FAO’s Investment Centre is stepping up its support for creating more robust & sustainable agri-food systems
Q&A with FAO Investment Centre Director
21 December 2020, Rome – Mohamed Manssouri, Director of FAO’s Investment Centre discusses the Centre’s work & expansion plans.
What’s the FAO Investment Centre?
Simply put, the FAO Investment Centre creates investment solutions in sustainable food & agriculture. The Centre offers a range of investment support services helping countries to create long-term investment policies & plans, to design & implement investment projects with financing partners & to generate knowledge & build capacities related to investment.
Better investment in food & agriculture leads to more efficient & equitable food systems as well as greater resilience in the face of climate change & other shocks such as COVID-19.
What’s new is that FAO members have recently agreed to inject significantly more resources into the Centre – enabling it to expand, provide more in-depth investment support to countries & strengthen its collaboration with international & national financial institutions & other development partners.
As FAO Director-General QU Dongyu said, “together, we are transforming agriculture & food systems through targeted investment, innovation, knowledge & strengthened capacities.”
In the last three years alone, we helped mobilize US$ 19 billion of public investment to create stronger & more sustainable food systems. & in Sub Saharan Africa alone, in 2020 we supported the design of US$ 2 billion new public investments that will provide people with access to healthy food & create jobs. A good example is the Joint Programme to Respond to the Challenges of COVID-19, Conflict & Climate Change, benefitting six countries in the Sahel by investing in agricultural infrastructure, innovative technology as well as human & social capital in cross border areas facing security issues. Both FAO & World Food Programme (WFP) will be supporting the G5 Sahel Secretariat & International Fund for Agricultural Development (IFAD) in project implementation. The cost of the project is US$ 180 million over six years of which 109 million financed by IFAD & US$ 71 million by the Green Climate Fund.
In 2020, we supported the implementation of projects worldwide in some 120 countries. This consists of providing critical technical support to governments during the projects’ implementation period (typically around five years) to make sure that investments are on track to deliver the desired outcomes. The Centre’s multidisciplinary teams can address implementation issues related to all aspects of agriculture & rural development including infrastructure & irrigation, agriculture, livestock, fisheries, forestry, etc. The Centre also provides support to better soft investments in human & social capital & capacities, governance & institutions, farmer organizations & community development.
You mentioned COVID-19. Could you tell us about the Centre’s work in relation to this?
Countries have been looking to FAO for policy guidance on responding to COVID-19 & technical assistance to ongoing projects. In response, we provided timely policy advice, undertook rapid impact assessments of COVID-19 on food systems to inform countries’ decisions & solutions to mitigating the negative effects of the pandemic on their food & agriculture sector.
With investment partners such as the World Bank – the Centre’s oldest & largest partner – we developed response packages & reoriented ongoing projects to address the COVID-19 challenges.
With the European Bank for Reconstruction & Development (EBRD), we established a ($ 3 million) technical response facility to help the agri-food sector to overcome COVID-19 challenges & to strengthen food systems’ longer-term resilience.
With the European Commission, we are undertaking rapid food systems assessments in many countries – by end of 2021 we aim to reach 61 countries, among the most affected by food insecurity & malnutrition. The assessments are only the first step. The work will help to shape new policy recommendations in food & agriculture, & potential private & public investments in food systems transformations in those countries. We are also working with many partners, including European Development Finance Institutions, to help de-risk investments in the agri-food sector – a sector marked by uncertainty & volatility even at the best of times.
We are also integrating COVID-19 response activities into the Global Agriculture & Food Security Program (GAFSP) projects in countries such as Bangladesh, Ethiopia, Haiti, Senegal & Yemen.
The Centre has also stepped up its actions to increase visibility & influence public debate on the need for investment in food systems as the world works towards building back better.
We have a good track record of bringing stakeholders together from the public & private sectors, including farmers & their organizations, to discuss policy issues & resolve bottlenecks.
In parallel, the Centre has been key to the rolling out of the poverty-focused Hand-in-Hand Initiative in close to 40 countries.
(Note: more info on the Centre & its work on COVID-19 here).
Apart from supporting the COVID-19 response, could you give some other examples of the Centre’s work & key achievements in 2020?
Despite these difficult times, the Centre succeeded in supporting countries to mobilise public investments worth $ 6.1 billion – $ 500 million more than in 2019 – for over 30 agricultural projects.
Our investment team played a substantial role in the design of a new regional investment project to revitalize economic activities & food systems in six Sahel countries – Burkina Faso, Chad, Mali, Mauritania, Niger & Senegal. The Rome based UN agencies – FAO, IFAD & WFP – partnered with G5 Sahel to strengthen the resilience of rural households in cross-border areas of the six countries, reaching almost one million people impacted by either conflict, climate change, or the COVID-19 pandemic. It is anticipated that the partnership will expand to involve the Green Climate Fund & other partners.
We forged new partnerships with financing institutions to expand our investment support, & new collaborations are being built with the European Investment Bank, the Asian Infrastructure Investment Bank & others.
Mindful that public money alone is not enough to end poverty, we are creating new & innovative partnerships to transform how development is financed, especially through blended finance – the use of public or philanthropic money combined with private investment into businesses that generate social & environmental impacts alongside financial returns.
For example, we are working with the European Commission, through the AgrIntel initiative, providing advisory services to impact funds & blended finance operations investing in small & medium agribusinesses through equity & loans. Blended finance is certainly an area to watch.
In collaboration with the EU Delegation in Uganda, the Centre is strengthening the national Uganda Development Bank (UDB) to finance responsible private investments in food & agriculture.
Blending FAO’s knowledge & expertise with finance & working with national & international financial institutions will help our member countries achieve the impact at the scale required to achieve the SDGs.
The Centre is also teaming up with research centres to advance knowledge in digital agriculture, human capital, & foster opportunities for rural youth & women across the food value chain.
Another key area is green & climate financing, helping countries better tap into this type of financing. Both directly as FAO & with financing partners, we unlocked around $ 675 million of green financing with the Green Climate Fund between 2018-20.
What’s ahead for the Centre? What are some of the main priorities over the next years?
We will continue to work with international funds & banks on ways to strengthen the resilience of the food systems. This means helping public & private actors to transition to greener & better production systems that offer better nutrition without harming the environment, ultimately leading to a better life for all.
We will also continue to enable & promote the use of new data sources & climate-sensitive technologies (like geospatial data, digital applications & drones) to create better investment planning, risk management & lower interest rates for farmers.
We look forward to supporting national banks in more countries to enable them to finance more & better farmer & private investments in sustainable food & agriculture.
What are the key ingredients for creating sustainable growth?
I would sum it up as: a clear long-term strategy, improved policy environment & critical public investment to accelerate the adoption of innovation including digital & green technologies & practices, alongside basic infrastructure. Public investment is critical to catalyze private investment, particularly in finance. Meeting the SDGs – from ending poverty & hunger to building a more equitable, healthier & greener world – calls for more blended financing.
Increasing efficiencies in the food system must also go hand-in-hand with reducing inequalities, creating decent jobs & livelihoods for women & youth especially. In this respect, public investment in human capital of the men & women who produce, process & trade food (especially small-scale farmers) is essential as an enabler for all the rest: growth, sustainability, equality & inclusiveness.
There is a need for urgent action to transform agri-food systems. The resources – intellectual, financial & material – are there, but we must be better organized & coordinated so that the world’s efforts are not too late & ineffective for too many people.