here, private sector companies may be able to provide access to microloans and savings accounts for farmers and other SMEs, as well as insurance and risk management services—services that become ever more necessary given climate change, persistent regional conflict, and price volatility.

Spotlight: Mobile Tech 

Mobile technology is one such area in which private sector investment in agricultural development has proven revolutionary. For so many of the inputs that small-scale farmers throughout the developing world are missing—education, market access and information, access to banking and financial services, or female empowerment—mobile technology can help. Organizations like the Ethiopian Agricultural Transformation Agency can use mobile technology to send text messages with up-to-date agronomic information, and field hot line phone calls. Digital connectivity can help agricultural cooperatives to purchase seeds and fertilizer in bulk, and distribute trusted information to widely-dispersed member bases. With a cell phone, a woman can open a private bank account, or receive training of which local men might not have approved.



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With the majority of people in African countries equipped with cell phones, many financial institutions are collaborating with mobile providers to serve smallholders. Mobile banking is spreading across the continent; platforms like Vodafone’s M-Pesa, M-Shwari, and M-Pawa allow clients to make deposits, earn interest, transfer money, and take out loans. A number of other platforms have arisen to serve farmers, like MyAgro, which allows for incremental saving so that farmers can avoid paying a large lump sum for planting inputs. Ideas are pouring into this sector, and while there is a need for greater coordination among apps to streamline service provision, phone-based platforms are on their way to transforming Africa’s agricultural sector.

 
Filling the Gap 
 

A number of governments and development organizations have sounded the call for greater private sector engagement in agricultural development, and the private sector is stepping up. In particular, Feed the Future (FTF) has held an important role in convening private sector companies to address global food security. By advocating “win-win” partnerships involving private sector-led growth in emerging markets, FTF has succeeded in fostering a number of linkages between the agricultural sectors of developing countries and local and international private companies.

One such linkage is the Southern Agricultural Growth Corridor of Tanzania—a multi-stakeholder partnership between the Tanzanian government, donors, farmers, agri-businesses, and private sector corporations designed to improve agricultural productivity throughout the country. With a detailed investment blueprint, the partnership has identified a number investment opportunities along the southern corridor of Tanzania.

Feed the Future has also contributed to the New Alliance for Food Security and Nutrition, a partnership between African governments, donors, and the private sector to increase investment in agriculture. The Alliance has facilitated the commitments of over 200 companies—the majority of which are based in Africa—to invest in African agriculture, worth $10 billion. To date, these investments have reached over 8 million small-scale farmers and have thus far created over 20,000 jobs, primarily for women.

If such investment momentum continues, and expands across the developing world, it may be that the international development community and the private sector can help reduce funding gaps in agricultural production. The many investments in small-scale farmers that we’ve detailed in this series are absolutely critical for the development of an effective and sustainable global food system. And, without tapping into smallholder productivity, it may be that the world’s largest food and beverage companies will not be able to deliver the profits expected by their shareholders. The benefits of private sector engagement in agriculture are mutual as much as they are essential to scale up food production and ensure global food security. 


Read previous posts in the "Growing Food for Growing Cities" blog series: 

Tackling Food Waste along the Supply Chain 

Food System Resilience in the Face of a Changing Climate

Delivering Good Nutrition 

Food System Development to Improve Food Security

Urbanization Is an Opportunity for Many Small-Scale Farmers 

Food Security in an Urbanizing World

About

The Global Food and Agriculture Program aims to inform the development of US policy on global agricultural development and food security by raising awareness and providing resources, information, and policy analysis to the US Administration, Congress, and interested experts and organizations.

The Global Food and Agriculture Program is housed within the Chicago Council on Global Affairs, an independent, nonpartisan organization that provides insight – and influences the public discourse – on critical global issues. The Council on Global Affairs convenes leading global voices and conducts independent research to bring clarity and offer solutions to challenges and opportunities across the globe. The Council is committed to engaging the public and raising global awareness of issues that transcend borders and transform how people, business, and governments engage the world.

Support for the Global Food and Agriculture Program is generously provided by the Bill & Melinda Gates Foundation.

Blogroll

1,000 Days Blog, 1,000 Days

Africa Can End Poverty, World Bank

Agrilinks Blog

Bread Blog, Bread for the World

Can We Feed the World Blog, Agriculture for Impact

Concern Blogs, Concern Worldwide

Institute Insights, Bread for the World Institute

End Poverty in South Asia, World Bank

Global Development Blog, Center for Global Development

The Global Food Banking Network

Harvest 2050, Global Harvest Initiative

The Hunger and Undernutrition Blog, Humanitas Global Development

International Food Policy Research Institute News, IFPRI

International Maize and Wheat Improvement Center Blog, CIMMYT

ONE Blog, ONE Campaign

One Acre Fund Blog, One Acre Fund

Overseas Development Institute Blog, Overseas Development Institute

Oxfam America Blog, Oxfam America

Preventing Postharvest Loss, ADM Institute

Sense & Sustainability Blog, Sense & Sustainability

WFP USA Blog, World Food Program USA

Archive




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