FAO (Food and Agriculture Organization of the United Nations) general director Jacques Diouf attends press conference at FAO headquarter in Rome. (AFP PHOTO)
MILAN (Reuters): The world needs to invest $83 billion (51.7 billion pounds) a year in agriculture in developing countries to feed 9.1 billion people in 2050, the United Nations’ Food and Agriculture Organisation said last week.
World agriculture needs massive investments to raise overall output by 70 percent over the next 41 years, including almost doubled output in the developing countries to feed a projected extra 2.3 billion people by 2050, the FAO said.
Primary agriculture investment needs include some $20 billion a year earmarked for crop production and $13 billion for livestock, the FAO said in a paper ahead of a forum on how to feed the world in 2050 it is due to hold on October 12-13 in Rome.
A further $50 billion a year would be needed for downstream services, such as storage and processing facilities, it said.
Most of this investment would have to come from private investors: farmers buying seeds, fertilizers and machinery and businesses investing in processing facilities, the agency said.
On top of this, public investments are needed in agriculture research and development, in big infrastructure projects such as building roads, ports, storage and irrigation systems as well as into education and healthcare, the FAO said.
Much-needed official development assistance (ODA) to agriculture plunged 58 percent in real terms from 1980 to 2005, dropping from a 17 percent share of total aid to 3.8 percent over the period. It now stands at about 5 percent, it said.
Leaders of rich nations at the G8 meeting in July pledged $20 billion over three years to boost agricultural investment in poorer countries and fight hunger, and the Group of 20 last month asked the World Bank to set up a trust fund to boost agricultural support to low-income countries.
Up to $29 billion of the $83 billion projected annual net investments in agriculture would need to be spent in the two countries with the largest populations – India and China.
Sub-Saharan Africa would need about $11 billion, Latin America and the Caribbean region would require some $20 billion, the Middle East and North Africa $10 billion, South Asia $20 billion and East Asia $24 billion, the FAO said.
With scarce funds in many developing countries, foreign direct investment in agriculture there could make a significant contribution to bridging the investment gap, the paper said.
But so-called “land grab” investments by rich nations in countries that are poor or lacking in food security have raised political and economic concerns, because they are often meant to export output to the investing countries.
Such deals should be designed in such a way as to boost benefits to host populations, increase their food security and reduce poverty, the FAO said.