Investing in performance: dialogue for impactful public-private partnership
There are 500 million smallholder farmers in the world, most of whom are subsistence farmers facing economic and social constraints as well as severe effects of climate change. To ensure sustainable livelihoods, smallholders need to progress from “farming to live” to “farming to make a living”, with a strong link to viable markets. Moreover, the future generation of farmers, the youth, find little place for themselves in current subsistence farming models. Degraded land creates a vicious circle where low yields lead to poor livelihoods and even more environmental degradation. Inefficient connections to markets and little access to knowledge, technology and financing, further prevent farmers from raising out of poverty.
Recently, the World Agroforestry Centre (ICRAF) and Livelihoods, brought together about 80 high-level officials from governments, private sector and NGOs to explore innovative ways to use blended finance to create mutual value for smallholder farmers, investors and off-takers in complex agricultural landscapes.
Dr. Tony Simons, ICRAF’s Director General, highlighted the five top global risks as identified by the World Economic Forum in The Global Risks Report 2016. Of significance are unemployment and underemployment, identified as top risks for doing business in more than half of the economies surveyed.
While risks are important, so are opportunities. The model that places risk on the smallholder, and the biggest reward, on the investor has got to be unraveled. It is those partnerships to share risks, partnerships to share rewards that will be most fruitful and successful.
“As a knowledge based institution, we seek to develop models, metrics and systems to be able to predict, analyze and show change in those areas where we can start making decisions to back the kind of initiatives that Livelihoods is supporting,” said Simons. He gave highlights on some of ICRAF’s research on soil carbon to illustrate the models, metrics and systems.
The role of governments
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“Going forward, we recommend how we as government can interface all these approaches and models. We need to leverage on government activities, such as on extension officers, to stretch the amount of investment and create more impact.” Hon. Bett.[/perfectpullquote]
In his remarks, Hon. Willy Bett, Kenya’s Cabinet Secretary for Agriculture, reiterated the role of government in the sector to eradicate hunger, create jobs and contribute to the country’s economy. Smallholder farmers contribute to over 80% of Kenya’s agricultural production while 25% of the economy is driven by the sector. It is therefore key that smallholder farmers make business sense of their agricultural activity as it will improve the livelihoods of millions of Kenyans. He said that to make agricultural sustainability in the long run, it is necessary to impart knowledge and practices to small holder farmers to plant trees and improve soil fertility, for example.
Dr. Mohamed Ait Kadi, President of the General Council of Agricultural Development of Morocco, presented the Initiative for the Adaptation of the African Agriculture to Climate Change. Announced in December 2015 at the UN climate talks in Paris, it seeks to ensure resilience economic development for Africa, notably in the agriculture sector. This will improve productivity, reduce vulnerabilities, enhance resilience and manage natural resources more sustainably, complementing other ambitions led by NEPAD, the African Development Bank and FAO.
“The Paris Agreement explicitly refers to safeguarding food security in its preamble and has opened the door for more adaptation in the agriculture sector. The willingness to include agriculture and food security finally appears to have some impact. By including adaptation and food security in the agreement, the international community fully acknowledges that urgent attention is needed to preserve the well-being and future of those who are on the frontline of climate change threats and impact,” said Dr. Kadi.
- What if Africa’s agriculture became resilient enough to accelerate agricultural growth? According to the World Bank, given its massive agricultural potential, Africa’s farmers and businesses could create a trillion-dollar food market by 2030.
- The Adaptation of the African Agriculture initiative invites us to think and design new models that bring together the public and the private sectors and the NGOs to achieve a triple performance – economic, social and environmental.
- Africa needs to take some effective shortcuts through scaling up what works.
The panel discussion led by Bernard Giraud, Chair of Livelihoods, focused on what can be done better to achieve scale in improving performance.
Hon Judi Wakhungu, Cabinet Secretary for Environment emphasized Kenya’s efforts in operating seamlessly with private sector, NGOs and civil society organizations and the government’s commitment to tackling climate change.
“We have recently enacted the Climate Change Act, and we are one of the fewer countries in Africa that has a climate change law. The President will soon be launching the Climate Change Council. All climate change activities will be part and parcel of each sector,” said Hon Wakhungu.
Opportunities and challenges
The relationship between public and private sector can be leveraged more efficiently through operational coalitions to mobilize knowledge, markets and resources. There is a need for initiatives where projects and funds aiming simultaneously at social, environmental and economic impact can be designed, tested and scaled up. New approaches to financing and acting are developing and should be encouraged from impact investment to hybrid financial models mixing public and private funding.
A joint initiative of Livelihoods, VI Agroforestry and Brookside Dairies in Mount Elgon area of Kenya, is an example of a viable investment project that combines productivity, social and environmental advantages.
Watch the video: The Livelihoods Mount Elgon Project- Kenya
Participants made recommendations on how investment prospects can benefit smallholder farmers. Specifically, they looked at how financial models that incorporate public and private funding can be developed, how the private sector, NGOs and governments can combine resources to implement impactful projects, and how to leverage market connections and inclusive development.
Again, it is those partnerships to share risks, partnerships to share rewards that will be most fruitful and successful.