Last week the UN Food and Agriculture Organisation called for a change in research funding for agricultural improvements around the world. The Rome-based agency said it wants to see "more and better investments in agriculture [aimed at] reducing hunger and poverty while safeguarding the environment."

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In its State of Food and Agriculture report, the release of which coincided with the FAO's appeal, the UN organisation found that farmers are currently the greatest source of investment in agriculture. The report revealed farmers in low- and middle-income countries invest more than $170 billion (£105bn) a year in their farms - about $150 per farmer, amounting to three times as much as all other sources of investment combined. The figure is more than 50 times higher than official development assistance to these countries.

FAO said that any improvements to funding would need to remain centred on farmers' needs to be effective, enabling mostly small-farmers in developing countries whilst protecting the environment and remaining socially sensitive.

Make better use of limited public funds

The FAO called on governments around the world to ensure small farmers in particular are supported; the SOFA report's authors said moves need to be taken to improve education, social protection, access to land and other resources and infrastructure, as well as reducing corruption, which continues to be a problem around the world. FAO also said, "Stronger producer organizations, such as cooperatives, can help smallholders deal with risks and provide better market access."

National governments, found to be the second largest source of investment in agriculture, were urged to channel public funds towards areas that have been proven to be strongly supportive of agricultural growth and poverty reduction, such as agricultural research, rural infrastructure and education. According to FAO, evidence suggests that investing in these areas "has much higher returns than spending on subsidies for agricultural inputs such as fertilizer." While such subsidies may be politically popular, they usually do not provide the best outcomes.

The report's authors said that, when done successfully, investment in agriculture pays off. It stated that, over the last 20 years, the countries with the highest rates of on-farm investment have made the most progress towards meeting the first Millennium Development Goal, that of halving world hunger by 2015.

The FAO announced earlier this year that meeting the first MDG remains possible, though agency data reveals nearly 900 million people worldwide are still chronically hungry, around 12.5 percent of the global population. In 2000, when the Millennium Development Goals were set, the number of hungry people was virtually the same, though these people accounted for a greater percentage of the global population, which was then smaller. By FAO's own admission, most of the progress made on the MDGs, "was achieved before 2007–08. Since then, global progress in reducing hunger has slowed and levelled off."

Nevertheless, on Thursday (6th December), the agency announced that 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 report suggested, "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."

FAO cautioned that, whilst the growing trend for large-scale investments by transnational corporations presents some benefits, such as increased exports and employment, unless local communities and the environment are taken into account this can count for naught, leading to oppression and degradation.

FAO chief calls for 'good governance'

The organisation's director-general José Graziano da Silva said on Thursday (6th December), that "The key word is good governance. We need to assure that the investments meet a certain set of conditions that assure that they contribute to food security and sustainable local development."

Graziano da Silva continued, "A new investment strategy is needed that puts agricultural producers at its centre.  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."

At the beginning of the year, the FAO director general called for a "paradigm shift in agriculture." Speaking in Berlin, he said, "Agriculture contributes 30 percent of the greenhouse gases that cause global warming and we must raise the awareness of our farmers. Agriculture is not just part of the problem, it is also part of the solution to the environment issue. It can contribute a lot to the planet's sustainable development, by finding techniques less harmful to the environment, by helping with clean energy and with a better redistribution of production."