This piece is part of the weekly series “Growing Forward: Insights for Building Better Food and Agriculture Systems,” presented by the Global Food Institute at the George Washington University and the nonprofit organization Food Tank. Each installment highlights forward-thinking strategies to address today’s food and agriculture related challenges with innovative solutions. To view more pieces in the series, click here.
Ambassador Ertharin Cousin has spent more than four decades advancing solutions to hunger, malnutrition, and food insecurity across the public and private sectors, and multilateral institutions. As the former Executive Director of the U.N. World Food Programme, she oversaw operations in more than 80 countries and led a global team delivering assistance to 80 million people annually. She has served as the U.S. Ambassador to the U.N. Food and Agriculture Organization and helped lead national efforts to combat hunger as Chief Operating Officer of America’s Second Harvest. Cousin is continuing her work as the Managing Director and CEO of Food Systems for the Future and FSF Ventures, where she supports innovations that bridge the gap between investment and impact in food and agriculture, helping scale market-driven solutions that prioritize equity, resilience, and sustainability.
Ertharin Cousin recently shared her thoughts on the challenges and opportunities in mobilizing capital to support more resilient, equitable food systems.
This interview has been edited for length and clarity.
You have written that food systems are just as culpable for accelerating global planetary health, human health, and poverty crises as they are capable of generating the solutions to fix them. You have also argued that in order for food systems to improve, that finance institutions ranging from banks to private equity will be critical. What kinds of financing do you think are most critical to unlocking this potential, and where is capital still falling short?
Financing is critical across the entire food system, from inside the farm gate all the way to wage production. But we know we lack the financing to support the systems changes required to make the necessary impact. To quantify the problem, climate financing is less than 5 percent globally—and outside the United States, likely less than 1 percent of that funding flows to food systems.
We often get into conversations about mitigation versus adaptation funding. We need both. We also need funding from both the public and private sectors. The reality is, if you use the U.S. as an example, 85 percent of agricultural subsidies flow to just 15 percent of farmers—typically the largest operations. But a critical piece of the work the public sector needs to do is not just about redistribution—it’s about redefining what we choose to subsidize in the first place.
We often talk about the nearly US$900 billion in agricultural subsidies proposed in the U.S. Farm Bill and whether we’re subsidizing foods that are detrimental to human health. But these subsidies also support processes for production and for cultivation that are harmful to our soil, to the income of farmers, to our planetary health—and ultimately, because of the impact on soils, to human health too.
And, instead of pitting large farmers against small farmers, the U.S. should be creating new capital for midsize and smaller farmers—not just for what they grow, but for how they grow it and directing new capital to producers growing specialty crops that haven’t traditionally received the same level of support as grains and other staples. Innovative public financing that invests in regenerative agricultural practices, and the opportunity to protect our soils and reduce the greenhouse gases from agricultural production, are critical.
We also need the private sector. We often talk about supporting financial returns to farmers for how they grow, not just what they grow, by creating carbon credits as a part of a carbon credit system. But we get significant pushback from the climate community about carbon credits for agriculture because of challenges with verification, measurement, sequestration, and additionality. The challenge is that we don’t have the tools yet to support that type of measurement to the satisfaction of many in the climate community.
In order to capture more of the climate capital, we need new monitoring, measuring, reporting, and verification systems to validate carbon credits from agriculture. This would allow for, as an example, credits generated by farmers transitioning to regenerative agriculture, or reducing or sequestering carbon, to be used by CPG companies to offset emissions in their supply chains. We also need capital from VCs, private equity, and others to invest in businesses supporting food system transformation from farm gate to waste reduction.
Lastly, sovereign wealth and other institutional investors—pension funds and the like—have mostly sat on the sidelines when it comes to investing in food systems transformation. Their capital is large and usually goes into big infrastructure projects. But if we know, for example, that sub-Saharan Africa needs irrigation systems, that’s an opportunity to attract large-scale capital for public works projects that could transform food systems. We’ve seen almost none of this to date. There’s enormous potential in creating large-scale, transformational projects to attract that kind of capital.
What kinds of hesitations or concerns do you most often hear from funders regarding food system investments, and what factors might be shaping how they evaluate these opportunities?
Number one, risk.
Capital funders—whether private equity, venture capital, or institutional investors—don’t like risk. And agriculture is a risky business. Compared to sectors like energy, health, or fintech, food and agriculture just aren’t as attractive. The metrics that venture capital firms use to evaluate financial return—scale and timing—don’t align well with food systems, a space where returns often take longer. And while they may still be attractive, they don’t typically compete with what investors might expect in faster-growth sectors.
Investors looking for unicorns often don’t see the value in placing bets on food and agriculture. And when it comes to the kind of large-scale projects I mentioned earlier—the ones that could attract significant institutional capital—those require strong government engagement and policy support. Many investors have been hesitant to invest in developing regions because of perceived governance risks. And for those who manage capital, these aren’t just excuses—they see them as responsibilities.
Until we, as a broader community, create the systems and shift the narrative to overcome these concerns, it will continue to be difficult to raise the level of investment we need in this space.
Can anything be done to mitigate the risk of investing in food systems?
There are ways to structure investments that can change the risk. At FSF Ventures, we’re focused on investing in businesses that can make a measurable impact on the food system or nutrition by scaling sustainable models.
When you define the investment opportunity differently—when you recognize that timelines are going to be longer and returns may be more modest—you start attracting a different type of investor. These are investors who care about impact, but who also expect a real return. And when you build a vehicle that’s designed to deliver on both sides of that equation, you’re in a much better position to overcome some of the risk barriers.
Have you seen any policy shifts or tools that have been particularly effective in motivating investors or making food systems investments more attractive across the value chain?
The Inflation Reduction Act is a great example of a shift in policy. It’s the kind of government action that can help unlock private capital by creating new pathways for investment that weren’t there before, like by driving more capital into farms not just for what they grow, but for how they grow.
We’re also seeing progress in parts of sub-Saharan Africa. Countries like Ghana, Senegal, Rwanda, South Africa, and parts of Kenya are working to institutionalize transparent, rules-based investment systems. And when that happens—when there are clear rules around contracts, protections, and returns—it starts to reduce the hesitancy investors feel about putting money into markets that have historically been labeled as high-risk. In many cases, those labels have been applied too broadly or unfairly. But when governments take meaningful steps to strengthen governance, we start seeing capital flow into new programs and projects.
How can we ensure that producers and farmers of different sizes—especially smaller farmers—aren’t left behind?
I’m not Pollyanna—I recognize and acknowledge that capital will flow where there’s less risk and a greater opportunity for financial return. That’s the reality of how these systems work.
But if we want small farmers to succeed, we need to create structures that allow them to work collectively. That means more support for cooperatives and shared facilities—models that can help farmers pool resources to scale their operations and attract capital.
We also need to make real a concept that we often talk about, but have few examples of where it’s really worked. And that is blended capital stacks, where you have government, foundation, or grant funding to help catalyze private sector investment. It’s not happening as much as it should, and we must move beyond a concept to a reality of blended capital.
What’s your call to action?
Here’s the reality: the geopolitical situation is quite interesting today. But the issues that began the global consensus around the necessity for food systems transformation have not changed.
And so that means we still have a responsibility to do the work—to keep identifying the right partners, to keep pushing forward on the changes we know are necessary, and to achieve the goals that are required for us to feed not only the global community today, but also the projected increased global community for 2030 and 2050.
Interview conducted by Jessica Levy
Photo courtesy of Irewolede, Unsplash
