CoSAI evidence: Re-orienting investments in agricultural innovation

Governments and private businesses invest billions of dollars every year in agri-food innovation for the Global South. But most innovations do not support environmental sustainability and fail to benefit the poorest people.

CoSAI commissioned a range of studies to understand why. The studies identified investment trends, calculated investment gaps, and estimated the returns that higher investments could generate for agricultural productivity, food security, and climate adaptation and mitigation.

Key findings, outlined below, have informed a series of recommendations targeting the mobilization of investments in innovation and their application across the Global South.

1. The scale of the investment gap is significant

The USD 60 billion invested in agricultural innovation in the Global South each year falls short of what is required to meet the Sustainable Development Goals (SDGs) and address the climate crisis. Equivalent to 4.5% of agricultural sector output, this amount is low in relation to other sectors. For example, investment in innovation in the energy sector – another key sector for climate change – is 6% of sector output. CoSAI has calculated that matching that 6% would generate an additional USD 20 billion every year for innovation in agriculture.

Another CoSAI study, which used a different and narrower basis of calculation, estimated that business-as-usual investment in innovation would be approximately 9.8 billion dollars a year between 2010 and 2050. By closing the minimum investment gap in science and technology and water management – estimated to be USD 15.2 billion per year – the international community could also help get SDG2, SDG6 and SDG13 and the Paris Agreement back on track. Complementary funding would be required in finance, agricultural extension and infrastructure.

2. National governments are the biggest investors in agricultural innovation

CoSAI research reveals that over 60% of the USD 60 billion invested in innovation for agricultural systems comes from Global South governments (half from China) and about a quarter is from the global private sector (mainly companies). Although only 10% is from aid and development partners, they play an important catalytic role.

3. Investments in innovation should be refocused to include environmental and social aims

CoSAI research suggests that future investments in agricultural innovation should be more closely oriented towards environmental and social aims. CoSAI analysis showed that only 7% of funding had tangible environmental aims and only around half of that (4.5%) had both environmental and social aims.

The Principles for Innovation in Sustainable Agri-food Systems, developed by an independent multi-stakeholder task force initiated by CoSAI, will help research and innovation managers and funders to check whether all relevant outcomes have been considered – informing the design and management of innovation processes.

4. Social equity needs to be institutionalized and adequately resourced

Wider issues of equity beyond gender and youth (such as wealth, caste and ethnicity) are not systematically incorporated into research and innovation. A CoSAI study showed that of 1.3 million agri-food research publications examined using machine learning, less than 10% reported any social inclusion or human development outcomes.

It is important to track equity issues in innovation processes and consider appropriate mitigation measures and compensation or complementary support for those adversely impacted by agricultural innovation initiatives. The Principles for Innovation in Sustainable Agri-food Systems are one tool planners can adopt.

5. Critical innovation solutions continue to be overlooked

There are several important areas that continue to be overlooked by funders. Post-harvest loss and waste is critical for food security and climate change, but receives less than one-tenth of the funding for innovation in post-harvest production; innovation in local informal seed systems gets less than 0.5% of all seed innovation funding, even though these are the main source of seed for many farmers; and investments in land and natural resource management continue to fall short of the required levels.

In addition, funders need to recognize that innovations in urban and peri-urban agriculture offer important opportunities for shortening and democratizing food chains, and improving water and waste management as part of a circular economy. Some 40% of cropland globally is within 20 km of a town or city.

6. Protecting and restoring nature requires purposive support to farmer-stewards

CoSAI evidence highlights the importance of investments that target innovative farm-level financial instruments and encourage farmers to protect and restore nature. The challenges involved in implementing farm-level instruments are not new. However, the large amounts of private and public money now coming into ‘Paying for Nature’ programs make it an urgent issue to resolve.

7. Innovation intentions and their implementation need to be tracked

There is currently no central tracking hub or international standard for transparent reporting and measurements concerning agricultural innovation, making it more difficult to track investment flows, identify gaps and constraints, and ultimately, shift investment patterns.

Through an international task force on principles and metrics, CoSAI is encouraging funders and investors to reorient their research and innovation to include sustainability and equity aims. The task force recommends eight Principles for Innovation in Sustainable Agri-food Systems and a scoring system that has been piloted by public and private sector organizations. CoSAI has also recommended the development of an international tracking hub for innovation.

8. Approaches and instruments for more effective and efficient innovation need greater attention

Investors in agricultural innovation need to look beyond traditional linear approaches to research and development. CoSAI evidence has highlighted the importance of leadership, trust building and informal links. Innovation instruments (for example platforms, prizes and incubators) have the potential to increase uptake and the equity of innovations, but these are often project-driven and not institutionalized in national systems. More work is needed to collect systematic evidence on the selection and design of different instruments.