Growth & Productivity in Agriculture & Agribusiness Evaluative Lessons from World Bank Group Experience Gaborone, Botswana October 19-20
2 Context for the evaluation
3 The majority of poor in Sub-Saharan Africa are dependent on agriculture
4 The poor suffer the most from food price increases
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) 2007-2008 food crisis and continued price volatility Serious resource constraints (e.g. water) and difficult climate change challenge 5
6 There is good news
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 US$ million Donors are increasing their focus on agriculture 8000 6000 ALL DONORS (OECD data) 4000 2000 0 WB = IDA + IBRD* (WB data) 7
Productivity is high in some settings Productivity in cereal production: Country Kilograms per hectare China 5095 Egypt 7545 Guinea 1476 Mali 979 8
9 But there are also areas of concern
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 Productivity in Africa is particularly low
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
What is the World Bank Group s record in agriculture?
WBG engagement in agriculture has been large and spread over the production chain World Bank lending 1998-2008: $18.1 billion IFC investments 1998-2008: $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
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 100 80 88 96 80 79 60 56 63 40 20 15 0 AFR EAP ECA LCR MNA SAR
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
IFC activities in agriculture have focused on middle-income countries until recently Percentage Commitments Share of IFC agriculture investments by region 1998-2008 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% LAC ECA SAS SSA Regions 17
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% 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 18
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
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
Sustainability is a concern worldwide In infrastructure/irrigation Research and extension Credit O&M; cost recovery? Environment including adaptation to climate change 21
Main recommendations
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
Thank you http://www.worldbank.org/ieg/agriculture