Excessive corruption, poor infrastructure and scarce government resources were deterring investment in agriculture and contributing to high levels of malnourishment around the world, said an FAO report released Thursday.

The report of the UN Food and Agriculture Organization FAO said the world’s 1-B farmers are the largest investors in the agriculture of developing countries and that their investment decisions are central to any strategy aimed at improving agricultural investment.

“A new investment strategy is needed that puts agricultural producers at its center,” FAO Director-General Jose Graziano da Silva was quoted as saying in the report released in Rome, the seat of the FAO headquarters.

“The challenge is to focus the investments in areas where they can make a difference. This is important to guarantee that investments will result in high economic and social returns and environmental sustainability,” he added.

The report: The State of Food and Agriculture 2012: Investing in agriculture for a better future — is the FAO’s annual flagship publication.

New data compiled for the report show that farmers in low- and middle-income countries invest more than US$170-B a year in their farms, about US$150 per farmer.

This is 3 times as much as all other sources of investment combined, 4 times more than contributions by the public sector, and over 50 times more than official development assistance to these countries.

But the high cost of food production and rising food prices were hampering investment and contributing to high levels of undernourishment.

“Consumer food prices have risen more rapidly than overall consumer prices since Y 2000 in all but 6 of the 166 countries for which data are available,” the report said.

“Food price inflation exceeded overall consumer price inflation by up to 10% in 73 countries, up to 20% in 55 countries and more than 30% in 12 countries,” it added.

Population growth, higher incomes, urban migration and weather-related production shocks had all contributed to an increase in agricultural prices.

The regions where hunger and extreme poverty are most widespread ; South Asia and sub-Saharan Africa have seen stagnant or declining rates of agricultural investment over three decades, the FAO said.

“Recent evidence shows signs of improvement, but eradicating hunger in these and other regions, and achieving this sustainably, will require substantial increases in the level of farm investment in agriculture and dramatic improvements in both the level and quality of government investment in the sector,” it said.

Investing in agriculture is considered one of the most effective strategies for reducing poverty and hunger and promoting sustainability.

The regions where agricultural capital per worker and public agricultural spending per worker have stagnated or fallen during the past three decades are also the epicenters of poverty and hunger in the world today, said the report.

Demand growth for agricultural products over the coming decades will put increasing pressure on the natural resource base, which in many developing regions is already severely degraded.

Investment is needed for conservation of natural resources and the transition to sustainable production, the report added.


Paul A. Ebeling, Jnr.

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.

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