Recently I attended the” Cracking the Nut 2012″ conference in Washington DC. This leading global event focuses on how to attract investors from the private sector to invest in rural and agricultural markets.
Attracting private investors has become a pressing issue, as according to the FAO, $180 billion in gross agricultural investments is needed in developing countries to halve the number of undernourished people by 2015. From experience, it is estimated that 75 percent of this amount will have to come from the private sector, especially farmers.
I met representatives from multinational businesses and large food companies, value chain financiers, investment fund managers, development practitioners, donor representatives, public servants and many others from 41 countries on five different continents.
In informal discussions and in sessions, we shared methodologies, strategies, tools, and programs that have proven to be successful in attracting private sector investors to rural and agricultural markets. We also learned how to identify investment opportunities at all points along the dynamic rural and agricultural value chains.
How Netafim Succeeded to Attract Private Sector Investment in Drip Irrigation.
I was invited to give a session at the conference, on how Netafim succeeded to attract private-sector investment in drip irrigation in Latin America and Africa. More than advising the participants on how they can attract private sector investment in other fields of agriculture, I was looking for some advice and ideas on how to increase private and other sectors investments in drip irrigation.
potential private sector investors must have good conditions to make it worth their while to invest in agriculture. This requires national investment in different aspects of agriculture, such as irrigation, technology, and the conservation of natural resources.
Governments, NGOs, and the like should be encouraged to provide financial assistance to these private-sector investors, for installation of equipment – in our case it was drip irrigation systems, maintenance, capacity building of farmers and stakeholders, and both short and long-term training.
An efficient administrative framework must be built to connect government, banks, farmers, and micro-irrigation companies to each other. Private-sector investors must adhere to product quality and standards. Penalties should be administered for violation of responsibilities.
Private investors should also be taught to increase their productivity in one or both of two ways:
- Transforming the Corporate Social Responsibility (CSR) approach to business
- Using a business approach to improve farm productivity, improve organization, provide access to working capital, improve market access, and improve infrastructure
It is our hope that the suggestions resulting from our successful experiences will help private-sector investors increase their yields and boost their incomes.