Investing in agriculture is essential for reducing hunger and promoting sustainable agricultural production. Those parts of the world where agricultural capital per worker and public investments in agriculture have stagnated are the epicentres of poverty and hunger today. Demand growth over the coming decades will place increasing pressure on the natural resource base. Eradicating hunger sustainably will require a significant increase in agricultural investments, but also an improvement in their effectiveness. Farmers are the largest investors in developing country agriculture and must be central to any strategy for increasing investment in the sector, but if they are to invest more in agriculture they need a favourable climate for agricultural investment based on economic incentives and an enabling environment. Governments also have a special responsibility to help smallholders overcome the constraints they face in expanding their productive assets and to ensure that large-scale investments in agriculture are socially beneficial and environmentally sustainable. Government investment in agriculture is a crucial component of providing an enabling environment for private investments in the sector. Governments need to channel scarce public funds towards the provision of essential public goods with high economic and social returns.
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