Join IFAD and the Global Donor Platform for the launch of the report: The strategic role of the private sector in agriculture and rural development. Jonathan Mitchell (ODI), lead author of Platform Knowledge Piece 3 will be joined in his presentation via video by the authors of the Tanzania, Thailand and Vietnam country studies: Frédéric Kilcher, Wyn Ellis and Pham Thai Hung. A Question and Answer session will follow each discussion point.

1. The strategic role of the private sector
in agriculture and rural development
Platform Knowledge Piece (Part 1)
Jonathan Mitchell
Wednesday 28th March 2012
International Fund for Agricultural Development, Rome
.

2. Introduction (1)
Aims of Platform Knowledge Piece 3
The aim of this Platform Knowledge
Piece (PKP) is:
• to improve our understanding of
the role of the private sector in
agricultural and rural
development; and to
• propose practical and operational
measures for donors to engage
effectively with the private sector
to leverage poverty reduction at
scale.
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3. Introduction (2)
Research methods
Activity Research method
Country case studies for Tanzania, Primary and secondary analysis by
Ghana, Peru, Vietnam, Thailand in-country research teams
Overview of public policy towards Country case studies and
private sector conceptual insights from secondary
data
Global survey of private sector Secondary data
activity
Donor survey 12 telephone interviews, website
searches, evaluations
Synthesis Workshop and desk exercise
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4. Sources of investment in
agriculture in developing countries
Low & Lower Upper Middle
Middle Income Income
Bangladesh Argentina
Data sources used in analysis:
Bolivia Brazil
1. Total agricultural investment in Egypt China
agriculture estimated from El Salvador Costa Rica
FAOstats on agricultural capital Ethiopia Jordan
stock
Fiji Kazakhstan
2. Public expenditure: IFRI SPEED India Kyrgyz Rep.
data for 64 countries Indonesia Mauritius
3. FDI: UNCTAD for 31 of the 64 Malawi Mexico
countries Moldova Oman
4. Official aid: OECD DAC adapted Morocco Panama
by PKP2 Pakistan Thailand
5. Domestic private sector(s): the Philippines Tunisia
residual (i.e. 1 minus 2, 3 & 4) Syria Turkey
Uganda
Vanuatu
Zambia
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5. Results for Developing Countries
200
180
160
140
120
US$ Billion
100
80
60
40
20
0
1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Domestic Private Sector Investment FDI Public Expenditure ODA

6. Source of investment:
Conclusions
• Overall value of agricultural investment has risen
between 1980 and 2007
• International flows are small with tiny FDI increasing
fast and small ODA decreasing in share
• Domestic private sector investment dominates but it’s
share of total investment has fallen from 75% in 1981
to 61% in 2007
• Public investment is increasing fast and by 2007 had
increased to 35% of total investment
• Main conclusion for donors aid is a very small part of
picture and leveraging domestic private sector
investment is necessary to have impact
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7. Rural areas are in the midst of a
profound transformation (1)
• Dynamism of
agricultural value Numbers of major supermarkets in Thailand
chains output growth
and non-farm economy
• Domestic demand in
South is leading to
shorter and higher
quality supply chains
• Vertical coordination
(informal and contract
farming)
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8. Rural areas are in the midst of a
profound transformation (2)
Maize, rice, and wheat export prices, weekly from Jan 2005 to Feb 2012
1200
• Better informed value Rice, Thai A1 Super
chains 1000 Rice, Thai 100% B
• Change in balance 800 Maize, US No.2
US$ per tonne
Yellow
between supply and 600
Wheat, US No. 2
HRW
demand 400
• Broad based growth
200
through agricultural
development 0
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
May-05
Sep-05
May-06
Sep-06
May-07
Sep-07
May-08
Sep-08
May-09
Sep-09
May-10
Sep-10
May-11
Sep-11
Source: With data from FAO ESC
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9. Questions & Answers!
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