The United Nations Food and Agriculture Organization (FAO) and FMO, the Dutch Entrepreneurial Development Bank launched a formal partnership which aims to increase investments in favor of small and medium enterprises (SMEs) and small-scale producers operating within the agribusiness sector in developing countries.
According to the Memorandum of Understanding, over the next two years, FAO and FMO will work with members of farmers’ organizations, staff of SMEs and rural microfinance institutions to improve agri-business management skills, sustainable agro-ecological and processing practices and food loss-reduction techniques. The pilot project of the partnership will be undertaken in Kenya.
Through this unique partnership, the two institutions will work to improve access to finance for all actors along the agricultural value chain, enabling small-scale producers, cooperatives and SMEs in the agribusiness sector to grow and operate in a more environmentally and socially responsible manner.
Roberto Ridolfi, FAO Assistant-Director-General for Programme Support and Technical Cooperation, hailed the partnership as a step forward in combating rural poverty and hunger. “The private sector is key for guaranteeing economic development, food security and ultimately, prosperity of rural areas. We look forward to working with FMO to increase investments in favour of rural development, also in line with FAO’s AgrInvest initiative, aimed at promoting and facilitating private sector contributions in sustainable agriculture and agribusiness”.
Pieternel Boogaard, Director of the Agribusiness, Food and Water Department of FMO said: “FMO views the partnership with FAO as critical in boosting sustainable agribusiness supply chains in developing markets with a focus on climate adaptation and smallholder impact”.
The collaboration combines FMO’s private sector expertise with FAO’s technical knowledge.
FMO has a track record of investing in companies along the agri-supply chain (from fertilizers to food) to support its development into a sustainable one. This ultimately benefits SME’s and smallholder farmers. FAO actively promotes both the CFS Principles for Responsible Investment in Agriculture and Food Systems and the Voluntary Guidelines on the Responsible Governance of Tenure (VGGT) as vehicles to work towards SDG-compliant investments.
FMO, the Dutch public-private development bank, supports sustainable private sector growth by investing in businesses, projects and financial institutions in under-served and emerging markets. Founded in 1970, FMO is currently active in 85 countries, including in some of the world’s most challenging business environments.
The private sector plays a key role in achieving the Sustainable Development Goals (SDGs). Achieving SDG 1 (No poverty) and SDG 2 (Zero Hunger) alone will require an estimated additional USD $140 billion per year of direct investments in agriculture and rural development. Mobilizing the private sector, and the financial sector in particular, is therefore essential to achieve the necessary levels of investment.