With Recurring Food Crises, a Call to Boost Agricultural Productivity

Says a new report from independent evaluation at multilateral development banks.

WASHINGTON, February 1, 2011 - The Evaluation Cooperation Group (ECG), a network of independent
evaluation units of multilateral development banks (MDBs), released today a
synthesis evaluation on MDB assistance to Agriculture and Agribusiness. The
evaluative lessons assume special significance today as the world faces the
possibility of another food crisis, as food prices rose to a record in
December on higher costs for sugar, grain and oilseeds. The overarching
message in this context concerns the urgency to raise productivity all along
the agricultural value chain.

Growth in agricultural productivity suffered a slowdown as investments by
developing countries and donors declined sharply in the last two decades –
the bi-lateral and multilateral assistance alone to the sector fell by some
40 percent by early 2000s from its peak in the mid-1980s. This slowdown has
been especially felt in Sub-Saharan Africa, where productivity has been the
lowest and where the vast majority of the population depends on agriculture
for their livelihood.

Today, the renewed attention from governments and the donor community to
agriculture is reflected in a notable increase in official development
assistance, which rose to over $8 billion in 2008 from an average of
$3.5-$4.5 billion per year between 1998 and 2004. The evaluation finds that
while the increase in investments is timely, that alone does not assure
results on the ground. The key challenge is in ensuring that increased
investments are accompanied by policies that will result in improvements in
productivity.

In view of the complexity of the agricultural production chain, a
multi-faceted approach is key to raising productivity. The ECG report, based
on evaluations of ECG members and relevant research literature, identifies
six areas where the MDBs and the countries can take action.

    - Research and extension: Investment in research can yield the highest
      returns but for it to be effective, the appropriate technology must
      reach farmers and be adopted for use within the different farming
      systems. In India public investment in agricultural research accounted
      for nearly 30 percent of the sector's growth. International
      institutions can play an essential part in facilitating better outcomes
      from research and extension.
    - Access to water: Effective water management and irrigation can
      drastically increase productivity, however, to date only a small
      percentage of agricultural land is irrigated for much of the developing
      world. In Tanzania, of the 44 million hectares suitable for
      agricultural production, only a mere 2 percent is irrigated for
      cultivation. Addressing inefficient management practices in water use
      and rain-fed agriculture is vital for the growth of the sector.
    - Access to credit: Inadequate incomes and limited access to credit
      impede growth, especially in agriculture-based economies. International
      institutions have played a significant role in facilitating access to
      credit through rural finance programs but sustainability beyond project
      duration remains a challenge. Going forward, it will be crucial to also
      leverage private initiatives in this area.
    - Access to land and land rights: Land tenure gives farmers rights to an
      important asset with two critical benefits: it encourages long-term
      investment in land and facilitates credit access by providing
      collateral. Uncertain land tenure or limited private use rights greatly
      restrict the efficacy of rural development activities.
    - Roads: The greatest returns for agricultural productivity often result
      from investments in roads. In Ethiopia access to all-weather roads
      decreased poverty by some 7 percent and increased food consumption by
      nearly 17 percent. Today there continue to be large differences in road
      accessibility across regions. Inadequate maintenance of rural roads
      hinders the growth of productivity.
    - Policies, markets and agribusiness: Increased productivity largely
      depends on enabling frameworks and policies for agribusiness, agro-
      industry and improvement of markets. Market failures have been acute,
      especially in rural Africa. International institutions can play a more
      prominent role in facilitating the improvement of markets and supply
      chains, while better leveraging the role of the private sector.

Institutional factors are central to the effectiveness of these six
steps. Among them, crucial are client commitment, country capacity, and good
governance. Positive outcomes are also contingent on coordination within
organizations and among countries and partners.

The ECG study Evaluative Lessons for Agriculture and Agribusiness can be
found at: www.ecgnet.org

ABOUT ECG: The Evaluation Cooperation Group (ECG) is a network of
evaluators of multilateral financial institutions (MFIs) established in 1996
with a mandate to strengthen cooperation among evaluators, to enhance
collaboration within the evaluation community of development organizations,
and to increase the impact of evaluation through harmonization and
dissemination.

ECG members include the African Development Bank Operations Evaluation
Department, Asian Development Bank Independent Evaluation Department,
European Bank for Reconstruction and Development Evaluation Department,
European Investment Bank Operations Evaluation, Inter-American Development
Bank Office of Evaluation and Oversight, International Fund for Agricultural
Development Office of Evaluation, International Monetary Fund Independent
Evaluation Office, Islamic Development Bank Group Operations Evaluation
Department, and the World Bank Group Independent Evaluation Group.

The United Nations Development Programme Evaluation Group and the
Evaluation Network of the Development Assistance Committee of the
Organisation for Economic Co-operation and Development are observers. Black
Sea Trade and Development Bank Independent Evaluation Office and Council of
Europe Development Bank Ex Post Evaluation Department are aspiring members.

ECG members encourage journalists to also contact management of the
multilateral finance institutions.

Sona Panajyan (In Washington, D.C., USA), +1-202-473-9751, spanajyan at ifc.org