Pauline Kamau stands in the new processing facility of her Kenyan milling business, Sopa Supplies. Credit: Technoserve.
On March 30, the Council launched a new report, Stability in the 21st Century: Global Food Security for Peace and Prosperity, at the Global Food Security Symposium 2017. Each week, we will highlight one of the report’s recommendations on the Global Food for Thought blog. Watch for a new post each Wednesday, and join in the discussion using #GlobalAg.
Marshaling the knowledge, ideas, market reach, energy, and financial resources of the private sector is essential to enhancing global food and nutrition security in the face of today’s challenges. Private businesses are at the core of creating jobs and increasing income opportunities all along the value chain, from family farms to city supermarkets. Existing programs have initiated efforts to partner with private investors, but there is significant potential to accelerate and expand these efforts to better harness private-sector involvement in tackling these challenges.
As such, the Council recommends that the US government productively partner with committed companies to amplify the power of the private sector to transform food and nutrition security, from individual entrepreneurs to multinational businesses.
To accomplish this, the US administration should take the following steps:
Form strong public-private partnerships to harness the private sector’s strengths and spur inclusive and sustainable growth in smallholder agriculture and food systems in low-income countries.
The United States should identify and promote areas where the strengths and involvement of the private sector can make a difference. Such areas include building and strengthening agricultural value chains that bring more food to market, diversifying income opportunities, and creating jobs for youth and women. For example, the United States could use tax incentives, reductions in regulations, trade incentives, or agreements to promote engagement by the private sector in priority low-income countries. The United States could also incentivize multinational investment by US investors through tax and regulation harmonization and tax credits.
The United States should also create or expand challenge programs that incentivize the private sector to develop creative, effective, and sustainable solutions to the world’s most pressing food and nutrition security challenges. Programs that could be expanded or replicated include the Grand Challenges as well as AgResults, a $118 million multidonor, multilateral initiative created at the 2010 G20 Summit that offers competitive, results-based economic incentives to private actors to spur the development, pilot testing, and adoption of new agricultural technologies that promote global food security, health, and nutrition.
Strengthen and open the environment for investment, action, and collaboration.
The United States should work with local governments to build capacity to improve policies for private investment in agriculture and value chain activities. Such policies include moving towards open markets, removing distortions, reducing and eliminating corruption, and providing greater opportunities for farmers. Given that private-sector partners play a key role in the US global food security strategy, the United States should develop metrics that track cost sharing in US agricultural development activities by the American private sector.
Additionally, to promote trade as an economic development tool, the United States should develop programs that help increase the efficiency of regional trade through consistent processes and improved food safety and phytosanitary standards. The United States should also work with countries to help them reduce or remove tariff and nontariff barriers and unnecessary border restrictions and improve cross-border infrastructure and capacity. Such measures would encourage national and regional investment from the private sector while also improving the cross-border flow of food regionally. The United States should also enhance and better coordinate US government, multilateral, and other bank investments in infrastructure, including roads, ports, irrigation, water management, cold storage, markets, electricity, and information and communications technology.
Increase access to finance and mitigate the risks that undermine opportunities for investors.
The United States should support the development of national or multilateral mechanisms to mitigate political, currency, and weather-related risks for potential US investors in low-income countries’ agriculture and food systems. In partnership with other national governments, the United States should aim to mitigate risk both for local farmers and rural entrepreneurs. For example, the United States should further expand financial tools such as crop and weather insurance programs, mobile money, and digital payments. The United States should also support programs that address the key constraints faced by women and youth entrepreneurs, especially access to credit, land, and technologies, and empower women to make credit and other financial decisions.
Agriculture is a sector fraught with risks, but these risks are also managed with specialized financial mechanisms. The United States should increase the scope and reach of instruments that help local financial institutions better assess agricultural risk and mitigate that risk. At the same time, the United States should support the continued development of creative mechanisms aimed at reducing risk and encouraging private investment in food security activities using local government agencies and appropriate financial institutions.