Private sector engagement

Context

The private sector is omnipresent within a food system, and can entail all forms and scales of activity, from farmers and local small and medium-sized enterprises to multinational firms. In order to develop a sustainable and lasting impact, it is imperative that both market actors and private actors be involved in global efforts to make food systems more resilient, sustainable, efficient and inclusive to ensure healthy diets for all.

On the one hand, private sector engagement in food systems, especially in low- and middle-income countries, needs to be framed by strong accountability mechanisms. Switzerland supports the strengthening of private sector norms and regulations through standard-setting bodies and capacity-building for government to shape better food environments.

On the other hand, the private sector should be one of the driving forces for economic development and sustainable, healthy and inclusive food systems. As such, Small and Medium Entreprises (SMEs) need to be mobilised to bring to domestic markets sustainably produced diversified and nutritious food for low- and middle-income consumers, and to be able to contribute to local food systems innovations.

Just to achieve SDG 2, there is currently an investment gap of USD 33-50 billion per annum which development finance alone cannot aspire to fill. Accordingly, investment pathways must be developed, by demonstrating that there is also a business case for investing in food system transformation at various scales. Switzerland is as such strongly engaged in supporting and developing better financing schemes and modalities, notably via dialogues and partnerships with international financial institutions, notably IFAD, and inclusive-responsible impact-first funds which enable agroecological, nutritious-sensitive and competitive rural-urban value chains.

• Market System Development

  Market Systems Development (MSD), also referred to as Making Markets Work for the Poor (M4P), is an approach that aims to strengthen the functioning of market systems, with the aim to deliver sustainable benefits to low-income and marginalized populations. Instead of providing direct services or subsidies, MSD focuses on understanding how markets operate, identifying the constraints that prevent poor people from participating fully, and facilitating systemic changes, including improving incentives, relationships, rules, and supporting infrastructure, so that markets become more inclusive, resilient, and responsive to the needs of the poor over the long term.

  To make this happen, key recommendations include:

  • Focus on systemic change, not short‑term fixes: Interventions should target the root causes and constraints that prevent markets from functioning effectively and inclusively. This requires market analysis, identification of bottlenecks, and a systemic mindset that prioritises lasting, large‑scale change in how market functions and actors interact.
  • Conduct rigorous market diagnostics: Before designing interventions, carry out in‑depth analysis of market systems, including core functions, supporting functions (e.g. services, information), and formal/informal rules, to understand how poor men and women participate and what factors hinder or enable inclusion.
  • Design adaptive and facilitative interventions: Facilitate rather than replace market dynamics by working with existing market actors—businesses, associations, regulators, service providers—to shift incentives, behaviours and rules so that they naturally deliver better outcomes for the poor.
  • Build stakeholder partnerships: Develop strategic partnerships with private sector actors, public institutions, and civil society to co‑create solutions, strengthen local capacities, and ensure that changes are owned and sustained by market players themselves.
  • Integrate cross‑cutting themes: Ensure that gender, social inclusion, and environmental sustainability are embedded throughout the MSD process—from analysis to intervention and monitoring—so that disadvantaged groups benefit equitably and systems remain resilient and sustainable.
  • Monitor systemic outcomes: Measure success not by project outputs but by market system outcomes and behavioural changes among core actors that lead to improved access, participation, and benefits for poor populations. Monitoring should capture changes in systems over time, informing adaptive management and learning.

Key Resources

Thematic Integration Brief on food systems & private sector (upcoming)
Knowledge Hub, SDC A&FS Network

Market systems development
SDC Education and Economy Network (see guidances at the bottom of the page)

International Fund for Agricultural Development (IFAD)

IFAD’s private sector engagement

A guide to investing in landscape restoration to sustain agrifood supply chains
IUCN, 2023

Principles for Responsible Investment in Agriculture and Food Systems
CFS-RAI, 2014

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