"Recent evidence shows signs of improvement, but eradicating hunger in these and other regions, and achieving this sustainably, will require substantial increases in the level of farm investment in agriculture and dramatic improvements in both the level and quality of government investment in the sector," the report said.
Overcoming investment barriers
The report emphasizes that in many low- and middle-income countries, farmers are often confronted with weak incentives to invest.
A number of factors can drastically reduce the incentive to invest, including poor governance; absence of rule of law; high levels of corruption; insecure property rights; arbitrary trade practices; high "taxation" of agriculture relative to other sectors; and inadequate levels and quality of rural infrastructure and public services.
Smallholders face specific, severe constraints, often including extreme poverty, weak property rights, and poor access to markets and financial services.
Overcoming these barriers will be essential to unlock the full investment potential of farmers in many rural areas. The report recommends focusing on a number of areas in order to foster smallholder investment, including the following:
-Governments and their development partners need to help smallholders mobilize their own savings and gain improved access to credit.
-Stronger producer organizations, such as cooperatives, can help smallholders deal with risks and provide better market access.
-Social protection can contribute to the expansion of the asset base by the poorest smallholders.
Make better use of limited public funds
National governments are the second largest source of investment in agriculture. The report urges governments and donors to channel their limited public funds into areas that have been proven to be supportive of agricultural growth and poverty reduction, such as agricultural research and development, rural infrastructure and education.