Substantial increases in agricultural investments in developing countries are needed to combat poverty and realize food security and nutrition goals. Agricultural investment is the most important and most effective strategy for poverty reduction in rural areas, where the majority of the world’s poorest people live. Investing in agriculture reduces poverty and hunger through multiple pathways. However, low investment in the agricultural sector and into smallholder farms in particular in most developing countries over the past 30 years has resulted in low productivity and stagnant production. The recent food crisis has exposed these weaknesses, as agricultural production was slow to respond to rising prices. Yet, the agricultural sector faces a considerable challenge over the next four decades.