The Potential of Absorbing Foreign Agricultural Investment to Improve Food Security in Developing Countries

Abstract

Global food security has been in a severe condition in recent years, especially in developing countries. These countries need sufficient investment to promote their agricultural development. At the same time, the increasing foreign investment in agriculture has aroused widespread concern in the international community. It is controversial whether it is conducive to the host country’s agriculture and social development. In order to study whether developing countries can promote food security by absorbing adequate and effective foreign agricultural investment, we use principal component analysis and select 135 countries (regions) as samples to construct an indicator system from three aspects: investment demand, investment environment and investment motivation. We use cross-section data consisting of the values of the most recent year updated for each indicator. The results show that the demand for foreign investment in developing countries is strong, but overall, it does not have much investment appeal and the investment environment is bad. There is a gap between the expectations and realities in societies in each developing country in terms of the introduction of foreign agricultural investment to promote food security. Governance and capacity building should be strengthened to reconcile their investment needs with investors’ motives. Meanwhile, more inclusive rules for foreign agricultural investment will help it to play its due role in developing countries.