With the global financial crisis, governments are struggling to find the resources to support the sector and dependence on donor aid is proving to be a risky strategy. As a result, the private sector has been identified as an important partner, resulting in their increased involvement in agricultural development. But can their involvement be used to realise the right to adequate food? Most investment in smallholder agriculture is made by smallholders themselves, but these (definitely private) investments are rarely the ones alluded by initiatives for “private sector involvement.” The public sector also plays an important role in enabling and maximising smallholders’ own investment through extension services, research and development, infrastructure development, support for collective bargaining and access to credit, amongst other initiatives. Whilst there is certainly a place for support from private investors, they are often made up of a vast and diverse range of actors with varying interests which do not always align with poverty alleviation and food security.
The motivations that induce stakeholders such as transnational corporations to invest include, among others, the financial gains that corporations can potentially achieve and the profit they can generate by capturing market share, expanding distribution channels, securing new business partners and brand recognition. This can eventually lead to market concentration and the creation of oligopolies.Market concentration in the food chain is a matter of grave concern in poor nations where international companies compete with local supply, thus compromising opportunities for local economic development.
Public-private initiatives on agricultural investments currently make little reference to the existing human rights frameworks or corporate regulation mechanisms that intend to protect the right to food in business deals. Unfortunately, ample evidence points to the role of agricultural investors in human rights violations, including labour rights and rights to land, livelihood, health and a clean environment, and even to the killing of human rights defenders.
In a recent briefing, CIDSE asks what global business and human rights standards should be applied to agricultural investment in order to reach the ultimate objectives of achieving the right to food, alleviating poverty, enhancing sustainable food production and creating decent employment conditions for agricultural workers. It provides an overview of existing business and human rights standards that can be applied to a broad range of international agricultural policy initiatives and outlines the obligations of States and the responsibilities of business with regard to agricultural investment. As smallholder food producers bear the highest risks from these investments, the briefing seeks to provide them with tools to hold governments to account for their duty to protect these right-holders. We believe public policies should regulate investment so as to strengthen smallholder production systems and facilitate achieving the objective of a resilient, smallholder-based, sustainable food system.
Gisele Henriques is the livelihoods advisor at the UK-based Catholic Agency for Overseas Development –CAFOD. (This blog was written during her tenure as a Policy Officer on Food and Agriculture at CIDSE.The article was originally published in the blog RightingFinance.org