2019 Arab-DAC Dialogue on Development. Background note - Session 4 - Agriculture and Food Security.

1. EXPLORING THE PIVOTAL ROLE OF FOOD SECURITY AND AGRICULTURE ACROSS THE
SUSTAINABLE DEVELOPMENT GOALS AND THEIR TARGETS
Achieving sustainable development requires acknowledging that sustainable food and agriculture can revitalise
rural areas and deliver inclusive growth to countries. Sustainable food and agriculture embrace the 2030 Agenda
vision, whereby people’s livelihoods and the management of natural resources are addressed jointly and lead to a
world where food is nutritious and accessible for everyone. This background note provides information on the
importance of exploring the pivotal role that food security and agriculture play across the 2030 Agenda for
Sustainable Development, including but also beyond the Sustainable Development Goal 2 (SDG 2), which
addresses food security and agriculture.
Key issues for discussion:
 How can Arab and DAC development co-operation providers best mobilise financial resources to achieve
SDG2? How could a shift to an inter-sectoral approach in the planning, management and use of vital
natural resources of water, energy and land contribute to SDG2?
 Which policies and approaches could Arab and DAC providers pursue to enhance more sustainable
investments in agriculture and the food value chain? How can development actors mobilise commercial
investment towards smallholder farmers and small and medium enterprises in the agriculture sector?
 What are the models and programmes that are already applied and that could be scaled up, e.g. in
blending finance? What role can agri-businesses play in achieving SDG 2? What international tools are
available today to help agri-business investors conduct business responsibly?
 Which areas could be identified for co-operation between Arab and DAC providers of development co-
operation in this area?
Possible outcome:
 Increased understanding of the range of tools available to support SDG2 in partner countries and of the
complementarities across different types of providers to assist them, notably on how providers can co-
operate through ODA, blended finance, aid-for-trade and in promoting responsible business conduct.
Transforming food security, improved nutrition and sustainable agriculture
Food and agriculture stand today at a crossroads. Looking back, major improvements in agricultural productivity
have been recorded over recent decades to satisfy the food demand of a growing global population. But progress
has often come with social and environmental costs, including water scarcity, soil degradation, ecosystem stress,
biodiversity loss, decreasing fish stocks and forest cover, and high levels of greenhouse gas emissions. The
productive potential of our natural resources base has been damaged in many places around the globe,
compromising the future fertility of the planet. According to the Food and Agricultural Organization, agriculture is
THE 2019 ARAB-DAC DIALOGUE ON DEVELOPMENT
14 January 2019, Kuwait City

2. the main source of food, a major economic sector and a big employer of the labor force in many economies, in
which around 80 percent of the global poor are rural people who produce most of the food. Lessons drawn from
implementing the Millennium Development Goals show that food, livelihoods, and the management of natural
resources are indeed inextricably linked. Today, 790 million people are hungry, and every third person is
malnourished, reflecting a food system that is out of balance. Distress migration is at levels unprecedented for more
than 70 years, as the social cohesion and cultural traditions of rural populations are threatened by a combination of
limited access to land and resources and rising numbers of crises, conflicts and disasters, oftentimes climate-related.
The 2030 Agenda for Sustainable Development envisions a world in which food and agriculture, people’s livelihoods
and the management of natural resources are addressed not separately but as one. The 2030 Agenda includes a
Sustainable Development Goal, SDG2, which seeks sustainable solutions to end hunger in all its forms by 2030 and
to achieve food security. The aim is to ensure that everyone everywhere has enough good-quality, nutritious food to
lead a healthy life and to do so through sustainable agriculture. As such, SDG2 is a driving force for achievement
across the 2030 Agenda. Achieving SDG2 entails improving the productivity and incomes of small-scale farmers by
promoting equal access to land, technology and markets, sustainable food production systems and resilient
agricultural practices. It also requires increased investments through international co-operation to bolster the
productive capacity of agriculture in developing countries. In addition, achievement of SDG2 can be a catalyst for
achieving progress across most of the SDGs and their targets, considering the links with other Sustainable
Development Goals, notably SDG1 (poverty), SDG3 (health), SDG5 (gender equality), SDG6 (water), SDG8 (economic
growth), SDG12 (sustainable consumption and production), SDG13 (climate change).
The role of development co-operation providers: Official Development Assistance, blended finance, aid-for-trade
and responsible business conduct
Achieving food security through the efficient use of agricultural resources and their sustainability is critical for
spurring progress towards the SDG targets. Improving land productivity and irrigation efficiency, especially in
countries with limited arable land and scarce water resources, such as in the Middle East and in northern Africa, is
critically important for increasing food production.
Agriculture was relatively neglected for some decades and its share from global Official Development Assistance
(ODA) dropped sharply between 1979 and 2004. Today, there is better recognition of the role of agriculture in
enhancing the eradication of poverty and hunger in the world, especially in the aftermath of the 2007-08 world food
crisis. According to the OECD DAC Creditor Reporting System statistics, over 2008-2010, agriculture and rural
development-related aid reached USD 12.3 billion, while over 2014-16 it reached USD 14 billion. Given the growing
amounts spent on agriculture-related ODA, the Arab-DAC Dialogue provides an opportunity for the two largest
communities of providers to share experiences, lessons learnt, good practices in this policy area, and to explore the
range of tools available to support SDG2 in partner countries, as well as the complementarities across different
types of providers to assist them.
Beyond ODA flows, innovative models that aim at mobilising private sector investment are increasingly applied
among different actors in the agri-finance ecosystem. Blended finance, which is the strategic use of development

3. finance for the mobilisation of additional finance towards sustainable development in developing countries,1
can
help mobilise commercial financing and investments along the agricultural value chain. However, only 3% of the
total amounts mobilised from the private sector by official development finance interventions are directed towards
the agriculture sector. That is, USD 2.5 billion of private resources were mobilized in the agriculture sector, as
reported to the OECD over 2012-15.2
A collaborative project on blended finance and agriculture between the OECD
and the Smallholder and Agri-SME Finance and Investment Network (SAFIN) is currently underway to strengthen the
knowledge base on the current state of blended finance in and for agriculture. It will inform the application of the
OECD DAC Blended Finance Principles3
in the agriculture sector and the SAFIN agenda of critically approaching the
role, actual and potential, of blended finance directed in particular to support to agri-SMEs.
“Agriculture is the backbone of the economies of many developing countries, notably Least Developed Countries,
and can play a pivotal role for economic growth and poverty reduction,” according to the Food and Agricultural
Organization, Director-General José Graziano da Silva. He also noted that “trade can influence market structure,
value-chain development, investment in agriculture, rural employment and income. For those reasons, trade is a key
enabler of the SDGs”. Aid for Trade (A4T), an initiative that interlocks aid and trade policies in order to “help low-
income countries overcome the barriers that constrain their ability to benefit from trade expansion, as well as to
promote a stronger impact of trade on economic growth and poverty reduction, can play an important part in
leveraging ODA to achieve the 2030 Agenda and SDGs.
Private investment is essential if agriculture is to fulfill its vital function of contributing to economic development,
poverty reduction, and food security. In a context of rising land and water scarcity, agricultural investment is critical
to induce output expansion and bolster incomes in rural areas, thereby enhancing global food security. A coherent
policy framework is an essential component of an attractive investment environment for all investors, be they
domestic or foreign, small or large. To assist governments mobilise private investment in agriculture, the OECD has
developed the Policy Framework for Investment in Agriculture (PFIA). Beyond the key role of smallholders, large
international investors also foster the accumulation of agricultural capital stocks in some countries. They can create
employment and bring expertise, financing capacities and marketing networks to enhance the competitiveness of
agricultural production and value chains.
Investing in agriculture is one of the most effective strategies for economic growth and poverty reduction in rural
areas. However, agri-business investments can have adverse social and environmental impacts, including on the
rights and livelihoods of local communities – particularly in countries with weak regulatory capacity and tenure
rights. Businesses have a key role to play in ensuring that their operations do not have adverse impacts, and that
1 OECD (2018), Making Blended Finance Work for the Sustainable Development Goals, OECD Publishing, Paris. Available online at:
http://dx.doi.org/10.1787/9789264288768-en
2 Benn, J., C. Sangaré and T. Hos (2017), "Amounts Mobilised from the Private Sector by Official Development Finance Interventions:
Guarantees, syndicated loans, shares in collective investment vehicles, direct investment in companies, credit lines", OECD Development Co-
operation Working Papers, No. 36, OECD Publishing, Paris, https://doi.org/10.1787/8135abde-en.
3 For further information, see https://www.oecd.org/dac/financing-sustainable-development/development-finance-topics/OECD-Blended-
Finance-Principles.pdf.

4. they benefit local communities and host countries.4
Observing responsible business conduct principles and
standards can ensure that they contribute to sustainable development. The 2016 “OECD-FAO Guidance for
Responsible Agricultural Supply Chains” calls on companies to:
 Ensure that their operations contribute to food security and nutrition and sustainable and inclusive rural
development.
 Hold good-faith, effective and meaningful consultations with communities before initiating any operations
that may affect these communities.
 Respect legitimate tenure rights holders and their rights over natural resources potentially affected by their
activities.
 Seek to ensure that legitimate tenure rights holders receive prompt, adequate and effective compensation
of their tenure rights being negatively impacted by their operations.
The role of sustainable agriculture in food security, ending hunger, and accelerating the achievement of most of the
SDGs calls for strengthening co-operation among all development co-operation providers to assist partner countries
in promoting sustainable agriculture and food security.
4 OECD (2018), Development Co-Operation Report 2016: The Sustainable Development Goals as Business Opportunities , OECD Publishing,
Paris, http://dx.doi.org/10.1787/dcr-2016-en