What are potential areas for public and private collaboration in international agricultural development? According to Nick Maddock, an expert in international rural development from the United Kingdom, both traditional and emerging areas for cooperation exist between governments and agribusinesses through Public-Private Partnerships, or PPPs.
While PPPs have become fashionable in other development sectors, Nick prefers to remain realistic about their potential for transforming the agriculture sectors in middle-income countries, like those in the Greater Caspian Region. Based on his experiences, Nick identifies three potential areas for Public-Private Partnerships in agriculture.
Area 1: ‘Automatic’ PPPs
These project areas of ‘automatic’ public-private collaboration have become so commonplace that, even though they are public-private partnerships by definition, we rarely consider them as such. They include:
In this commonly practiced form of PPP, governments, farmers, and Water Use Associations split irrigation costs. Typically, the government owns and maintains the primary irrigation canals, while farmers and Water Use Associations operate secondary canals and equipment.
Agricultural Wholesale Markets
In most agricultural wholesale markets, governments own the infrastructure and set market regulations, while the private sector drives market operations. Governments are increasingly encountering pressure to provide more sanitary market conditions, increase dry and cold storage, and manage the ‘cartelisation’ of wholesale markets.
The Greater Caspian Region presents unique opportunities for public-private engagement in irrigation projects.
Area 2: Common PPPs
Governments and the private sector are increasingly working together in:
Public agencies in many countries are assuming more active roles in export promotion by organizing trade missions, guiding local businesses through each step of the export process, and providing compliance and documentation regulation guidance. USAID’s Private Sector Activity engages in elements of this form of PPP, offering market entry support, marketing assistance, and compliance guidance to U.S. agribusinesses interested in expanding into the Greater Caspian Region.
In countries where major equipment and infrastructure are too expensive for the average farming operation, such as cold storage solutions, governments increasingly offering leasing or partial grant funding schemes to finance the necessary machinery.
Area 3: Emerging PPPs
International Outgrowing for Food Insecure Countries
Recently, several of the Gulf States and fellow high-income countries with high levels of food insecurity have begun securing food supply by establishing ‘outgrowing’contracts with regional neighbors to grow and export a prearranged portion of food production to the contracted food-insecure country. Outgrowing can be an entirely private enterprise, but food-insecure governments have also proven willing to fund feasibility studies, provide incentives and guarantees, and subsidize domestic buying.
As Mr. Maddock suggests, public-private partnerships are unique projects that allow governments and businesses to jointly tackle large-scale barriers to agricultural development. Through the Private Sector Activity and similar projects, USAID continues working to foster innovative PPPs to generate sustainable and equitable advances in agriculture in partner countries.
Stay tuned for the next article in our PPP series highlighting potential public-private partnerships in the Greater Caspian Region.
Content for this article derived from Nick Maddock’s remarks in the U.S.-Azerbaijan Chamber of Commerce’s ‘Public-Private Partnerships in Food and Agriculture Projects in Azerbaijan’ webinar on February 24th, 2021.
Disclaimer: The views expressed in this article and services provided by USAID contractors for the implementation of USAID projects do not necessarily reflect the views of USAID or the United States Government.