Investing in people to promote agrifood transformation

FAO Investment Centre and Innovations for Poverty Action (IPA) have released the fourth and final brief in a series exploring how finance, prices, technology and human capital, and decisions around them shape agricultural investment and productivity.

The brief, Approaches to human capital investment: Lessons from experimental evidence, distils experimental and quasi-experimental evidence on how strengthening farmers’ skills and social networks can boost productivity and incomes.

“The investment of today is the impact of tomorrow, and nothing is more important that investing in people. Investing in people is investing in productivity,” said Mohamed Manssouri, Assistant-Director General and Director of FAO Investment Centre. “This human capital brief brings together evidence to highlight that knowledge, training and social capital are key to enabling farmers to make the most of financial, technological and market opportunities.”

Exploring investment drivers

Each of the four briefs in the series examines a different but related aspect of agrifood investment. Access to finance enables farmers to invest in technology and inputs, but success depends on products tailored to the local context. Finally, stable prices encourage investment yet may be constrained by poor infrastructure and unequal market power. Technology adoption enhances productivity but complementary investments in finance, information and skills also play an important role in this. Human capital – the focus of this latest brief – shapes farmers’ capacity to innovate, manage risk and seize market opportunities.

Skills, information and social networks

Drawing on 44 experimental and quasi-experimental studies, the human capital brief reviews evidence on agricultural extension, digital tools, education and the role of social networks in building human capital.

Practical, hands-on learning – through farmer field schools, demonstration plots or peer exchanges – drives stronger and more lasting adoption than lecture-based training.

Digital platforms can extend reach and reduce costs of human capital interventions, but their impact depends on farmers and firms' access to inputs, finance and trusted intermediaries. Evidence presents examples of effective programmes that combine digital and in-person learning.

Social and peer networks also matter. Farmers are more likely to adopt innovations when they see other producers benefiting. Evidence from Kenya and Uganda shows that “lead farmer” models accelerate technology diffusion, especially when women and youth are among them.

The human capital brief complements existing and ongoing work done by the Investment Centre on this topic. For instance, FAO and IFPRI produced a series of reports on Agriculture Human Capital Investments.  More recently, the FAO Investment Centre has been collaborating with the World Bank on a study on skill gaps and needs in the maize and dairy value chains in Uganda. The ambition is to look more broadly at skills gaps and investment opportunities at the intersection of agrifood and education systems.

A foundation for inclusive productivity growth

The human capital brief stresses that investing in human capital must be inclusive. Women and young farmers still face barriers to training, finance and advisory services. Targeted outreach, flexible scheduling and gender-responsive approaches help close these gaps, boosting both equity and returns on investment.

Evidence from Ethiopia, India and Uganda shows that even basic literacy and numeracy improve farm management and market engagement. When paired with practical training, these foundational skills strengthen decision-making and lay the groundwork for sustained, inclusive growth.

“This synthesis provides a valuable perspective on agriculture through the lens of human capital,” said Hope Michelson, Professor of Agricultural and Consumer Economics at University of Illinois Urbana-Champaign. “Assumptions about the endowments and dynamics of farmer education, training, and experience are often implicit in hypotheses about the drivers of agricultural development. This brief makes those assumptions clear, exploring human capital as mechanism of and sometimes impediment to agricultural technology adoption in low income countries.”

Evidence to inform smarter investment

This FAO–IPA series provides a synthesis of evidence to inform investments, to support policymakers and investors in agrifood systems. This final brief in the series underscores that when farmers have the right knowledge, skills, and networks, every other investment – in technology, finance, or markets – delivers greater impact.