NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Thursday, April 19, 2018

By Willy Foote – Root Capital

The majority of the world’s extremely poor—about 800 million people—depend almost entirely on agriculture for their livelihoods. Smallholder farmers produce much of the world’s food, yet are highly vulnerable to hunger, financial hardship, and climate shocks. So when UN Member States adopted a set of goals aimed at ending poverty, protecting the planet, and ensuring prosperity for all by 2030, it made sense that agriculture featured prominently among them. And agricultural businesses are key in reaching those goals.

The Sustainable Development Goals (SDGs) provide a framework for mobilising investment to change the lives of billions of people left behind by unequal economic growth. It’s a bold initiative; one that harnesses our collective resources and innovation. But according to UN estimates, there’s still an annual $2.5 trillion funding gap without which developing countries cannot hit the SDG targets. As the development community looks increasingly to private investors to fill that gap, we have to ask ourselves: What are the most cost-effective, highly impactful solutions? How can investors get the most “bang for their buck”?

The answer is: agricultural businesses. Cooperatives, farmer associations, and entrepreneurs building private enterprises are the heart of many rural communities. They connect hundreds, sometimes thousands, of smallholder farmers to formal markets. They provide critical inputs—such as seeds, tools, technology, training, credit—and bundle those services in custom-fit ways to enable market access while helping producers increase yields, quality, and incomes.

Agricultural businesses are uniquely situated to advance progress across multiple SDGs, from zero hunger to gender equality. And they are in dire need of investment.

Photo courtesy of Jutta Benzenberg.