Background note - Session 4 - Agriculture and Food Security
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The document discusses the pivotal role of food security and agriculture in achieving the Sustainable Development Goals (SDGs). It notes that sustainable food and agriculture systems are critical to revitalizing rural economies, delivering inclusive growth, and ensuring nutritious food for all in an environmentally sustainable way. The document examines how different development approaches, including official development assistance, blended finance, aid for trade, and responsible business conduct can support SDG2 on zero hunger and agriculture across partner countries through increased cooperation between development providers. It emphasizes the importance of sustainable agriculture and food systems for achieving multiple SDGs and calls for strengthened cooperation to assist partner countries in promoting sustainable agriculture and food security.
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Background note - Session 4 - Agriculture and Food Security
- 1. EXPLORING THE PIVOTAL ROLE OF FOOD SECURITY AND AGRICULTURE ACROSS THE SUSTAINABLE DEVELOPMENT GOALS AND THEIR TARGETS Achieving sustainable development requires acknowledging that sustainable food and agriculture can revitalise rural areas and deliver inclusive growth to countries. Sustainable food and agriculture embrace the 2030 Agenda vision, whereby people’s livelihoods and the management of natural resources are addressed jointly and lead to a world where food is nutritious and accessible for everyone. This background note provides information on the importance of exploring the pivotal role that food security and agriculture play across the 2030 Agenda for Sustainable Development, including but also beyond the Sustainable Development Goal 2 (SDG 2), which addresses food security and agriculture. Key issues for discussion: How can Arab and DAC development co-operation providers best mobilise financial resources to achieve SDG2? How could a shift to an inter-sectoral approach in the planning, management and use of vital natural resources of water, energy and land contribute to SDG2? Which policies and approaches could Arab and DAC providers pursue to enhance more sustainable investments in agriculture and the food value chain? How can development actors mobilise commercial investment towards smallholder farmers and small and medium enterprises in the agriculture sector? What are the models and programmes that are already applied and that could be scaled up, e.g. in blending finance? What role can agri-businesses play in achieving SDG 2? What international tools are available today to help agri-business investors conduct business responsibly? Which areas could be identified for co-operation between Arab and DAC providers of development co- operation in this area? Possible outcome: Increased understanding of the range of tools available to support SDG2 in partner countries and of the complementarities across different types of providers to assist them, notably on how providers can co- operate through ODA, blended finance, aid-for-trade and in promoting responsible business conduct. Transforming food security, improved nutrition and sustainable agriculture Food and agriculture stand today at a crossroads. Looking back, major improvements in agricultural productivity have been recorded over recent decades to satisfy the food demand of a growing global population. But progress has often come with social and environmental costs, including water scarcity, soil degradation, ecosystem stress, biodiversity loss, decreasing fish stocks and forest cover, and high levels of greenhouse gas emissions. The productive potential of our natural resources base has been damaged in many places around the globe, compromising the future fertility of the planet. According to the Food and Agricultural Organization, agriculture is THE 2019 ARAB-DAC DIALOGUE ON DEVELOPMENT 14 January 2019, Kuwait City
- 2. the main source of food, a major economic sector and a big employer of the labor force in many economies, in which around 80 percent of the global poor are rural people who produce most of the food. Lessons drawn from implementing the Millennium Development Goals show that food, livelihoods, and the management of natural resources are indeed inextricably linked. Today, 790 million people are hungry, and every third person is malnourished, reflecting a food system that is out of balance. Distress migration is at levels unprecedented for more than 70 years, as the social cohesion and cultural traditions of rural populations are threatened by a combination of limited access to land and resources and rising numbers of crises, conflicts and disasters, oftentimes climate-related. The 2030 Agenda for Sustainable Development envisions a world in which food and agriculture, people’s livelihoods and the management of natural resources are addressed not separately but as one. The 2030 Agenda includes a Sustainable Development Goal, SDG2, which seeks sustainable solutions to end hunger in all its forms by 2030 and to achieve food security. The aim is to ensure that everyone everywhere has enough good-quality, nutritious food to lead a healthy life and to do so through sustainable agriculture. As such, SDG2 is a driving force for achievement across the 2030 Agenda. Achieving SDG2 entails improving the productivity and incomes of small-scale farmers by promoting equal access to land, technology and markets, sustainable food production systems and resilient agricultural practices. It also requires increased investments through international co-operation to bolster the productive capacity of agriculture in developing countries. In addition, achievement of SDG2 can be a catalyst for achieving progress across most of the SDGs and their targets, considering the links with other Sustainable Development Goals, notably SDG1 (poverty), SDG3 (health), SDG5 (gender equality), SDG6 (water), SDG8 (economic growth), SDG12 (sustainable consumption and production), SDG13 (climate change). The role of development co-operation providers: Official Development Assistance, blended finance, aid-for-trade and responsible business conduct Achieving food security through the efficient use of agricultural resources and their sustainability is critical for spurring progress towards the SDG targets. Improving land productivity and irrigation efficiency, especially in countries with limited arable land and scarce water resources, such as in the Middle East and in northern Africa, is critically important for increasing food production. Agriculture was relatively neglected for some decades and its share from global Official Development Assistance (ODA) dropped sharply between 1979 and 2004. Today, there is better recognition of the role of agriculture in enhancing the eradication of poverty and hunger in the world, especially in the aftermath of the 2007-08 world food crisis. According to the OECD DAC Creditor Reporting System statistics, over 2008-2010, agriculture and rural development-related aid reached USD 12.3 billion, while over 2014-16 it reached USD 14 billion. Given the growing amounts spent on agriculture-related ODA, the Arab-DAC Dialogue provides an opportunity for the two largest communities of providers to share experiences, lessons learnt, good practices in this policy area, and to explore the range of tools available to support SDG2 in partner countries, as well as the complementarities across different types of providers to assist them. Beyond ODA flows, innovative models that aim at mobilising private sector investment are increasingly applied among different actors in the agri-finance ecosystem. Blended finance, which is the strategic use of development
- 3. finance for the mobilisation of additional finance towards sustainable development in developing countries,1 can help mobilise commercial financing and investments along the agricultural value chain. However, only 3% of the total amounts mobilised from the private sector by official development finance interventions are directed towards the agriculture sector. That is, USD 2.5 billion of private resources were mobilized in the agriculture sector, as reported to the OECD over 2012-15.2 A collaborative project on blended finance and agriculture between the OECD and the Smallholder and Agri-SME Finance and Investment Network (SAFIN) is currently underway to strengthen the knowledge base on the current state of blended finance in and for agriculture. It will inform the application of the OECD DAC Blended Finance Principles3 in the agriculture sector and the SAFIN agenda of critically approaching the role, actual and potential, of blended finance directed in particular to support to agri-SMEs. “Agriculture is the backbone of the economies of many developing countries, notably Least Developed Countries, and can play a pivotal role for economic growth and poverty reduction,” according to the Food and Agricultural Organization, Director-General José Graziano da Silva. He also noted that “trade can influence market structure, value-chain development, investment in agriculture, rural employment and income. For those reasons, trade is a key enabler of the SDGs”. Aid for Trade (A4T), an initiative that interlocks aid and trade policies in order to “help low- income countries overcome the barriers that constrain their ability to benefit from trade expansion, as well as to promote a stronger impact of trade on economic growth and poverty reduction, can play an important part in leveraging ODA to achieve the 2030 Agenda and SDGs. Private investment is essential if agriculture is to fulfill its vital function of contributing to economic development, poverty reduction, and food security. In a context of rising land and water scarcity, agricultural investment is critical to induce output expansion and bolster incomes in rural areas, thereby enhancing global food security. A coherent policy framework is an essential component of an attractive investment environment for all investors, be they domestic or foreign, small or large. To assist governments mobilise private investment in agriculture, the OECD has developed the Policy Framework for Investment in Agriculture (PFIA). Beyond the key role of smallholders, large international investors also foster the accumulation of agricultural capital stocks in some countries. They can create employment and bring expertise, financing capacities and marketing networks to enhance the competitiveness of agricultural production and value chains. Investing in agriculture is one of the most effective strategies for economic growth and poverty reduction in rural areas. However, agri-business investments can have adverse social and environmental impacts, including on the rights and livelihoods of local communities – particularly in countries with weak regulatory capacity and tenure rights. Businesses have a key role to play in ensuring that their operations do not have adverse impacts, and that 1 OECD (2018), Making Blended Finance Work for the Sustainable Development Goals, OECD Publishing, Paris. Available online at: http://dx.doi.org/10.1787/9789264288768-en 2 Benn, J., C. Sangaré and T. Hos (2017), "Amounts Mobilised from the Private Sector by Official Development Finance Interventions: Guarantees, syndicated loans, shares in collective investment vehicles, direct investment in companies, credit lines", OECD Development Co- operation Working Papers, No. 36, OECD Publishing, Paris, https://doi.org/10.1787/8135abde-en. 3 For further information, see https://www.oecd.org/dac/financing-sustainable-development/development-finance-topics/OECD-Blended- Finance-Principles.pdf.
- 4. they benefit local communities and host countries.4 Observing responsible business conduct principles and standards can ensure that they contribute to sustainable development. The 2016 “OECD-FAO Guidance for Responsible Agricultural Supply Chains” calls on companies to: Ensure that their operations contribute to food security and nutrition and sustainable and inclusive rural development. Hold good-faith, effective and meaningful consultations with communities before initiating any operations that may affect these communities. Respect legitimate tenure rights holders and their rights over natural resources potentially affected by their activities. Seek to ensure that legitimate tenure rights holders receive prompt, adequate and effective compensation of their tenure rights being negatively impacted by their operations. The role of sustainable agriculture in food security, ending hunger, and accelerating the achievement of most of the SDGs calls for strengthening co-operation among all development co-operation providers to assist partner countries in promoting sustainable agriculture and food security. 4 OECD (2018), Development Co-Operation Report 2016: The Sustainable Development Goals as Business Opportunities , OECD Publishing, Paris, http://dx.doi.org/10.1787/dcr-2016-en