Making more and better investments in agriculture is one of the most effective ways to reduce hunger and poverty while safeguarding the environment, according to FAO's flagship annual report, The State of Food and Agriculture 2012 presented Thursday in Rome.
The world's more than one billion farmers must be central to any agricultural investment strategy, as they are the biggest investors in this sector, the report notes. But farmers' investments are often limited by unfavorable investment climates.
"A new investment strategy is needed that puts agricultural producers at its center," said FAO Director-General Jose Graziano da Silva. "The challenge is to focus the investments in areas where they can make a difference. This is important to guarantee that investments will result in high economic and social returns and environmental sustainability. "
Governments urged to create favorable investment climate for farmers
Investing in agriculture pays off
New data compiled for the report show that farmers in low- and middle-income countries invest more than $170 billion a year in their farms – about $150 per farmer. This is three times as much as all other sources of investment combined, four times more than contributions by the public sector, and more than 50 times more than official development assistance to these countries. Investing in agriculture is clearly paying off, according to the FAO report. Over the last 20 years, for example, the countries with the highest rates of on-farm investment have made the most progress in halving hunger, to meet the first Millennium Development Goal.
The regions where hunger and extreme poverty are most widespread – South Asia and sub-Saharan Africa – have seen stagnant or declining rates of agricultural investment over three decades.