Who Invests How Much in Agriculture in Low- and Middle-Income Countries? An Empirical Review

This article provides estimates of the relative size of on-farm investment in agriculture; foreign direct investment (FDI) in agriculture; government investments in agriculture; and official development assistance to agriculture. It finds that in a set of 76 low- and middle-income countries farmers are by far the largest investors in primary agriculture. On-farm investments are more than three times as large as all other sources of investment combined, with annual investment in on-farm agricultural capital stock exceeding government investment by more than 4 to 1, and other resource flows by a much larger margin. In spite of significant attention to the role of FDI, the article shows that the levels of FDI in primary agriculture are small, and that their increase has been overstated. The article concludes by recommending some areas for future research and what is needed in terms of data, as well as considering the policy implications of the findings.