Devex: Food systems need a financing plan, says former WFP chief

Article by: Catherine Cheney Published: 26 April 2022

Link to original article: https://www.devex.com/news/food-systems-need-a-financing-plan-says-former-wfp-chief-103101

Those in the private sector have long seen agriculture and food systems as too risky to invest in. But that is beginning to change, said Ertharin Cousin, who served as the executive director of the World Food Programme from 2012 to 2017.

The reasons for this shift include climate change, which is driving urgency for action; a rise in blended capital, which mixes public and private finance and thus helps derisk investments; and new tools, including digital technologies.

While the Russian invasion of Ukraine has raised awareness of just how fragile the global food system is, it’s unclear whether that will lead to the private sector investment needed to finance its transformation. “People are admiring the problem,” Cousin said Monday in Washington during a Devex event on food systems. “We are not beginning to talk about the solutions and plan for them, and particularly plan the financing for those solutions.” With Ukraine bringing food systems issues into focus, the former WFP chief said the conflict could be an opportunity to increase private sector engagement and ensure that innovations reach farmers, no matter where they are based.

Cousin is currently the CEO at Food Systems for the Future, an impact investment fund she founded in 2019 to support innovations for improving nutrition outcomes in the United States and sub-Saharan Africa. For example, the group is involved in a collaboration between Rwanda’s Agriculture Ministry and Protix, an insect protein and nutrients company. While investments are growing for food and agriculture, most of these are not reaching low income contexts, Cousin said. “They’ve all come online for affluent consumers and affluent farmers,” she said. “They’ve not come online for poor consumers and poor farmers.” To transform the food system, she added, it’s key to build the “capital stack” — the range of financing sources required — as well as the narrative around the need and the opportunity.

“We’re in a nascent stage,” she said. “We have not yet achieved the level where the interest has developed into significant dollars.” It’s critical to draw the private sector to investments in food system innovations, particularly given how stretched governments are in the context of COVID-19, Cousin added. That’s part of what took her to Washington this week.

Cousin is attending Good Food Finance Week, an event bringing together technical experts, investors, government leaders, and others to promote investment in sustainable food systems. “The opportunity for us to appeal to the private sector to support the investment that is necessary in food system transformation is directly related to our ability to continue to build the heuristics that are required to move dollars into market-based enterprises that can support the food systems transformation in developing countries,” she said. Now is the time for the international humanitarian community to rethink the way it addresses hunger, malnutrition, and food insecurity, Cousin said. “We need to do better than just distributing fertilizer,” she said. This could be an opportunity for the humanitarian community to deliver on promises made at the United Nations’ Food Systems Summit in September, which called for building more “sustainable, resilient and equitable” food systems. That means providing tools to farmers that allow them to “begin to have a more sustainable agricultural production,” Cousin said.