Since the mid-1990s, the private sector has taken on growing importance as an active partner of development cooperation, both in Germany and internationally. This means that the private sector is involved in both the financing and the conception and implementation of development cooperation measures. In the context of Technical Cooperation, private sector engagement takes place within different programmes (e.g. develoPPP) and measures (e.g. DEG Business Support Services), and within the framework of bilateral projects (integrated development partnerships).
In agriculture as in other sectors, cooperation with the private sector is becoming increasingly important in such areas as the provision of advisory services or financial resources, knowledge and technology transfer, or building dependable business relationships. The objectives of the private sector and development cooperation are said to complement each other. While the private sector wishes to secure its supplies of raw materials (e.g. by means of contract farming), or to safeguard or extend its markets, the objectives of development cooperation are to strengthen the economy in rural areas, increase and diversify production and productivity in agriculture, and create additional jobs in and outside agriculture, in the aim of supporting environmentally and socially sustainable structural change in rural areas.
Critics of the involvement of private companies in promoting agricultural development see a number of risks, such as the danger of private sector interests overriding development objectives such as poverty reduction and food security, and in particular, of not reaching poorer population groups. Another fear is that human rights standards and principles might be neglected due to the cooperation.
Despite the constantly growing importance of private sector engagement, especially in the agricultural sector, as yet German development cooperation has not carried out any systematic appraisal of the relevant strategies and support programmes and the underlying theory of change. Likewise, the question of to what extent the different forms of cooperation are appropriate ways of contributing to the achievement of development cooperation objectives has not yet been systematically pursued. Furthermore, in light of criticisms of the approach, the necessity arises to analyse which measures for acknowledging human rights standards and principles and environmental and social standards are integrated into the programmes. It is also important to find out to what extent mechanisms for monitoring adherence to these standards and principles are embedded and utilised by the BMZ and the implementing organisations.