Just a few minutes prior to the official signature of the contract between Mars, Inc. and Danone for the launch of Livelihoods Fund for Family Farming (Livelihoods 3F), the round table titled ‘Impact investment: a new approach to development aid ?’ ended to enthusiastic applause. Sir Ronald Cohen, Chairman of the G8 Taskforce on Impact Investment; Lionel Zinsou-Derlin, President of PAI Partners and Chairman of the Franco-African Foundation for Growth; Tony Simons, Director General of the World Agroforestry Centre (ICRAF) in Nairobi, Kenya and Emmanuel Faber, CEO of Danone, explained why they support social impact investment.
More than 80% of the world’s food supply is produced by family farmers
More than 80% of the world’s food supply is produced by family farmers, according to the UN’s ‘The State of Food and Agriculture 2014′ report. With the world’s population set to increase from 7 billion to 9 billion in 2050, the need to produce more with fewer available natural resources is a growing challenge, while ecosystems are increasingly threatened by deforestation, land degradation, climate change and the loss of biodiversity.
This is why Danone and Mars, Inc. decided to launch the new Livelihoods 3F fund, which is based on the conviction that sustainable farming, climate change and poverty are interrelated. On Wednesday 4 February, Danone and Mars, Inc. announced the creation of an innovative investment fund designed to help smallholder farmers. Known as the Livelihoods Fund for Family Farming (read more on Livelihoods 3F here), this new fund will implement projects that simultaneously restore the environment and help degraded ecosystems get back on track, while improving the productivity, incomes and living conditions of small rural farmers in developing countries.
Connecting food chains is a high priority
When interviewed about his decision to invest his time and influence in promoting impact investment, Sir Ronald Cohen said that we have no choice. ‘In the 21st century, risk, return and impact is what it’s going to be about when we invest,’ he says. Lionel Zinsou-Derlin agreed, saying that ‘we are in a completely new situation, because we need to do something that nobody has done before. We need to develop new instruments that no one has yet invented. Working with Livelihoods is very exciting.’
‘The only way to overcome the problem of granulation farms is by mobilising field workers,’ says Emmanuel Faber, author of the recommendation report ‘A new approach to development aid?’ for the French Foreign Ministry of Foreign Affairs and International Development. ‘Food chains are being desynchronised, and if we are not careful, our business could simply disappear in 50 years, when the food chains are broken (…). Connecting these chains is a high priority.’
Named the ‘invisible heart of markets’ in the report established under the UK presidency of the G8 last September, impact investment attracted more investors in 2014 than ever before.
Photo © Livelihoods