What does a European company producing sugar in Tanzania for export have in common with an Indonesian woman farmer selling fair trade nutmeg on the international market via a producers’ cooperative? Nothing. Yet, those two situations illustrate what the European Union calls “the role of the private sector in development”. A role that European countries have decided to support with policies and public finance. But in the global market, who wins: the big or the small guys?

But what private sector are we actually talking about?

There is a big difference between small enterprises and big multi-nationals. There is also a big difference between financing development through sustainable socially responsible agencies and global speculative banks and investment funds…

European agribusiness can contribute substantially to poverty reduction and improve social outcomes in developing countries“, says the FAO. That’s the theory. The reality is different: 70% of the world’s food needs are produced by small-scale producers in developing countries. Small-scale producers represent 90% of the total investment in agriculture and more than 80% of smallholders operate in local and domestic food markets. However, in the field of agriculture, large corporations and agribusinesses are the most often involved, like in public-private partnerships, these resulting in huge power imbalances. From beneficiaries or targets of agriculture policy, the small-scale producers should be depicted as actors of food security and protectors of biodiversity.

Sustainable business is critical for development outcomes. Don’t shy away from profit or business

Alexander de Croo

Belgian Minister for Development Cooperation, AidEx Brussels, 15 November 2017

Private sector involvement must be distinguished and tamed

So while we definitely believe the private sector can positively contribute to sustainable development in a myriad of ways, it is nonetheless important to remind ourselves that the private sector is responsible for tax avoidance, lobbying against climate change regulations and incriminating evidence of pollution and waste.

The 9 recommendations drawn in the report put the Right to Food back to the center of the private sector’s investment in agriculture.

Our recommendations

  1. Re-examination of the EU private sector policy with a Right to Food lens
  2. The essential role of public investment
  3. Recognizing the heterogeneity of private sector
  4. Enabling environment for farmers and MSMEs
  5. Privileging territorial markets
  6. Blended finance: when and how?
  7. European External Investment Plan
  8. Governance and power imbalances
  9. Human rights and land rights