With privatization, globalization and the transformation of the food chain from the farm to the table, the importance of the private sector has increased, FAO Director-General Jacques Diouf said when addressing an international private sector forum on food security.

Held as a pre-Summit event from 12 to 13 November, the forum is organised within the context of the World Summit on Food Security, taking place from 16 to 18 November in Rome.

FAO estimates the investments needs in developing countries from Official Development Assistance (ODA) at US$44 billion per year. These will need to be complemented by financing from national budgets and private investments in primary agriculture and downstream services such as storage and processing, Diouf advised.

Business interest encouraging

The FAO said that it was encouraging that the private sector’s interest in agriculture has increased. Foreign direct investment (FDI) in the sector tripled since 2000 from $US1billion to more than $3 billion in 2007, but this still represents less than one per cent of total world FDI inflows.

Long-term view

The FAO Director-General encouraged private companies to take a longer-term view of investment and business opportunities in developing regions rather than focussing on immediate needs.

He also encouraged companies to take the extra step to look into countries where they perhaps have not previously ventured, particularly for input supply, produce procurement and agro-industry development.

International companies needed to work closely with smaller and medium-scale local enterprises, including input suppliers as well as food manufacturers, distributors and retailers, which he said were important intermediaries with primary producers and an important source for rural employment and income growth.

Share