This sector profile focuses on gender-based opportunities and gender-smart investing as an investment strategy for the food and agriculture (F&A) sector. It aims to support investors and fund managers to identify existing and future opportunities for gender-smart investing in the food and agriculture sector. See CDC’s full Gender Sector Brief for the evaluation of food and agriculture investments, including screening and due diligence questionnaires and quick facts.
Gender-smart investing is smart business. We know that companies that perform well on gender inclusivity return greater profit. We also know that women are highly represented across the F&A sector as employees, smallholder contractors, consumers, and community members, yet their value can be overlooked. This highlights a significant business and impact opportunity.
Adopting gender as an investment strategy can also catalyse investors’ contribution to the Sustainable Development Goals (SDGs). There is significant potential for investors to align with the SDGs, shaping gender outcomes in line with: SDG 2 on zero hunger, SDG 5 on gender equality, SDG 8 on decent work, SDG 11 on sustainable communities, SDG 13 on climate action, as well as SDG 14 on life below water and SDG 15 on life on land.
Guidance on ESG issues and opportunities linked to the F&A sector, including gender-based environmental and social risks, is provided in the CDC ESG Toolkit for Fund Managers. Further evidence of development impact in the sector, including linked to gender outcomes, can also be found in the CDC impact study for the food and agriculture sector.
Why take a gender lens to food and agriculture investments?
- Business case
- Improving supplier productivity and increasing yield:Women are present throughout the agribusiness value chain, but often play a prominent role in the labour-intensive segments of production, processing and retail. According to the Food and Agriculture Organization (FAO), reducing gender inequalities in access to productive resources and services could produce an increase in yields on women’s farms of between 20 percent and 30 percent, as well as diversifying agribusinesses’ supplier base.
- Reducing employee absenteeism, turnover and retraining costs: Beyond engaging women as farmers and suppliers, attracting and retaining women in professional roles allows agribusinesses to capitalise on the diversity dividend in their management and employee teams. Gender-smart interventions that provide women with equal access to opportunities and resources, and enable them to do their job better, can in turn translate into a more productive, loyal and satisfied workforce. Creating a supportive environment for female workers can positively impact their attendance and retention, resulting in significant cost savings.
- Future-proofing the business around shifting demographics: The “feminisation of agriculture” has been documented in developing countries ,as men migrate farther away and for longer for off-farm employment, while women – more constrained in terms of time and mobility – are more likely to continue agricultural work. Investing in building a strong female supplier network and internal workforce is therefore critical to tap into, rather than getting caught out by, this demographic shift.
- Building a positive corporate reputation: Purchasing from female farmers or gender-equitable cooperatives enhances social impacts on female farmers involved in these groups. Also, adopting gender-inclusive policies and practices within agribusiness leadership and the workforce can also attract investors and open the door to export and other high-value markets.
- Impact case
- Contributing to global nutrition challenges: Realising female farmers’ full potential through equal access to inputs could reduce the number of undernourished people in the world by 100-150 million, or 12-17%. Similarly, women are clearly the most critical target group from a nutrition standpoint. The evidence is clear – when women farmers have the opportunity to earn and control income, they are more likely to focus their spending on their children’s nutrition, education and health. Improving the knowledge and status of women within agriculture would deliver significant improvements to agricultural production, food security, child nutrition, health and education.
- Increasing women’s job quality and leadership in agriculture: Women account for more than 50% of the agricultural labour force in South Asia and sub-Saharan Africa, with agriculture considered the most important source of employment for women in these geographies. Nonetheless, female farmers face disproportionate barriers to land ownership, market information, farming inputs, equipment, technology, credit, and hired labour. Prevailing gender norms and discrimination mean women typically farm less profitable crops, face an excessive work burden, and that much of their labour remains unpaid and unrecognised. Women are also considerably less likely to be active in commercial farming than men. These constraints translate into a gender gap in agricultural yields and income, meaning female farmers tend to have lower output per unit of land. This affects the entire value chain, from the livelihoods of smallholders and viability of farmer cooperatives, to the operational continuity of companies involved in aggregation, processing, and export of agricultural commodities.
- Increasing inclusive economic development: Addressing gender gaps is key to driving inclusive economic development in Africa and Asia, while realising widespread social and health benefits for families and communities. Critically, however, when key firm characteristics are controlled for, gender gaps in productivity virtually disappear. Overall productivity in developing countries would increase by 2.5-4% if women were to have equal access to inputs and thus achieved equal yields. This could reduce the number of undernourished people in the world by 100-150 million, or 12-17%. More generally, mass male migration is driving a so-called ‘feminisation’ of agriculture, which has implications for women’s agency and agricultural productivity, as mediated by factors such as land tenure and access to agricultural extension services. For agribusinesses to remain competitive and future-proof, strategies to proactively anticipate and capture the shifting supplier and workforce demographics are therefore key.
- Contributing to climate mitigation, adaptation and resilience: In most emerging markets, gender gaps tend to be exacerbated by climate change vulnerabilities. Women’s unequal participation in decision-making processes and labour markets compound inequalities and often prevent women from fully contributing to climate-related planning, policy-making and implementation. Nonetheless, women play a critical role in the response to climate change, due to their local knowledge of sustainable resource management and leadership in sustainable practices in households and communities.
Gender-smart investment process
- 2X ScreeningThe investor should answer 2X-aligned screening questions before the deal is submitted for approval. The questions below explore gender-based opportunities and focus on the company’s smart inclusion of women across its workforce and supply chain, and its efforts to serve female customers. Screening questions will help determine: (1) If the deal meets thresholds and/or qualifies under the 2X Challenge; (2) if there are potential gender-based opportunities to be explored further in due diligence.
See the Gender 2X Screening Questionnaire for this sector.
- Due diligenceGender due diligence is the process of gathering gender-related data and information from the potential investee company for analysis to determine whether gender gaps present opportunities that may impact performance and affect an investee company’s operations and financials. Deal teams can integrate these questions into existing due diligence workstreams (e.g. E&S, impact, commercial). The investor will collect the due diligence information and proceed to confirm 2X qualification; (2) confirm gender-based opportunities to determine whether to take forward compared to other impact investing themes. Selected sector-specific documents can also be requested to guide due diligence further.
For gender-smart investors, due diligence on gender-based risks and negative impacts is an important aspect of ESG due diligence. Improper screening and poor management of gender-based risks can prevent effective gender-smart investing and have a detrimental impact on a company’s performance in terms of operational costs, reputational damage, stakeholder engagement, employee productivity and loss of confidence.
- Climate change and natural disastersLow income households are often forced to sell their productive assets, reduce their meals or leave their livelihoods in search of work. This disproportionately impacts women as the primary caregivers of their families and who make up 45-80 percent of the food-producing workforce in developing countries. Investors can support their investees to develop an integrated approach to build greater resilience, among at-risk communities, particularly women.
- Low-carbon economy transitionFeeding nine billion people by 2030 – while protecting the vital natural systems which sustain our planet – will be one of the core challenges of a just rural transition towards a low-carbon economy. As part of a just rural transition, agriculture will need to move away from carbon-intensive approaches towards more sustainable food systems. Other F&A sectors, such as sustainable forestry, will also become more important. However, efforts to reduce greenhouse gases (GHGs) in the F&A sector can also bring disruptions to livelihoods and women’s agricultural activity. The International Labour Organization (ILO) estimates that over 60 percent of all working women in Southern Asia and sub-Saharan Africa remain in agriculture, often unpaid or poorly paid, while being concentrated in time- and labour-intensive activities. Women already face a range of barriers due to unpaid care work, social norms, educational barriers, and legal barriers to entry in a range of industries. In addition, women’s jobs and livelihoods in agriculture are vulnerable to the effects of climate change through heat stress, flooding, and other impacts. Rural women’s employment and entrepreneurship in the F&A sector should therefore be protected and promoted by investors, through investing in low-carbon businesses and supporting the low-carbon transition.
- MigrationMale movement to other sectors, or migration to urban centres, has led to an increasing share of female participation in agriculture over the past 40 years, both in smallholder farming and agricultural wage labour. Given that women farmers in many regions 1) have comparatively less access than men to improved inputs, land and other assets, and agricultural finance; and 2) face significant additional time burdens for caregiving and household chores, the feminisation of agriculture could, if not managed carefully, result in declining household-level income and food production, with negative effects on the wellbeing of women and their households.
- Intelligence of everythingWomen make up 45-80 percent of the food-producing workforce in developing countries. Artificial Intelligence (AI) and big data could help to improve productivity (e.g. automated drip irrigation systems) and risk mitigation (e.g. weather index-based insurance).
The following resources can further guide investors and fund managers on their gender-smart investing approach in the sector.
- Climate Investment Funds (CIF), Gender and Sustainable Forest Management: Entry Points for Design and Implementation
- IDH, Gender Guide – Agribusiness (2017)
- ICRW, Gender-Smart Investing Resource Hub: Agriculture
- IFC, The Business Case for Women’s Employment in Agribusiness (2016), Investing in Women along Agribusiness Value Chains (2016) and Working with Smallholders: A Handbook for Firms Building Sustainable Supply Chains (2013)
- Value for Women, Gender Self-Assessment Tool for Agribusiness, Gender Inclusion for Climate-Smart Agribusinesses (2018)
- FAO, Country Gender Assessments: National Gender Profiles of Agriculture and Rural Livelihoods