Agricultural investment needs to improve quality

Due to the recent food crisis in some countries and the growing concern about global climate change, agriculture has become the focus of the international community. Eradicating hunger and achieving sustainable agricultural development require a significant increase in agricultural investment, but more importantly, the quality of investment needs to be improved.

Governments and donors play a key role in promoting, guiding and governing agricultural investment, but private investors, mainly farmers themselves, must be at the core of all agricultural investment strategies. Investors in the agricultural sector can be divided into public or private investors, foreign or domestic investors. Most of the domestic private investors are farmers, who are currently the largest source of agricultural investment in low-and middle-income countries. Domestic public investors are mainly governments, which is the second largest source of agricultural investment, followed by development partners and other foreign public investors, companies and other foreign private investors.

The purpose of farmers' investment is to support their families, increase and diversify their income, and accumulate wealth. For farmers, investing in agriculture means making sacrifices (such as money, energy or time) now in order to accumulate assets or capital that will increase productivity and income in the future. The purchase of ploughs, the construction of irrigation canals, the learning of new skills or the cultivation of trees and animals until their breeding stages are all forms of investment aimed at increasing farmers' productivity or income. Only when the expected return can offset the potential risk and exceed the alternative investment. Investment in agriculture is essential for reducing hunger and promoting sustainable agricultural production. In today's world, places where agricultural capital per capita and public investment in agriculture are stagnant are at the center of the current problems of poverty and hunger. The growing demand in the coming decades will put more and more pressure on the natural resource base. Eradicating hunger in a sustainable manner requires not only a significant increase in investment in agriculture but also a more effective investment. Farmers are the largest investment group in agriculture in developing countries, and any strategy aimed at increasing agricultural investment must be centered on farmers.

Private and public investors in agriculture face different challenges in different contexts. Characteristics at the regional and national levels have a certain impact, as do the characteristics of each investor. However, all agricultural producers, regardless of their size or national conditions, need an enabling environment with basic characteristics: infrastructure and human resources development, trade and market systems, macroeconomic stability and good governance. Investment in agriculture is particularly dependent on key enabling factors, such as predictability and transparency of policies, clear land use rights and property ownership, transparent trade policies and sound rural infrastructure (including transport, irrigation, communications, water and sanitation and electricity). Other favorable factors related to agriculture include production practices and standards, research and development, and rural financial services.

The increasing trend of large-scale enterprise investment in agriculture has brought new opportunities and challenges to agriculture. Governments, donors, civil society and the private sector (especially farmers) need to re-establish partnerships to ensure that more investment is invested in agriculture, to produce socially beneficial and environmentally sustainable results that enable investment in agriculture to create a better future.