Advancing Food Security with the Private Sector: Conversation with Yasser Toor and Paul Weisenfeld
First in a series of blogs on U.S. International Development Finance Corporation’s new Development Strategy, the Roadmap for Impact
By Andrew Herscowitz, Chief Development Officer, U.S. International Development Finance Corporation
U.S. International Development Finance Corporation (DFC) recently announced our comprehensive $75 billion development strategy, the Roadmap for Impact, directly benefitting people in less developed countries around the world. Through this Roadmap, we will work with the private sector and across sectors — from healthcare to energy — to help countries attract critical investment that can provide direct benefits to businesses, individuals, and communities.
A critical component of DFC’s strategy is focused on food security and agriculture. Through this new Roadmap, by 2025, we committed to the goal of investing at least $500 million to food security and agriculture projects, with 75 percent of food security investments directed towards low and lower- middle income countries and fragile states. Through these efforts, we intend to support at least one million smallholder farmers. Already in our first year, we’ve exceeded the $500 million goal and will revise it upwards.
I sat down with Yasser Toor, DFC’s Food Security lead, and Paul Weisenfeld, former head of USAID’s Bureau for Food Security and a DFC Development Advisory Council Member, to discuss why this type of investment in global food security is so important, particularly as the world faces the challenges related to COVID’s secondary and tertiary effects.
Here’s what they had to say about where we’ve been, where we’re going, and how private investment can play a role in global food security.
How has the world made progress in agriculture, food security, and nutrition over the past 10 years? What are the remaining challenges?
Paul Weisenfeld: We’ve been on a path of progress addressing global food insecurity since the Green Revolution of the 1960s, with spurts of great success, as well as significant challenges along the way. The recognized father of the Green Revolution, Norman Borlaug, is credited with saving a billion lives from starvation as a result of efforts to produce hardier, high yield crops. But we periodically experience both natural and manmade crises that arrest advances or, worse, cause a reversal of progress.
A few months ago, the global community celebrated the 10-year anniversary of the Feed the Future initiative, an ongoing, concerted effort to improve global food security and reduce hunger, poverty, and malnutrition. A multi-stakeholder, whole-of-U.S. government effort in which DFC plays a critical role, Feed the Future has helped millions of smallholder farmers improve the lives of their families by, among other things, generating more than $13.7 billion in agricultural sales and expanding access to innovations that can improve agriculture and nutrition. Feed the Future also builds and strengthens agricultural market systems so that these results are sustainable over the long term.
COVID-19 and other recent challenges are the latest issues that threaten to reverse some of these development gains, showing that progress can be tenuous if we don’t maintain a sharp focus. These setbacks can have dramatic consequences in terms of mortality, morbidity, immediate quality of life, and future life potential as they affect both livelihoods as well as human nutrition.
Yasser Toor: Despite progress in global food security since the food price spikes of 2007–2008 and a positive shift toward sustainably increasing food production using less land and better innovations, the benefits of this progress have not been evenly distributed. Over half the people in sub-Saharan Africa and South Asia still cannot afford a healthy diet.
Looking forward, one of the biggest challenges is going to be the shifting composition of food demand, especially in sub-Saharan Africa and South Asia. As these regions continue to develop, urbanization will keep increasing and hopefully incomes will keep rising. We know that these factors, supercharged by population growth, increase the demand for animal protein, fresh fruits and vegetables, and processed foods, all of which stress the local food system.
The good news is that we are beginning to understand the hidden costs of unhealthy diets and unsustainable production. By 2030, the diet-related health costs and diet-related greenhouse gas emissions are projected to reach $3 trillion annually. Therefore, we not only need to focus on increasing the production of food, but we also need to focus on increasing the affordability of healthy and sustainable diets.
DFC will continue to partner with the private sector to focus on providing critical access to financing to improve livelihoods and incomes for poor, rural communities to allow them to buy nutritious foods, one of the most direct and lasting way to improve food security and nutrition.
Why is private sector investment important to improving food security in developing countries?
Paul Weisenfeld: While there are many things that donors, governments, and foundations can do to improve food security for families around the world, they are only part of the solution. Analyses show that, even with all the public sector investment in global agriculture, there is still a more than $200 billion gap in the investment needed to address food insecurity. Increased investment from the private sector can help reduce that gap, supporting the financing needed across the agricultural value chain in lower-income countries — from inputs to infrastructure to other important agricultural assets. Equally important, crowding in the private sector to engage robustly in the agricultural system is critical to setting it on a sustainable path.
Investment must be paired with a national and local policy environment that can enable responsible private sector investment. Without that matching of host-government priorities with private sector engagement, private investments may not be successful or sustainable over the longer term.
Yasser Toor: A thriving agricultural market system requires a coordinated effort. The private sector is the backbone of successful agricultural market systems and is essential to building the supply chains needed to get inputs — such as seeds and irrigation technologies — to farmers on time for their harvest and at a reasonable price.
In Africa, the off-farm segment — which includes food processing, storage, transport, and retail — makes up 60 to 70 percent of the agri-food value chain and is served almost entirely by private enterprises that are crucial to enabling the delivery of safe, nutritious, and affordable food to local consumers. Without technical and financial support to keep those private enterprises functioning efficiently, the value chain from farms to markets cannot be sustainable, and local communities will suffer.
We know that projects and markets in lower income countries and fragile states are often smaller; nevertheless, DFC is committed to partner with a more diverse client base to do more projects with a smaller average investment size to encourage a focus on the least developed markets where DFC’s dollars can have the most meaningful and sustained developmental impact.
As detailed in the Roadmap, especially as we work to address the impact of COVID-19, DFC will continue to focus its investments in projects that promote nutrition, food security and robust agriculture value chains by linking smallholder farmers to markets and innovations, supporting agro-processing and storage companies, advancing industrialization, and growing local small and medium enterprises that form the backbone of a vibrant agriculture sector in lower income countries.
How does investing in lower income countries agriculture help support U.S. national security?
Yasser Toor: Simply put, instability is usually bad. It’s bad for households, communities, and entire nations, and it can often have unforeseen repercussions. When people are hungry and fear not being able to access enough food to feed their families, they can turn to extreme measures such as rioting or earning money from illicit alternate livelihoods such as growing coca for cocaine in the Andes. When there are severe food shortages, people migrate, which creates additional security issues.
DFC will continue to invest in food security and agriculture projects to create stability and foster economic growth, especially for underserved communities. For example, this past year we committed to a range of projects that will empower smallholder farmers.
In India, we committed $15 million in equity to help Freshtohome deliver high-quality, affordable fish, meat, and produce to homes across the country. In addition to strengthening food security, the project will support more than 1,500 farmers and fishermen throughout the country, where 70 percent of rural households depend primarily on agriculture for their livelihood.
In Kenya, we are supporting sustainable agribusiness by committing a $7 million guaranty to One Acre Fund, which will support the procurement and provision of agricultural inputs on credit to smallholder farmers — most of whom are women — across Kenya.
The list goes on, and we will ensure to continue to work with a diverse group of clients to ensure that we are having the greatest development impact and in turn, strengthen U.S. national security.
Paul Weisenfeld: Back when I worked for the U.S. Government, we used to frame our global work in the context of the “3Ds” — three pillars that support U.S. national security: Defense, Diplomacy, and Development. Each pillar reinforced the others to form the foundation for protecting U.S. national interests abroad.
As Yasser states above, a more food-secure country is likely to be a more economically stable and secure country. Not only are such countries less likely to require food aid and other assistance from the global community, they are also less likely to erupt in conflict that may require U.S. “boots on the ground.” As the COVID-19 pandemic has shown, in today’s very interconnected world, a major threat in one part of the world can easily translate to a threat anywhere else. In short, it is in our best interest as a global leader to improve food security across the world.
Yasser Toor is the head of food security investments at DFC, America’s development bank. He is an experienced investor and advisor in the U.S. as well as emerging markets and fragile states. He spent ten years as an Investment Banker and principal investor in the United States, including as a General Partner at TSG Consumer Partners LLC. He spent the last decade working in sub-Saharan Africa focusing on agribusiness and critical-infrastructure development, first as the head of the Office of Tony Blair’s (now Tony Blair Institute for Global Change) private sector development team advising the Office of the President of Sierra Leone before joining the Africa Agriculture Development Co. as the head of West Africa at its inception in 2011. He has an abiding love of farmers but is also proud to be the chairman of Rising Academies, a quality-focused, low-cost provider of education in fragile and conflicted-afflicted states. To learn more about DFC’s agriculture and food security efforts, visit dfc.gov/our-work/agriculture-and-food-security.
Paul Weisenfeld is the executive vice president for international development at RTI International, an independent nonprofit research and international development institute. In this position, he leads RTI’s international development practice, which designs and implements programs across a wide range of sectors to help lower- and middle-income countries and communities address complex problems and improve the lives of their citizens. Before joining RTI, Mr. Weisenfeld served as a foreign service officer for the United States Agency for International Development (USAID) for more than 20 years. During this time Mr. Weisenfeld directed the Bureau for Food Security at USAID, which led Feed the Future, the U.S. Government’s global hunger and food security initiative. To learn more about RTI International’s global food security efforts, visit rti.org/food-security.