Growth & Productivity in Agriculture & Agribusiness. Evaluative Lessons from World Bank Group Experience Gaborone, Botswana October 19-20

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1 Growth & Productivity in Agriculture & Agribusiness Evaluative Lessons from World Bank Group Experience Gaborone, Botswana October 19-20

2 2 Context for the evaluation

3 3 The majority of poor in Sub-Saharan Africa are dependent on agriculture

4 4 The poor suffer the most from food price increases

5 Urgent steps are needed to increase food production and agricultural productivity Years of declining donor support until mid-2000s Increased demand worldwide (population growth, changing diets, biofuels) food crisis and continued price volatility Serious resource constraints (e.g. water) and difficult climate change challenge 5

6 6 There is good news

7 US$ million Donors are increasing their focus on agriculture ALL DONORS (OECD data) WB = IDA + IBRD* (WB data) 7

8 Productivity is high in some settings Productivity in cereal production: Country Kilograms per hectare China 5095 Egypt 7545 Guinea 1476 Mali 979 8

9 9 But there are also areas of concern

10 Recent productivity growth has stagnated worldwide Modest investment in infrastructure (roads, irrigation) Limited R&D and innovation Lack of access to inputs, markets, and credit Water constraints and weather disruptions 10

11 11 Productivity in Africa is particularly low

12 Increases in cereal production in Africa have come from area expansion rather than productivity growth Growth in cultivated area and yield in Africa and Asia: 12

13 What is the World Bank Group s record in agriculture?

14 WBG engagement in agriculture has been large and spread over the production chain World Bank lending : $18.1 billion IFC investments : $5.6 billion Mostly World Bank interventions, including for enabling environment Mostly IFC interventions; World Bank provides support for enabling environment Areas of World Bank Group support Research and extension, irrigation and improved soil and water management, credit Improved harvesting techniques, storage, credit Roads and input and output marketing infrastructure, credit Agribusiness activities Marketing support Inputs and activities that make the food production chain possible Land, labor, cultivars, fertilizers, water, disease control measures, financing Labor, harvesting techniques, storage Access to roadsand transport services; marketing infrastructure, including telecommunications Agro-industry Marketing and retail distribution Crop production chain Crops planted and grown Crop harvest and storage for home consumption or market To market to sell surplus to consumers or industry for processing Processing Sold as processed product 14

15 WB project effectiveness has been strong overall but low in Africa 120 Percentage of WB projects focused on agricultural productivity with moderately satisfactory or better outcomes AFR EAP ECA LCR MNA SAR

16 Most World Bank agriculture lending in Africa has not focused on productivity Share of agriculture lending focused on productivity (in green): The focus of most World Bank agricultural lending in Africa has not been on productivity 16

17 IFC activities in agriculture have focused on middle-income countries until recently Percentage Commitments Share of IFC agriculture investments by region % 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% LAC ECA SAS SSA Regions 17

18 IFC has also been less effective in Africa Blue = successful; Red = unsuccessful [size of circle is proportional to number of projects] High DO/IO Low DO/IO ECA, 83% SAS, 85% LAC, 60% SSA, 51% LAC, 28% ECA, 6% SAS, 11% SSA, 18%

19 How can WBG effectiveness be improved? Continued investments in knowledge Stronger cross-sectoral and WBG synergies Client and WBG capacity-building Fit of project design to local capacity Stronger M&E to monitor outcomes and learn what works 19

20 IFC s trader-processor model is a promising approach for reaching smallholder farmers Example: soybean production Farmer delivers soy; receives inputs, extension, finance Processor delivers soy-meal, recovers costs from purchaser Farmer Farmer Farmer Trader Processor MARKETS Input Output Technology Financial Logistics 20

21 Sustainability is a concern worldwide In infrastructure/irrigation Research and extension Credit O&M; cost recovery? Environment including adaptation to climate change 21

22 Main recommendations

23 Overarching Recommendation: Focus on increasing the effectiveness of WBG support to agr. productivity in Africa On WBG effectiveness: Step up IFC engagement in SSA Address skill gaps in WB and IFC Ensure sufficient quality & quantity of analytical/advisory work Strengthen monitoring & evaluation frameworks On areas for stronger substantive focus: Integrate global/local (e.g. CGIAR); south-south partnerships Support medium-term expenditure planning for sustainability Focus more centrally on rainfed agriculture Ensure attention to cross-cutting environment and gender issues 23

24 Thank you