Public-private partnerships: a crucial link for agricultural transformation

In a programme to improve market participation of the poor in Vietnam, IFAD worked with both public and private actors. Photo: IFAD
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May 16, 2018

by

Marissa Van Epp (CCAFS) and Le Nghiem (CIAT Vietnam)

A transformation is required in the agriculture sector for which actors have to support climate adaptation that not only benefit their own businesses but also the communities.

In order to achieve food security, sustainably increase productivity, alleviate poverty, and build resilience in the face of a changing climate, a transformation is required in the agriculture sector. As agriculture continues to contribute up to a third of global greenhouse gas emissions, such a transformation will also need to ensure that agricultural development takes a low emissions trajectory. This transformation requires new approaches to agricultural development.

One missing piece of the transformation puzzle is investment. Currently, climate financing in the agriculture sector is growing, but needs to be strengthened and further tailored to benefit smallholder farmers, some of the most vulnerable stakeholders. One solution? Increased engagement of the private sector.

But the private sector forms a diverse group of actors, with a wide range of sizes, revenues, formality, and motivations. So it is important to identify the right incentives to encourage different actors to take actions to support climate adaptation that not only benefit their own businesses but also promote inclusive growth for communities.

A case study in Vietnam found that public-private partnerships can enable vulnerable groups to be included in business growth. Photo: IFAD

Public-private partnerships (PPPs) have the potential to fill this gap. To test this theory, and explore ways to make investing in agricultural development appealing and less risky for businesses, the International Fund for Agricultural Development (IFAD) developed an approach for encouraging private sector involvement and investment through its Adaptation for Smallholder Agriculture Programme (ASAP). A recent study of the results of the program conducted by the CGIAR Research Program on Climate Change, Agriculture and Food Security (CCAFS) and the International Center for Tropical Agriculture (CIAT) found that the approach has been successful, mutually benefitting both businesses and farmers.

A case study of ASAP in Vietnam, for instance, found that PPPs can enable the most vulnerable groups in a community to be included in business growth, if structured appropriately. In the ASAP PPPs, a commitment to give jobs to the marginalized (the poor, ethnic minorities, female-headed households, etc.) was a prerequisite for eligibility for co-financing from IFAD.

A report summarizing the study’s findings, The Business Advantage: Mobilizing private sector led climate actions in agriculture, will be launched by IFAD on 14 June. This event, the Agro Business Barometer Conference, aims to bring public and private stakeholders together in an innovative format to hear lessons from the ASAP experience, gauge businesses’ interest in supporting agricultural transformation through PPPs, and provide participants with a platform to build on the lessons from ASAP, laying out a pathway for action.