77911 IMPLEMENTING AGRICULTURE FOR DEVELOPMENT © 2013 The World Bank Group 1818 H Street, NW Washington, DC 20433 Telephone 202-473-1000 Internet www.worldbank.org/rural E-mail ard@worldbank.org All rights reserved. This volume is a product of the staff of The World Bank Group. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Directors of The World Bank Group or the governments they represent. The World Bank Group does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank Group concerning the legal status of any territory or the endorsement or acceptance of such boundaries. All dollars are US dollars unless otherwise noted. Rights and Permission The material in this publication is copyrighted. 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Photo credits: Curt Carnemark (Fishermen, Mexico); Tran Thi Hoa (Harvesting rice-fields in a White Thai village in Mai Chau, Hoa Binh province, northern Vietnam); Curt Carnemark (Young boy with herd, Kenya); Maria Fleischmann (Fruits, vegetables and greens, for sale in a market in Guatemala City, Guatemala); V.T. Khanh/ Shutterstock, LLC (Terraced rice fields in Yen Bai, Vietnam) CONTENTS Tables...........................................................................................................................................v Boxes...........................................................................................................................................vi Figures.......................................................................................................................................vii Foreword...................................................................................................................................ix Acknowledgments................................................................................................................xi Abbreviations and Acronyms.........................................................................................xiii Summary...................................................................................................................................xv Chapter 1: The Evolving and Volatile Context........................................................1 Chapter 2: Lessons from FY2010–2012.......................................................................... 11 Chapter 3: The World Bank Group Support for Agriculture FY2013–2015.........15 Results We Will Help Our Clients Achieve....................................................................................... 15 What We Will Help Our Clients Do.................................................................................................... 17 Raise Agricultural Productivity........................................................................................24 Link Farmers to Markets and Strengthen Value Chains..................................................34 Facilitate Rural Non-Farm Income.................................................................................. 41 Reduce Risk, Vulnerability, and Gender Inequality .........................................................43 Enhance Environmental Services and Sustainability.......................................................50 World Bank Group Program FY2013-2015........................................................................................53 Aggregate Program.........................................................................................................53 Regional Differentiation..................................................................................................55 Sub-Saharan Africa.............................................................................................................60 South Asia..........................................................................................................................65 East Asia and Pacific..........................................................................................................67 Latin America and the Caribbean.......................................................................................69 Middle East and North Africa............................................................................................. 71 Europe and Central Asia..................................................................................................... 74 Global..............................................................................................................................77 How We Will Implement The Program.............................................................................................82 iv WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Annex 1: WBG Portfolio Performance and Portfolio Quality FY2010–2012..........................................................................................87 Annex 2: Lessons of the WBG Agriculture and Related Sector Program: FY2010–2012......................................................................................95 Annex 3: Agriculture Action Plan Scorecard.....................................................101 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 v Tables Table 1: Summary of Key Actions on Areas of More Emphasis, Indicators of Progress, Timeline of Expected Results, and Responsibilities................................................. xx Table 2: Overview of WBG Projections, What We Will Do More of, Less of, and What Is New..............................................16 Table 3: Results We Will Help Our Clients Achieve...............................................................19 Table 4: Regional Disaggregation of Financing Projections ($ billions)..................................56 Table 5: Differing Emphasis Across the Three Worlds of Agriculture....................................59 Table 6: World Bank Group and Related Sector Lending by Subsector ($ millions)...............87 Table 7: World Bank Group and Related Sector Lending by Region ($ millions)....................89 Table 8: Agriculture Action Plan Scorecard [Illustrative set of indicators]............................ 101 vi WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Boxes Box 1: Shifting Scale and Geography of Global Grain Production and Exports.....................3 Box 2: Scaling Up IFC Interventions in the Agribusiness Value Chain...................................6 Box 3: Recent Progress on Food Security, Poverty Reduction, Agricultural Growth, and Environmental Sustainability.....................................................................................18 Box 4: Examples of Landscape Approaches.......................................................................22 Box 5: More Emphasis on Climate-Smart Agriculture.........................................................26 Box 6: Recent Examples of Land Tenure Projects..............................................................31 Box 7: Seven Principles of Responsible Agricultural Investments (PRAI)...........................32 Box 8: More Emphasis on Facilitating a Private Sector Response......................................35 Box 9: Liquid Biofuels: A Prominent Agricultural Issue in Global Food Price Discussions........................................................................... 36-37 Box 10: The Importance of Promoting Cross-border Regional Trade in Sub-Saharan Africa...............................................................................................40 Box 11: More Emphasis on Risk Management, Nutrition, Gender, and Governance................................................................................................. 44-45 Box 12: Worst Drought in 60 Years in the Horn of Africa and the Sahel...............................46 Box 13: More Emphasis on Landscape Approaches.............................................................50 Box 14: Triple Win of Sequestering Carbon in Soils..............................................................52 Box 15: General Sector Guide to In-Country Dialogue on WBG Prioritization in Country Assistance Strategies and Partnership Strategies....................................................57 Box 16: Beyond Lending Operations: Fee-Based Services and Reimbursable Technical Assistance in Middle-Income Countries..................................................................60 Box 17: A Special Initiative to Scale Up IFC Impact in Africa................................................65 Box 18: Agriculture in the Scaling Up Nutrition (SUN) Movement........................................80 Box 19: Lessons from the Independent Evaluation Group Review of the WBG in Agriculture & Water.............................................................................. 96-97 Box 20: IDA Crisis Response Window and Immediate Response Mechanisms.................100 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 vii Figures Figure 1: Recent World Food Price Spikes................................................................................2 Figure 2: Growth Rates of Yields for Major Cereals Have Begun to Rise but Remain Low....24 Figure 3: Global Aquaculture and Capture Fisheries Production.............................................27 Figure 4: IDA/IBRD Ongoing Program: Composition of Undisbursed Balance.......................53 Figure 5: World Bank Group Agriculture and Related Sector Financing..................................55 Figure 6: AFR Composition of Current IDA/IBRD Program: Undisbursed Balance.................61 Figure 7: SAR Composition of Current IDA/IBRD Program: Undisbursed Balance.................66 Figure 8: EAP Composition of Current IDA/IBRD Program: Undisbursed Balance.................68 Figure 9: LCR Composition of Current IDA/IBRD Program: Undisbursed Balance.................70 Figure 10: MNA Composition of Current IDA/IBRD Program: Undisbursed Balance...............73 Figure 11: ECA Composition of Current IDA/IBRD Program: Undisbursed Balance.................75 Figure 12: Volume of Spending on Analytical and Advisory Activities......................................91 viii WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Foreword Agriculture remains critical for food and nutrition security, improving incomes and employment, and providing environ- mental services. The latter includes critical needs such as absorbing carbon, sustainably managing watersheds, and preserving biodiversity. Enhancing agriculture’s impact in all these areas requires more and better investment in the sector, particularly in view of three world food price spikes over the last five years, continued medium-term price uncer- tainty, and already observable crop yield losses from global warming. In this context, we are very pleased to present the World Bank Group’s Agriculture Action Plan for Fiscal Years 2013-15. In combination with the FY2010-12 Agriculture Action Plan, it will result in a continuous six year period of operationalizing the World Development Report 2008: Agriculture for Development. The Agriculture Action Plan FY2013-15 outlines the continuation of a scaled-up World Bank Group commitment to agriculture and related sectors, projected at between $8 billion to $10 billion annually over the next three years. Scaled-up support is needed to meet the World Bank Group goals of reducing poverty, increasing shared prosperity, and promoting environmental sustainability. Our predominant focus continues to be on raising agricultural productivity and resilience, especially for smallholder farmers. We will also be giving more emphasis to: climate-smart agriculture, private sector responses, longer-term risk management, gender mainstreaming, nutrition, and landscape approaches to farming and to land use more gener- ally. The approach addresses an evolving and volatile context with a long-term focus on growth and sustainability, and the mix of our support across and within countries will continue to be guided by the strategic insights in the World Development Report 2008: Agriculture for Development. Complementing our country-level support, priority for engagement in global partnerships will be on those that improve the efficiency and effectiveness of agricultural assistance in poor countries and that leverage greater resources in low-, middle- and high-income countries to address global public goods. This leverage will be sought through lowering risks, improving transparency, increasing global environmental sustainability, improving nutrition, safeguarding public health, and encouraging private sector provision of public goods through partnerships. These will all help enhance the power of agriculture to reduce poverty, improve food security, and help avoid a 4ºC warmer world. Rachel Kyte Rashad Kaldany Vice President Vice President and Chief Operating Officer Sustainable Development Network Global Industries The World Bank International Finance Corporation x WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 xi Acknowledgments The World Bank Group Agriculture Action Plan FY2013–2015 was prepared by a core team comprising Robert F. Townsend (Team Lead, World Bank), Iride Ceccacci (World Bank), Sanjiva Cooke (World Bank), Mark Constantine (IFC), and Gene Moses (IFC). The broader team who provided significant inputs included Martien van Nieuwkoop (Africa Region), Madhur Gautam (South Asia), Patrick Labaste (East Asia and Pacific), Julian Lampietti (Middle East and North Africa), Holger Kray, Irina Ramniceanu (Europe and Central Asia), Laurent Msellati (Latin America and the Caribbean), Nabil Fawaz (MIGA), Christopher Delgado, Jorge Munoz, Sergiy Zorya, Saswati Bora, and Susanne Scheierling. Additional input and support were provided by Marc Sadler, Grahame Dixie, Mateo Ambrosio Albala, Yurie Tanimichi Hoberg, Aparajita Goyal, Peter Dewees, Gerhard Dieterle, Marjory-Anne Bromhead, Eija Pehu, Riikka Rajalahti, Francois Le Gall, Randall Brummett, Manuel Lantin, Iftikhar Mostafa, Johannes Linn, and Amy Stilwell. Overall guidance was provided by the Agriculture and Rural Development Sector Board, including Juergen Voegele, Sector Director; Mark Cackler, Karen Brooks, Dina Umali-Deininger, Ethel Sennhauser, Laurent Msellati, Hoonae Kim, Simeon Ehui, Magda Lovei, Iain Shuker, Will Martin, Susanne Scheierling, Richard Henry, Jonathan Wadsworth, and Bill Sutton; and by Atul Mehta, Director, IFC; and German Vegarra, Associate Director, IFC. Review and additional guidance was provided by Rachel Kyte, Vice President of the Sustainable Development Network (SDN); Grace Yabrudy, Director of Strategy and Operations for SDN; other SDN Sector Directors, and both the regional and non-regional vice presidential units within the World Bank. xii WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 xiii Abbreviations and Acronyms AAA Analytical and Advisory Activities AAP Agriculture Action Plan ADB Asian Development Bank AES Agriculture and Environmental Services AfDB African Development Bank AFR Africa Region AIDS Acquired Immune Deficiency Syndrome ALLFISH Alliance for Responsible Fisheries AMIS Agricultural Market Information System ARD Agriculture and Rural Development CAADP Comprehensive Africa Agriculture Development Programme CAS Country Assistance Strategy CFS Committee on World Food Security CGIAR Consultative Group on International Agricultural Research CPS Country Partnership Strategy CRW Crisis Response Window CSO Civil Society Organization DEC Development Economics DGM Dedicated Grant Mechanism DIME Development Impact Evaluation Initiative EAP East Asia and the Pacific ECA Europe and Central Asia EU European Union FAO Food and Agriculture Organization FAOSTAT FAO Statistical Database FBS Fee Based Service FCPF Forest Carbon Partnership Facility FIF Financial Intermediary Fund FIP Forest Investment Program FPD Finance and Private Sector Development FY Fiscal Year G8 Group of Eight (France, Germany, Italy, Japan, United Kingdom, United States, Canada, Russia) G20 Group of Twenty (Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, United Kingdom, United States, European Union) GAFSP Global Agriculture and Food Security Program GDP Gross Domestic Product GEF Global Environment Facility GFRP Global Food Crisis Response Program GHG Greenhouse Gas GIS Geographic Information Systems GLOBALGAP Global Good Agricultural Practice xiv WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 GPO Global Partnership for Oceans GPS Global Positioning System HDN Human Development Network HIV Human Immunodeficiency Virus IBRD International Bank for Reconstruction and Development ICFA International Coalition of Fisheries Associations ICT Information and Communication Technology IDA International Development Association IDB Inter-American Development Bank IEG Independent Evaluation Group IFAD International Fund for Agricultural Development IFC International Finance Corporation IMF International Monetary Fund IRM Immediate Response Mechanism ISR Implementation Status Report IUCN International Union for Conservation of Nature LCR Latin America and the Caribbean MDG Millennium Development Goals M&E Monitoring and Evaluation MIC Middle-Income Country MIGA Multilateral Investment Guarantee Agency MNA Middle East and North Africa OECD Organisation for Economic Co-operation and Development OPCS Operations Policy and Country Services PPP Public Private Partnerships PRAI Principles of Responsible Agriculture Investments PREM Poverty Reduction and Economic Management Network PROFISH Global Program on Fisheries PROFOR Program on Forests REDD Reducing Emissions from Deforestation and Forest Degradation RTA Reimbursable Technical Assistance SAR South Asia SDN Sustainable Development Network SDR Special Drawing Rights SUN Scaling Up Nutrition UN United Nations UNCTAD United Nations Conference on Trade and Development US United States USDA United States Department of Agriculture VG Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries, and Forests in the Context of National Food Security WBG World Bank Group WDR World Development Report WFP World Food Program WTO World Trade Organization WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 xv Summary 1. The future needs an agricultural system that produces about 50 percent more food to feed the world’s 9 billion people by 2050;1 that provides adequate nutrition; that substantially raises the levels and resilience of incomes and employment for most of the world’s poor, 75 percent of whom live in rural areas and most of whom rely on agriculture for their livelihoods; that provides environmental services such as absorbing carbon, managing watersheds, and preserving biodiversity; and that uses finite land and water resources more effi- ciently. It can be done with more and better investment in the sector, with more attention to reducing gender inequality in access to resources and opportunities, and to addressing cross-sectoral linkages between agri- cultural actions and outcomes for economic growth, livelihoods, the environment, nutrition, and public health. Such linkages were addressed in depth in the World Development Report (WDR) 2008, Agriculture for Development. More recently, the already-urgent need for action in agriculture has been amplified by recurrent spikes in global food prices, their lasting impact on poverty and nutrition, and the associated risk of social and political tensions. And for each degree Celsius of global warming, the potential grain crop yield loss is about 5 percent.2 Investment returns in the sector can be high. Income gains in agriculture are no more costly to achieve than income gains in other sectors,3 and the associated growth originating from agriculture has been two to four times more effective at reducing poverty than growth originating from other sectors.4 2. The evolving and volatile context. Higher short-term food price volatility is increasingly becoming a longer- term phenomenon. Food prices are spiking again for the third time in five years. In 2012, the US experienced its worst drought in 50 years, which, combined with lack of rains in Russia, Ukraine, and Kazakhstan, signif- icantly raised world maize, soybean, and wheat prices. The increased frequency and intensity of weather events is making it harder to produce enough food for the world’s growing population, which, combined with projected rising demand and the inherent slow responsiveness of the food system, is leading to high food price volatility. While higher food prices offer improved incentives to producers, these are weakened by high food price volatility and inputs costs. Beyond grain markets, growing demand for higher-value products, including from livestock and aquaculture, offers new opportunities for producers, but with the challenge for smallholders to meet more exacting standards. Low and slowing economic growth in developed economies and increased South-South trade provide a shift in market opportunities. Private investment in the sector has increased substantially over the last three years, along with a renewed focus on agriculture by devel- oping countries, donor governments, and the World Bank Group (WBG). Long-term pressure on donor public financing amplifies the need for more-effective use of public sector support, which includes leveraging larger private investment inflows into agriculture to provide public goods such as increased supplies of more nutri- tious foods, lower marketing costs, greater food safety, and higher incomes more broadly spread. 3. The World Bank Group Agriculture Action Plan FY2013–2015 builds on recent scaled-up support for agriculture and related sectors 5 that focused on helping developing countries make progress toward the 1 An estimate based on Alexandratos, N., and Bruinsma, J. (2012). “World Agriculture Towards 2030/2050. The 2012 Revision.� ESA Working Paper No. 12-03, Food and Agriculture Organization of the United Nations. Rome. 2 Lobell, D., Schlenker, W., and Costa-Roberts, J. (2011). “Climate Trends and Global Crop Production Since 1980.� Science 333: 616–620. 3 World Bank (2010). Cost-benefit analysis of World Bank Projects. Independent Evaluation Group. Washington, DC. 4 World Bank (2007). World Development Report 2008. Agriculture for Development. Washington, DC. 5 The coverage of “agriculture and related sectors� includes IDA/IBRD investments coded as agriculture, fishing, and forestry; agro-industry, marketing and trade; public-administration–agriculture and other investments directly related to agricultural production under the Agriculture and Rural Development Sector Board (e.g., land administration, agricultural and rural finance, market roads); and IFC investments in (i) agribusiness production and processing, (ii) agri-related trade finance, (iii) fertilizers, (iv) agri-logistics and infrastructure, and (v) food retail. xvi WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Millennium Development Goals (MDGs) of halving 98 percent of all Bank-financed agriculture and poverty and hunger. In response to client demand, rural development projects [and 100 percent in five the WBG support to agriculture and related sectors of the six regions] were gender informed),8 and increased in aggregate by 70 percent, from an improved access to finance for private sector actors annual average of $4.1 billion in FY2006–08 to $7.0 in liquidity constrained IDA countries to stimulate billion in FY2010–12, consistent with earlier projec- trade of critical agricultural commodities and inputs tions (annex 1). Reflecting the growing role of the to improve food security (through programs such private sector, International Finance Corporation as IFC’s Critical Commodity Finance Program). (IFC) investments in the sector more than doubled. IFC further elaborated its elements of the action 4. Going forward, the WBG will sharpen its focus plan through its Agribusiness Strategic Action Plan on long-term actions in response to the evolving in 2011. IFC’s expanding presence in the agricul- and volatile context. The WBG will continue to ture sector was notably evident in Sub-Saharan focus on helping developing countries make prog- Africa, where investments tripled from $190 million ress on poverty reduction, on which improved perfor- in 2011 to $586 million in FY2012. In FY2010–12, mance of agriculture has been particularly effective, there was a particular focus on the poorest coun- and on food and nutrition security. Given that higher tries, with the share of International Development short-term agricultural price volatility is becoming a Association (IDA) resources supporting agricul- longer-term phenomenon requiring longer-term solu- ture and related sectors increasing from 17 to 19 tions, and reflective of client demand, our support percent. Benefits are reaching the poorest people, over the next three years, relative to the previous who mainly reside in rural areas. For example, three, will give more emphasis to improving the resil- the Global Food Price Crisis Response Program ience of agricultural systems and rural livelihoods (GFRP) reached 66 million people in 49 coun- through support for more climate-smart agriculture, tries since its inception in 2008. Recent economic longer-term risk management, and better nutritional returns to Bank investments in agriculture, which outcomes, while giving less attention to shorter- have improved over time, have been relatively high, term solutions, such as through the GFRP. As higher with median returns of 24 percent.6 The dominant average agricultural prices offer better opportuni- focus of support is on smallholder agriculture. The ties for smallholder producers, traders, and agro- broader program, with Bank investments in 93 processors, more emphasis will be given to helping countries, has supported longer-term investments stimulate this private sector response, including such as in agricultural research and extension, and analytical work to better understand some of the improved water management with measured prog- political and institutional constraints to improving ress on irrigated areas (supported 1.2 million hect- agricultural performance. In addition, with growing ares of new or improved irrigation and drainage), pressure on land, and natural resource inter-link- agricultural management practices (supported 3 ages, more emphasis will be given to supporting million client days of training to improve agricul- landscape approaches to better integrate the use tural management practices), adoption of new of land, water, and forest resources for their more technologies (600,000 farmers adopted new sustainable use. The annual average level of WBG technologies),7 gender mainstreaming (in FY2012, investment in the sector over the next three years is projected to be between $8 billion to $10 billion 6 Median of the subset of projects that closed in FY2009–11 (an increase from the FY2010–12 projection of $6.2 evaluated by the World Bank Independent Evaluation Group (IEG) that had ex-post rates of return estimates. 7 For projects closing during FY2010–11. As these results 8 The Bank standard is that a project is gender informed indicators are now among the World Bank core sector if it satisfactorily addresses at least one dimension indicators, they will be collected more systematically of gender in project design (gender-focused analysis, over the next three years. gender actions, or gender-disaggregated M&E). WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 xvii billion to $8.3 billion). Responding to client demand, productivity growth, including increasing the these investments will give more emphasis to the share of IBRD/IDA/IFC agriculture lending and evolving global context, while maintaining the longer- investments that support climate change adap- term directions set over the last three years to scale tation and mitigation, such as improved land up impact by building systematically on the lessons and water management, development and of our past engagement. The WBG will: adoption of more drought and flood tolerant plant varieties, and support for animal and �� Maintain the strategic focus of long-term forest management systems that reduce and actions through five thematic areas to help absorb greenhouse gas (GHG) emissions; (ii) clients improve sustainable agricultural growth, facilitating private sector response, including, incomes, food and nutrition security, and their but not limited to, increasing IFC’s agribusiness resilience to climate change. The thematic investments by about 65 percent (projected) areas—shaped by the WDR2008, associated to, on average, between $4 billion to $5 billion consultations, and implementation lessons—are annually in FY2013­ –15; (iii) pursuing agricul- (i) raising agricultural productivity and its resil- ture risk management more explicitly, including ience through support to better land and water increasing the number of country-level agricul- management in irrigated and rainfed areas, and ture sector risk assessments, and continued improved technologies, including through the development of new market-based risk-hedging Consultative Group on International Agricultural instruments for farmers; (iv) improving gender Research (CGIAR), and greater IFC support mainstreaming by raising the bar for agricul- for critical inputs such as fertilizer and farm ture beyond the Bank standard; 9 (v) greater equipment; (ii) linking farmers to markets and attention to nutritional outcomes of agricultural strengthening value chains to improve market actions, including increasing the share of agri- access and trade through support to improve culture projects with an explicit focus on nutri- infrastructure, information technology, post-har- tion; (vi) more use of landscape approaches, vest handling, and access to finance; (iii) facili- including increasing the number of projects tating rural non-farm income through improving that combine agriculture, water, forestry, and the rural investment climate and skills develop- biodiversity complementarities; and (vii) gover- ment; and the two cross-cutting themes of: (iv) nance, including strengthening analytical work reducing risk, vulnerability, and gender inequality to better understand the nature of political and through support to risk management mecha- institutional constraints to improving agricul- nisms, greater transparency in food markets, ture performance, and support to improve the and improving women’s access to services, governance of land tenure. resources, and opportunities; and (v) enhancing 9 With a target that, in the design of agriculture and rural environmental services and sustainability, development projects, by FY2015, 100 percent are including support to better manage livestock informed by gender analysis, and 75 percent also have systems, forests, and oceans, and to enhance gender actions and gender-disaggregated monitoring and evaluation (M&E). For a relatively small set of projects, carbon capture in agriculture. Successful imple- after the gender analysis is complete it may reasonably be mentation will continue to require addressing concluded that gender-specific actions and related M&E local, national, (sub) regional, and global gover- are not appropriate. The focus on all three elements of design (gender analysis, gender actions, and gender disag- nance issues in agriculture. gregated M&E), raises the bar for an agriculture and rural development project beyond the Bank standard of having only one of these elements satisfactorily addressed. Using �� In recognition of the evolving global con- the Bank standard, over FY2010–12, 88 percent of agricul- text, give more emphasis to (i) climate-smart tural and rural development projects (98 percent in FY2012) agriculture, within the theme of agricultural addressed at least one of the three gender elements of design, while 47 percent addressed all three. xviii WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 �� Give less emphasis to (i) short-term emergency (MNA), it will be on raising productivity through response to food price spikes through GFRP. better management of water resources; reducing This will be de-emphasized starting in FY2013 risk and vulnerability, including through better nutri- because most client countries and the WBG tion; improving market access and competitive- have now largely adapted to the increased risk ness; rural livelihoods; and jobs. In East Asia and stemming from international food price uncer- the Pacific (EAP), Latin America and the Caribbean tainty (that was largely unexpected at the time (LCR), and Europe and Central Asia (ECA), more of the 2008 food price spike). More emphasis attention will be given to linking farmers to higher going forward will be given to longer-term solu- value markets—a differentiation consistent with the tions, and the World Bank now has more per- “three worlds of agriculture� highlighted in WDR manent instruments to respond to future emer- 2008: Agriculture for Development. While these gencies, including those related to agricultural are aggregate regional areas of focus, there is wide price spikes, through the IDA Crisis Response diversity within regions and countries, to which Window (CRW) and Immediate Response projects will be adapted. For example, there has Mechanism (IRM); (ii) on average, smaller proj- been growing demand from middle-income coun- ects relative to country context will be given less tries (MICs) for Bank engagement beyond lending emphasis. To improve portfolio quality with fixed operations for fee-based services and reimbursable staff numbers and fixed budgets, the number of technical assistance in areas of agricultural compet- IDA/IBRD projects in the portfolio will need to itiveness and access to markets, inclusive green remain the same or even decline, implying larger growth, and public-private partnerships. project sizes at the slightly higher IDA/IBRD pro- jected levels of assistance over the next three 6. The WBG will be more effective in agricul- years, even though small projects may still need ture through leveraging resources of others, to be supported in some specific contexts; (iii) including clients, the private sector, and donor stand-alone crop and forest IDA/IBRD projects partners. By itself, $8 billion to $10 billion a year will be given less emphasis with a shift toward in new investment in agriculture is significant, but more integrated agriculture, water, and for- not enough to meet global needs. While it can estry projects, using a landscape approach for lead to significant results on its own, this invest- more sustainable resource use; and (iv) opera- ment will lead to more comprehensive and effec- tions outside a country-led framework for coor- tive results if it is aligned to and leverages larger dination of agricultural investments where such public and private responses. In addition, there frameworks have been put in place in response will be continual efforts to improve the quality and to aid effectiveness concerns. effectiveness of our agriculture portfolio. In these respects, the WBG will: 5. The mix of WBG support will vary by country and by region. For example, the dominant focus �� Use a strategic approach to global partner- of our support in the Africa Region (AFR) will be ships. High external demand for partnership on raising agricultural productivity and improving from the WBG and limited staff time require market access through more emphasis on, among that a more strategic approach be used in others, irrigation, research and extension, input undertaking global partnerships. In agriculture, availability and distribution, private investment, the priority will go to partnerships that improve improved governance of agricultural land, better the efficiency and effectiveness of agricultural integration of value chains, and improved rural roads assistance in poor countries and that leverage and other infrastructure. In the South Asia Region greater resources in both low- and middle- (SAR) and the Middle East and North Africa Region income countries through lowering risks, WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 xix improving transparency, increasing global envi- Africa-led Comprehensive Africa Agriculture ronmental sustainability, improving nutrition, Development Program (CAADP) process to and safeguarding public health. This mandates improve country investment plans and prioriti- larger and broader partnerships, increased coor- zation in agriculture and the associated quality dination with other sectors within the WBG, of public expenditures and investments from and expanding engagement in initiatives under all sources of financing, including the WBG; external governance. A good example of the (ii) strengthen the internal platforms such as latter is the newly reformed CGIAR, which con- the Global and Africa Region Agribusiness centrates the resources of 1,000 highly quali- Platform to better link and coordinate WBG fied scientists on the critical issue of increasing support to both the public and private sectors smallholder productivity in food crops in poor at the country level; and (iii) strengthen part- countries. We will also pay particular attention nerships (such as through the SecureNutrition to those partnerships that allow public sector Platform) to leverage knowledge and main- funding to better leverage private sector provi- tain our analytical base for policy dialogue sion of public goods such as innovation in agri- and project development. All can help both culture and food safety. Global partnerships improve the quality of our portfolio and the will complement our country-level programs magnitude of our impact. and associated bilateral and multilateral part- nerships in which we will also give attention to 7. A summary of the key actions on areas of more new areas, and emphasize some areas more. emphasis over the next three years are reflected in Table 1. The actions relate to specific elements �� Give attention to new areas, including (i) of portfolio composition with the associated base- working with other partners, primarily USAID lines and the direction of change, reflective of the and African Development Bank (AfDB), to direction of client demand. Specific targets at the establish a project preparation facility for level of detail on portfolio composition across needed but more costly to prepare projects each of the areas emphasized (e.g., climate-smart (such as irrigation and land tenure projects, agriculture, nutrition, and landscape approaches), including public-private partnerships (PPPs)) as reflected by the indicators in Table 1, are not in AFR (regardless of who ultimately finances included as this would leave little room for flex- them); (ii) developing new IFC market-based ibility to respond to specific client demands over instruments that leverage private finance to FY2013–15. We will, however, engage in country manage price and weather risks, reduce post- dialogue on each of these areas which, together harvest losses, spread the use of low water with the direction of client demand, should use irrigation and expand aquaculture produc- increase the share of our program focusing on tion; and (iii) shifting more toward a strategic these issues. This was the same approach taken and context-specific framework approach and in the WBG Agriculture Action Plan FY2010–12. early risk screening to manage project risks We will increasingly report on outcome indicators (safeguards) as a more cost-effective and as aggregate information becomes available on timely approach to recognizing and managing these. In addition to the set of core sector indi- these risks. cators reported on in FY2010–12 (related to irri- gation, agricultural management practices, and �� Give more implementation emphasis to (i) technology adoption), an expanded set, many of support capacity development for policy, plan- which are outcome indicators, will be reported on ning, and investment prioritization through the in FY2013–15 (see full list in annex 3). xx WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Table 1: Summary of Key Actions on Areas of More Emphasis, Indicators of Progress, Timeline of Expected Results, and Responsibilities What we will help our clients do Year results expected [shaded] Key WBG Actions on Current Thematic Areas Areas of More Emphasis Indicators of progress Value FY13 FY14 FY15 Responsibility Raise agricultur- More emphasis on climate- al productivity smart agriculture (and improve its resilience) Increase share of support Share of IDA/IBRD agricul- 31% Regions for adaptation through in- ture lending that supports [FY11–12] with technical vestments such as develop- climate change adaptation.11 support from ment and adoption of more AES and DEC. drought and flood tolerant Increased amount of Reporting by varieties, improving land and IFC financing for use $75 million OPCS water management prac- of high-efficiency irrigation IFC tices, and reducing gender equipment. inequality across these types of investments.10 Increase share of support for Share of IDA/IBRD agricul- 20% mitigation through invest- ture lending that supports [FY11–12] ment such as animal and climate change mitigation. forest management systems that reduce GHG emissions. Link farmers More emphasis on private to markets and sector response strengthen value chains Strengthen value chains, Share of IFC’s agribusiness 39% IFC and increase small holder investment in total WBG [FY10–12] supplier networks serving support for agriculture. agribusiness processors, [Volume of IFC agribusiness traders, agri-commodity investment projected to in- supply chain integrators, and crease by about 65 percent food retailers, including by from $2.7 billion in FY2010–12 women smallholders. to between $4 billion and $5 billion in FY2013–15, reaching 1.5 million farmers]. Increase rural More emphasis on private non-farm income sector response Develop and implement Number of countries covered 0 80 AES and FPD/ ‘Doing Agribusiness Surveys’, in annual Doing Agribusiness IFC together with more focused Surveys. multiple country analysis on specific topics. 10. The indicators of progress on gender mainstreaming cut across agriculture projects, including those focusing on raising agricultural productivity (see cross-cutting section of the table for specific indicators on gender). 11. Measures the share of the portfolio that provides adaptation co-benefits both when climate change adaptation is among a project’s stated objectives or one of its positive externalities. The same approach is used for the indicator on climate change mitigation. WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 xxi Table 1 (continued) What we will help our clients do Year results expected [shaded] Key WBG Actions on Current Thematic Areas Areas of More Emphasis Indicators of progress Value FY13 FY14 FY15 Responsibility Cross-cutting: More emphasis on reducing Reduce risk, gender inequality vulnerability, and gender inequality Raise the standard for main- Share of projects that include 68% 100% Regions with streaming gender into agri- gender analysis in design. [FY10-12] AES culture programs beyond the Bank-wide standard Share of projects that address all three gender dimensions (analysis, actions, and M&E) 46% 75% in project design. [FY10-12] More emphasis on risk management Increase the number of Number of country-level 2 AES with country level agricultural agriculture sector risk [FY12] Regions sector risk assessments assessments undertaken. Expand the number of crop Number of IBRD-IFC crop- 10 IBRD/IFC related insurance offerings related insurance projects. Expand financial instru- Number of clients accessing TBD in FY13 IFC ments for agricultural price the IFC Agricultural Price Risk risk management and trade Mechanism. facilitation. Number of clients accessing TBD in FY13 IFC’s Critical Commodity Finance Program. Provide financial and techni- Monthly and biannual 0 monthly 9 10 10 AES, DEC, FAO, cal support to the recently global food outlook reports reports OECD, WTO, established (global) Agri- available. IFAD, WFP, cultural Market Information 0 biannual 2 2 UNCTAD G20 System to improve market reports plus 8 other transparency and informa- countries tion availability on the global food situation. More emphasis on nutrition Encourage development Share of projects with an 12% Regions with and adoption of biofortified explicit focus on nutrition. [FY12] AES, HDN, and varieties; food fortification; PREM crop diversification to food with high nutrient content; and improving nutrition edu- cation through agricultural extension and livelihoods projects. xxii WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Table 1 (continued) What we will help our clients do Year results expected [shaded] Key WBG Actions on Current Thematic Areas Areas of More Emphasis Indicators of progress Value FY13 FY14 FY15 Responsibility More emphasis on governance More analytical work to Number of AAA that address TBD in FY13 Regions, AES, better understand the nature political economy issues. PREM of political and institutional constraints to sustainably improving agricultural pro- ductivity and resilience, and more use of land governance assessment frameworks at country level. Dissemination; technical Share of projects addressing 100 100 100 AFR, EAP, ECA, cooperation; financial assis- the governance of tenure of LCR, MNA, tance; institutional capacity land, fisheries, and forests SAR, support development; knowledge that support voluntary efforts from AES and sharing, including through by client country government DEC, with other South-South cooperation; to implement these VGs. development and assistance in developing partners national tenure policies and transfer of technology in ac- cordance with the Voluntary Guidelines on the Responsi- ble Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security (VGs). New IFC investments in Number of IFC investments in 0 IFC larger-scale primary agricul- larger-scale primary agricul- ture will include food security ture that assess food security baseline impact assessments baseline. in food-insecure countries and disclosure of key con- Number of IFC investments in 0 tract terms in government to larger-scale primary agricul- private transfers of land. ture that have disclosed key contract terms in government to private transfers of land. Cross-cutting: More emphasis on landscape Enhance approaches environmental services and Promote more use of land- Share of projects that use TBD in FY13 Regions, AES sustainability scape approaches for more landscape approaches. sustainable resource use (e.g., combine agriculture, water, forestry, and biodi- versity). WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 xxiii Table 1 (continued) How we will implement Year results expected [shaded] How we will Key Actions on Areas of Current implement More Emphasis Indicators of progress Value FY13 FY14 FY15 Responsibility Strengthen Seek additional financing for Volume of support through $12.5 AFR planning and the Multi-Donor Trust Fund the CAADP Multi-donor million investment supporting capacity devel- Trust Fund. prioritization opment for policy, planning, in the poorest and investment prioritiza- countries tion through the Africa-led CAADP country processes. Support the process of plan- Number of agricultural public 7 12 18 Regions (mainly ning and investment priori- expenditure reviews complete. [FY09–10] AFR) using PER tization through agricultural toolkit from AES public expenditure reviews. Implement new special initia- Volume of IFC agribusiness $0.6 bn $1.2 bn IFC tive to scale up IFC agribusi- investments in AFR. [FY12] [FY15] ness impact in AFR. Facilitate Work with other partners to Project preparation facility 0 USAID, AfDB, additional scale- establish a project prepara- operational. WB AFR, IFC, up of irrigation tion facility for needed, but and other and land tenure more costly to prepare proj- development projects in AFR ects (such as irrigation and partners land tenure projects, includ- ing PPPs). [led by USAID] Better link IDA/ Strengthen explicit coor- Number of projects that Regions, IFC, IBRD/IFC/ dination between IFC and explicitly benefit from cross- 4 AES MIGA support at World Bank country teams, institutional learning between country level including through use of staff from the agriculture and internal platforms such as private sector development the Global and Africa Region sectors of the Bank and staff Agribusiness Platform, which from IFC. includes IFC, WB regions’ private sector development and agriculture units. Strengthen linkages between Number of GAFSP countries 1 GAFSP, WB, public and private invest- with both public and private IFC, ADB, AfDB, ments through the Global sector window investments. IDB, IFAD, FAO, Agriculture and Food Secu- WFP rity Program (GAFSP). xxiv WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Table 1 (continued) How we will implement Year results expected [shaded] How we will Key Actions on Areas of Current implement More Emphasis Indicators of progress Value FY13 FY14 FY15 Responsibility Strengthen Strengthen partnerships, Share of agriculture and relat- 54% SDN analytical work, including through the ed sector analytical products [FY09–11] including impact SecureNutrition Knowledge (by expenditure) that focus evaluations to Platform on Food Security explicitly on agriculture and guide sector and Nutrition, and for AFR, rural development.12 dialogue through the ongoing work and project under the CAADP process) Share of staff satisfied with identification to leverage knowledge and analytical outputs (relative to maintain our analytical base area of expertise/interest). to guide sector dialogue and our future project pipeline. Share of external clients satis- fied with analytical outputs (relative to area of expertise/ interest). Make strategic use of impact Number of impact evaluations 20 +4 +4 +4 Regions, DIME evaluation and look toward undertaken. ongoing supporting long-term path- through ways for scaling up impact DIME beyond the individual project. Improve project [Focus on design and sustain- Share of closed projects with 71% 80% SDN quality ability] Establishment of a satisfactory outcomes. [FY09–11] Sustainable Landscape Prac- tice that integrates agricul- ture productivity, livestock, forestry, land tenure, biodi- versity, and climate-smart Share of active projects 66% 80% agriculture into one team. with implementation issues [end FY12] or those not meeting their [Focus on risks] Engage in development objectives that AES, Regions, ongoing revision to the World have had corrective actions SDN Bank Safeguards, ensuring completed. sector issues are addressed. [Focus on staffing] Align staff ARD Sector with size and composition Board, and of support, including use of Regions secondees, additional hires beyond current levels, and cross-regional support. 12. Share of analytical work on agriculture and related sectors under the responsiblity of the Agriculture and Rural Development Sector Board. The analytical work on agriculture under the responsiblity of other sector boards is usually a component of a broader-focused mutisectoral analysis. Chapter 1: The Evolving and Volatile Context 1 Chapter 1: The Evolving and Volatile Context 1. The world continues to consume more food every year as the population grows and demand for the use of food crops in biofuels rises. Projections suggest that food production would need to increase by about 50 percent to feed the world’s population by 2050,13 but even today too many people remain hungry14 and malnourished. Land and water scarcity is becoming more of a constraining factor and is compounded by growing concerns about climate change. Water consumption by agriculture is expected to further increase by about 11 percent in 2050 compared to 2005.15 The expansion of farming frontiers into forested areas pose huge challenges for reducing GHG emissions from land-use change. At the same time, demand for forest- based fiber and wood energy is also increasing rapidly. Widening rural-urban income disparities increase the risk of social and political tensions. More exacting standards continue to pose challenges and oppor- tunities for producers and especially smallholder farmers to compete in growing high-value markets. All these trends continue to call for greater attention to agriculture to ensure it fully contributes to food secu- rity, poverty reduction, and green growth. Recent increases in agricultural investment have yielded a positive response. Developing countries were slightly more resilient to the 2011 and 2012 food price spikes than in 2008 mainly due to higher domestic production. However, these recent gains in developing countries have not been enough to put all countries on track to meet the MDGs on halving poverty and hunger by 2015.16 Over the next three years, the WBG will continue to assist clients to respond to these broader long-term trends that remain in place and will give more emphasis to changes that occurred in the global context over the last three years. Changes in the World 2. Food (and broader agricultural) prices have increased, as has price uncertainty. Higher agricultural prices provide an opportunity for farmers to produce and invest more, an incentive that is weakened by higher price volatility and higher input costs. World food prices spiked again in 2012 for the third time in five years (figure 1). The World Bank Food Price Index rose by 62 percent from mid-2007 to mid-2008. After declining by 30 percent from mid-2008 to mid-2010, it rose sharply again and in February 2011 reached its 2008 peak. Throughout 2012 food prices have remained high and in July 2012 they spiked again, especially for maize and wheat, with world food prices being 65 percent higher than their mid-2007 levels (53 percent in real terms). Broader agricultural prices also increased in 2011 and 2012 along with food prices, raising the value of agricul- tural land. Energy and fertilizer prices have increased substantially raising production costs and reducing farm profits. Higher food prices and food price variability, along with higher input costs, are likely to continue for the foreseeable future, with persistent uncertainty on the supply side including continued low stock levels; rising projected demand, especially for biofuels, and the inherently slow responsiveness of the global food system to supply and demand shocks.17 In practical terms, farmers deciding what to plant, and countries deciding 13 The 2050 projection estimates are based on Alexandratos, N., and Bruinsma, J. (2012). “World Agriculture Towards 2030/2050. The 2012 Revision.� ESA Working Paper No. 12-03, Food and Agriculture Organization of the United Nations. Rome. 14 About 900 million people remain hungry (undernourished) according the latest published estimate from FAO. 15 FAO (2009). Global Agriculture Towards 2050. Rome. 16 World Bank (2012). Global Monitoring Report 2012: Food Prices, Nutrition, and the Millennium Development Goals. World Bank. Washington, DC. 17 World Bank (2012). Responding to Higher and More Volatile World Food Prices. Agriculture and Rural Development Department. Washington, DC. 2 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Figure 1: Recent World Food Price Spikes 250 200 World Food Price Index (1990 = 100) 150 100 50 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: World Bank. when to import, face increased uncertainty in the share of food exports from larger-scale produc- likely distribution of future world food (and agricul- tion systems, improving the performance of small- tural) prices and perhaps greater consequences in holder agriculture remains critical for food and using past price levels and distributions to guide nutrition security in many regions (box 1). current decisions. Weather variability played a larger contributing role to food price increases in 3. Climate change has an increasing impact, recent years.18 Trade-restricting policy responses to but there are new opportunities to respond. higher food prices exacerbated price increases; for “Climate-smart agriculture,� which aims to example, changes in border protection measures enhance productivity, resilience, and reduce GHG accounted for an estimated 45 percent of the emissions has gained more recognition20 at the UN world price increase for rice and 30 percent of the Climate Change Conferences in Cancun 2010, in increase for wheat in 2006–08.19 Despite the rising Durban 2011, and at Rio+20 in 2012. In addition, recent agricultural reforms, particularly in OECD 18 In 2010/11, there were simultaneous weather-induced countries, are shifting slowly toward “greener� production losses in Canada, Russia, Ukraine, and the EU, agricultural support, 21 with more positive envi- which contributed to a 25 percent decline in cereal stocks ronmental externalities and reduced emissions. in developed countries. More generally, the number of reported droughts, floods, and extreme temperatures Reducing global warming cannot be achieved seems to be increasing. Relatively recent examples range from dry weather in Brazil, Ukraine, and Russia, to flooding in Australia, Pakistan, and West Africa. 20 The triple win of increasing productivity, resilience, and reducing GHG emissions /enhancing soil carbon 19 Martin and Andersen (2011). “Export Restrictions and sequestration. Price Insulations during Commodity Price Booms.� World Bank Policy Research Working Paper 5645, 21 World Bank ( 2012 ). Inclusive Green Growth: The Washington, DC. Pathway to Sustainable Development. Washington, DC. Chapter 1: The Evolving and Volatile Context 3 Box 1: Shifting Scale and Geography of Global Grain Production and Exports Globally, the average farm size (scale of production) declined from 2.1 hectares in 1980–1985 to 1.9 hect- ares in 2006–2010 (FAOSTAT), with large regional variations. The average farm size in AFR declined from 3.2 hectares to 2.1 hectares, and in SAR from 0.5 to 0.4 hectares during this period, while average farm size grew in LCR (from 5 to 8 hectares), ECA (from 8 to 14 hectares), and high-income developed countries (from 22 to 35 hectares), mainly due to out-migration of farm labor to non-agriculture sectors. Regions with large smallholder agriculture sectors (AFR, EAP, SAR, and MNA), increased their share in global grain production from 39 percent (in 1971–1980), to 44 percent (in 2001–2012), and their global share of grain exports from 6 to 12 percent for the respective periods. Yield gaps (the difference between actual farm and research farm yields) are the largest in AFR and SAR, but fairly small in EAP, pointing to the potential of smallholders to achieve higher yields when a conducive environment is in place. Smallholder agriculture will continue to be an important source of global and local food security. The global grain production share of regions with larger farms (ECA and LCR), has remained at about 14 percent, however, with stagnant local demand due to stag- nant population growth (for example, the population of ECA has remained at about 400 million people since the mid-1990s), their share of global grain exports increased from 9 to 27 percent from 1990–95 to 2006–10. Source: Derived from FAOSTAT and USDA. without reducing GHG emissions from agricul- Communication Technology (ICT) innovations ture, which, together with the deforestation asso- (such as GIS, sensors, and high-resolution satel- ciated with land conversion, accounts for about 30 lite images) offer further opportunities to enhance percent of all emissions. In addition, agriculture soil management in response to climate change, has significant potential to sequester carbon emis- and for crop yield monitoring and forecasting, sions with an estimated potential of 20 percent of and dissemination of weather-related informa- all GHG emissions. 22 There has also been prog- tion. There also remain substantial, less capacity- ress on a methodology to measure and value intensive gains to be made to directly improve carbon sequestered through sustainable land farm and water management practices that can management, which could allow for carbon to be raise yields, enhance resilience, and reduce emis- sold on the voluntary market on behalf of farmers sions. These activities may include (i) adopting to generate additional revenues for them. At the farming techniques that use less fuel such as same time, increased soil carbon can improve soil shifting to conservation tillage, (ii) changing the productivity and the resilience of farming systems nutrient management practices applied to crops to climate shocks. This productivity increase to reduce emissions from nitrogen fertilizers and would be complemented by reductions in climate manure applied to farmers’ fields, and (iii) changing change and GHG emissions. 23 Information and livestock and manure management practices, including improving livestock nutrition. 22 Smith, P., Martino, D., Cai, Z., Gwary, D., Janzen, H., Kumar, P., McCarl, B., Ogle, S., O’Mara, F., Rice, C., 4. World economic growth has slowed, but Scholes, B., Sirotenko, O., Howden, M., McAllister, T., South-South trade has increased. With major Pan, G., Romanenkov, V., Schneider, Uwe., Towprayoon, S., Wattenbach, M., and Smith, J. (2008). “Greenhouse financial turbulence in the Euro area and unrest gas mitigation in agriculture.� Phil. Trans. R. Soc. B 363 in some important oil producing countries, world (1492): 789–813. economic growth has slowed. Real GDP growth in 23 World Bank (2010). World Development Report 2010: advanced economies has slowed from 2.4 percent Development and Climate Change. Washington, DC. 4 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 (2006–2008 average) to 1.7 percent (2012–2013 increase the returns to assistance provided. In addi- estimate), while in developing economies it slowed tion, there are new opportunities for South-South from 7.6 percent to 5.9 percent.24 Trade among collaboration (e.g., the Africa-Brazil Agricultural developing countries has increased. For example, Innovation Marketplace). Private sector invest- China is now the biggest trading partner for Brazil ment in agriculture supply chains, including primary and Argentina in agricultural products, and South- production, continues to expand rapidly. Agricultural South trade will be an important source of agricul- land investment, particularly from foreign investors, tural growth over the next three years relative to has also increased, bringing both new opportunities trade with developed countries. Rising inequality and new risks, which will need to be assessed and and associated risks of social and political unrest can mitigated on a country-by-country basis and through further undermine the growth process. Tempering the continued development of such initiatives as the the widening rural-urban income gap will require Principles on Responsible Agricultural Investment.26 higher and more productive private and public Large private companies have also increased their investment in rural areas. With current demographic sourcing of products and their engagement directly patterns, particularly in Africa and the Middle East, at the farm level, with greater attention to sustain- this investment will need to provide more opportu- ability. Public and private investments needed to nities for young people. Key to this is ensuring the achieve the MDGs remains substantial.27 overall enabling environment (polices, laws, and regulations) fosters private sector entrepreneur- ship in rural areas and protects land rights of small- Changes in the World Bank Group holder farmers, especially women. Leveraging more private sector investments in agriculture can help 6. Over the last three years there have been several accelerate growth and generate jobs. positive changes in the WBG related to the imple- mentation of the Agriculture Action Plan (AAP). 5. Governments, development partners, and These include the broader 2010 post-crisis direc- private sector commitments to agriculture have tions of the institution after the fuel and financial increased.25 African governments, for example, crisis to reinvigorate efforts to address poverty; have committed to and are scaling up support for the mainstreaming of emergency response instru- agriculture through the CAADP initiative. The G8 ments; development of the IFC Agribusiness in L’Aquila in July 2009 and the G20 in Pittsburgh Strategic Action Plan, including a new initiative to in September 2009 pledged $22 billion to support expand IFC agriculture investments in Africa, and food security and agricultural growth in low-income the resulting rapid increase in IFC investments; countries, including through the public and private and increased collaboration across sectors and sector windows of the Global Agriculture and the WBG, as illustrated by the SecureNutrition Food Security Program (GAFSP); however, actual Knowledge Platform and GAFSP). provision of these funds continues to fall short of pledges. Traditional and new donors are increasingly 7. Post-crisis direction. In April 2010, in response looking at the WBG to play a stronger role in coor- to the food and financial crisis, and in an effort to dinating fundraising activities and in managing the modernize multilateralism to reflect the changing associated resources through trust funds. Strategic world, the WBG initiated a set of actions and reforms and efficient management of these resources can 26 World Bank (2011). Rising Global Interest in Farmland: improve the effectiveness of aid delivery and help Can It Yield Sustainable and Equitable Benefits? Wash- ington, DC. 24 IMF (2011): World Economic Outlook: Slowing Growth, 27 FAO (2009 ). Capital Requirements for Agriculture in Rising Risks. Washington, DC. Developing Countries to 2050. Experts Meeting on How 25 http://www.oecd.org/dataoecd/36/61/49154108.pdf to Feed the World in 2050, June 24–26, 2009, Rome. Chapter 1: The Evolving and Volatile Context 5 to reinvigorate efforts to address poverty.28 The five approved by the Board in December 2011 to allow priority areas identified for strategic engagement for reallocations by countries of a portion of their are targeting the poor and vulnerable, especially in undisbursed balances from ongoing projects to AFR; creating opportunities for growth; promoting crisis response operations. The design of these global collective action for scaled up impact; instruments draws on lessons from other crisis- strengthening governance; and managing risk and response instruments used over the last three preparing for crises. In addressing these strategic years, including GFRP. areas, the WBG is modernizing services (to simplify procedures, enhance flexibility, and strengthen tech- 9. IFC is leveraging a broader range of private nical practices) and enhancing service delivery (with sector investments in the agriculture value decentralization to get closer to clients, supported chain. In 2011, IFC undertook an extensive review by stronger central guidance on policies and prac- of its engagement in the agriculture sector with tices). The WBG AAP FY2013–15 constitutes a key the objective of enhancing its footprint and posi- part of this invigorated effort to address poverty. tive impact. The resulting Agribusiness Strategic Action Plan emphasizes collaborative efforts 8. Mainstreamed emergency response instru- across the agriculture value chain to (i) enhance ments have been introduced. The food price food security through increased productivity and spikes of early 2008 led to requests for rapid reduced losses; (ii) promote inclusive economic delivery of flexible and fast-disbursing assistance growth and development, targeting benefits to to meet a rapidly developing crisis. The main result smallholder farmers and women; and (iii) promote was the GFRP approved by the Board on May 29, the dissemination and uptake of sustainability stan- 2008. Committing over $1.5 billion to 49 coun- dards and make better environmental and social tries, the bulk of it in a relatively short time period. performance a business driver (box 2). By way of At that time, GFRP fit the need of having a flex- example, a targeted focus on food security has ible vehicle to meet the urgent demands of a wide resulted in more investments in essential agricul- diversity of countries and was designed to disburse tural inputs such as seeds, productivity-enhancing resources quickly to the most affected ones. Rapid equipment, and fertilizers. It has also resulted in response from the agriculture-specific financing the development of programs such as the Global of GFRP (which also included budget support and Warehouse Finance Program, which supports social protection options) and other mechanisms private bank lending backed by agricultural produc- accounted for about 15 percent of IDA/IBRD agri- tion, and the Critical Commodity Finance Program, culture and related sector programs in 2009. created to stimulate the trade of critical agricul- However, with continued food price volatility and tural commodities and inputs. The importance of repeated income shocks, there clearly emerged managing risk has led to the development of new a need for more mainstreamed instruments with instruments such as the Agricultural Price Risk emergency triggers more suited to broader circum- Mechanism, a new IFC product that addresses stances. The Bank responded with the creation of price risk volatility. A focus on inclusive growth two instruments: (i) an IDA CRW was approved in has resulted in new investments in global agri- the course of the IDA-16 replenishment process, commodity traders because they provide direct and provides IDA countries with timely access links to markets for smallholder farmers; promoting to additional resources for crisis responses not sustainable supply chains through the uptake of limited to food crises; and (ii) an IDA IRM that was sustainability standards has provided a platform for working with retailers, consumer brands, and 28 New World, New World Bank Group: Post-Crisis Direc- other buyers of primary production to enhance tions. Paper presented to the Development Committee the performance and long-term viability of their on April 20, 2010. Washington, DC. 6 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Box 2: Scaling Up IFC Interventions in the Agribusiness Value Chain IFC is scaling up its support across the agribusiness value chain to improve the investment climate, expand infrastructure, improve access to agricultural inputs, facilitate trade, strengthen agribusiness-smallholder linkages, expand risk management options, and provide advisory and ecosystem services. Areas of support Investment Land tenure, regulation for provision of security, warehouse receipt climate finance, and streamlining customs procedures Infrastructure Concessions for storage, irrigation, and transport Input producers Farm equipment, micro irrigation, fertilizer, and agrochemicals and distributors Traders, distribu- Backward linkage to smallholders through provision of finance, Scale up in areas tors, and retailers extension services, and ecosystem services with largest impact Financial Expand agribusiness financing with risk sharing, warehouse receipt intermediaries financing, risk management products, trade finance, and environmen- tal and social standards Advisory and Farmer, small- and medium-scale enterprise training, environmental ecosystem and social standards, resource efficiency, corporate governance, services strategic community investments suppliers. Other manifestations include devel- efforts to improve nutrition, with approximately oping new multicountry applicable small farmer– $450 million going directly to nutrition activities friendly financing mechanisms for low water use (approved between FY2005 and FY2012). The irrigation technologies, or reengaging in aqua- Bank’s disbursement for nutrition since FY2000 culture as global demand for protein increases. has been averaging over $100 million per year. Partnerships have been emphasized in the private The largest portions of these commitments are sector and with governments, civil society organi- focused in AFR, SAR, and LCR. Agricultural prac- zations (CSOs), and regulatory bodies; examples titioners in the WBG have long sought a vehicle to include the launching of an Agriculture Investors improve collaboration among vice presidential units Forum and anticipated active participation for IFC on food issues, especially with regard to nutritional in helping provide a more representative and diver- outcomes. The new SecureNutrition Knowledge sified private sector voice in the FAO Committee Platform, 29 established in 2011, aims to link agri- on Food Security’s deliberations to define the culture, food security, and nutrition. It is coordi- Responsible Agriculture Investment Principles. nated jointly by HDN, the Poverty Reduction and Economic Management Network, and SDN, and 10. Launch of the SecureNutrition Knowledge is one of six knowledge platforms supported by Platform. The Bank, under the leadership of the the Knowledge and Learning Council of the Bank. Human Development Network (HDN), has made The Knowledge Platforms are intended to foster a concerted effort over the past three years to cooperation on multisectoral and transforma- scale up World Bank work in nutrition. The Bank tional issues between development practitioners, currently has 52 active projects that include 29 http://www.securenutritionplatform.org Chapter 1: The Evolving and Volatile Context 7 policy makers, researchers, and academia, while WDR 2008 highlighted the continued relevance also promoting a higher level of cross-sectoral and and importance of focusing on smallholder agricul- cross-vice presidential unit collaboration within ture (see also box 1). In addition to the WDR 2008, the Bank. The main objective of SecureNutrition the AAP FY2013–2015 builds on the findings of is to create an active community of practice— analytical work undertaken over the last three both virtual and physical, and internal and external years, particularly on Responding to Higher and to the WBG—where information and operational More Volatile Food Prices, Rising Global Interest in knowledge can be shared on how to increase the Farmland, the WDRs on Climate Change, Gender, nutritional impact of agriculture and food security and Jobs, the 2012 Inclusive Green Growth for investments and interventions while focusing on All report, and the Global Monitoring Report 2012 the following themes: (i) measurement: how food on Food Prices, Nutrition and the Millennium security and nutrition can be accurately and consis- Development Goals. tently measured to inform policy and programs, and how nutrition interventions could be better moni- 12. Responding to higher and more volatile food tored and evaluated over time; (ii) delivery: how to prices. Further analytical work was undertaken deliver interventions through the agriculture sector on responding to food price volatility30 and subse- that will have positive impacts on nutrition, and quently summarized in the economic and sector how to minimize possible negative impacts that work on Responding to Higher and More Volatile agriculture interventions may have on nutrition; (iii) World Food Prices. The key messages are that knowledge: what information exists on policies and agricultural commodity prices are likely to remain programs linking food security, poverty reduction, higher than pre-2007 levels and high food price agricultural production, and nutrition outcomes, volatility is likely to continue for the foreseeable and how to use this information to maximize the future, largely due to persistent uncertainty on impact of policies and programs. the supply side, projected rising demand, and the inherent slow responsiveness of the food system. Measures suggested to reduce average food price Analytical Underpinnings escalation: (i) raise food crop yields, and their resilience, as the single most important action 11. WDR 2008: Agriculture for Development needed for sustainable global food security; (ii) continues to provide the strategic framework facilitate land markets, with a strong emphasis on for our support. The overall message of the supporting the poor; (iii) curb biofuels mandates; WDR 2008 on the need to invest more and better (iv) better use price risk management tools; and in agriculture to enhance its role in overall growth, (v) better integrate markets to ensure world price poverty reduction, and environmental sustainability signals reach more producers to induce a supply remains as valid today as it was at the time of the response. Measures suggested to reduce world report. Seventy-five percent of poor people remain food price volatility: (i) develop weather-tolerant in rural areas and most depend on agriculture crop varieties to reduce food production shocks; for their livelihoods. A reinvigorated response to (ii) ensure sufficient food stock levels and improve reduce the number of poor and food insecure will management of stock purchases and releases; (iii) require improving the performance of agriculture open trade across markets; and (iv) improve market in low-income countries. Agriculture’s contribution transparency. Measures suggested to reduce the to growth, poverty reduction, and environmental sustainability continues to differ across three 30 The Development Committee Paper of April 2011 on Responding to Food Price Volatility and Its Impact distinct agriculture worlds—agriculture-based, on Food Security, the June 2011 interagency paper transforming, and urbanized economies. The prepared for the G20 on Price Volatility in Food and Agri- cultural Markets: Policy Responses. 8 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 negative impact of price shocks on food security: weather and climate information, and risk manage- (i) reduce taxes and tariffs (in some countries) to ment systems. (ii) Gender gaps in productivity lower domestic prices, (ii) provide short-term food and earnings remain pervasive, and gender differ- and cash transfers to preserve purchasing power, ences in time use, in access to assets and credit, and (iii) support next season agricultural production and in treatment by markets and formal institutions to increase local supply. (including the legal and regulatory framework) all play a role in constraining women’s opportunities. 13. Rising global interest in farmland. In response Equalizing access to productive resources between to increased interest in land and large-scale agri- female and male farmers could increase agricultural culture following the world food price spikes, output in developing countries by as much as 2.5 the WBG undertook analytical work completed to 4 percent. 34 This will require actions to improve in 2011 to better understand this phenomenon: access to economic opportunities for women Rising Global Interest in Farmland: Can It Yield and increase their access to assets and services. Sustainable and Equitable Benefits? The find- (iii) Jobs: In poor agrarian economies, making ings of the analysis are that demand for land is farming jobs more productive and creating off-farm growing, particularly in Africa, Latin America, employment for those in rural areas may be the and Southeast Asia. This rising interest provides most conducive ways to improve living standards. opportunities for investment, but also poses Farming is typically the largest source of income considerable risks. This calls for increased for rural households; growth in income from agri- support to improve governance of land tenure; culture is particularly effective in reducing poverty, secure local land rights; increase the transparency as was dramatically shown in China’s experience in of land transactions; and improve the capacity the last two decades of the 20 th century. for assessing the technical, economic, environ- mental, and social merits and risk of potential agri- 15. Green growth. The 2012 report on Inclusive cultural investments involving large tracts of land. Green Growth for All: A Pathway to Sustainable Development argues that sustainable manage- 14. WDRs messages on climate change, 31 gender, 32 ment of natural capital underlies green growth in and jobs: 33 (i) Climate change will make it harder key sectors—such as agriculture, manufacturing, to produce enough food for the world’s growing and energy—and is vital for resilience and welfare population, altering the timing, availability, and gains. The report argues that innovation, effi- quality of water resources. To avoid encroaching ciency gains, and integrated landscape approaches into already-stressed ecosystems, agricul­ tural can help secure agricultural productivity gains productivity growth will have to almost double through sustainable intensification while avoiding while minimizing associated negative environ- ecosystem damage. The key is to “use resources mental effects. This will require improving land and (such as land, water, forest and fisheries) without water resource management, including through using them up� and to recognize that the elements landscape approaches, farm production prac- of natural capital cannot be regarded in isolation. tices, trade, crop varieties that withstand climate The report suggests that in designing a green shocks, rural livelihoods, management of forests, growth strategy, priority should go to policies and investments that provide higher local and imme- 31 World Bank (2010). World Development Report 2010: diate benefits and where inertia and/or risk of irre- Development and Climate Change. Washington, DC. versibility is higher, such as land use planning and 32 World Bank (2011). World Development Report 2012: sustainable intensification in agriculture. Enabling Gender Equality and Development. Washington, DC. 33 World Bank (2012). World Development Report 2013: 34 FAO (2011). The State of Food and Agriculture — Closing Jobs. Washington, DC. the Gender Gap for Development. Rome. Chapter 1: The Evolving and Volatile Context 9 policies and investments include: (i) better defined of diarrhea and waterborne diseases (MDG 7). property rights, (ii) value chain enhancement, and Higher food prices have weakened intergovern- (iii) better reflecting the economic value of the envi- mental coordination in food markets (MDG 8). ronmental services that natural capital provides. The many pathways along which food crises affect household and individual welfare also offer 16. Global Monitoring Report 2012 message on multiple entry points in consumption and social nutrition. Progress on nutrition-linked MDGs protection, biology and health, and production and is lagging. Higher food prices make it more diffi- income generation. Interventions should include 35 cult to achieve most MDGs, especially those (i) improving the information about nutrition status, related to nutrition. As food prices increase, the practices, and interventions; (ii) targeting the purchasing power and food consumption of the period from conception to two years of life; (iii) poor decreases, while the composition of their diet tailoring interventions to country implementation worsens, directly affecting all targets of MDG 1 on capacity; and (iv) incorporating nutrition sensitive poverty, full and productive employment, hunger, approaches in multisectoral interventions. and undernutrition. Malnutrition affects early child- hood development and makes children more likely 17. The evolving context and the findings of the recent to drop out of school (MDG 2). An increase in analytical work suggest more emphasis is needed food prices affects women and girls’ consump- on climate-smart agriculture, risk management, tion disproportionately (MDG 3). Undernutrition is private sector responses, nutrition, gender, and linked directly to more than one-third of children’s landscape approaches. deaths each year (MDG 4). Pregnant women face heightened maternal mortality, through increased anemia, during a food price crisis (MDG 5). The 35 These extend beyond increasing the amount of food adverse effects of a food crisis on the availability available, as the quantity of food is necessary but not of health services and on health status affect coun- sufficient for good nutrition. The quality of a diet (diver- tries’ and individuals’ abilities to combat the HIV/ sity of nutritious foods that provide minerals, vitamins, protein, and other nutrients) combined with adequate AIDS epidemic (MDG 6). Undernutrition weakens health care and appropriate child care practices are the immune system and compounds the effect needed for positive nutrition outcomes. 10 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Chapter 2: Lessons from FY2010–2012 11 Chapter 2: Lessons from FY2010–2012 18. Lessons from the last three years of implementation have been integrated into the AAP FY2013– 2015. These lessons have relevance to specific regions and to broader themes across regions. They are taken from the Independent Evaluation Group (IEG) reviews on what worked and did not work; they have been derived from broad lessons from implementation of the AAP FY2010–2012, including preliminary assess- ments of short-term food price response activities, 36 and lessons on managing project risks, on integrating nutrition into agricultural programs, on landscape approaches, and on climate-smart agriculture. More detail on the WBG portfolio performance in FY2010–2012 and lessons are included in Annex 1 and 2, respectively. 19. The IEG review of the WBG in agriculture 37 and water 38 has helped refine our focus. The IEG’s review of lessons over 1998–2008 recommended that, to improve performance in the sector, the WBG should aim to (i) foster public-private partnerships and building synergies between the IDA/IBRD and IFC to improve agriculture and agribusiness outcomes even in difficult business environments such as AFR; (ii) provide better support to research and extension through global research programs (e.g., through the CGIAR) focused on key strategic priorities, linked to national programs, and mainstream research results in country-level projects; (iii) encourage agricultural public expenditure analysis to assess the efficiency and equity of public spending allocations (of which the Bank resources are part), and for guiding future investment priorities in the sector; (iv) improve water, soil, and crop management in current rainfed areas to increase agricultural productivity; and (v) contribute to gender equality by improving economic opportu- nities for women through agriculture, which in turn will also increase agriculture productivity. In addition, the IEG water review recommended that to improve the performance of irrigation, the WBG should give more attention to agricultural water resource management—including groundwater, on which attention has declined while its use for irrigation is increasing. These recommendations will continue to be further inte- grated in the implementation of this AAP. 20. Lessons learned from the design and operational aspects of the AAP FY2010–2012 include the following : (i) Specifying overall lending projections helped focus attention and provided a basis for moni- toring progress (ii) Continued attention is needed to maintain the quality of our program, including ensuring that our operations are built on a solid and consistent knowledge base; more staff time and budgets focused on increased lending has come at the expense of reduced analytical work and depth of client engagement on broader sector issues. (iii) There is a need to strengthen the quality assurance process, including through the associated role of Sector Boards, including the World Bank Agriculture and Rural Development Sector Board. (iv) The pressure to deliver on short-term results needs to be balanced with the needed attention on longer- term agricultural development that may take time to show tangible benefits, but without which problems will continue to recur over decades. (v) Political economy factors can add to portfolio risk, and these factors need to be considered in program selection, design, and implementation. 36 IEG is in the process of doing this more comprehensively for GFRP projects, but results are not yet available as of writing. Assessment of lessons learned is ongoing within the World Bank and is the subject of continuing positive discussion with the UN food agencies that have similar interests in improving good practice. 37 World Bank (2011). Growth and Productivity in Agriculture and Agribusiness: Evaluative Lessons from WBG Experience. Independent Evaluation Group, Washington, DC. 38 World Bank (2010). Water and Development: An Evaluation of WBG Support, 1997–2007. Independent Evaluation Group, Washington, DC. 12 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 21. Lessons from the impact on the 2008 and 2011 management; and (vii) poor countries that have food price spikes. Higher and volatile food prices been able to move from emergency response can lead to higher levels of undernourishment, in 2008 to longer-term and strategic agricultural higher inflation, deteriorating balance of payments programs have typically exhibited country owner- with public spending reallocations from longer- ship of programs through national engagement in term development goals to short-term emergency peer review processes, transparency, and broad response, and price volatility weakening incentives stakeholder consultations, such as in the CAADP to produce more food; 39 all negatively impact prog- process in Africa. ress to the MDGs of halving poverty and hunger.40 The food price spike in 2008 was estimated to 23. Lessons from integrating nutrition into agri- have pushed 105 million people into poverty in culture programs. Despite increased awareness low-income countries, and in 2011 and 2012, about of the need to incorporate nutrition more in agricul- 40–44 million people were estimated to be nega- tural operations to more directly induce nutritional tively affected.41 Even in the longer-term, neither outcomes, the share of agricultural or rural develop- supply response to higher prices nor wage adjust- ment projects supported by the Bank that explicitly ments were large enough to offset the initially include objectives or targets for improving nutri- large adverse impact on poverty and malnutrition. tion outcomes is fairly low (currently 12 percent). The reasons include (i) the limited evidence base 22. Specific lessons in helping clients respond to on nutrition-sensitive approaches in agricultural food price spikes include: (i) responses to unan- operations (relative to operations in the health ticipated food price spikes require both short-term sector or in social protection through direct income measures that give clients options for food crisis support); (ii) weak client demand; (iii) the added mitigation, including emergency assistance, and complexity of multisectoral approaches in project longer-term interventions that give options for design and implementation; and (iv) the difficulty adaptation to changed circumstances and preven- of measuring results. 42 Actions that can make tion of reoccurrence; (ii) short-term interventions the agricultural portfolio more nutrition-sensitive need to be straightforward (simple to implement), include (i) investing in women; (ii) increasing year- rapid, and targeted to the poor and vulnerable; (iii) round access to and availability of high-nutrient more cost-effective and timely approaches are food; (iii) improving nutrition knowledge among needed in safeguard clearance to recognize and rural households to enhance dietary diversity; and manage risks; (iv) more nutrition sensitive invest- (iv) incorporating explicit nutrition objectives and ments are needed, including more awareness indicators into agricultural operations. of the linkages between agriculture and nutri- tion, ensuring an emphasis on women; (v) safety 24. Lessons learned from our work on landscape nets can create capital investments in rural areas approaches include the following: (i) they work (e.g., roads and irrigation systems), and help better if land tenure and water rights are secure, preserve purchasing power of poor households; which provides more incentive for individual (vi) continued effort is needed on longer-term risk farmers, households, and communities to invest in improved land and water management and to 39 World Bank (2012). Responding to Higher and More protect trees and forests; (ii) there is a need to Volatile World Food Prices. Washington, DC. find an appropriate balance between bottom-up 40 World Bank (2012). Global Monitoring Report. Washing- ton, DC. participation with top-down planning of the appro- priate soil and water conservation interventions; 41 World Bank (2012). Global Monitoring Report 2012: Food Prices, Nutrition, and the Millennium Development Goals. Washington, DC; World Bank (2012). “Note on 42 World Bank (2013). Improving Nutrition through Multi- Food Price Spike in 2012.� DEC, Washington, DC. sectoral Approaches. Washington, DC. Chapter 2: Lessons from FY2010–2012 13 (iii) appropriate pricing regimes encourage the support are generally more effective, benefit more sustainable use of scarce resources; (iv) regula- farmers, and are more sustainable in the long-run; tions are likely needed (e.g., to control pollution the exception is where input use is very low. (ii) runoff or avoid free grazing of animals), but need Integration of the productivity, adaptation, and to be complemented by appropriate incentives mitigation agendas must be addressed if climate- for farmers to invest in public good activities that smart agriculture is to achieve the “triple win,� may benefit others; and (v) the public good nature both in strategies and in financing mechanisms. of many of these investments, including positive (iii) Water management is a critical challenge in environmental impacts outside the project area, water-stressed countries; measures to enhance justify complementary financing from local and agricultural water productivity are often most central governments. helpful if combined with measures to support broader economic diversification. (iv) In countries 25. Lessons from climate-smart agriculture 43 most highly exposed to climate variability and include the following: (i) Patterns of public support change, disaster management and a climate resil- that focus on research, support for investments in ient, diverse agricultural sector are closely linked. soil and water conservation, weather and climate (v) To be successful, programs need a long-term services, land tenure, technology, and value chain commitment. (vi) Aligning strategies and policies development rather than on commodity or input with enabling measures and institutional support, adapted to country circumstances, provides incen- 43 World Bank (2011). Climate-Smart Agriculture: Increased tives for responsible private sector investment, Productivity and Food Security, Enhanced Resilience and Reduced Carbon Emissions for Sustainable Develop- both large- and small-scale. ment. Washington, DC. 14 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 15 Chapter 3: TheWorld Bank Group Support for Agriculture44 FY2013–2015 26. The strategic framework being used for the Agriculture Action Plan (AAP) was developed in the WDR 2008: Agriculture for Development. This framework, which remains valid today, was subject to extensive global consultations through preparation of the WDR. Implementation of the FY2013–15 AAP, together with that of the FY2010–12 AAP, will provide a continuous six-year period of operationalizing the WDR 2008 within the WBG. Ongoing thematic consultations undertaken during implementation of the FY2010–12 AAP informed the FY2013–15 AAP. These consultations covered a wide variety of themes, including international food price volatility, agricultural research for smallholders, climate-smart agriculture, food safety and zoonotic disease control, secu- rity of land tenure, shared resources like forests and oceans, and responsible agricultural investment. Individual Bank-financed projects are all prepared and implemented in the context of Country Assistance and Partnership Strategies, which themselves are subject to extensive dialogue and consultation. Consultations in the context of the WBG’s numerous global partnerships over FY2010–12 also helped inform the FY2013–15 AAP and involved a broad range of stakeholders, including civil society, national and sub-national government bodies, academia, the private sector, and other development partners. Finally, ongoing regional consultations informed the AAP—for example, the CAADP, an Africa-led initiative, guides WBG’s support in Africa. An overview of the 2013-15 AAP projections and what we will do more of, less of, and what is new is presented in table 2. Results We Will Help Our Clients Achieve 27. We will continue to support our clients’ progress toward the MDGs (box 3) but will also monitor indicators being tracked as part of the IDA/IBRD corporate scorecard (annex 3), and relevant Bank core sector indicators. The selected MDGs reflect the global targets of clients and development partners, not what we would achieve alone with our FY2013–15 program, but are important to monitor following the direction of causality of contribu- tions from project-level indicators to sector performance to reductions in poverty and hunger (table 3). 28. There is currently a lag in the data availability on the MDGs and sector performance indicators, as well as concerns about data quality, which constrain accurate and timely reporting on progress on results. A Global Strategy to Improve Agriculture and Rural Statistics is being implemented with the objective of providing a minimum set of timely core data, integrating agriculture into national statistical systems, and ensuring the sustainability of the statistical system through governance and capacity building. 29. A concerted effort is under way to develop more consistent institution-wide WBG results indicators for agri- culture. For example, IFC is piloting an agriculture-focused indicator to measure the number of farmers with “increased or improved sustainable farming opportunities� (to be collected systematically across IFC proj- ects beginning in FY2014). As part of the Bank-wide effort to improve results reporting, several core sector indicators have been identified for agriculture to include in the IDA/IBRD Implementation Status Reports of projects. A more detailed set of indicators is provided in annex 3; some of the core sector indicators that we will track are reflected in table 3, which will be disaggregated by gender where appropriate. 44 We will continue with a more explicit focus on agriculture (in title and composition) relative to rural development. This responds to the earlier concern from IEG that the Bank’s attention to agriculture had been increasingly subsumed within a broader rural focus in which its importance had suffered. Broader investments in rural areas, beyond agriculture, that are being supported through other sector specific strategies (e.g. rural electrification through the WBG Infrastructure Strategy Update FY2012–2015) will not explicitly be addressed in this Agriculture Action Plan, although relevant linkages will be highlighted. 16 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Table 2: Overview of WBG Projections, What We Will Do More of, Less of, and What Is New Projections What we will do more of, less of, and what is new Results we will help our clients achieve MDG level: Halving poverty and hunger More concerted effort is under way to develop and use more and consistent institution-wide core sector indicators, to be monitored Sector level: Improved agricultural growth through project Implementation Status Reports. and environmental services Project-level examples: 2 million hectares of new or improved irrigation 3 million client days of training 0.5 million farmers adopting new or improved technologies 1.5 million farmers reached through IFC investments per year by 2015 20 percent median economic rate of return on investment projects (as evaluated by IEG), or at least at levels similar to other sectors What we will help our clients do Raise agricultural productivity More capacity development for country driven programs, particularly Link farmers to markets in Africa; more emphasis to climate-smart agriculture, private sector Facilitate rural non-farm income responses, risk management, nutrition, gender, and governance. and on cross-cutting areas: Less focus on short-term emergency response through GFRP, Reduce risk, vulnerability, stand-alone crop or forest projects, and operations outside a country-led and gender inequality strategic framework for coordination of agricultural investments where Enhance environmental services such frameworks have been put in place in response to aid effectiveness and sustainability concerns. 50 percent of program in poorest regions (AFR and SAR) Aggregate program $8 billion to $10 billion projected annual average More IFC investments, doubled in AFR by FY2015. support for FY2013–15 [IDA/IBRD/IFC] Aggregate consolidation by IDA/IBRD. $350 million in annual average support [in the form of recipient executed grants] through Trust Funds How we will implement 80 percent of projects that close in FY2013–15 New project preparation facility for needed, but more costly to prepare have satisfactory outcomes projects (e.g., irrigation and land tenure projects, including PPPs) in 80 percent of projects with implementation issues AFR [led by USAID]. or those not meeting their development objectives New special initiative to scale up IFC agribusiness impact in AFR. have had corrective actions completed Less focus on small projects relative to country context (with fixed staff 100 percent of new project include gender numbers and fixed budgets, and the projected levels of assistance). analysis in design 75 percent of new projects addressing all gender dimensions of design (analysis, actions, and M&E) Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 17 30. Aggregate in-country impact: The relative size technology (e.g., seed varieties, livestock and aggregate impact of the WBG’s program var- breeds, aquaculture/fisheries, and agro-forestry), ies significantly across countries. In some coun- improved agricultural water management in irri- tries, IDA/IBRD financing accounts for a relatively gated and rainfed areas, tenure security and land large share of overall public spending, and associat- markets, increased access to inputs, strength- ed sector programs (e.g., for projects that closed in ened agricultural innovation systems, and across FY2009–12, IDA/IBRD supported new or improved these areas, reducing gender inequality in access irrigation of an estimated 25 percent of all irrigated to services, assets, and inputs. land in Niger and 14 percent in Azerbaijan). In other countries, IDA/IBRD financing accounts for small (ii) Link farmers to markets and strengthen value shares of public spending and associated programs chains —including continued support to (e.g., in China, our projects that closed in FY2009– improve market access and trade, integrate 12 supported less than 1 percent of all irrigated smallholders into the supply chain, investments land). Selectivity of projects, particularly in countries in transport and storage infrastructure, better where our IDA/IBRD program is a small share of use of information technologies, strengthened overall sector financing (e.g., India and other MICs), producer organizations, improved market infor- will be guided by in-country consultations and one mation and standards, and access to finance. or more of the following criteria: (i) the project is transformative and can subsequently be scaled up (iii) Facilitate rural non-farm income —including or mainstreamed into the government program; (ii) support for an improved rural investment the project has high potential for leveraging financ- climate and infrastructure, upgraded skills for ing from domestic and/or international sources; expanding job opportunities, improved rural live- and (iii) the project is targeting a specific issue/ lihoods, and promotion of youth employment. area on which it can have a significant aggregate impact (e.g., geographically targeted to “pock- (iv) Reduce risk, vulnerability, and gender ets of poverty�). Some of our analytical work is inequality —including continued support for also assisting in improving overall sector spending social safety nets, integrated agricultural (not just from IDA/IBRD), through the increasing risk management, better managing national number of agricultural public expenditure reviews food imports and food reserves, innovative being undertaken. insurance products, protection against cata- strophic loss, climate-resilient farming sys- tems, reduced risk of major livestock disease What We Will Help Our Clients Do outbreaks, improved market transparency, and reduced gender inequality in access to ser- 31. To contribute to our client targets of reducing vices, resources, and opportunities. poverty and hunger, and improving environmental sustainability, our support will continue to be (v) Enhance environmental services and sus- aligned around five thematic areas, as they remain tainability —including better-managed live- as relevant today as they were at the start of the stock intensification; improved rangeland and AAP FY2010–12. All are important for food security forestry management; conserving ecosys- through contributions to improve food availability, tems, including oceans; more use of land- access, stability, and utilization. Themes (iv) and (v) scape approaches; increasing uptake of com- are considered cross-cutting themes. modity certification systems; and support to link improved agricultural practices with mar- (i) Raise agricultural productivity —including kets for global public goods (such as biodiver- support for increased adoption of improved sity and carbon markets). 18 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Box 3: Recent Progress on Food Security, Poverty Reduction, Agricultural Growth, and Environmental Sustainability There has been recent progress on the key results we are helping our clients achieve, although many countries are still off track to meet the MDGs. While direct attribution of the share of this overall progress due to the implementation of the WBG agricultural program is difficult to quantify, improved agricultural performance has historically been relatively efficient at reducing poverty. �� Food security: Eighteen countries have already met the MDG of halving the proportion of the population below the minimum level of dietary energy consumption (between 1990 and 2015); 26 countries are on track to meet it, whereas 42 countries have made insufficient progress. Countries close to meeting the target include Bangladesh, Bolivia, Egypt, Indonesia, Jordan, Kenya, Pakistan, Rwanda, and Zambia. Still all but two of these countries have made insufficient progress on the other MDG target of reducing the prevalence of underweight children under five. �� Poverty reduction: Of the 85 developing countries with available data, 47 are on track to meet the MDG target of halving extreme poverty (the proportion of the population living below $1.25 per day); 21 countries are close to being on target; and 17 are far behind. Countries close to the target include Bangladesh, Burkina Faso, El Salvador, Guinea, India, Lao PDR, Lesotho, Philippines, and Uganda. Poverty rates remain highest in AFR (36 percent), which is the only region significantly off track at an aggregate level on halving poverty by 2015. Ninety-six percent of people in extreme poverty are in three regions: AFR (30 percent), SAR (44 percent), and EAP (22 percent). �� Agricultural growth: Countries that are on track to reach the MDGs had faster overall per capita GDP growth over 1990–2009, and in many poor countries, agriculture contributes a significant part of this overall growth and subse- quent poverty reduction. While 14 of 49 developing countries with available data had real agricultural GDP growth rates over 5 percent in 2010, only 10 of these countries—Cambodia, Ethiopia, Mozambique, Tajikistan, Angola, Armenia, El Salvador, Mongolia, Paraguay, and Uzbekistan—managed to sustain this level of growth (5 percent annual growth over five years). Higher agricultural growth can help put countries on track to meeting the MDGs. Estimates suggest that a 1 percent increase in crop yields could reduce poverty by 0.72 percent in Africa, by 0.48 percent in both South and East Asia, and by 0.1 percent in Latin America. �� Environmental sustainability: Average global deforestation rates have slowed, yet the highest deforestation rates are still occurring in some of the world’s most biologically diverse regions. Although global forest cover has been declining and degrading, at the same time, tree planting on farms, forest plantation development, and the natural expansion of forests in some regions, have added more than 7 million hectares of new tree cover and forests annually. As a result, the net loss of forested areas over the period 2000–10 was reduced to 5.2 million hectares per year, down from 8.3 million hectares per year in 1990–2000. Forest cover in ECA has increased, now accounting for more than 25 percent of the world’s forests. However, South America and Africa continue to show the largest net losses of forests. Some 80 percent of global capture fisheries are exploited to their biological limit or beyond, threatening biodiversity, the integrity of coastal habitats, and the livelihoods and food security of 3 billion people worldwide who rely on these ecosystems. Source : FAO (http://www.fao.org/fileadmin/templates/es/Hunger_Portal/MDG_Progress_per_country.pdf); World Bank (2011): Global Monitoring Report, 2011. Improving the Odds of Achieving the MDGs. Washington, DC.; World Bank (2010): Unfinished Business: Mobilizing New Efforts to Achieve the 2015 Millennium Development Goals (http://www.worldbank.org/mdgs/MDGPaperFINALSeptember102010.pdf); World Bank (2011): World Development Indicators, 2011. Washington, DC.; Thirtle, C., Lin, L., and Piesse, J. (2003): The impact of research-led agricultural productivity growth on poverty reduction in Africa, Asia and Latin America, World Development (31): 1959–1975. Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 19 Table 3: Results We Will Help Our Clients Achieve Targets/indicators 1. High-level results our clients are striving to achieve (MDGs on halving poverty and hunger) Poverty Reduction Halving the proportion of the population below the $1.25 (purchasing power parity) per day Food Security Halving the proportion of the population below the minimum level of dietary energy consumption Halving the prevalence of underweight children under five 2. Sector-level results that contribute to reducing poverty and hunger Growth Increasing the number of countries with agricultural GDP growth rates above 5 percent 1 Higher cereal yields Higher agricultural value added per worker Environmental services Reducing the rate of average annual deforestation and increasing the proportion of fish stocks within safe biological limits 3. Examples of project-level results projected in FY2013–2015 that contribute to improving sector performance (attribut- able to project implementation); these will be disaggregated by gender where appropriate Agricultural water 2 million hectares of new and improved irrigation and drainage services management Agricultural management 3 million client days of training practices Technology adoption 0.5 million farmers adopting new technologies Rural roads 16,000 kilometers of new or rehabilitated rural roads Forest and tree cover Hectares of forest and tree cover area under management plans 2 Land Population and number of land parcels with use or ownership rights recorded; and land area where sustainable land practices have been adopted2 1 The 5 percent agricultural growth target reflects the explicit target set by AFR—an ambitious target in Africa and elsewhere. 2 Recently adopted core sector indicators. Aggregate data for these indicators will be available in FY2013. Areas we will give more emphasis Raise agricultural productivity, while emphasizing more: 32. In response to the evolving and volatile context of �� Climate-smart agriculture : The increasing food price uncertainty, climate change, increased frequency and intensity of droughts and private sector interest in agriculture, lagging nutri- floods,45 together with longer-term tempera- tion-linked MDGs (many of which are interrelated), ture changes calls for a more climate-smart the increasing scarcity of land and water resources, agriculture. More emphasis will be given to and the findings of recent analytical work, we will increasing the resilience of agricultural produc- emphasize the following areas: tivity gains to climate change (more important in the poorest countries where climate change impacts on lowering yields are projected to be 45 IPCC (2012). Managing the Risks of Extreme Events and Disasters to Advance Climate Adaptation. 20 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 large), and to lowering agriculture’s net GHG capital. In addition, clients who wish to mobilize emissions (with agriculture accounting for about the power of private investment need to both 14 percent of global GHG emissions, or approx- establish a favorable overall investment climate imately 30 percent when considering land-use and be sure that investors, including small- change, such as deforestation driven by agricul- scale domestic ones, know about it and have tural expansion for food, fiber, and fuel). confidence that it is true. Key actions: (i) increase the share of IDA/ Key actions: (i) Increase the share of IFC’s IBRD agriculture lending that supports climate agribusiness investment in total WBG support change adaptation (31 percent in FY2011–12), for agriculture (39 percent in FY2010–12). The such as improved agricultural management volume of IFC’s agribusiness investments is practices and development and adoption of projected to increase by about 65 percent from more drought- and flood-tolerant varieties; (ii) $2.7 billion annually in FY2010–12 to $4 bil- increase the amount of IFC financing for use of lion to $5 billion annually in FY2013–15 while high-efficiency irrigation; and (iii) increase the reaching more farmers (1.5 million per year by share of IDA/IBRD agriculture lending that sup- 2015). (ii) Develop and implement annual “Doing ports climate change mitigation (20 percent in Agribusiness Surveys� in 80 countries, together FY2011–12), such as animal and forest manage- with more focused multiple country analysis on ment systems that reduce GHG emissions. The specific business environment topics.46 CGIAR partnership is particularly important in both supporting development of more drought- Reduce risk, vulnerability, and gender inequality, and flood-tolerant varieties and in improving the while emphasizing more: carbon absorption capacity of plants. �� Risk management : In the increasingly vola- Link farmers to markets and strengthen value tile environment (three world food price spikes chains, and facilitate rural non-farm income while in the last five years, continued risk of major emphasizing more: outbreaks of crops and livestock pests and diseases, and the increasing frequency and �� Private sector response : Farmers, herders, severity of droughts and floods), we will assist traders, input suppliers, and agro-processors clients to better assess and prioritize agricul- are all private sector actors. Higher average tural risks, develop holistic risk management agricultural prices offer significant opportunities strategies, and support the management of to raise incomes of poor people, attract higher these risks with financial instruments. levels of private investment, and increase overall sector growth while improving food Key actions: (i) increase the number of country- security. The public sector role is to establish level agriculture sector risk assessments a good governance framework and facilitate a (building on the experience of those completed level playing field for a much more active pri- in Honduras and Niger); (ii) expand crop-related vate engagement, including by smallholders. insurance offerings such as the Global Index Better inclusion of disadvantaged groups in the Insurance Facility, a program established by IFC market is a particular priority, as is securing the and IBRD to support developing markets for productive assets of the poor. Improving access to finance can help stimulate a private sector 46 FAO (2013). The State of Food and Agriculture: Investing response, especially by those groups who in Agriculture for a Better Future. Rome. Shows a pos- until now had difficulties in securing access to itive correlation between the investment climate and agricultural capital stock per worker. Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 21 index-based insurance for farmers vulnerable countries between 2.5 and 4 percent.49 This to catastrophic weather and other natural disas- will require actions to improve access to ser- ters; (iii) expand financial instruments for agricul- vices, assets, and opportunities. Recognizing tural price risk management and trade facilitation the importance of gender issues in agriculture,50 (the IFC’s Agricultural Price Risk Mechanism and gender mainstreaming in agriculture and rural the IFC’s Critical Commodity Finance Program); development projects has been raised above and (iii) provide financial and technical support the Bank standard. The World Bank will focus to the recently established global Agricultural on (i) analysis of gender-related issues rele- Market Information System (AMIS) 47 to help vant to project objectives and components; reduce some of the uncertainty and volatility in (ii) actions that are expected to narrow gender international food markets. inequality, including through specific actions to address the distinct needs of women and girls, �� Nutrition : Nutrition-linked MDGs are lagging, and men and boys, or that have positive impacts particularly child mortality and maternal mor- on gender equality; and (iii) monitoring and eval- tality.48 In addition to the estimated 870 mil- uation frameworks that monitor gender impact lion people undernourished, another 2 bil- and facilitate gender disaggregated analysis. lion are deficient in micronutrients like iron, The target is that, in the design of agriculture zinc, and vitamin A (“hidden hunger�). and rural development projects, by FY2015, 100 Food production increases do not automat- percent of projects will include gender analysis, ically translate into improved nutritional out- and 75 percent will also have gender actions comes for specific groups of the population, and gender-disaggregated M&E. For a relatively such as children under five. Key investments small set of projects, after doing the gender beyond those targeted at raising income and analysis it may reasonably be decided that food production can help: including a focus gender-specific actions and related M&E are not on women smallholder farmers; development appropriate. This target raises the bar for agricul- and adoption of biofortified varieties; food tural projects beyond the overall Bank standard fortification that adds micronutrients to pro- where the satisfactory treatment of only one of cessed food; crop diversification to food with the three dimensions is required for a project to high nutrient content (e.g., horticulture, pulses, be deemed as gender informed. meat, dairy, fish); and increased nutrition edu- cation through agricultural extension and live- Key actions: (i) increase the share of agri- lihoods projects, which can improve dietary culture and rural development projects that variety in production and consumption. include gender analysis in design with a target of 100 percent by FY2015; and (ii) increase the Key action: (i) increase the share of agriculture share of agriculture and rural development proj- projects with an explicit focus on nutrition (cur- ects that include all three gender dimensions rently at 12 percent). (analysis, actions, and M&E) in project design, with a 75 percent target by FY2015. �� Gender: Bringing yields on the land farmed by women up to the levels achieved by men �� Governance : Political economy issues in agri- would increase agricultural output in developing culture often constrain institutional and policy 49 FAO (2011). The State of Food and Agriculture: Women 47 http://www.amis-outlook.org/ in Agriculture—Closing the Gender Gap for Development. Rome. 48 World Bank (2012). Global Monitoring Report: Food Prices, Nutrition, and the Millennium Development 50 World Bank (2009). Gender in Agriculture Sourcebook. Goals. Washington, DC. Washington, DC. 22 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 reform that could potentially improve agricul- that forests provide. We cannot sustain forests tural productivity and make growth a more without thinking of how we will feed a growing inclusive process. These include issues related population. And we can’t grow food without to both public spending patterns (such as sub- water. The WBG is increasingly using land- sidies) and policies (such as trade restrictions). scape approaches that integrate the manage- The governance of land tenure, particularly in ment of land, water, and living resources, and AFR where less than a fifth of land is formally that take account of human interactions with registered, is increasingly important to protect those resources in a way that equitably pro- the rights of current land holders, resolve dis- motes sustainable use and conservation of nat- putes, and provide appropriate safeguards for ural capital (box 4). potential future private investors. Key action: Increase the share of projects that Key actions: (i) strengthen analytical work, use a landscape approach for more sustainable including through the expanded program of resource use (e.g., that combine agriculture, public expenditure reviews, analysis of the water, forestry, and biodiversity). alignment of agricultural and water subsidies and green growth to help better understand the nature of political and institutional constraints to sustainably improving agricultural productivity Box 4 : Examples of Landscape Approaches and resilience, and make more use of the land governance assessment framework at country The Loess Plateau Watershed rehabilitation project level; (ii) ensure that all projects addressing the in China is one example that has returned a devas- governance of land tenure support the efforts tated area to sustainable agricultural production, by client country governments to implement improving the livelihoods of 2.5 million people and the Voluntary Guidelines on the Responsible securing food supplies in an area where food was Governance of Tenure of Land, Fisheries, scarce. Other examples include the ongoing project and Forests in the Context of National Food in Rwanda that is supporting an integrated approach Security, endorsed by the Committee on World to land husbandry, water harvesting, and hillside irri- Food Security in May 2012; (iii) ensure new IFC gation, with better management of rainfall, erosion investments in large-scale primary agriculture prevention through terracing, and improved soil include food security baseline impact assess- quality; a new project in Tunisia integrating natural ments in food-insecure countries and disclo- resource management with agricultural develop- sure of key contract terms in government to pri- ment, including support for reforestation, improved vate transfers of land. management of soils and pastures, and better water management; and in Albania supporting local Enhance environmental services and sustainability, communities to improve the sustainable manage- while emphasizing more: ment of upland resources at the micro-catchment level, to reduce erosion, improve carbon sequestra- �� Landscape approaches : Given the inter- tion, and enhance livelihood opportunities. linkages of our natural resources, we need to manage landscapes in a more integrated Referenced projects : Rwanda, Land Husbandry, Water Harvesting, and Hillside Irrigation Program (P114931); Tunisia, way and to restore the 2 billion hectares of GEF Second Natural Resources Management (P112568); Albania, degraded landscapes globally. For example, we Environmental Services Project (P130492); China, Second Loess Plateau Watershed Rehabilitation Project (P056216). cannot achieve food security, or nutrition secu- rity, without preserving the ecosystem services Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 23 Areas we will give less emphasis �� Operations outside a country-led stra- tegic framework for coordination of agri- �� Short-term emergency response to food cultural investments where such frame- price spikes through GFRP: Higher short- works have been put in place in response term food price volatility is becoming a longer- to aid effectiveness concerns : Client govern- term phenomenon requiring longer-term solu- ments, regional organizations and donor part- tions. Having met its objective of reducing the ners have emphasized the importance of aid negative impacts of the unanticipated food effectiveness in food and agriculture, adapting crisis in 2008, benefiting almost 66 million to the sector the broader concerns of the Paris people in 49 countries, the GFRP expedited Declaration and the Accra Agenda for Action. processing facility closed on June 30, 2012 These were specified for food security most (meaning no more Bank-financed projects can recently in the Rome Principles of the 2009 be processed under the expedited procedures Summit on World Food Security.51 The key ele- of GFRP). The Bank now has more permanent ments include country-leadership, evidence- new instruments to respond to future emergen- base, inclusiveness, transparency, and multilat- cies, building on the GFRP experience, such eralism. The World Bank Group has committed as IDA CRW and IRM, and IBRD’s Exposure to support these principles through its regular Management Framework. agricultural lending. It further signaled its sup- port through setting up in 2010 and hosting �� On average, small projects relative to the multiagency Global Agriculture and Food country context : The median size of agricul- Security Program (GAFSP). ture projects has gone up from $30 million in FY2006–08 to $43 million in FY2010–12. To 33. Detailed actions are provided in the next sections improve portfolio quality, with fixed staff num- in each of the five thematic areas of raising agri- bers and fixed preparation and supervision bud- cultural productivity; linking farmers to markets; gets, the number of projects in the portfolio will facilitating rural non-farm income, including the need to remain the same or decline, implying cross-cutting areas of reducing risk vulnerability that the median project size across the port- and gender inequality; and environmental services. folio will need to be about $45 million or higher Political economy factors will influence the extent at the projected levels of assistance (i.e., on and pace of progress, particularly on sensitive average less focus on small projects relative to issues such as land and water. If these become a country context). However, in some contexts larger share of the overall portfolio, then the quality and for some investment types, small projects of the overall portfolio may be adversely affected. will continue to be supported. Governance issues are being addressed more explicitly in project preparation, with additional �� Stand-alone IDA/IBRD crop or forestry screening tools available (such as the land gover- projects : These stand-alone projects don’t nance assessment frameworks), and continued benefit from the synergies of a more inte- attention will need to be given to this area. The grated landscape approach, which can lead to increased program of agricultural public expendi- more sustainable resource use, particularly in ture reviews and using analytical tools to better the context of rising pressure on land, water understand the associated political economy and forest resources. issues can help. 51 http://www.fao.org/fileadmin/templates/wsfs/Summit/ Docs/Final_Declaration/WSFS09_Declaration.pdf 24 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Thematic Area 1: Raise Agricultural to rely more on yield increases. Water constraints Productivity are more binding, requiring improvements in water productivity. In this respect, future land productivity 34. Raising food crop yields and increasing their resil- gains will need to rely more on narrowing the gap ience to climate change are the most important between average farm yields and experimental yield actions needed for sustainable global food secu- potential, in the generation and adoption of new rity.52 A more climate-smart agriculture is needed climate-smart technologies and management prac- (box 5). After a two-decade decline in the growth tices, and in improved water management and fertil- rate of major cereal yields produced in developing izer calibration. Integrating in combination improved countries, from 2006 onward they have been rising land, soil, and water management measures into again from a low of about 1 percent to about 1.8 climate-smart production systems can maintain and percent (figure 2). This recent yield growth has not even enhance the value of natural capital.53 The focal matched annual growth in consumption, with some areas will be on raising yields (of food, traditional of the shortfall being made up by an expansion of exports, and high-value crops, livestock, agro-forestry area planted on degraded or converted land. While in systems, and fisheries); improving agricultural water certain regions in some countries there is still some management; strengthening land tenure secu- scope for further expansion of uncultivated lands— rity and land markets; fostering agricultural innova- mainly in AFR, LCR, and ECA—the aggregate land tion systems (research, extension, and education); frontier is closing, and future supply growth will need supporting considerations for new technology tools, 52 World Bank (2012). Responding to Higher and More 53 World Bank ( 2012 ). Inclusive Green Growth: The Volatile World Food Prices. Washington, DC. Pathway to Sustainable Development. Washington, DC. Figure 2: Growth Rates of Yields for Major Cereals Have Begun to Rise but Remain Low 10-year rolling growth rates of yields for major cereals in developing countries 3.5 3.0 Average annal growth rate (percent) 2.5 2 1.5 1 .5 0 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 20 Source: Derived from USDA data. Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 25 and opportunities for mechanization. The focus of yielding seed varieties were 20 percent higher the CGIAR research portfolio is aligned with these among targeted households in Uganda.56 priorities, with research on food crops (rice, maize, wheat, roots, tubers, bananas, grain legumes, and 36. Close the livestock productivity gap. Over dry cereals) aimed at increasing productivity, both by the next three years, the WBG will build on the increasing the yield potential (or breaking the “yield successes of recent livestock projects, particularly ceiling�) through plant breeding and by addressing in transforming economies, such as India, through production constraints to narrow the gap between (i) providing matching grants for adoption of new yields in farmers’ fields and experimental plots/ breeds, (ii) extending the reach of extension and farms. More attention will be given to gender main- advisory services to improve animal and rangeland streaming across all these areas. management practices, (iii) expanding veterinary services and vaccinations, (iv) supporting pasture 35. Close the crop yield gap. As average farm yields management (including combining agro-forestry in many countries are often only a third of experi- and pastures—e.g., silvo-pastoral systems), and (v) mental farm yields, there still remains significant reducing gender inequality. These types of interven- scope for closing this yield gap for food, tradi- tions have led to significant livestock productivity tional exports, and high-value crops. Over the gains among targeted households. For example, next three years, the WBG, with more attention milk yields increased by 65 percent among targeted to reducing gender inequality, will continue to households in Assam 57 through adoption of support (i) expanding the reach of demand-driven improved breeds; and by 11 to 33 percent among pluralistic extension and advisory services, giving targeted households in Himachal Pradesh58 through smallholder farmers, especially women, more improved fodder availability. Livestock mortality control over resource allocation decisions and the rates declined by 29 percent for large ruminants type of advice they receive; (ii) strengthening rural and by 21 percent for poultry in Afghanistan,59 and access to financial services and providing incen- improved grassland management in Gansu and tives such as matching grants for technology Xinjiang region in China contributed to a doubling adoption; (iii) strengthening and increasing input of herder income.60 Improved management of dry markets and investments (fertilizers, machinery, woodlands in Southern Africa 61 has also improved micro-irrigation), including input market regulatory livestock productivity. reform; and (iv) expanding the use of information and communication technologies. More emphasis 56 Benin, S., Nkonya, E., Okecho, G., Randriamamonjy, J., will be given to broader landscape or watershed Kato, E., Lubade, G., Kyotalimye, M. (2011). “Returns to management approaches, particularly in rainfed Spending on Agricultural Extension: The Case of the Na- tional Agricultural Advisory Services Program in Ugan- areas. Support through these types of interven- da.� Agricultural Economics 42: 249–267. tions have improved crop yields (and associated 57 India, Assam Agricultural Competitiveness project incomes) of targeted households in rainfed areas (P084792). through Bank-supported programs. For example, 58 India, Himachal Pradesh Mid Himalayan Watershed crop yields increased by 15 to 20 percent among Development Project (P093720). targeted farmers in Karnataka, India,54 productivity 59 Afghanistan, Horticulture and Livestock Productivity doubled among targeted households in rainfed Project (P098256). 55 areas of Rwanda, and adoption rates of higher- 60 China, The Gansu and Xinjiang Pastoral Development Project (P065035). 61 Dewees, P., Campbell, B., Katerere, Y., Sitoe, A., Cunning- 54 India, Karnataka Watershed Development Project I ham, A., Angelsen, A., and Wunder, S. (2010). “Managing (P067216). the Miombo woodlands of southern Africa: Policies, incen- 55 Rwanda, Land Husbandr y, Water Har vesting, and tives and options for the rural poor.� Journal of Natural Re- Hillside Irrigation Project (P114931). sources Policy Research 2 (1): 57–73. 26 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Box 5: More Emphasis on Climate-Smart Agriculture Climate-smart agriculture seeks to increase productivity in an environmentally and socially sustainable way, strengthen farmers’ resilience to climate change, and reduce agriculture’s contribution to climate change by reducing greenhouse gas emissions and increasing carbon storage on farmland. A more climate-smart agriculture is needed as agriculture is significantly affected by, and has been a significant contributor to, climate change. For each 1o Celsius of global warming, grain yields are projected to decline by 5 percent. Already, since 1980, global wheat and maize production is 3–5 percent lower than if warming trends had not occurred. The increasing frequency and intensity of drought and floods have also significantly affected agriculture, as recently experienced in the Horn of Africa and the Sahel. At the same time, global agriculture (and the associated land-use changes) have contributed about 30 percent of GHG emissions (over half of which is CO2). Yet agriculture has the biophysical potential to offset about 20 percent of total annual CO2 emissions. More effort is need to raise productivity, improve resilience, reduce GHG emis- sions, and enhance soil carbon storage. �� Raising agricultural productivity can reduce pressure for land-use change, such as reducing deforestation driven by agricultural expansion of food, fiber, and fuel. Raising productivity has been the dominant focus of our agriculture program. �� Strengthening farmers’ resilience will help adaptation to the increasing frequency and intensity of droughts and floods, together with longer-term temperature changes. Improving land and water management, better weather forecasting, early warning systems and risk insurance, and developing new technologies such as drought- or flood- tolerant crops can improve climate resilience. �� Reducing GHG emissions from agriculture to mitigate climate change beyond reductions in CO2 emissions (which are predominantly from land-use changes), require reduction in methane and nitrous oxide emissions. Activities to reduce methane emissions include improved livestock nutrition and feed management, reduced frequency and intensity of biomass burning, keeping wetland rice fields dry in the off-season, and better waste management in intensive livestock systems. Activities to reduce nitrous oxide emissions include timely use of (and slow release) nitrogen fertilizers, when applied, and more use of legume trees to reduce dependency on nitrogen fertilizers. �� Increasing carbon storage in farmland will also help mitigate climate change. Actions to enhance carbon storage can also improve productivity and resilience leading to a triple-win of higher productivity, more resilience, and greater carbon capture in soils. This includes techniques such as mulching, intercropping, integrated crop- livestock management, conservation agriculture, and agro-forestry. The potential for carbon storage is highest on degraded lands (which are furthest from carbon saturation levels). Key actions: (i) increase the share of IDA/IBRD agriculture lending that supports climate change adaptation (31 percent in FY2011-12), such as improved agricultural management practices, and development and adoption of more drought and flood tolerant varieties; (ii) increase the amount of IFC financing for use of high efficiency irrigation; and (iii) increase the share of IDA/IBRD agriculture lending that supports climate change mitigation (20 percent in FY2011-12), such as animal and forest management systems that reduce GHG emissions. Sources: Lobell, D. B., Schlenker, W., and Costa-Roberts, J. (2011). “Climate trends and global crop production since 1980.� Science 333 (6042): 616–620; Smith, P., Martino, D., Cai, Z., Gwary, D., Janzen, H., Kumar, P., McCarl, B., Ogle, S., O’Mara, F., Rice, C., Scholes, B., Sirotenko, O., Howden, M., McAllister, T., Pan, G., Romanenkov, V., Schneider, U., Towprayoon, S., Wattenbach, M., and Smith, J. (2008). “Greenhouse gas mitigation in agriculture.� Phil. Trans. R. Soc. B 363 (1492): 789–813. World Bank (2013). Turn Down the Heat: Why a 4oC Warmer World Must Be Avoided. Washington, DC.; Vermeulen, S.J., Campbell, B.M., and Ingram, J.S.I. (2012). “Climate change and food systems.� Annu. Rev. Environ. Resour. 37:195-222. Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 27 37. Raise aquaculture yields and fisheries sustain- eries management, protected marine areas, and ability. Aquaculture and capture fisheries provide certification. Improving aquaculture production prac- an important source of income and protein for many tices, resource use, and environmental manage- poor people (15 percent of global dietary protein).62 ment can help improve aquaculture productivity Over the last several decades, the annual volumes and sustainability. The Bank has provided support of global capture fisheries has remained relatively to improved management of coastal fisheries, for stagnant (despite larger fishing fleets and improved example, through increasing the share of territo- technology), with a declining share from developed rial seas off Tanzania under effective protection or countries. In contrast, aquaculture production has management,64 and to aquaculture development, increased significantly (7.6 percent annual growth for example, through support for community fish since 1990), with most of the growth coming from ponds (under community-driven development proj- developing countries (figure 3). Aquaculture now ects) and integration of fisheries components in accounts for about 45 percent of global fish produc- irrigation tank (reservoir) projects.65 Over the next tion, with 55 percent from capture fisheries. Shifting three years, the WBG will support: (i) increasing the capture fisheries toward sustainable extraction rates capacity of developing countries to implement and remains a challenge, but it is beginning to be under- enforce effective management of capture fisheries; taken in some fisheries63through rights-based fish- (ii) fishing port infrastructure; and (iii) improving aquaculture practices. In addition, after a decade 62 Frid, C., and Paramor, O. (2011). “Feeding the world: What role for fisheries?� ICES Journal of Marine Science. Oxford University Press, UK. 64 Tanzania, Marine and Coastal Environment Management (P082492). 63 The Prince’s Charities (2012). Fisheries in Transition: 50 Interviews with the Fishing Sector. Report commis- 65 In projects in Orissa, Andhra Pradesh, and Karnataka, sioned by the Prince’s Charities International Sustain- fish production in 800 reservoirs in India increased by ability Unit, UK. 190 percent. Figure 3: Global Aquaculture and Capture Fisheries Production Tons (millions) 180 160 140 120 100 80 60 40 20 0 1950 1952 1954 1956 1958 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 Aquaculture — Aquaculture — Capture �sheries — Capture �sheries — developing countries developed countries developing countries developed countries Source: Derived from FAO data. 28 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 of minimal activity in the sector, IFC is reengaging hectares). In the FY2010–12 period, SAR, which in fisheries, with a particular focus on investment has the largest irrigated land area in the developing opportunities in sustainable aquaculture enterprises, world, also received the largest volume of IDA/ given that an increasing share of the global supply of IBRD support for irrigation and drainage, in partic- fish will have to be sourced from aquaculture. ular in India and Pakistan. The second most impor- tant region, both in terms of irrigated land area and 38. Improve agricultural water management commitments, was EAP, with China as the largest in rainfed and irrigated areas. Attention will borrower. In FY2012, AFR was in third place, with continue to be given to improving water manage- Nigeria as the most important country. IFC is also ment in rainfed agriculture, which covers most of increasingly investing in agricultural water manage- the world’s cropland and accounts for most of agri- ment. Support for micro-irrigation in India (part- cultural production in developing countries, espe- nering with Jain Irrigation) benefited about 25,000 cially in the water-constrained rainfed production small farmers, most with less than one hectare of systems of arid and semi-arid regions, where land. The switch in irrigation technology has helped yields tend to be relatively low. Combined with an reduce water applications by more than 40 percent improvement in other production factors, such as and contributed to increased annual incomes by soil fertility, crop varieties, and tillage practices, up to $1,000. Technological innovations combined better management of rainfall and runoff can help with changes in the policy environment are playing to achieve significant increases in yields and agri- an increasingly important role in agricultural water cultural productivity. The expansion of irrigation will management. For example, advances in the use also continue to be an important source of produc- of remote sensing technologies are now making tivity growth, especially in AFR and parts of LCR it possible to cost-effectively estimate crop evapo- that still have large untapped water resources transpiration (the sum of evaporation and plant and opportunities for economically feasible agri- transpiration to the atmosphere) from farmers’ cultural use. In other regions where the scope for fields and to improve water accounting and further expanding irrigated agriculture is limited, management at the regional and basin-wide levels. more efforts are needed to better use the available Since 2010, China is adopting this approach in the water, raising water productivity and its sustainable Xinjiang Turpan Water Conservation Project in the use. This includes addressing the technical, policy, arid northwestern part of the country. and governance aspects of agricultural water use while accounting for the competing demands of 39. To improve agricultural water management other water-using sectors. Ensuring sustainability over the next three years, the WBG will of irrigation investments will require more atten- support : (i) strengthening water management in tion to sustainable financing for operation and rainfed areas through a combination of measures maintenance. Support for irrigation and drainage ranging from technological interventions, such as accounts for the dominant share (24 percent) of water harvesting and other water control and water the IDA/IBRD’s support for agricultural produc- capture infrastructure, to the provision of better tivity related activities—particularly in MNA, SAR, climatic information and innovative approaches ECA, and EAP—and is a growing share of the that allow farmers to better cope with the risks program in AFR. Annual support during FY2010–12 posed by climate variability; (ii) improving water- increased to about $1 billion. Projects that closed shed management practices, in particular in in FY2010–11 had supported one and half million rainfed areas, and reforestation in upper water- hectares (1,588,361 hectares) of new or improved sheds to reduce soil erosion and enhance water irrigation. Projects that were approved in FY2011 capture; (iii) expanding new irrigated areas, espe- alone are targeting two million hectares (1,972,800 cially in AFR, with a focus on viable smallholder Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 29 and small-scale, community-managed irrigation, and with little transparency. The WBG is espe- and also public-private partnerships 66 ; (iv) reha- cially concerned that large-scale land acquisi- bilitating and modernizing existing irrigated areas, tions do not disadvantage smallholder farmers, including large-scale systems; (v) strengthening who depend on land for their livelihoods. The irrigation services, including for women, as well as WBG supports (and consistently recommends) supporting water user associations and the decen- government policies that implement systematic tralization of management functions, including land surveying and titling programs that recog- for more sustainable operation and maintenance nize all forms of land tenure: public and private; of irrigation systems; (vi) strengthening systems formal and customary, including those of pasto- for water rights allocation and improving water ralists or others with weak formal rights; collec- pricing; (vii) putting a stronger focus on assessing tive and individual, including women’s rights; and water resource availability in the longer-term and rural and urban. The World Bank has supported promoting irrigation water conservation, including governments’ efforts to strengthen land policies through better monitoring and modeling; and (viii) and administration systems in member coun- improving river basin and groundwater manage- tries for over four decades. Since 1990, the Bank ment through institutional development and a move has provided finance of $2.7 billion to more than toward more integrated water management. In 60 land administration projects around the world addition, the IFC plans a Global Efficient Irrigation (see recent examples of land tenure projects in Program, partnering with the GAFSP in IDA coun- box 6). At the request of individual countries, we tries and the Global Environment Facility (GEF) in provide support through information and research, non-IDA countries, to provide access to finance and by working with governments to implement and technical knowledge to help farmers switch to sound policies. As of mid-2012, 23 stand-alone improved technologies, such as sprinklers and drip projects were under implementation focused on irrigation; and by cooperating with the World Bank supporting improved governance of land tenure and GAFSP’s public sector windows that support with IBRD/IDA commitments of $964 million (12 basic infrastructure for irrigation. projects in ECA, 6 in LCR, 3 in EAP, and 1 each in AFR and SAR). In addition, there were 23 broader 40. Improve the governance of land tenure and projects that include land tenure components (13 land markets. High and volatile food prices in Sub-Saharan Africa). Land administration and add urgency to the challenges of improving land redistribution projects are inherently complex and governance and applying appropriate safeguards difficult to implement, and they require long-term to protect the land rights of the poor, especially commitments from governments and partners. women. High food prices and shortages, increased demand for biofuels, and countries trying to secure 41. The WBG does not support speculative land food supplies have contributed to rising demand investments or acquisitions that take advan- for farmland and led to global concerns about tage of weak institutions in developing coun- forced land acquisitions and “land grabbing.� The tries. In those countries where there is some scope governance environment in which land acquisition for expansion of uncultivated arable lands, the WBG is happening is often weak, and traditional users’ will support government efforts to attract domestic rights are often overlooked or abused, with little and foreign productive investments by encouraging or no consultation with communities affected inclusive business models that integrate smallholder farmers into high-value chains; emphasizing strong social and environmental safeguards, particularly 66 Public-private partnerships in irrigation are increasingly being initiated, including in Morocco, Brazil, Ethiopia, and with regards to land tenure rights; and insisting on Zambia. the highest standards of responsible agribusiness 30 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 investments. IBRD and IDA interact primarily with supporting the implementation of the VGs at the governments to increase agricultural productivity, country level through widespread dissemination, strengthen land tenure policies and improve land capacity building, and financial support to policies governance. More than 90 percent of the World and projects that enhance the governance of land Bank’s agriculture portfolio focuses on the produc- tenure according to these VGs. The WBG considers tivity and access to markets by smallholder farmers. these VGs as a major international instrument to Five percent of our agriculture and rural develop- guide specific policy reforms, since they provide an ment program currently focuses on the governance agreed framework for action, broad participation, of land tenure. Similarly, investments by the IFC, and monitoring outcomes. These VGs will guide including those in larger-scale enterprises, over- IDA/IBRD’s current and future engagement in land whelmingly support smallholder farmers through tenure projects and are now being operationalized improved access to finance, inputs, and markets, in IFC’s agriculture investments in primary produc- and as direct suppliers. IFC invests in environmen- tion involving significant expansion onto new tally and socially sustainable private enterprises in all lands.67 All WBG projects addressing the gover- parts of the value chain (inputs such as irrigation and nance of tenure of land, fisheries, and forests will fertilizers, primary production, processing, transport support voluntary efforts by client country govern- and storage, traders, and risk-management facilities, ments to implement these VGs. This support will including weather/crop insurance, and warehouse be through wide dissemination of the VGs; tech- financing). IFC due diligence and Performance nical cooperation; financial assistance; institu- Standards, which address issues ranging from envi- tional capacity development; knowledge sharing, ronmental and social impacts to labor practices including through South-South cooperation; and to assuring future livelihoods for existing users, assistance in developing national tenure policies apply in all cases. IFC’s Performance Standards and transfer of technology in accordance with the were recently strengthened to address many risks VGs. In line with this institutional commitment, associated with land investments and are widely the Bank and several partners have developed regarded as best industry practice. In addition, IFC the Land Governance Assessment Framework,68 has recently further strengthened its approach to a diagnostic tool to assess the status of land investments involving significant parcels of land to governance at the country level in a participatory include assessment of local food security impacts process that draws on local expertise and existing and adding a new requirement for contract trans- evidence rather than on the advice of outsiders. parency in cases of government to private transfers To date, assessments through this framework have of land. This complements existing Performance been carried out or are under way in 13 countries Standard coverage of issues pertaining to protection (10 of which are in AFR). of existing users rights and consultation, as well as enhanced early risk screening tools. 42. The Bank has actively supported prepara- tion and endorsement (May 2012) by the 67 Encouraging collaboration with the Sustainable Com- modity Roundtables can help to increase the extent to Committee on World Food Security (CFS) of which crop production systems meet voluntary environ- the Voluntary Guidelines on the Responsible mental and social criteria, including the Roundtable for Governance of Tenure of Land, Fisheries Responsible Soy, the Roundtable on Sustainable Palm Oil, the Better Sugarcane Initiative, and a variety of for- and Forests in the Context of National Food est certification processes. Security (VGs). The Bank is actively engaged 68 Deininger, K., Selod, H., and A. Burns (2011). The Land with multiple partners (UN agencies, bilateral Governance Assessment Framework: Identifying and donors, the International Land Coalition, CSOs) in Monitoring Good Practice in the Land Sector. ARD Series, World Bank, Washington, DC. Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 31 Box 6: Recent Examples of Land Tenure Projects For many years in Nicaragua, the lack of an institutional and legal framework made it difficult for indigenous and ethnic community groups to have their rights and natural resources formally recognized and their territo- ries demarcated and titled. Under the Land Administration Project, the World Bank helped to demarcate, title, and register 1 million hectares of land in the country’s Atlantic coastal region, and prepare territorial manage- ment plans with participation of the indigenous and ethnic communities and their leaders and authorities to guide future development efforts. In Malawi, inequitable access to arable land, combined with insecure land tenure, unsustainable farming practices, and intense competition for resources have resulted in chronically low incomes and persis- tent poverty. To address these challenges, the Community Based Rural Land Development Project was launched in 2004 to generate greater opportunities for the poorest of the Malawi’s rural poor. By 2010, 15,000 poor families had access to land. Gross margins per hectare had increased tenfold for hybrid maize from the pre-location phase. In Bolivia, the Bank helped update the 1952 land reform law, establish a new tenure regime for indigenous people, and modernize the land administration system. As a result, 2.8 million hectares of land were surveyed and titled—of these, 588,000 hectares were for indigenous peoples’ communal territories. In Indonesia, the Bank supported post-tsunami recovery efforts in Aceh through rapid community mapping and land registration and titling, introducing the concept of joint titling and gender recording. A total of 222,628 land title certificates were distributed to land owners after the tsunami, out of which 63,181 were given to women either individually or as joint owners with their spouses. 43. The WBG supports international cooperation develop options for promoting responsible invest- on principles of responsible agricultural invest- ment in agriculture.�69 At the Los Cabos Summit ments. At the request of some member countries, in 2012, the G20 reaffirmed its support for the and in the context of the 2009 UN roundtable on PRAI. The Bank is now working with several this issue, concurrent with the 64th UN General stakeholders in operationalizing and retrofitting Assembly meetings in New York, the United (to selected past investments) these seven prin- Nations Conference on Trade and Development ciples. More recently, the Committee on World (UNCTAD), the International Fund for Agricultural Food Security has launched a process of global Development (IFAD), the Food and Agriculture consultations, similar to that pursued for the VGs Organization (FAO), and the World Bank, in consul- on Land Tenure, around responsible agricultural tation with a number of stakeholders, generated investments. The WBG fully supports the commit- principles of responsible agriculture investments tee’s process and will contribute to it, along with (PRAI) that could be used by both foreign and IFAD, FAO, and UNCTAD. Moreover, the World local investors, and by governments to address Bank Group is an active participant in Grow Africa, the needs of vulnerable groups, especially small- which is a partnership platform to accelerate holder farmers (box 7). At the Seoul Summit in investments for sustainable and inclusive growth November 2010, the G20 encouraged “all coun- in African agriculture, coordinated by the African tries and companies to uphold the Principles for Union’s New Partnership for Africa’s Development Responsible Agricultural Investment,� and further and its CAADP, and the World Economic Forum. requested “UNCTAD, the World Bank, IFAD, FAO, and other appropriate international organizations to 69 G20 Seoul Summit 2010: Seoul Development Consen- sus for Shared Growth—Summit Communique. 32 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 The first Grow Africa Investment Forum was held Seven Principles of Responsible Box 7: in Addis Ababa in May 2012. It attracted 270 top- Agricultural Investments (PRAI) level leaders from global, regional, and national businesses, African and other governments, 1. Existing rights to land and associated natural international organizations, and civil society and resources are recognized and respected. farmers’ organizations. A total of 116 companies 2. Investments do not jeopardize food security but participated, including 49 African and 47 multina- rather strengthen it. tional companies plus 20 from other regions, such 3. Processes for accessing land and other as Asia and the Middle East. More than 60 compa- resources, and making associated investments, nies signed letters of intent reflecting intended are transparent, monitored, and ensure account- private investments of $4 billion in African agricul- ability by all stakeholders, within a proper busi- ture. This number reflects both the strong interest ness, legal, and regulatory environment. of the private sector to invest in African agriculture, as well as to do so in a sustainable and inclusive 4. All those materially affected are consulted, and way supported by Grow Africa. agreements from consultations are recorded and enforced. 44. In these areas, over the next three years the 5. Investors ensure that projects respect the rule WBG will be providing support to (i) protect of law, reflect industry best practice, are viable the rights of local communities and individuals to economically, and result in durable shared value. forest and farmlands, particularly for women; (ii) 6. Investments generate desirable social and working with governments and other partners to distributional impacts and do not increase better direct new agricultural investments toward vulnerability. those lands where there are genuine development opportunities, existing land rights are adequately 7. Environmental impacts due to a project are recognized and protected, and adverse environ- quantified and measures taken to encourage mental and social impacts are minimized (for sustainable resource use while minimizing example, in already converted or degraded lands); the risk/magnitude of negative impacts and (iii) increasing land access for the poor and vulner- mitigating them. able, including women, through community-based redistributive land projects and forest management enhancing conflict resolution through the use of tenure regularization programs; (iv) incorporating alternative resolution mechanisms, more compe- greater transparency of government to private tent institutions, and increased civic participation. land transfer contracts, evaluating local food secu- rity impacts, and more inclusive business models 45. Strengthen agricultural innovation systems in new IFC investments, which include small- (agricultural research, extension, education, holders/users in the production supply chain of training), including promotion of more nutri- larger farms; (v) increasing transparency and effi- tious food crop diversification. Accelerating ciency of land administration systems, including long-term agricultural productivity growth is espe- the use of computerized registration systems with cially challenging for researchers facing a moving increased access by the public; (vi) strengthening target in that new technologies must address local governance and cost recovery via decentral- current and future realities, and must also show ized land administration service delivery, revised resilience in the face of climate change. The property valuation and land tax policies, and other World Bank focus over the next three years will measures; (vii) building capacity for sustainable be on (i) improving the relevance and responsive- land administration and management; and (viii) ness of cutting edge and traditional research and Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 33 extension through inclusive prioritization of farmer of the lagging nutrition-linked MDGs. Biofortified needs, empowerment of end users, encouraging crops are being supported by programs such as pluralism and gender balance in service quality the CGIAR’s HarvestPlus program and in Brazil by and delivery, and farm innovation; and on ensuring their national agricultural research institute, as well better links between research and extension and as fortified inputs such as zinc and iodine fertil- other innovation actors, including by promoting izers that increase yield and the nutrient content the use of ICT for achieving these objectives; (ii) of the produced food. Over the next three years, continuing to reflect these principles in program the Bank will support actions such as (i) strength- and project design to contribute to enhanced ening nutrition modules in extension and advisory use of new agricultural innovations in improving systems such as through home economics exten- rural livelihoods and income generation and the sion to deliver simple nutrition messages around systematic scaling up of successful innovations; specific crops; (ii) national agricultural research and (iii) education and training, in collaboration systems in testing and disseminating biofortified with HDN, including for capacity building, institu- crops; (iii) improving access to fortified fertilizers tional development, and tertiary education. More such as zinc and iodine fertilizers; and (iv) scaling attention will be given to sustainable financing up successful programs. of agricultural research and partnership develop- ment, supporting regional programs for research 46. Support consideration of new technology in Africa to ensure economies of scale in research tools. The WBG will continue to respond to efforts, and development of Centers of Excellence. requested client demand when activities related Public sector financing remains essential for agri- to new or less common technologies, ranging cultural research, but more can be done to facili- from organic farming to biotechnology, including tate private sector research. CGIAR has approved transgenics,70 have a potential to contribute to a policy on intellectual assets in consultation with poverty reduction, economic growth, and envi- donors and the private sector for two years on a ronmental sustainability. The global area under trial basis. This is expected to increase collabora- biotechnology crops continues to expand and tive agricultural research between the CGIAR and in developing countries has reached the same the private sector (flood-tolerant rice has been area under production as in developed coun- adopted by farmers at a significant rate through tries.71 The largest adopters in developing coun- partnerships with private sector seed compa- tries are Brazil, Argentina, India, and China, but nies). Further attention will be given to South- other smaller countries such as Burkina Faso (in South collaboration and partnerships drawing on cotton) are also using biotech crops. The WBG successful experiences in Latin America (e.g., IFC will continue to support actions to (i) develop is in active discussion with Zamarano, Honduras, country capacity for assessing the potential risks about the possible replicability of their agricul- and benefits of biotechnology; (ii) contribute to tural education model). Continued support will be reverse the neglect of pro-poor traits and orphan provided to the recently reformed CGIAR, with crops, through focusing more research on crop attention to strengthening mechanisms to ensure 70 Transgenics, or genetically modified organisms, are the CGIAR research results are effectively integrated result of transferring one or more genes, usually from a into national programs. In this respect, there are wild species or a bacterium, to a crop plant. Transgenic opportunities for local adaptation, dissemination varieties offer significant opportunities; however, to mitigate potential risks, they should be used in situations and scaling-up of CGIAR developed biofortified where international biosafety standards are in place and crops, which are starting to be released in AFR, are being implemented. SAR, and LCR. Biofortified crops offer important 71 James, C. (2012). “Global Status of Commercialized nutritional enhancement, particularly in the context Biotech/GM Crops: 2011.� ISAAA Brief No 43. ISAAA: Ithaca, NY. 34 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 and cropping systems of most relevance to poor costs and prices. High post-harvest losses along farmers and poor countries; and (iii) develop cost- the value chain reduce farm incomes and lead to effective and transparent regulations and produc- wasting scarce resources. Newer biofuels markets tion programs, together with the expertise and have recently emerged (box 9). Traditional bulk competence to manage their adoption and use. commodities (such as coffee, cocoa, and cotton) remain important in some of the poorest coun- 47. Consider opportunities for mechanization. tries, and associated market structures have The WBG will support actions to pilot the estab- significant impacts on country competitiveness. lishment of leasing and rental markets and scale Higher-value markets, however, require more up those initiatives that prove successful. If prop- exacting standards, timeliness in delivery, and erly coordinated, machine rentals provide a prac- the overall production system for these markets tical and convenient way to substitute capital for often involves economies of scale and access to labor, including for part-time farmers, who are finance. Even in middle-income countries there often most in need of labor-saving technology, and remain barriers to entry, especially for small- overcome the indivisibility of machine inputs when holders that operate locally at the village level or credit markets are absent or imperfect. IFC actively within a small provincial economy. High infrastruc- works with local financial institutions and equip- ture costs, along with poor logistics, inadequate ment operators to develop and expand equipment- support services, lack of finance, and weak insti- leasing programs. The use of machine rentals has tutions, pose challenges to farmers. As increased historically been practiced in many Asian countries weather variability is changing the geographical to capture economies of scale and is on the rise in distribution of global food production and trade, China. Support can also be provided to the forma- more rules-based international trade and trade tion of voluntary farmers’ groups where members facilitation support is necessary to ensure the own the machines collectively.72 timely flow of food from surplus to deficit areas nationally, regionally, and globally. Enabling small- holders to more actively participate in markets will Thematic Area 2: Link Farmers to Markets contribute to accelerating overall supply response. and Strengthen Value Chains Support needs to be differentiated by regions and tailored to different types of markets. The Bank 48. Better connecting farmers to local, urban, regional, will help clients to improve physical infrastruc- and global markets can help to raise incomes, link ture; strengthen producer organizations, business deficit regions with surplus regions, and reduce services, and value chain coordination; improve overall agricultural price volatility. Urban food standards and food safety; increase micronu- markets in Africa alone are set to increase fourfold trient fortification of processed foods; facilitate to over $400 billion by 2030,73 and the growing trade; and increase access to finance, all of which middle class around the world is also seeking are consistent with the WBG’s Trade Strategy.74 greater diversity and higher quality in its diets. Overall, more emphasis will be given to facilitating Yet food staple markets are often hampered by a private sector response (box 8). poor infrastructure, inadequate support services, and weak institutions, which push up transaction 49. Improve physical infrastructure, and infor- mation and communication technologies, 72 FAO (2011). “The Kyrgyz Republic Farm Mechanization including reducing post-harvest losses. and Agricultural Productivity.� Country Highlights Paper commissioned under the FAO/WB Cooperative Program. 74 World Bank (2011). Leveraging Trade for Development 73 World Bank (2013). Growing Africa: Unlocking the Po- and Inclusive Growth: The World Bank Group Trade tential of Agribusiness. Washington, DC. Strategy, 2011–2021. Washington, DC. Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 35 Box 8: More Emphasis on Facilitating a Private Sector Response Farmers, herders, traders, input suppliers, and agro-processors are all private sector actors. Higher average agricultural prices offer significant opportunities to raise incomes of poor people, attract higher levels of private investment, and increase overall sector growth while improving food security. The public sector role is to facilitate a level playing field for a much more active private engagement, including by smallholders. Better inclusion of disadvantaged groups in the market is a particular priority, as is securing the productive assets of the poor. Improving access to finance can help stimulate a private sector response, especially by those groups who until now had difficulties in securing access to capital. In addition, clients who wish to mobilize the power of private investment need to both establish a favorable overall investment climate and be sure that investors, including small-scale domestic ones, know about it and have confidence that it is true. Recent analysis also shows a positive correlation between the business climate and on-farm capital stock (FAO). Increasing access to finance by private traders can also help facilitate on-lending and advisory support to downstream suppliers, particularly smallholder producers, and support to local financial intermediaries can facilitate lending to agricultural input providers and agro-processing enterprises. These help facilitate private sector responses and can draw in more private investments along the value chain. Key actions: (i) increase the share of IFC’s agribusiness investment in total WBG support for agriculture (39 percent in FY2010–12). The volume of IFC’s agribusiness investments is projected to increase by 60 percent from $2.7 billion annually in FY2010–12 to $4 billion to $5 billion annually in FY2013–15 while reaching more farmers (1.5 million per year by 2015); and (ii) develop and implement annual “Doing Agribusiness Surveys� in 80 countries, together with more focused multiple country analysis on specific business environment topics. Note : This is not intended to be an exhaustive list of actions, but focuses in on several that will be given more emphasis over the next three years. Reference : FAO (2013). The State of Food and Agriculture: Investing in Agriculture for a Better Future. Rome. Improved rural infrastructure and market informa- in Assam, India75 ); (ii) market points and storage tion can reduce transaction costs, facilitate the (including grain storage as was supported in the shift of farmers from subsistence to commercial Punjab,76 and cold storage at sea and airports as agriculture, reduce post-harvest losses, promote was supported in Mali77 ); (iii) access to water and value addition, and enable private sector invest- electrification for food processing; (iv) infrastruc- ment. Effectively prioritizing rural infrastructure ture to reduce post-harvest losses (including to to improve access to electricity and connectivity preserve harvests and adding value to crops, as with national and regional markets often requires is being supported in Ghana,78 and investments strengthened capacity of local and national govern- in public-private partnerships to expand grain ments to plan, build, and maintain the quality of storage capacity and inventory management to rural infrastructure in a cost-effective manner. In ensure grain quality and reduced losses, as is addition, better information technology (mobile phones) can improve price discovery and reduce 75 India, Assam Agricultural Competitiveness Project (P084792). product waste. Over the next three years, the WBG will continue to work across sectors to support 76 India, Punjab Silos (28159). (i) transport infrastructure (including the reach 77 Mali, Agricultural Competitiveness and Diversification Project (P81704). and quality of rural roads as is being supported 78 Ghana, Commercial Agriculture Project (P114264). 36 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Box 9: Liquid Biofuels: A Prominent Agricultural Issue in Global Food Price Discussions There has been significant growth in the use of liquid biofuels : Maize-based ethanol in the US accounted for 48 percent of liquid biofuel production globally in 2011, following 25 percent a year growth between 2003 and 2010 under a policy regime intended to promote its use. More recently, growth in the use of maize-based ethanol slowed in the US, changing little between 2010 and 2011, while ethanol production increased 5 percent, reflecting a surge in exports to Brazil and the EU. The use of liquid biofuel is now wide- spread throughout the world. Biodiesel represented 78 percent of biofuels used in the EU in 2011, where liquid biofuel consumption grew by nearly 40 percent per year from 2003 to 2010. The US, Brazil, and the EU account for more than 90 percent of global ethanol and 70 percent of global biodiesel production and consumption. A further 19 countries have explicit policies to promote or channel liquid biofuel use. Global growth in the use of food crops (or food-growing resources) for biofuel feedstock helped promote a claim in policy discussions that this phenomenon is behind current high agricultural prices. The first section of this document on the evolving and volatile context argued that there are several explana- tions of current high food prices, plausibly working together, and plausibly including high oil prices as a driver through the demand side (via biofuels) in addition to through the supply side (fuel and fertilizer). Proactive poli- cies to promote biofuels use can also contribute if they have an effect beyond that of high fuel prices by them- selves, particularly if their application is inflexible in terms of market conditions. This box uses the dominant case of maize use for ethanol in the US to explore some of the complexity for the broader issue of the rela- tionship between high fuel and crop prices. The increase in the amount of maize used in ethanol production between 2003 and 2010 was equivalent to the entire growth in US production of maize. At roughly 40 percent of the US maize crop in 2011, amounts are substantial. This shift contributed to world maize price increases, as the growth in US maize production was no longer helping meet steady growth in aggregate demand for maize outside the US that was outstripping the supply of maize outside the US. This imbalance between demand and supply outside the US developed for years, but began to have a bigger impact on global prices when US exports ceased to expand in tandem with the demand for imports from the US. Maize is not the primary ethanol feedstock in the Bank’s client countries, where crops such as sugarcane are much more prevalent. The consequences of biofuel production on the levels and volatility of world sugar and vegetable oil prices are a plausible concern for developing countries. The merits of liquid biofuel use and policies affecting use are highly context-specific, depending on local prices for fuels relative to feedstock and many other factors in the production and consumption of both feedstock and fuels. A feed- stock crop such as sugar is particularly efficient at reducing net CO2 emissions through photosynthesis. The primary issue overall is whether biofuels are an efficient way to attain the net benefits sought when all the ramifications are assessed. Current WBG involvement in liquid biofuel production is small. IFC has several projects that include sugar-based ethanol, usually manufactured in dual-purpose mills that are flexible for both sugar and ethanol production. IBRD/IDA has had several pieces of formal analytical work on the topic. Policy mandates and subsidies have been widely used to promote development of biofuels capacity. Blending mandates for gasoline are typically set for a fixed period of years. Mandates are typi- cally set in percentages of biofuels to be blended, ranging from 1 to 10 percent. Mandatory blending has been implemented in some form in Argentina, Australia, Brazil, Canada, China, Colombia, Ethiopia, the EU, India, Indonesia, Jamaica, Malawi, Malaysia, Mexico, Paraguay, Peru, the Philippines, the Republic of Korea, Thailand, the United States, Uruguay, and Zambia, with varying levels of actual compliance. Some countries, such as China, India, and South Africa are now proactively seeking to ensure that food crops are not used as Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 37 Box 9 ( continued) feedstock. The US is atypical in that it has a volume as opposed to a percentage mandate for ethanol. A key feature of mandates is whether they are flexible enough to permit temporary waivers in times of high feed- stock prices. Brazil, for example, has a flexible mandate that is adjusted with supply availability. Subsidies may be more flexible than mandates. Many countries provide a fuel excise tax reduction or exemption, soft loans, tax credits, and direct subsidies to producers. Further policy support comes in some cases from import tariffs on liquid biofuel to prevent consumption subsidies from benefiting imports, deterring efficient production of biofuels in countries with comparative advantage. The commercial profitability of the production of first-generation liquid biofuel is driven by the difference between the prices of petroleum and agricultural raw materials, taking into account government incentives. Petroleum and crop feedstock may be separately affected by different drivers, including different sorts of shock. At one point in early 2006, for example, the US ethanol was selling for $4 a gallon when corn was selling for $1.50 a bushel. Ethanol blending at that point was growing strongly beyond mandated amounts, and this growth was clearly fueled by high profitability. In contrast, the margins on ethanol production from maize shrank after 2006, and the continued rapid growth of blending was more clearly dependent on policy incentives and requirements. When maize reached $8/bushel after disastrous weather in summer 2012 in the US, a considerable amount of US ethanol production capacity was idled, in spite of relatively high petroleum prices of about $130/barrel. Further production was not profitable at these price relatives, and the credits (“Renewable Identification Numbers�) accumulated by blenders toward mandated amounts were sufficient at that point to satisfy policy requirements. Paradoxically, high corn and soybean prices in recent years have also led to a tripling of the price of Distillers Dried Grains, an ethanol by-product used for feed that has become an important part of the US ethanol producers’ net margins. There are contrasting views on whether liquid biofuels improve ecological sustainability. Potential positive effects might include lower vehicular emissions of harmful pollutants in countries with less stringent emissions control, as ethanol is less polluting than some of the other additives used in some countries to boost octane. Plants grown for feedstock may absorb more CO2 overall than would have been the case other- wise on the same land. However, potential negative effects include increased pressure on land and water sources, soil erosion, soil pollution, extra energy use for production and transport, loss of agro-diversity due to mono-crop cultivation, and loss of diversity in general due to agricultural expansion. The net impact on ecological sustainability needs to include a production landscape approach to factor in all costs and benefits. The WBG will work with clients, if requested, to assess the wide range of costs and benefits in specific situations, as well as any spin-off effects on a broader set of markets and clients. The WBG recog- nizes the imperatives to address multiple needs for fuel, food, feed, income growth, and ecological sustain- ability. While the WBG maintains a general focus on facilitating market adjustments to both changing long-term needs and short-term shocks—something that in most cases quantitative restrictions and in many cases subsidies or other market distortions are not helpful to—it recognizes the breadth of policy objectives and complexity of underlying issues of this subsector. Better understanding the likelihood of unexpected consequences is especially critical here. The bottom line is that presently the outlook is for the global supply of food and feedstock to continue to fall short of needs unless global productivity grows faster than it is doing in most countries; there is a critical need for efficient responses to this issue worldwide. 38 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 being supported by IFC in Punjab, India); and (v) AgResults initiative 80 and increased collaboration more use of information technology to facilitate with agri-commodity supply chain integrators; and price discovery and reduced product waste.79 (iv) do more cross-regional South-South learning on Attention will be given to improve geographic prior- good practice approaches. Our programs are having itization and targeting of infrastructure to link high an impact. For example, new market identification, potential agricultural areas with markets; promote new product development, technical assistance, development along growth corridors; promote and advisory services to agribusiness companies cross-border trade, especially in low-income coun- in Kyrgyz Republic have increased sales and profits tries where the infrastructure gap remains signif- for smallholders. 81 Productive alliances to help icant; and strengthen competition in delivery of producers transition into high-value supply chains transport services to avoid monopoly and rent in Bolivia have significantly increased both produc- seeking in the transport sector. IFC will increase tion and prices received by producers, with these its investments in critical infrastructure needs in productive alliance projects now being financed logistics, storage/silos, and dedicated agriculture in 10 LCR countries. The use of ICT through an port terminals during the three-year period to help internet portal to access product prices in Anhui to reduce post-harvest spoilage through better Province in China contributed to small cooperatives storage and more efficient transportation systems better identifying market opportunities for poultry that speed access to markets. sales in major markets.82 50. Strengthen producer organizations, busi- 51. Improve the enabling environment. The policy ness services, and value chain coordination. and legal environment influences the incentives for The ability of farmers, particularly smallholders, to private sector investment in agriculture—including compete in growing higher-value markets will deter- by smallholder farmers, traders, and agro-proces- mine the poverty-reducing effect of future agricul- sors. IDA/IBRD will continue to use analytical work tural growth. Improved supply chain management to guide dialogue with client countries on improving leading to lower costs (operating, procurement, the policy and legal environment, and the IFC is marketing, and distribution) will help smallholders to developing a program of support for (i) regula- move beyond local markets to urban, regional, and tory reform for the agriculture sector, (ii) ware- global markets. Our focus over the next three years house systems regulation, (iii) competition policy, will be to (i) scale up successful business models and (iv) tax and incentive reform in the sector. In that link smallholders to markets, which includes addition, WBG is extending the Doing Business support for producer organization, ICT and business methodology to “Doing Agribusiness,� with development services to farmers, value chain coor- dinators, out-grower schemes, and matching grants 80 AgResults is an initiative to enhance smallholder welfare and improve food security for the poor and vulnerable to spur innovative approaches; (ii) provide technical through the use of “pull mechanisms� in agriculture. support on the policy environment, market struc- Pull mechanisms are results-based financial incentives ture, and degree of private sector competition; rewarding successful innovations and their adoption. They are designed to overcome market failures and encourage (iii) pull in the private sector, including through the private and public sector innovators to develop products and services that they would not otherwise bring to the market. Well-crafted pull mechanisms can be used to close the gap between the demand for socially desirable goods and services and their supply by the private sector in developing countries. 81 Kyrgyz Republic, Agribusiness and Marketing Project (P049724). 79 World Bank ( 2011). ICT in Agriculture Sourcebook. 82 China Construction and Popularization of Agriculture Washington, DC. Info-Service System. Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 39 plans to develop indicators of laws, regulations in maize and peanuts), with an estimated 4.5 related to accessing agricultural inputs, exporting billion people exposed to aflatoxins in their agricultural products, getting credit for agribusi- diet, 85 which is believed to cause 5–28 percent ness, and accessing agricultural land and water, of all liver cancer cases around the world, 86 other among others. The survey results on agribusiness liver diseases, stunting, and immune suppres- constraints can help inform policy dialogue. sion; and (vii) promotion of voluntary sustain- ability standards to limit environmental and social 52. Improve quality standards and food safety. risks of production (e.g., the WBG through the Improving capacity to meet quality and safety Roundtable on Sustainable Palm Oil set a compre- standards in growing high- and middle-income hensive, agreed-upon sustainability standard that markets can improve smallholder competitive- producers could adopt, to limit the crop’s impact ness in these markets and improve domestic on deforestation and biodiversity loss 87 ). IDA / health and nutrition. The WBG will continue to IBRD support to governments to strengthen support (i) improving implementation of sani- food safety standards (policy and regulation), are tary and phyto-sanitary standards and other food complemented well with IFC support to compa- safety standards, including improving capacity to nies to implement the standards. comply with export market standards, as is being supported in Moldova; 83 (ii) training, knowledge 53. Support fortification of processed foods with sharing, and analytical research on standards, micronutrients. Micronutrient fortified processed including e-learning courses (with the World Bank food can help improve nutrition outcomes. Some Institute) on good practice in development assis- countries have universal fortification mandated by tance standards; (iii) aligning food safety institu- law, such as folic acid in wheat flour in Latin America tions and systems to market needs, as is being and iron-fortified fish sauce in Vietnam and China, supported in Vietnam 84 with improvements and while other fortified products are market driven, such hygiene along the meat chain, and in Ukraine as iron-enriched curry powder in South Africa. The and Central Asia, through IFC Advisory Services WBG will do more to support micronutrient fortifi- support to better align food safety practices with cation, for example, through developing financing international regulations, including the EU; (iv) mechanisms to offset additional fortification costs of improving grading and packaging, as is being cereal millers and vegetable oil refiners or supporting supported in productive alliance projects in LCR, the development of the regulatory framework for including support for enabling policies on intellec- fortification standards and related food laws (as is tual property rights (e.g., brands and trademarks); being done through the AgResults88 ). (v) improved product traceability and verification of environmental and social sustainability prac- 54. Facilitate intra-regional, South-South, and tices (e.g., IFC is providing support to Armajaro global trade. Greater trade within regions (box 10), Trading Limited to help maintain closer contact 85 Williams, J., Phillips, T., Jolly, P., Stiles, J., Jolly, C., and with cocoa and coffee farmers and coopera- Aggarwal, D. (2004). “Human aflatoxicosis in develop- tives and offer value-added services); (vi) raising ing countries: a review of toxicology, exposure, potential awareness, standards, and testing for improved health consequences, and interventions.� Am J ClinNutr 80: 1106–22. “food safety� for better health and nutrition, 86 Liu, Y., and F. Wu (2010). “Global burden of aflatoxin- particularly on aflatoxins (a mold predominately induced hepatocellular carcinoma: A risk assessment.� Environmental Health Perspectives 118 (6): 818–824. 83 Moldova, Agricultural Competitiveness Project (P118518), 87 World Bank (2012). Inclusive Green Growth: The Path- Investment Climate Reform Moldova Project (576047). way to Sustainable Development. Washington, DC. 84 Vietnam, Livestock Competitiveness and Food Safety 88 http://siteresources.worldbank.org/CFPEXT/Resources/ Project (P090723). AGPM_OVERVIEW_April.pdf 40 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Box 10 : The Importance of Promoting Cross-border Regional Trade in Sub-Saharan Africa Africa’s producers are not generally competitive in global markets for food staples. The same high interna- tional and domestic logistics costs that provide natural protection for local food producers pose a signifi- cant barrier when it comes to exporting. For example, Mozambican farmers, who are highly competitive in producing cassava for the domestic market, would have to cut production and logistic costs by more than 80 percent to become competitive exporters of cassava to Europe (FAO and World Bank 2009). Regional markets and cross-border trade in Sub-Saharan Africa appear to offer the most promising opportu- nities for agricultural expansion over the short-to-medium term. Demand in regional markets is expected to grow rapidly as a result of population growth, income gains, and accelerating urbanization. Serving regional markets with less sophisticated requirements on food safety and quality than in developed countries is more affordable, including by displacing imports from outside the region, which is currently considerable. In addition, cross-border trade offers more than new market opportunities. It facilitates the flow of food from surplus to deficit areas across country borders, reducing short-term food price volatility. Impact simulations of maize production shortfalls on food prices in Southern Africa illustrate that a 30 percent production short- fall would lead to maize price increases in Zambia of 163 percent without cross-border trade, but increases of only 36 percent when cross-border trade is permitted (World Bank 2008). In Malawi, a 20 percent produc- tion shortfall would result in maize prices spiking by 62 percent when trade with northern Mozambique is banned, and by 27 percent when cross-border trade takes place. Promoting cross-border trade is a cost- effective way of achieving price stabilization, in particular compared to such alternatives as export bans or buffer food grain stocks. Source : FAO and World Bank (2009). Awakening Africa’s Sleeping Giant: Prospects for Commercial Agriculture in the Guinea Savannah Zone and Beyond. ARD, Rome and Washington, DC.; and World Bank (2008). Regional Trade in Food Staples: Prospects for Stimulating Agricultural Growth and Moderating Food Security Crises in Eastern and Southern Africa. Washington, DC. among developing country markets, and with benefits of various policy options/agreements; developed countries can help raise farm incomes, (iv) capacity building (generally through the World link product surplus and deficit areas, and reduce Bank Institute) that aims at training on and dissem- price volatility. In addition to supporting infrastruc- ination of analysis; (v) provision of data and data- ture development, value chain coordination, and sets on trade flows and policy (so that countries improving standards, the WBG will support analyt- can assess market access implications); and (vi) ical work and technical assistance to promote open technical assistance to countries in trade facilita- trade policy and facilitate trade, including facilitating tion negotiations (working with our partners, espe- the identification and implementation of coopera- cially the WTO and UNCTAD). tive trade solutions to reduce the adverse impacts of unilaterally chosen policies on trading partners. 55. Increase access to finance. Rural finan- Support includes (i) support for multilateral action cial services are critical to developing the rural and cooperation, including conclusion of the Doha economy, to help farmers, traders, and agri- Round of WTO negotiations that would reduce business firms participate in trade and food distortions and strengthen disciplines on agricul- processing. The WBG continues to support clients tural trade restrictions; (ii) research that assesses in their efforts to deliver a broad range of finan- the impacts of current policies; (iii) highlighting cial services to the rural poor, especially women, Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 41 including through commercial banks (e.g., the urban job creation, and urban congestion, a priority is Agricultural Financial Support Facility in AFR and to promote rural non-farm employment in secondary Asia). Through the IFC, financing and advisory towns, including for women, and to strengthen rural- services are made available for financial institutions urban linkages. Effective functioning of land markets to increase their financing to the agriculture sector is also necessary to facilitate both entry and exit from and rural populations, and to facilitate value chain agriculture. Facilitating exit from agriculture, including financial solutions, such as warehouse financing, the intergenerational transfer of assets, is an important which provides farmer suppliers with needed issue facing many middle-income countries, many of liquidity by making commodities in warehouses which are also facing the challenge of an aging popu- available as collateral. We will scale up support for lation. In addition, to strengthening land markets, the financial service provision, market facilitation, and WBG will continue to support improvements in the the enabling environment for rural finance; building investment climate, investment in rural infrastructure, on relevant technological advances to spread skills upgrading, and livelihood programs. access and expanding multiple sources of rural finance, trade finance, as well as savings mobili- 57. Improve the rural investment climate. The zation, which includes (i) microfinance; (ii) inter- WBG is piloting a set of agribusiness indicators locking financial arrangements through contract in 9 countries, with recent analysis completed farming and out-grower schemes; (iii) warehouse in Ghana, Mozambique, and Ethiopia. A second financing (Global Warehouse Finance Program, a round of four country studies (Burkina Faso, program directed to support bank lending backed Tanzania, Kenya, and Zambia) is under way. Rural by agricultural production); (iv) matching grants to investment climate assessments are also being farmers and value chain participants; (v) support to completed in Georgia and Tajikistan. This work is establishing leasing markets; and (vi) credit facili- now being scaled up in partnership with the Global ties and capacity building for farmers, exporters, Indicators and Analysis Group, which undertakes 89 and processors, as is supported in Uzbekistan, the Doing Business Surveys. A hybrid approach of Cambodia,90 and Vietnam.91 an annual Doing Agribusiness Survey in 80 coun- tries, together with more focused multiple country analysis on specific topics will be used. The Thematic Area 3: Facilitate Rural Non- product can help guide policy dialogue to improve Farm Income the overall investment climate. 56. Rural non-farm income is increasingly important in 58. Invest in rural infrastructure. Rural areas often many countries and often provides critical linkages have poor physical and communications infrastruc- for agricultural growth as a vital source of savings ture. More developed infrastructure can lower and as a significant contribution to food access and transaction costs, increase connectivity, and raise food security. Growth of farm and rural non-farm non-farm earnings. The WBG will invest in infra- sectors often has mutual benefits through produc- structure, particularly in densely populated lagging tion and expenditure linkages. As urban centers and areas to support mobility. In India, for example, associated job opportunities develop, labor migra- where mobility is low and language and cultural tion out of agriculture will increase. However, where differences are considerable, complementing infra- there is excess labor in agriculture, a continued lag in structure investments with incentives for enter- prises to locate in lagging areas/states can help 89 Uzbekistan, Rural Enterprise Support Project Phase I raise rural employment.92 ( P04604 3 ). 90 Cambodia, Agribusiness Access to Finance Project (P121809 ). 92 World Bank (2008). World Development Report 2009: 91 Vietnam, Third Rural Finance Project (P100916). Reshaping Economic Geography. Washington, DC. 42 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 59. Upgrade skills to expand job opportunities. of the poor that provide the initial “push� for collec- Just as the 21st century farmer will need to be tive action, development of “voice� and organized better trained and educated, moving out of agri- access to new economic opportunities; (ii) human culture, whether to the rural non-farm sector or capital development, which is essential to equip by migrating to urban areas, depends on more communities with the range of functional, entrepre- and better-quality education. More specific skills neurial, administrative, technical, and social skills; and training are necessary to promote non-farm (iii) networks and federation development to allow activities such as subcontracting /outsourcing conversion of opportunities through economies of from urban to rural enterprises and households. scale and allow greater representation and aggre- Moreover, enhanced rural education is impor- gation of demand; (iv) systems of capital develop- tant for improving the productivity of the non- ment through access to credit, savings mobilization, farm sector.93 Vocational training can help to meet insurance, and matching grants for asset creation supply chain skills and capacity needs, and for rural and venture capital among the poor; (v) linkages non-farm employment (especially for women). The with markets and the private sector by facilitating WBG will support skills development, including access to markets or through partnerships or tertiary and vocational training, and seek opportu- “co-production� arrangements that encompass nities to link with the private sector to ensure skill both forward and backward linkages.96 The WBG relevance, including for new labor market demands will continue to support rural livelihood programs. from a green growth agenda (e.g., labor market implications from afforestation, and new opportuni- 61. Promote youth employment. Harvesting a “youth ties for biofuels production 94 ). HDN has also devel- dividend� through enhanced productivity of agricul- oped survey instruments to identify skills gaps tural and non-farm rural sectors and thus creation of and to ensure skills relevance by incorporating the more and better rural jobs for men and women, is needs of employers. Programs that provide cash both an opportunity and challenge in many parts of grants conditioned on school or training attendance the world. This is especially important in AFR, which, can increase demand for education. with its projected 1.7 billion people by 2050, will be the second most populous region in the world (after 60. Improve rural livelihoods. Establishing efficient SAR) and the only region in which the rural population and effective institutional platforms of the rural poor, will still be growing. When compared to adults, youth especially for women, can enable them to increase are more often employed under informal and casual household income through sustainable livelihood contracts; earn less; work more hours; have less enhancements and improved access to financial and assets, in particular land; and lack access to finance. other services, as is being done through livelihood The WBG will support client actions to remove programs in South Asia.95 Project interventions can barriers for youths to join the formal and informal aim to build up both tangible (physical and finan- labor force by improving youth access to land, capital, cial) and intangible (social and institutional) assets and skills. In AFR, the Youth Employment Flagship that enhance or contribute to increased income and analytical work will help take stock of youth employ- increased access to services. Key areas of support ment tailored programs, define actions to promote under livelihood operations can include (i) institutions youth employment in wage and informal sectors, and identify entry points to add youth lenses to ongoing 93 World Bank (2007). World Development Report 2008: and new projects and programs. Agriculture for Development. Washington, DC. 94 World Bank ( 2012 ). Inclusive Green Growth: The Pathway to Sustainable Development. Washington, DC. 96 Supporting the “People Sector�: The South Asia Ex- 95 India National Rural Livelihoods Project (P104164), Sri perience in Rural Livelihoods Development—A Sum- Lanka, Community Development and Livelihood Im- mary. http://siteresources.worldbank.org/INTRURLIV/ provement “GemiDiriya� Project (P074872). Resources/LivelihoodLearningNote1.pdf Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 43 Thematic Area 4: Reduce Risk, or premium (e.g., insurance, physical forward Vulnerability, and Gender Inequality contracts, and hedging); and (iii) risk coping through improving resilience to withstand and 62. Greater price uncertainty, increasing frequency cope with risk events, through ex ante preparation and severity of droughts and floods,97 continued (e.g., contingent financing, disaster risk financing, risk of major outbreaks of crop and livestock fiscal provisioning, saving, and establishment of pests and diseases are posing significant risks. targeted safety net programs). Implementation of The AAP emphasizes both short- and longer-term risk management strategies can be supported at risk management actions to address these risks. the local, regional, and global level—for example, Malnutrition and gender inequality increase vulner- the CGIAR can make a significant contribution ability and reduce overall productivity, and gover- through development of crop varieties resis- nance issues often constrain sector performance. tant or tolerant to abiotic stresses (drought and These issues will be given more emphasis (box 11). flooding) and biotic stresses (disease and insect While risk and vulnerability cut across many of the pests), which remains a breeding objective of the thematic areas, several actions are highlighted in this CGIAR Research Programs on crops. Maize vari- section in the context of heightened uncertainty. eties tolerant to drought have been developed and are now widely grown in southern Africa. 63. Better manage risks and reduce future vulner- Rice varieties tolerant to extended periods of abilities. Using the full range of risk manage- water submergence are already benefiting over ment strategies and tools, the WBG will assist 100,000 rice farmers in Bangladesh, India, and clients to better assess and prioritize agricultural the Philippines. risks; develop holistic risk management strate- gies; understand the socioeconomic and gender 64. Response to droughts, particularly in the asymmetries in the impact of the risks; iden- Horn of Africa and Sahel (box 12). The overall tify and prioritize risk management instruments; thrust of the Bank’s response in the Horn of Africa and support management of these risks with seeks to link short-term crisis mitigation with long- financial investments, policy support, improved term development objectives focusing on three gender and poverty targeting and technical assis- simultaneous phases: (i) Immediate targeted tance. Agricultural risk assessment (at broader responses (first six months) to provide nutrition, sectoral, supply chain, and farm levels) can iden- preserve purchasing power, and reduce asset tify and help plan ex ante risk management strat- depletion of the most vulnerable through cash-for- egies, which include (i) risk mitigation activities work programs, cash transfers, health screenings, to reduce the likelihood of adverse events or and nutrition schemes targeting vulnerable reduce the severity of actual losses (e.g., farming populations, especially women and children systems diversification, improved agricultural (e.g., support in Ethiopia 98 targeted chronic and water management, use of drought and flood transitory food-insecure populations, and in tolerant seeds, more resilient land-use systems, Kenya, household cash transfers were increased improved access to services for both men and to preserve purchasing power99 ). (ii) Livelihoods women farmers including veterinary services, recovery (first two years) through increasing agricultural extension, improved early warning investment to spur agricultural productivity growth systems, and adoption of better agronomic prac- (crops and livestock), advancing land management tices); (ii) risk transfer to third parties, for a fee and efficient irrigation techniques to strengthen 98 Ethiopia, Productive Safety Net Program III (P126430). 97 IPCC (2012). Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation. Avail- 99 Kenya, Cash Transfer for Orphans & Vulnerable Children able at http://ipcc-wg2.gov/SREX/. Project (P11545). 44 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Box 11 : More Emphasis on Risk Management, Nutrition, Gender, and Governance Risk management: In the increasingly volatile environment, with three world food price spikes in the last five years, continued risk of major outbreaks of crops and livestock pests and disease, and the increasing frequency and severity of droughts and floods, we will assist clients to better assess and prioritize agricul- tural risks, develop holistic risk management strategies, and support the management of these risks through investment in risk mitigation, capacity building of stakeholders, and improving access to financial instru- ments. Given the multiple risks in agriculture, an integrated risk management approach is needed. This involves (i) analysis of the three principle types of agricultural risks and their prioritization, based on prob- ability of occurrence and severity of losses—production risk, market risk, and enabling environment risk; (ii) assessment of risk management capacity across different producers, commercial sector stakeholder, and the public sector; (iii) developing strategies to manage agricultural risk—mitigation, transfer, and coping; and (iv) translating risk management strategies into specific actions—investments, technical assistance, and policy support. Key actions: (i) increase the number of country level agricultural sector risk assessments (building on the experience of those completed in Honduras and Niger); (ii) expand crop-related insurance offerings (such as the Global Index Insurance Facility, a program established by IFC and IBRD to support developing markets for index-based insurance for farmers vulnerable to catastrophic weather and other natural disasters); (iii) expand financial instruments for agricultural price risk management and trade facilitation (the IFC’s Agricultural Price Risk Mechanism and the IFC’s Critical Commodity Finance Program); and (iv) provide financial and technical support to the recently established (global) Agricultural Market Information System (AMIS) to help reduce some of the uncertainty and volatility in international food markets. Nutrition: Nutrition-linked MDGs are lagging (particularly child mortality and maternal mortality). In addition to the estimated 870 million people undernourished, another 2 billion are deficient in micronutrients such as iron, zinc and, vitamin A (“hidden hunger�). Investing in women smallholder farmers; development and adoption of biofortified varieties; food fortification that adds micronutrients to processed food; crop diversi- fication to food with high nutrient content (e.g., horticulture, pulses, meat, dairy, fish); and improving nutri- tion education through agricultural extension and livelihoods projects (which can improve dietary variety in production and consumption) can all help improve nutrition beyond raising incomes and production. Food production increases do not automatically translate into improved nutritional outcomes for specific groups of the population, such as children under five. Key action: (i) increase the share of agriculture projects with an explicit focus on nutrition (currently at 12 percent). Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 45 Box 11 (continued) Gender: Bringing yields on the land farmed by women up to the levels achieved by men would increase agri- cultural output in developing countries between 2.5 and 4 percent (FAO). This will require actions to reduce gender inequality in access to services, assets, and opportunities. Recognizing the importance of gender issues in agriculture, more will be done on gender mainstreaming in agriculture projects. The target is that by FY2015, 100 percent of new agriculture and rural development projects will include gender analysis in their design (an increase from 68 percent in FY2010–12), and 75 percent will also have gender actions and gender-disaggregated M&E (an increase from 48 percent in FY2010–12). The focus on all three elements of design (analysis, actions, and M&E) raises the bar for an agriculture project beyond the Bank standard of having only one of these elements satisfactorily addressed. Key actions: (i) increase the share of agriculture and rural development projects that include gender analysis informing design with a target of 100 percent by FY2015; and (ii) increase the share of agriculture and rural development projects that include all three gender dimensions of design (analysis, actions, and M&E) with a 75 percent target by FY2015. Governance : Political economy issues in agriculture often constrain institutional and policy reform that could potentially improve agricultural productivity and make growth a more inclusive process. These include issues related to both public spending patterns (such as subsidies) and policies (such as trade restrictions). The governance of land tenure, particularly in AFR where less than a fifth of land is formally registered, is increas- ingly important to both protect the rights of current land holders and possible future private investors. Key actions: (i) strengthen analytical work, including through the expanded program of public expenditure reviews, analysis of the alignment of agricultural and water subsidies, and green growth to help better under- stand the nature of political and institutional constraints to sustainably improving agricultural productivity and resilience, and more use of the land governance assessment framework at country level; (ii) ensure projects addressing land tenure issues are in line with the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries, and Forests, endorsed by the Committee on Food Security in May 2012; and (iii) ensure new IFC investments in large-scale primary agriculture include food security impact assessments and disclosure of key contract terms in government to private transfers of land. 46 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Box 12 : Worst Drought in 60 Years in the Horn of Africa and the Sahel In the Horn of Africa, the worst drought in the last 60 years reached emergency proportion at its peak in July 2011 due to low rainfall and record high prices of staple foods. Concurrently, the Sahel region was also affected by a severe regional drought that left 14 million people at risk of food insecurity, especially in the agro-pastoral and conflict areas. About 80 percent of the people in these regions rely on agricul- ture and pastoralism as their primary source of food and income. Farmers’ crops in many countries did not withstand the drought, reducing incomes and available food. Livestock losses from death and distress sales reduced household assets. Higher world food prices compounded increases in local prices caused by drought, conflict, and internal displacement. In September 2011, the Africa Region carried out a compre- hensive impact analysis of the drought, which estimated total damages and losses to be $13.5 billion, with profound impacts on national economies. The Bank Board approved a $1.8 billion Drought Response Plan. This Response Plan included $250 million from the IDA CRW, support from the donor-funded Global Facility for Disaster Reduction and Recovery, and support from the State and Peace Building Fund. longer-term resilience of agriculture households, 65. Reduce risk of disease outbreaks. Climate particularly in drylands, to weather shocks, with change is expected to increase the incidence of climate-smart agriculture as a priority (e.g., support malaria, dengue fever, and other vector-borne for agricultural inputs and temporary employment diseases and to harm ecological systems and their in Somalia,100 and to support inputs and productive biodiversity. IDA/IBRD is sustaining its effort in infrastructure in Chad101 ). (iii) Longer-term drought livestock disease surveillance, especially in regions resilience through investments to reduce food with intensive livestock systems (ECA, LCR, EAP, market uncertainty and associated food price and SAR). Moreover, the Bank is reviewing avail- spikes; develop cross-border strategies for able scientific and field-based knowledge to help drought risk reduction; and facilitate structural clients define early action frameworks and inter- transformation and labor transitions to higher- ventions to mitigate key climate-sensitive infec- waged industries and services. The latter would tious diseases, including (i) surveillance and early be supported through investments in skills warning systems; (ii) development of long-term development and through policies to reduce labor region- and country-specific disease outlooks; (iii) market rigidities (e.g., support to build social safety creation of climate-sensitive disease risk maps; (iv) net programs, improve management of natural implementation of climate-sensitive agriculture/ resources and rural resilience, including water livestock insurance and rural finance initiatives; and and energy in Djibouti,102 and support to improve (v) strengthening veterinary services. climate resilience of populations and production systems to increase food security in Niger103 ). 66. Protect against catastrophic losses. Over the next three years, the WBG will support (i) risk 100 Somalia, Drought Management & Livelihood Protection transfer products and catastrophe risk financing Project (P128143). solutions for governments based on the use of 101 Chad, Projet d’Appui à la Production Agricole (P074266). parametric and other triggers (for example, the 102 Djibouti, Crisis Response, Social Safety Net Project ( P130328 ); Rural Community Development Project weather derivative transaction for Malawi and ( P117355); Power Access & Diversification Project the Catastrophic Deferred Draw-down Option for (P086379). Colombia and Indonesia); (ii) improvement and 103 Niger, Community Action Project for Climate Resilience modernization of hydrological and meteorological (P125669). Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 47 services as part of a broader support for disaster approaches, if effectively designed, do not disrupt reduction and climate change adaptation; (iii) normal private sector market development, which is targeted country programs, such as the Index needed for long-term food security. In this respect, Based Livestock Insurance Program to reduce the WBG will continue providing analytical and the impact of livestock mortality on herders’ liveli- financing support to (i) integrate small emergency hoods (e.g., the Mongolia program that involves a food reserves into national food security strategies; combination of self-insurance by herders, market- (ii) effectively use early warning systems to reduce based insurance, and social insurance, and support costs and provide timely response to evolving in Ethiopia to increase the resilience of pastoral- needs; (iii) integrate emergency reserves with social ists to external shocks in response to drought and and food security safety nets, to increase their floods); and (iv) expand access to insurance (e.g., effectiveness in benefiting the vulnerable; and (iv) IFC support to improve access to insurance by reform public stocks arrangements that have nega- Rwandan farmers and livestock herders to protect tive impacts on long-term food security. their animals, crops, and livelihoods against natural disasters and weather-related risks, and the roll-out 68. Support greater global food market trans- of the Global Index Insurance Facility, a program parency. To reduce some of the uncertainty and established by IFC and IBRD to support developing volatility in international food markets, the Bank markets for index-based insurance for farmers is partnering with other multilateral international vulnerable to catastrophic weather and other organizations to increase public access to infor- natural disasters). mation on the quantity and quality of global grain exports and stocks through an Agricultural Market 67. Better manage food imports and public stocks. Information System. The partnership leverages Large net importers of food, such as countries in resources to improve global short-term agricul- MNA, Asia, and West Africa, remain vulnerable tural outlooks; policy analyses of global produc- to high and volatile world food prices and face tion, trade, stocks, and price developments; and higher import bills and reduced fiscal space. The promotes early information exchange and discus- WBG support will focus on helping clients better sion on crisis prevention and responses among manage market volatility with technical assistance policy makers. The WBG will continue to (i) to (i) improve grain-import supply chain efficiency increase transparency of global markets; (ii) better to keep import costs low and ensure timely delivery understand the market and policy drivers of price of supply; (ii) improve procurement systems; and volatility; and (iii) develop policy options at global (iii) more effectively use physical food reserves and national levels to reduce negative impacts. and financial strategies to hedge risk. In addition, designing transparent, rules-based arrangements 69. Better use of risk transfer tools. To improve for emergency food reserves to help shield vulner- the appropriate use of risk transfer tools, the able populations from food price spikes requires WBG is developing more accessible price hedging a solid foundation of empirical knowledge at the and insurance solutions for Government entities, global and country level. Unlike buffer stocks or commercial firms, and farmers. For example, across-the-board trade measures that attempt to IFC’s Agriculture Price Risk Mechanism facili- stabilize prices to all consumers and that act as tates private sector risk management transaction universal subsidies benefiting both poor and non- through a financial intermediary (with IFC sharing poor consumers, emergency food reserves can some of the credit exposure of smaller emerging facilitate provision of subsidized or free food to market counterparties in need of agriculture vulnerable population groups in times of crisis. In commodity price risk hedges). In addition to the addition, emergency reserves or social safety net Bank’s Treasury department’s hedging products, 48 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 such as commodity price swaps and weather 70. Better link social protection instruments derivatives, the department is also providing with sector interventions. Based on a recent customized advisory service to client countries on review,104 broader approaches to social protec- (i) risk assessment to identify the specific price tion, as articulated in the Bank’s Social Protection exposure and impact on the budget; (ii) analysis of and Labor Strategy,105 and recent experience with the policy framework; (iii) strengthening the institu- food price spikes and droughts, the Bank’s focus tional framework; (iv) general review of commodity over the next three years will be to (i) ensure that hedging products, including advantages and disad- there are more longer-term programs and broader vantages of different approaches; (v) technical social protection and labor systems in place before analysis of prototype hedging strategies; (vi) docu- crises hit; (ii) enhance existing programs so that menting and communicating what the hedging they can more easily capture the newly vulnerable strategy can realistically do; (vii) building capacity (such as more flexible and frequent mechanisms of staff and decision makers; and (viii) transaction for identifying beneficiaries); (iii) add programs execution, monitoring, and back-office support such as public works and unemployment insur- systems. In addition to reducing volatility of reve- ance that can be easily scaled up to protect the nues from exports and costs from imports, finan- newly poor and vulnerable and that can build resil- cial risk instruments can also be used to generate ience in farming systems through, for example, resources to support income transfers when there watershed management and agro-forestry; and is a large pass-through of international to domestic (iv) focus more on supporting safety nets in low- prices. In addition, private investment in developing income countries (two-thirds of lending for social countries is sometimes deterred by political risks, protection in 2011 was in middle-income coun- including (i) currency inconvertibility and transfer tries). Often women are more adversely impacted restrictions (preventing earnings repatriation); (ii) by crises, making it very important for the support expropriation (government takeover of assets, and safety-net programs to be gender respon- such as land, farm machinery, or food processing sive in their design. It has also been shown that plants); (iii) war and civil disturbances (causing women more readily share the benefits from direct destruction of assets); and (iv) breach of such programs among the family members. In contract (by governments and the contractual part- this context, our support to safety nets will focus ners). These risks also significantly increase the more on low-income countries and on prepared- cost of capital for investment in agriculture and ness to respond to shocks (with responsive design related sectors, and some lenders are unwilling features such as agile targeting systems, gender to extend credit in the absence of (political) risk analysis guiding investments, on-demand applica- insurance. MIGA will continue to provide products tion, and investments that are suitable for crisis to insure foreign direct investment against these response as well as alleviating chronic poverty— risks, and provide dispute resolution services such as improving nutrition, health, and education for guaranteed investments to prevent disputes outcomes for children; creating access to better from escalating. MIGA is currently providing $154 jobs; empowering girls and women; and promoting million in guarantees to the agriculture sector in greater equity), while better combining safety AFR, ECA, and MNA. net instruments with longer-term agricultural and 104 World Bank (2011). Social Safety Nets: An Evaluation of World Bank Support, 2000–2010. Independent Evaluation Group, Washington, DC. 105 World Bank (2012). Social Protection and Labor Strategy 2012–2022. Washington, DC. Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 49 nutrition investments.106 Investment in agriculture equality; and (iii) M&E frameworks that monitor and related sectors will complement the efforts gender impact and facilitate gender­- disaggregated of other sectors whose aim is to develop at least analysis. For instance, we will monitor at the one sound poverty-targeted safety net program in project level the number of women farmers countries where this does not exist.107 Programs adopting new technologies promoted by exten- in rural areas will aim to smooth consumption, sion services, the number of land parcels with particularly during slack agricultural seasons (when use or ownership rights of women recorded as a prices are volatile and demand for labor declines); result of the project, and active microfinance loan and to prevent depletion of productive assets in accounts held by women. To improve gender main- order to cope with repeated shocks. Promotion streaming, we have set a target that, in the design of multisectoral responses that help strengthen of agriculture and rural development projects, by health and nutrition access and outcomes for FY2015, 100 percent of projects include gender vulnerable groups, particularly children and preg- analysis and 75 percent also have gender actions nant and lactating mothers, remains crucial. and gender-disaggregated M&E. The focus on all three elements of design (gender analysis, gender 71. Reduce gender inequality in access to assets, actions, and gender-disaggregated M&E) raises services, and opportunities . Gender gaps the bar for an agriculture and rural development in productivity and earnings remain pervasive, project beyond the Bank standard of having only and gender differences in time use, in access to one of these elements satisfactorily addressed. assets and credit, and in treatment by markets and formal institutions (including the legal and regu- 72. The successful implementation of the agenda latory framework) all play a role in constraining across all thematic areas will continue to require women’s opportunities. Bringing yields on the addressing the governance challenges in agricul- land farmed by women up to the levels achieved ture that constrain institutional and policy reform by men would increase agricultural output in devel- and that could improve agricultural productivity oping countries between 2.5 and 4 percent.108 This and make growth a more inclusive process. will require actions to reduce gender inequality in Strengthening our analytical work (including access to services, assets, and opportunities. The through the expanded program of public expen- World Bank will continue to mainstream the treat- diture reviews) can help us better understand the ment of gender issues in agricultural projects with nature of political and institutional constraints to a focus on (i) analysis of gender-related issues improving agricultural productivity and resilience. In relevant to project objectives and components; (ii) addition, investment programs can help, including actions that are expected to narrow gender dispari- through (i) support for decentralization of agricul- ties, including through specific actions to address tural services and functions guided by the principle the distinct needs of women and girls, and men of subsidiarity (e.g., decentralization of land admin- and boys, or that have positive impacts on gender istration to selected localities with high growth potential to enable the handling of high volumes 106 World Bank (2011). Social Safety Nets: An Evaluation of of land transactions and disputes in Zambia,109 or World Bank Support, 2000–2010. Independent Evalua- community-based forest management in Mexico); tion Group, Washington, DC. (ii) support for institutional reforms of ministries of 107 The Bank-wide support for IBRD/ IDA allocations to Social Safety Nets rose sixfold, from just $1.2 billion agriculture to improve service delivery (e.g., reorga- in the FY06 – 08 pre-crises period (averaging $ 0.4 bil- nization of national advisory services in the Kyrgyz lion per year) to over $10 billion in FY09 –11 to date Republic110 and support for forest institutions in the (averaging $2.5 billion/year). 108 FAO (2011). The State of Food and Agriculture: Women 109 Zambia, Irrigation Development Project (P102459). in Agriculture — Closing the Gender Gap for Develop- 110 Kyrgyz Republic, Agricultural Investment and Services ment. Rome. Project Active (P096993). 50 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Republic of the Congo111 ), and strengthening local of land and water (see productivity section), and government capacity; (iii) strengthening participa- (iii) reducing negative environmental externalities tion in agricultural policy processes, including for while enhancing positive ones (to be addressed in funding decisions (e.g., through greater participa- this section). The latter can be done through better tion of CSOs in discussion on funding allocation managing landscapes; intensive livestock systems; decisions in GAFSP); (iv) strengthening institutions rangelands and dry woodlands; reducing deforesta- in fragile countries, including improving partici- tion and enhancing forest management; preserving pation through community-driven agricultural ecosystems, including oceans; and enhancing soil development and natural resource management carbon sequestration by adopting land manage- projects, and support for rural self-help groups’, ment systems that consider multisectoral issues women’s organizations, and producer associations across the rural landscape (more emphasis will and cooperatives (e.g., direct transfers of resources be given to landscapes approaches—see box 13). to local community organizations in Haiti); and (v) a IFC is specifically emphasizing the impact of envi- systematic focus on learning from our clients and ronmental sustainability for private sector invest- our experience on what works and what doesn’t ments; meanwhile, IFC’s Sustainable Business and on replicating and scaling up those initiatives Advisory group is working directly with firms to that prove useful. save costs, prevent waste, and reduce GHG emis- sions through more efficient use of energy, water, and materials. Thematic Area 5: Enhance Environmental Services and Sustainability 73. In addition to better managing the above- More Emphasis on Landscape Box 13 : mentioned risks, we need to reduce the risk of Approaches unsustainable (environment degrading) agricul- tural growth. Green growth to ensure that gains Given the inter-linkages of our natural resources, we are sustainable over the long-term requires an need to manage landscapes in a more integrated way, agriculture that is efficient in its use of land and and to restore the 2 billion hectares of degraded land- water, clean in its reduction of negative environ- scapes globally. For example, we cannot achieve food mental externalities, and resilient in its tolerance security or nutrition security without preserving the to climate change, which is consistent with the ecosystem services that forests provide. We cannot WBG Environment Strategy.112 This calls for a more sustain forests without thinking of how we will feed a climate-smart, environmentally sustainable agri- growing population. And we can’t grow food without culture and for continuous research. More atten- water. The WBG is increasingly using landscape tion will be given to each of these factors, which approaches that integrate the management of land, cut across raising agricultural productivity, linking water, and living resources, and that take account of farmers to markets, and facilitating rural non-farm human interactions with those resources in a way income. Focus will be given to (i) improving agricul- that equitably promotes sustainable use and conser- ture’s resilience to climate change (see productivity vation of natural capital. and markets section); (ii) improving the productivity Key action: Increase the share of projects that use 111 Republic of Congo, Forestry and Economic Diversifica- a landscape approach for more sustainable resource tion Project (P124085). use (e.g., combine agriculture, water, forestry, and 112 World Bank (2012). Toward a Green, Clean, and Resilient biodiversity). World for All: A World Bank Group Environment Strategy 2012–2022. Washington, DC. Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 51 74. Better managing intensive livestock systems 75. Reduce forest degradation. Forests absorb and rangelands. The WBG will continue to about 15 percent of the planet’s GHG emissions. discourage urban concentration of livestock intensifi- At the same time, deforestation and forest degra- cation and will support investments to better manage dation contribute significantly to those same emis- environmental and health problems related to live- sions. About 13 million hectares of forests are stock systems (as is supported in China to improve lost worldwide each year, while an estimated 2 environmental management practices113 ), including billion hectares of lost or degraded forest land- reducing methane emissions and nutrient runoff scapes could be restored and rehabilitated. The through better waste management (as is supported WBG117 will continue to support (i) sustainable 114 115 in Thailand and in the Black Sea catchment ). forest management systems, strengthening insti- Silvo-pastoral techniques (systems that combine tutions and forest governance (as in ECA),118 agro-forestry and pastures) in Latin America have improving concession management systems proven effective in increasing milk and beef produc- with an emphasis on benefit sharing, supporting tion, enhancing biodiversity, and sequestering carbon community based forest management, and water- while reducing methane emissions. Dry woodland shed management and protection, (as is currently management is a critical pillar for sustaining livestock supported in China and Albania); (ii) forest protec- through the dry season in southern Africa. The Bank tion (as in the Brazilian Amazon119 ) that includes will continue to support efforts to reduce pasture support for enforcement of environmental laws and rangeland degradation, to upgrade grasslands (often in remote areas) improving forest gover- to more productive grass species; to strengthen nance, respecting needs for improved livelihoods; pastoralist associations; to improve land and water and valuing and funding conservation activities in rights; to better manage livestock watering points partnership with indigenous people and forest- and to build more resilient livestock systems. Climate dependent communities; (iii) regenerating forests change impacts will increasingly result in loss of through farmer-managed approaches (as in rangelands or increased marginalization of livestock Ethiopia120 through a project developed jointly with production in extensive arid grazing zones or marginal World Vision); (iv) increasing IFC investments in cereal producing areas, such as the Maghreb, the Sahel, northeastern Brazil, and Rajasthan in India.116 117 IBRD and IDA assistance to the forest sector averaged In this context, the Bank will give emphasis to $327 million a year during the last three years. IFC invested sustainable agronomic and rangeland practices that $195 million in eight projects related to forest use in FY11. Jointly with other multilateral development banks, the Bank both increase yields of crop and fodder systems and also serves as an implementing agency for the Global Envi- enhance carbon residue retention in soils, and to the ronment Facility ($19.5 million for forests in FY11) and the establishment of agro-forestry, which could offer Forest Investment Program (about $630 million pledged). The Forest Carbon Partnership Facility (FCPF) aims to significant potential to sequester carbon and improve assist developing countries in reducing emissions from the resilience of the agro-ecosystem to extreme deforestation and forest degradation. With over $ 380 million already committed to these activities, the FCPF events, most notably in the recovery of agricultural has 37 participating “REDD countries,� of which 13 have lands from long-term droughts. already received grant allocations. 118 Being implemented in seven ECA countries through the regional Forest Law Enforcement and Governance Program 113 China, Henan Ecological Livestock Project (P100455). Trust Fund and regionally in partnership with the EU, the 114 Thailand, Small Scale Livestock Waste Management donor, IUCN, and WWF (European Neighborhood and Part- Project (P112092). nership Instrument East Countries Forest Law Enforce- ment and Governance Program (P111139, P131138)). 115 For example, the measures supported to reduce nutrient runoff from livestock manure through the Anatolia 119 Brazil, Amazon Region Protected Areas Program (P114819). Watershed Rehabilitation Project (P075094). 120 Ethiopia—the Humbo and Soddo Community-Based 116 World Bank (2009). Agricultural Development under a Natural Regeneration Project (P098428) is the first large- Changing Climate. Washington, DC. scale forestry project in Africa to be registered with the United Nations Framework Convention on Climate Change. 52 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 agro-forestry enterprises that reduce dependence Program123 ) —the WBG will support further devel- on natural forests; and (iv) reducing carbon emis- opment of the fisheries performance indicators, sions through better protection of forests from fire already available for 44 fisheries, to guide policy and pests (as in Russia).121 makers as well as pilot more holistic sustain- ability indicators to ensure that aquaculture in 76. Conserving ecosystems, including oceans. both oceans and freshwater is a net contributor In addition to preserving the ecosystem services to ecosystem health; and (iv) broader progress to that forests provide, the Bank will continue to better valuing of ecosystem services, including support (i) conservation of other ecosystems through partnership on natural capital accounting such as coral reefs in Indonesia and mangroves (alongside measures of changes in GDP), and in Vietnam to help reduce erosion and increase through the strengthening of biodiversity markets. livelihoods of coastal communities (with the resurgence of aquatic resources); 122 (ii) sustain- 77. Enhancing soil carbon. The WBG will continue able fisheries through management of aquatic to support (i) improved farm management prac- resources of coastal communities (as is also being tices such as agro-forestry, mulching, intercrop- done in Mozambique and Tanzania with coastal ping, and zero tillage to enhance the natural communities); (iii) better management of oceans process of soil carbon sequestration from crop through the Global Partnership for Oceans to residues and organic matter (box 14); and (ii) better improve sustainability of the resource (as is being linking improved agricultural practices to carbon supported through Pacific Islands Regional Ocean markets, through piloting innovative approaches and exploring new opportunities to broaden the scope of carbon finance and scale up its impact 121 Russia Forest Fire Response Project (P123923). 122 Vietnam, Mekong Delta Water Management for Rural 123 P a c i f i c I s l a n d s R e g i o n a l O c e a n s c a p e P ro g r a m Development (P113949). (P131655). Box 14 : Triple Win of Sequestering Carbon in Soils Carbon dioxide emissions are a significant cause of climate change. Some of this carbon dioxide can be transferred through a process of soil carbon sequestration, from the atmosphere into soils (in a form that is not immediately reemitted) through crop residues and other organic matter. Enhancing this natural process through improved soil management can lead to the triple win of (i) Mitigating climate change through extracting some atmospheric carbon dioxide; (ii) Enhancing land (agronomic) productivity through improved soil quality with more organic carbon; and (iii) Enhancing climate resilience with increased water retention in soils with higher carbon levels. Soil carbon sequestration can be accomplished by management systems that add high amounts of biomass to the soil, cause minimal soil disturbance, conserve soil and water, improve soil structure, and enhance soil fauna activity (e.g., continuous no-till, cover crops, and manure). This includes management systems for both crops and rangelands (the latter accounting for about two-thirds of total land surface). Source: Sundermeier, A., Reeder, R., and Lal, R. (2005). “Soil Carbon Sequestration—Fundamentals.� Ohio State University Fact Sheet, AEX 510-05. Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 53 on development (for example, the ongoing Kenya Figure 4: IDA/IBRD Ongoing Program: project that links smallholder farmers to carbon Composition of Undisbursed Balance markets,124 , and payment schemes for environ- Rural mental services including for carbon sequestra- non-farm Agricultural extension and research Finance 4% 7% tion and biodiversity conservation introduced as 2% Crops Infrastructure 3% an additional income stream for livestock produc- 11% tion in Costa Rica, Nicaragua, and Colombia). The Agro-industry, Kenya project helped to develop a methodology to marketing, and trade 7% Irrigation and drainage measure and value carbon sequestered through 24% Public administration: sustainable land management practices (approved other by the Verified Carbon Standard), and smallholder 7% Public administration: farmers are receiving payments for GHG mitiga- agriculture Animal production 4% tion based on sustainable agricultural land manage- 4% Forestry ment through the BioCarbon Fund. This offers new General agriculture 4% opportunities for farmers. However, the method- 23% ology is knowledge intensive, and its use at scale Rasing Agricultural Productivity will require significant capacity development of Linking Farmers to Markets agricultural extension, particularly in the poorest Facilitating Rural Non-farm Income countries. Assessment of cost trade-offs among actions to reduce emissions (e.g., improving farm practices) can help guide country priorities. focuses on linking farmers to markets (similar share to June 2009), while 4 percent focuses on the rural non-farm income (declining from 7 percent World Bank Group Program in June 2009). Support to reduce risk and vulner- FY2013-2015 ability, and to enhance environmental services and sustainability cut across all three areas, with 14 percent of the current IDA/IBRD portfolio having a Aggregate Program cross-cutting focus on environmental services and sustainability, and with 10 percent of the portfolio 78. The impact of the WBG agriculture and related having a focus on risk and vulnerability. In FY2012, sector program will depend on both the implemen- 98 percent of all Bank-financed agriculture and rural tation of ongoing projects under supervision ($14.5 development projects (and 100 percent in five of 125 billion undisbursed balance ), and new commit- the six regions) were deemed gender informed, ments over the next three years–both of which are meaning at least one of the three gender dimen- key parts of the FY2013–15 Program. sions of design (analysis, action, and M&E) was being addressed satisfactorily.126 79. Composition of ongoing spending. The domi- nant focus of the IDA/IBRD program across agri- 80. Composition of current Analytical and cultural productivity, linking farmers to markets, Advisory Activities (AAA). The allocation of and rural non-farm income has been on agricultural the Bank’s current AAA continues to map fairly productivity (figure 4) (increasing from 73 percent of closely to the undisbursed lending balance, with the undisbursed balance in June 2009 to 76 percent 77 percent focusing on agricultural productivity, 17 in June 2012). Twenty percent of the program 126 The Bank standard is that a project is gender informed 124 Kenya Agricultural Carbon Project (P107798). if it satisfactorily addresses at least one dimension 125 Undisbursed balance is the amount of an approved Bank of gender in project design (gender focused analysis, loan/credit/grant that is still available to be drawn down. gender actions, or gender-disaggregated M&E). 54 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 percent focusing on linking farmers to markets, and 82. Aggregate projections of new commitments: 7 percent on rural non-farm income (in FY2012). The AAP FY2013–15 will contribute to the objec- tives and results of our clients through projected 81. Areas of emphasis in FY2013–15: Over the next World Bank Group support at between $8 billion three years, client demand will drive the Bank program and $10 billion (figure 5). This includes support (box 15 provides a guide to in-country dialogue on our for agriculture production and marketing, as well programs). This includes responding to the evolving as agriculture-related investments (e.g., land context with more emphasis on climate-smart agricul- tenure, rural finance, market infrastructure) and ture, private sector response, risk management, nutri- is reflective of the initial existing pipeline (initial tion, gender, landscape approaches, and governance. client demand). Trust Fund financing from tradi- tional donors and private foundations for recip- �� New Investment Commitments : At the ient-executed grants will also be included more aggregate level, the IDA/IBRD portfolio will explicitly in measures of the level of support, given give more attention to various aspects of raising their recent growth in importance and the risks agricultural productivity, specifically water man- associated with a potential decline in Trust Fund agement for climate resilience, land administra- availability in the future. This is especially impor- tion to improve tenure security (including for- tant for low-income countries. The pipeline on estry), and agricultural research to support current Trust Fund commitments to agriculture is development of drought-tolerant varieties. On roughly $350 million per year. The increasing share linking farmers to markets, we will give more of IFC’s Advisory Services devoted to supporting emphasis to facilitating local, regional, and agribusiness will also be included. The increase in global market access and trade. As for cross- support is projected to be larger for IFC than IDA/ cutting themes, more attention will be given to IBRD. Particular emphasis by IDA/IBRD will be risk management, gender, and nutrition. given to maintaining portfolio quality. �� New AAA : The Bank’s analytical work will 83. Regional projections of new commitments: give emphasis to analysis of climate change WBG lower-range projections vary by region from (including for low carbon growth, and associ- $1.2 billion to $2.1 billion per year for each of five ated benefits), food security, irrigation, land gov- of the six regions, with a lower projection of $150 ernance, public expenditure reviews (particularly million to $350 million for MNA (table 4), which in IDA countries), storage, and trade, with tech- is reflective of client demand across regions. nical assistance on nutrition and green growth. The largest volumes of aggregate support will The analytical work will guide both policy advice be in AFR, SAR, and EAP. IDA/IBRD support is and subsequent investment financing. projected to increase in AFR, ECA, and EAP, with lower levels of support in SAR (reflective of India’s �� New Fee Based Services and Technical graduation from IDA and single borrower expo- Assistance: The Bank will step up the ability sure limits for IBRD) and MNA (with less demand to deliver just-in-time policy advice, diagnostic for development policy loans than in FY2010–12) assessments, technical assistance, sectoral In this respect, there is a significant projected expertise, and timely research, data, and sta- increase in the use of Trust Funds in SAR to about tistics for middle-income countries to help $240 million in FY2013, and if this level is sustained address challenges in agricultural competitive- through FY2015, then the aggregate support levels ness and access to markets, green growth, and (inclusive of Trust Funds) would be similar to the public-private partnerships. levels of support for SAR in FY2010–12. IFC is projecting significant increases in support to AFR, Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 55 Figure 5: World Bank Group Agriculture and Related Sector Financing 10.0 Annual Average ($ billions) 8.0 7.0 4.1 3.0 2.3 2000-02 2003-05 2006-08 2010-12 2013-15 Lower 2013-15 Upper IDA/IBRD - Other agriculture related investments IDA/IBRD — Agricultural production and markets IFC “Agricultural production and markets� include IDA/IBRD investments in agriculture, fishing, and forestry; agriculture markets, trade, agro- industry, and public-administration in agriculture; “Other agriculture related investment� include IDA/IBRD investments under the oversight of the Agriculture and Rural Development Sector Board other than those coded under “Agricultural production and markets.� These include related investments in land administration, agricultural and rural finance, and market roads. IFC includes (i) agribusiness production and processing, (ii) agri-related trade finance, (iii) fertilizers, (iv) agri-logistics and infrastructure, and (v) food retail. SAR, and EAP, with an aggregate support of $4 Regional Differentiation billion to $5 billion per year, on average, in FY2013– 15, the same aggregate projections as IDA/IBRD. 86. The five thematic areas of the AAP described in previous sections—agricultural productivity; linking 84. Trust funds: Trust funds focused on agriculture farmers to markets and strengthening value chains; and related sectors are projected to increase from reducing risk, vulnerability, and gender inequality; an equivalent of 6 percent of IDA/IBRD support to support for rural non-farm income; and enhancing 8 percent in FY13–15 (from $250 million to $350 environmental services and sustainability—are all million per year). Most of this growth is projected important for agricultural growth and food secu- from recipient executed grants, with 40 percent in rity. However, priorities among thematic areas vary SAR, and 25 percent in AFR. by regions and across countries within regions. The WDR2008 disaggregates this heteroge- 85. Risks: Maintaining the scaled-up support will neity into “three worlds of agriculture� based on be dependent on (i) IDA17 replenishment that is agriculture’s role in overall growth and poverty at least as large as IDA16, and the availability to reduction—agriculture based, transforming, and support the latter years of the AAP; (ii) the ability urbanized—each with a differing focus. The to establish a project preparation facility (for the WDR2008 message on each is still valid. scale up of irrigation and land administration proj- ects in AFR); (iii) continued strong client demand �� For agriculture-based countries, where agricul- to borrow IBRD resources and use IDA conces- ture and its associated industries are essential sional financing for agricultural development; and for growth and reducing mass poverty and food (iv) adequate staff and budget to carry out the insecurity, the focus needs to be on agricultural program. productivity growth, and food and nutrition 56 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Table 4: Regional Disaggregation of Financing Projections ($ millions) Annual Average Projections FY2013–15a Actual FY2010–12 Lower Upper Africa 1,356  2,100 2,600  IDA/IBRD 1,010 1,200 1,400 IFC 349 900 1,200 East Asia and Pacific 1,077  1,550 1,950 IDA/BRD 828 850 1,050 IFC 249 700 900 Europe and Central Asia 861  1,150 1,350 IDA/IBRD 156 350 450 IFC 705 800 900 Latin America and the Caribbean 1,471  1,300 1,650 IDA/IBRD 602 450 650 IFC 869 850 1,000 Middle East and North Africa 538  150 350 IDA/IBRD 164 50 150 IFC 374 100 200 South Asia 1,712  1,750 2,100 IDA/IBRD 1,522 1,100 1,300 IFC 190 650 800 Total 7,032 8,000 10,000 IDA/IBRD 4,282 4,000 5,000 IFC 2,750 4,000 5,000 a. The projections for IDA/IBRD are based on initial client demand reflected in the existing firm and likely project pipeline for FY2013–14. The FY2013–14 average was then projected as the average for FY2013–15, which was taken as a midpoint around which a range was added. At an aggregate level, a range of $2 billion, similar to that used for the FY2010–12 AAP was used, reflective of the uncertainty of the outer years of the pipeline. Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 57 General Sector Guide to In-country Dialogue on WBG Prioritization in Country Box 15 : Assistance Strategies and Partnership Strategies Our country-level agriculture and related sector program is identified more explicitly in the Work Bank’s Country Assistance Strategies (CAS) and Country Partnership Strategies (CPS), which is the result of exten- sive in-country dialogue with governments, stakeholders, and development partners. A general guide for in-country dialogue on WBG prioritization in the sector in the context of the preparation of the CAS/CPS is to (i) use the WDR 2008 “three world� typology as a starting point to identify broad areas of needed atten- tion (drawing on paragraph 86 and table 5); (ii) reflect the implication of the evolving and volatile global context on the needed areas of emphasis (pages 1–4, 19–23); (iii) identify the comparative advantage of the Bank within the broader set of local development partners to improve allocative efficiency of resources; and (iv) for the selected themes (and subthemes) of focus (pages 24–52), identify good practice projects in each area to inform project design to ensure technical efficiency of investments (project references are provided in each of the five thematic areas in this document for ease of access for practitioners, and following the Bank’s open access policy). In agriculture-based countries, where the Bank still provides a significant share of overall support, our program will often focus on broader national programs; in transforming and urbanized countries, where the Bank contributes a much smaller share of overall support, our focus is often on more targeted programs in poorer regions. There has been a positive correlation between the coverage of agriculture in CASs and agri- culture’s share of GDP in the respective countries. The dialogue around the CASs in African countries and the subsequent lending program will be informed by the Africa-led CAADP processes, and associated consul- tations, in those respective countries. The initial demand and pipeline of projects (reflected in the regional section) is the product of the CAS process and reflective of the thematic directions and areas of more emphasis presented in the action plan. 58 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 security, balancing support for both entrepre- While all these “worlds� are present in all Bank neurial actors and favored regions and their regions, the dominant world is agriculture-based links to markets, subsistence farming systems, in AFR; transforming in EAP, SAR, and MNA; and and safety nets. urbanized in LCR and ECA. There are growing inter- dependencies between the three worlds of agricul- �� For transforming countries, where agriculture is ture, with large “transforming country� importers no longer a major source of overall economic (e.g., China) sourcing their requirements from large growth but poverty remains overwhelmingly “urbanized country� exporters (e.g., Argentina and rural, the focus in agriculture needs to be on Brazil). Our support will reflect the differences in the reducing the rural-urban income gaps through agriculture agendas across these three worlds, both a shift in support from subsidy transfers to within and across countries and regions. Table 5 earned income (in higher-value markets, lag- provides an indicative, but not exhaustive, differen- ging regions, productivity growth, and rural tiation of focus across the three worlds, with further non-farm), and in strengthening value chains. program specificity developed on a case-by-case basis. AFR and SAR have received increased atten- �� For urbanized countries, where agriculture con- tion over the last three years, accounting for a larger tributes directly to only a small share of overall share of the overall IDA/IBRD program. They will economic growth and poverty is more urban, continue to account for a larger share over the next the challenge is to balance support for rapid three years, particularly for AFR. growth in medium to large farms and social safety nets for the poor with a focus on helping 89. Most of our financing support is through country- smallholders compete in modern food markets level programs; this includes through both IDA/ and nontraditional exports. This is especially IBRD country level projects and Trust Funded important since rural areas in these countries grants executed by recipients. In some regions, to are often home to half of the poor, with many benefit from scale economies, we will give more marginalized poor areas. emphasis to regional approaches. For example, we will consolidate and expand support to the 87. The AAP FY2010–12 had a differentiated emphasis West and East Africa Agricultural Productivity across the three worlds of agriculture. The focus Programs, which is scalable to other subregions in over FY2013–15 will be to build on the founda- Africa. We are also launching similar programs for tions put in place and the long-term directions southern and central Africa and scaling up support set over the last three years, while responding to to regional research institutes. the evolving context. Responses to the evolving context differ across the “three worlds of agricul- 90. Many of the transforming and urbanized economies ture,� given their varied importance (table 5). are in MICs in which our instruments of support are evolving. The Bank engages in multiple ways with 88. The three agriculture worlds differ both across and MICs as they (i) provide leadership in global and within countries, and regions. For example, Indian regional forums, (ii) address public goods issues, and states reflect all three worlds (e.g., Uttar Pradesh (iii) become bilateral development partners and influ- and Bihar are “agriculture based,� Arunachal ence multilateral institutions. Many of these countries Pradesh and Kerala are “transforming,� and continue to access Bank financing, with increased Chandigarh and Goa are “urbanized�), as do states demand for Bank engagement beyond lending in Mexico (e.g., Zecatecas and Sinaloa are “agri- reflected in the increased use of Fee Based Service culture-based,� Queretaro and Oaxaca are “trans- (FBS) and Reimbursable Technical Assistance (RTA), forming,� and Yucatan and Jalisco are “urbanized�). especially in MNA, ECA, and LCR (box 16). Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 59 Table 5: Differing Emphasis Across the Three Worlds of Agriculture Agriculture Building on the Differing Emphasis Across the Three Worlds of Agriculture in FY2010–2012, Action Plan with Areas of More Emphasis in Response to the Evolving World Context Focus Areas Agriculture-based Transforming Urbanized Agricultural Close the crop yield and Improve productivity in Improve equality in land productivity livestock productivity gap, higher-value markets, access, invest in agricultural expand irrigated areas, and including livestock products research, focus on grains and improve rainfed systems; 2 and aquaculture, and in oilseeds as well as higher- improve security of land;1-4 lagging regions; strengthen value markets invest in agricultural research land rental and sales markets; and extension2 improve water use efficiency; 2 integrate aquaculture into water management and water infrastructure 2 Link farmers to Improve market information, Improve food safety, Improve international trade, markets infrastructure (with emphasis environmental and social food safety, environmental on trade within regions standards, market integration and social standards, market and among developing business models (for integration business models countries); 2-3 strengthen smallholders), and finance (for (for smallholders) and finance producer organizations; and processors, distributors, and (for processors, distributors, finance (for micro, small, and retailers) 4 and retailers) 4 medium enterprises/farmers); 4 better integration of value chains Rural non-farm Improve the rural Upgrade skills, decentralize Upgrade skills, expand income investment climate, 4 non-farm activities, expand territorial development 3 expand infrastructure rural livelihoods approaches 3 Risk, vulnerability, Provide safety nets, Better manage food imports1 Provide safety nets1 and gender asset protection against (better manage food (better manage food reserves),1 catastrophic loss, reserves),1 reduce risk of livestock build resilience into reduce risk of livestock disease outbreaks, gender farming systems, gender disease, gender mainstreaming, nutrition- mainstreaming, nutrition mainstreaming, provide safety sensitive invesments5 sensitive investments 5 nets,1 nutrition-sensitive investments 5 Environmental Improve rangeland Manage intensive livestock Reduce deforestation, 2 services management, support for systems 2 expand payment schemes for carbon markets 2 environmental services Source: World Development Report 2008. Note: Bolded actions are those we will give more emphasis to in response to the evolving world context, with the numerical superscripts referencing actions linked to the respective evolving context of food price uncertainty (1 ), climate change ( 2 ), slowing global economic growth ( 3 ), increased private sector interest in the sector ( 4 ), and lags in nutrition-linked MDGs ( 5 ). 60 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Box 16:Beyond Lending Operations: Fee-Based Services and Reimbursable Technical Assistance in Middle-Income Countries There has been growing demand from MICs for Bank engagement beyond lending operations for Fee Based Services (FBS) and Reimbursable Technical Assistance (RTA). This engagement has been sought to address challenges in agricultural competitiveness and access to markets, green growth, and public-private partner- ships. This totaled $1.4 million in FY2010–12 ($0.9 million in LCR, $0.4 million in AFR, and $0.1 million in ECA). Higher demand from ECA and LCR is envisaged for FY2013–15. Technical advice associated with IBRD lending, such as on financial management, procurement, and safeguards has been the driver of demand for IBRD loans, rather than simply access to finance. Examples of FBS and RTA include agribusiness support to improve competitiveness and increase export value (e.g., Brazil); improving management of commodity price risk (e.g., agricultural insurance in Mexico); agriculture statistics and information systems (e.g., Algeria); adopting integrated silvo-pastoral techniques and improved forest management programs (e.g., Costa Rica, Mexico); improved water and natural resource management (also through a better use of new technology and ICT in India); advice on agricultural waste management and pollution control (e.g., China); and support to establishing food security research centers (e.g., Russia). Examples of technical advice as the driver of demand for IBRD loans include technical knowl- edge and fiduciary expertise in the IBRD financing project in Kazakhstan, accounting for only 30 percent of overall project financing (with the remaining 70 percent from the government). Sub-Saharan Africa Sahel and Horn of Africa. To increase and stabilize production over time, more emphasis is needed 91. Agricultural growth has continued over the last on improving water resource management (only three years, with cereal production being on 18 percent of arable land in the region with irriga- average 10 percent higher in 2010–12 than in tion potential is actually irrigated, with potential for 2006–08,127 aided by a more favorable policy envi- economically feasible returns to irrigation invest- ronment (lower taxes and conflict) and higher food ments, including for smallholders128 ), and on devel- prices (although perhaps growth could have been oping more weather-tolerant varieties and resilient higher if food price volatility had not also increased). land management systems (such as agro-forestry). Future growth will need to rely more on agricultural In view of rapid urbanization, better integration of productivity gains than price improvements or land agriculture value chains and more responsive intra- expansion. In addition, this growth will need to be regional trade to better match surplus with deficit more climate resilient given the increasing severity areas will also be important. The recent increase in of droughts that threaten development, as in the private sector interest in land investments offers 127 Aggregate production of maize, millet, rice, and sorghum 128 World Bank (2009). Africa’s Infrastructure: A Time for (USDA). Transformation. Washington, DC. Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 61 areas will also be important. The recent increase in been given to agricultural research and extension private sector interest in land investments offers (increasing from 12 percent of the overall program new opportunities and risks, and adds urgency to in 2009 to 16 percent in 2012), irrigation and more investment in land administration. Less than drainage (increasing from 9 percent to 14 percent), 20 percent of occupied land in the region is regis- strengthening public administration (up from 4 tered; the remainder is undocumented, informally percent to 11 percent), and value chain develop- administered, and vulnerable to “land grabs� and ment through agricultural markets, trade, agro- expropriation without adequate compensation. industry support, and fostering of public-private Women farmers are especially vulnerable, despite partnerships (increasing from 6 percent to 12 more than half of the countries in AFR recognizing percent). Consistent with the projected emphasis customary land rights and gender equality. More in the FY2010–12 AAP, more specific attention attention on agricultural and forest land adminis- has been given to scaling up support for irrigation, tration is needed to reduce these risks. Continued technology adoption, value chain development, efforts are needed to improve the overall invest- and land tenure security. ment climate. Coupled with the higher commit- ments to agriculture by African governments, �� Irrigation : Implementation of the AFR’s Irrigation development partner support has also increased Business Plan has progressed and will con- in number and volume, with a continued need to tinue to be implemented over the next few ensure aid effectiveness. years, focusing on five types of irrigation prac- tices: (i) market-oriented irrigation on a public- 92. The World Bank program in Africa will continue to private partnership basis (16 percent of the irri- be aligned around the four complementary areas gation program, with examples in Zambia, emphasized in the Africa-led CAADP: (i) land and Mozambique, and Senegal); (ii) individual small- water management, (ii) markets and infrastructure, holder irrigation for high-value markets (17 per- (iii) risk and vulnerability, and (iv) agricultural tech- cent of the program, with success stories in nology. The program will continue to respond to investment prioritization and demand emerging Figure 6: AFR Composition of Current IDA/ from the CAADP process at the country level. The IBRD Program: Undisbursed Balance Bank, through the CAADP Multi-donor Trust fund, is supporting this effort. More than 30 African Rural countries are currently going through the CAADP non-farm Infrastructure 2% Agricultural extension process, which includes consultation and involve- 6% and research 16% Agro-industry, ment of smallholders in investment planning and marketing, and trade decision making. More than 20 countries have 12% Crops Public administration: 5% completed the process through to the independent other 3% technical reviews of country investment plans that Public administration: Irrigation and will guide World Bank support. agriculture 8% drainage 14% 93. Implementation of ongoing undisbursed commit- Animal production ments: The dominant focus of the IDA/IBRD $3.2 3% Forestry billion agriculture and related sector program in the General agriculture 6% region has been on raising agricultural productivity 25% (figure 6), increasing from 72 percent of the overall Rasing Agricultural Productivity program in 2009 to 80 percent in 2012 (IDA/ Linking Farmers to Markets IBRD undisbursed balance). More emphasis has Facilitating Rural Non-farm Income 62 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Niger129 and Nigeria); (iii) small-scale, commu- domestic value-added, and income cre- nity-managed irrigation for local markets (36 per- ation. Economic growth and urbanization are cent of the program, with examples in Tanzania, expanding domestic markets for agricultural Malawi, Mali, and Rwanda); (iv) large-scale irri- products and creating opportunities for pro- gation (9 percent of the program, with examples cessing and enhanced quality. Private invest- in Ethiopia and Madagascar); and (v) improved ment and development in the post-farm water control and watershed management (22 portions of value chains are expanding oppor- percent of program, with examples in Ethiopia, tunities for the smallholder farming base to Mali, and Niger). For each of these five irrigation participate through contract farming and other practices, there are models and good practices arrangements that can improve on-farm pro- that can be scaled up. ductivity through better technology, credit, and market information. The Bank’s activity in this �� Research, extension, inputs: Consistent with area benefits from an extensive analytical foun- the CAADP framework for African Agricultural dation and numerous pilots. Over the past sev- Productivity, ongoing IDA support focuses eral years, operational finance has expanded to more on regional and continental approaches deepen, modernize, and diversify value chains. through our regular lending program as well as Clients now need support that better inte- Trust Fund supported programs (75 percent of grates the diverse components along the value the ongoing research program is focused at the chain and expertise essential to competitive- regional level, 20 percent on national efforts, ness. Attention to providing public goods and and 5 percent on continental-level efforts). developing a supportive business climate can The regional and continental focus provides facilitate private investment, either directly or the needed economies of scale in some of through PPPs. Within the WBG, the expertise the research effort. Complementary support for this work is deployed across units respon- focuses on improving access to modern inputs sible for agriculture, finance and private sector through support to both distribution of seed, development, the IFC, and infrastructure. To fertilizer, and animal feed in emergency pro- meld this expertise into more effective inte- grams, and to the development of better-func- grated teams, an Agribusiness Platform joins tioning seed and fertilizer distribution systems. the efforts of these disparate units. Four proj- Our support for extension is still the dominant ects—in Burkina Faso, Ghana, Tanzania, and share of the combined support for research, Senegal—are moving forward with the sup- extension, and inputs (with each respectively port of this platform, and additional projects will accounting for 37 percent, 52 percent, and 11 follow. Integration has clear benefits, but these percent of the combined program). In addition, projects are also complex and challenging to the Bank continues to contribute $50 million prepare with highly constrained budgets. annually to the CGIAR annual budget of $650 million, roughly half of which supports agricul- �� Land : The region has been doing more on tural research related to Africa. land administration; however the land port- folio is still small relative to other regions, with �� Value chain development and commercial agri- ongoing components in 13 projects focusing on culture: Commodity markets in AFR for food strengthening tenure security of smallholders, staples and export-oriented commercial crops but only one stand-alone project (the Ghana are often insufficiently structured and have Land Administration Project). The ongoing large potential for gains in competitiveness, land-related activities under supervision across the Bank portfolio amount to $226 million in 129 Niger, Private Irrigation Promotion Project (P072996). Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 63 projects that will be implemented over the land laws and policies (e.g., Tanzania), and issues course of the next three years. related to taxation of land (e.g., Mozambique). (ii) Markets and infrastructure: More attention will �� Risk transfer : MIGA is providing insurance be given to financing public goods and helping for $102 million in foreign investment in Côte develop supportive business climates that can d’Ivoire, Ethiopia, Kenya, Mozambique, Sierra facilitate private investment, either directly or Leone, South Africa, Uganda, Zambia, and through PPPs. This includes support to produc- Rwanda. The insurance provides cover to spe- tion infrastructure development and technical cific private company investments in the event assistance (e.g., Senegal); and market infra- of noncommercial risks such as wars, civil dis- structure and institutional support (e.g., Mali); turbances, and transfer restrictions that neg- (iii) Risk and vulnerability: On nutrition, a team atively affect their investments. This includes of agriculture and nutrition staff is established in insurance for specific investment in fruit pro- the region to focus on this issue and is working cessing and fruit and vegetable farming with project task teams to identify targeted nutri- (Ethiopia), fish processing (Sierra Leone), tion-supporting activities and results indicators in sugar production and processing (Mozambique agriculture projects. Examples include nutritional and Kenya), cocoa production rehabilitation and education in rural communities; planting materials processing (Côte d’Ivoire, Uganda), grain cul- for nutritionally dense traditional and biofortified tivation (Zambia), grain milling (Rwanda), and crop varieties; storage and processing of nutri- coffee production (Uganda). tious foods; improving the policy environment for food fortification, biofortified varieties, and 94. Focus of new commitments: The focus of new food safety; and assessment of nutrition needs commitments over the next three years will be within gender assessments given the critical role aligned around the four complementary areas of of women for achievement of both nutrition and CAADP on: (i) Land and water management: On agricultural production objectives in Africa. On water management, more attention will be given risk transfer, MIGA will continue to provide insur- to market-oriented irrigation on a public-private ance against noncommercial (political) risk (e.g., partnership basis. Country coverage of new for an initial project investment in a Zambian grain commitments in the first year of the action plan farming project). (iv) Agricultural technology: On implementation is projected to include Senegal, agricultural research, we will give more emphasis Niger, and Malawi. Complementary support will to regional approaches through consolidating and be provided to water policy dialogue, including on expanding support to the West and East Africa cost recovery, and development of technical and Agricultural Productivity Programs, launching organization skills in the public and private sector similar programs for southern and central Africa, to reduce irrigation costs, including support to and scaling up support to regional research insti- strengthening water users associations. On land tutes through Trust Funds.130 More attention will management, the Bank will scale up support for be given to coordinating more closely with the land administration to strengthen tenure secu- CGIAR to facilitate technology spillovers. On rity of smallholders, particularly women, as well extension, inputs, and education, the current as communities (currently, demand is high in scale of support for agricultural extension will Uganda, Tanzania, Madagascar, Mozambique, and be maintained while focusing on institutional Malawi). Investments will be complemented with 130 Association for Strengthening Agricultural Research development policy operations to support associ- include the West and Central African Council for Agri- ated policy reforms—such as adoption of new land cultural Research and Development, and the Centre for laws. (e.g., Malawi), effective implementation of Coordination of Agricultural Research and Development for Southern Africa. 64 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 and programmatic reforms to improve effective- annual investments in the region by FY2015. ness. Development of more effective subregional A priority vehicle for these investments is the input markets will be assisted through support for newly initiated GAFSP Private Sector Window, policy reforms, institutional changes, and invest- which provides dedicated capital for invest- ment interventions. In collaboration with HDN ments and advisory services in the poorest and working through partnerships and trust funds, countries. To address recent liquidity constraints we will give more support to technical vocational affecting private sector capacity to import food education and training and to tertiary education. and inputs into IDA countries, IFC has also estab- lished the Critical Commodity Finance Program 95. Analytical work: Building on the agricultural directed to stimulate the trade of critical agricul- public expenditure analyses initiated in five coun- tural commodities. Additionally, in the case of tries in FY2010–12, this work will be expanded prospective new investments in primary agricul- to Burkina Faso, Central African Republic, ture (and forestry), IFC will apply a more compre- Côte d’Ivoire, Ghana, Guinea, Liberia, Malawi, hensive approach to assessing food security Togo, Mozambique, and possibly Sierra Leone. impacts and ensuring contract transparency in Analytical work on agribusiness in Africa will government to private land transfers. be completed, together with a comprehensive review of land administration and land reform in 97. Public-private partnerships: The Bank will continue Sub-Saharan Africa, and support will be provided to support the Grow Africa Initiative, a platform that for the development of country-specific Land seeks to accelerate agricultural investments and Governance Assessment Frameworks. The transformative change in support to CAADP and Bank will continue to build on analytical work on the New Partnership for Africa’s Development. rice research and food security policies through Building on public-private partnership models existing partnerships such as the Africa Rice piloted by the World Economic Forum’s New Research and Productivity Development Program Vision for Agriculture Initiative, the partnership supported by the Government of Japan through has a catalytic role in (i) increasing private-sector the Policy and Human Resources Development investment in African agriculture, (ii) enabling multi- Fund and explore further collaborations with stakeholder partnerships to attract investment in donors on food security issues. Opportunities to initiatives that complement national agriculture- deploy sector development policy operations will sector strategies, and (iii) expanding knowledge be supported by analytical work. and awareness of best practices and existing initiatives to strengthen investor interest in agri- 96. IFC : Complementing the IDA/IBRD/MIGA work culture. For example, through Grow Africa, WBG in the region, IFC priorities include financing and is supporting commercial agriculture programs in building the capacity of local financial institutions Burkina Faso,131 Ghana,132 and Ethiopia.133 to facilitate increased exposure to the domestic agricultural sector, increasing access to finance and agriculture inputs for farmers, and partnering with private sector players to increase produc- tivity and develop sustainable supply chains which directly integrate smallholders. In FY2012, IFC provided $ 0.6 billion in agriculture-related investment in the region. Supported by a special 131 Burkina Faso, Bagré Growth Pole Project (P119662). initiative to scale up IFC agribusiness impact in 132 Ghana, Commercial Agriculture Project (P114264). Africa (box 17), IFC targets over $1.2 billion in 133 Ethiopia, Agriculture Growth Project (P113032). Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 65 Box 17 : A Special Initiative to Scale Up IFC Impact in Africa IFC will undertake a special initiative to scale up its agribusiness support in Africa to double investments from $0.6 billion in FY2012 to $1.2 billion by FY2015. The scale-up will be guided by a specific country focus, part- nership, and interventions to help improve the investment climate, direct project investment, and support through financial intermediaries to strengthen the value chain. Country Focus : Investment and advisory services will focus in countries with significant agricultural and agri- business potential, and a supportive government as validated by key partners (IDA, and USAID) —the initial countries include Ghana, Senegal, Côte d’Ivoire, Burkina Faso, Nigeria, Tanzania, Zambia, and Mozambique. Partnership Approach : IFC will work closely with IDA and partners at the country level to align with government, other development finance institutions and donors, and NGOs to mobilize the private sector; be proactive in communication with stakeholders; use MIGA for risk management; partner with IFC’s Asset Management Company for large-scale equity investments; implement the private sector window of GAFSP that provides concessional funds where needed; coordinate with Grow Africa partners; and joint ventures with financial markets for risk sharing, the Global Warehouse Finance Program, the Global Trade Liquidity Program, and the Critical Commodity Finance Program. Interventions at Three Levels : (i) sector/enabling environment—advisory support for improvements to the overall investment climate for agribusiness development in partnership with government, IDA and other development partners; (ii) direct project investment—support through short/medium-term financial products for key cash crops and critical agricultural commodities, and through long-term funding for capital expendi- tures in larger-scale projects; and (iii) strengthening the value chain—support through short-term finance through banks and traders/aggregators, environmental and social standards, capacity building for financial intermediaries and firms/farms, and finance through financial intermediaries for input distributors (fertilizers, seeds, crop protection). South Asia about the inclusiveness of overall economic growth. Rural poverty and malnutrition remain high. The 98. Rapid economic growth without a commensu- continued focus of our support will be on rural rate transition of labor out of agriculture has led to income growth and employment to address both widening rural-urban income disparities, and insuf- the widening rural-urban income gap and rural ficient reduction in rural poverty has been a source poverty. This includes improving productivity in food of social and political tension in parts of this region. staples as well as moving into higher-value markets Seventy percent of the 1.6 billion people in the (including livestock production, aquaculture, and region live in rural areas, and most rely on agricul- horticulture), with a focus on lagging regions and ture (with variation across countries) for their liveli- rainfed areas, support for agricultural innovation and hoods.134 Agricultural growth has slowed in recent adoption, market development and linking farmers years for the bulk of the region, raising concerns to markets, and strengthening the human and phys- ical capital base for better rural livelihoods. In addi- 134 World Bank (2011). World Development Indicators, 2011. tion, in response to the evolving context, more Washington, DC. 66 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Figure 7: SAR Composition of Current IDA/IBRD emphasis will be given to price risk management Program: Undisbursed Balance to respond to volatile commodity prices; to water Rural resources management to address the complex non-farm Agricultural extension and research synergy between agriculture, natural resources, Finance 6% 5% 2% Crops and energy; and to nutrition. While overall poverty Infrastructure 2% rates in SAR are lower than in AFR, undernourish- 6% ment rates are similar to AFR countries, with India, Agro-industry, marketing, and trade 7% Nepal, Bangladesh, and Pakistan making insufficient Irrigation and Public administration: progress toward meeting the MDG on halving the other 7% drainage 33% undernourishment rates by 2015.135 Public administration: agriculture 2% 99. Implementation of ongoing undisbursed commit- ments: The dominant ongoing IDA/IBRD focus in Animal production SAR is on raising agricultural productivity (figure 7), General agriculture 4% 26% increasing from 75 percent of the overall program in Rasing Agricultural Productivity 2009 to 79 percent in 2012 (IDA/IBRD undisbursed Linking Farmers to Markets balance). Irrigation and drainage is the main subsector, Facilitating Rural Non-farm Income accounting for 42 percent of the productivity program (33 percent of the overall agricultural program). Within the South Asia program, India accounts for 75 percent �� Markets and competitiveness : Support is being of the ongoing program (undisbursed balance), consis- provided to investments along various value tent with its share of the overall number of poor in chains (for fish, dairy, high-value crops, and region. The ongoing $5.8 billion program composition forest products), with increased attention on has a dominant focuses on: agricultural markets and trade, livestock, and animal health in terms of both added value and �� Water management : While irrigation infrastruc- agricultural support services to increase small ture investments continue to account for a sig- and marginal farmers’ competitiveness (e.g., nificant share of the ongoing program, increased agricultural competitiveness and livestock proj- support is being given to strengthen irrigation ects in India and Nepal). services, water resources management, and the decentralization of system management �� Rural livelihoods development : Support is services to water users/irrigation associations being provided to rural livelihoods and com- (e.g., in India, Pakistan, Afghanistan, and Nepal). munity-based programs focusing on building In addition, increased attention is being given institutions of the poor that can articulate their to water management in rainfed areas (e.g., in demand, especially for women; achieve econ- Bangladesh, India, and Nepal). omies of scale; improve access to public and private services (including financial); make �� Agricultural technology innovation : Continued rural producers attractive to private enterprise support is being provided to scaling up public (e.g., in India, Pakistan, and Sri Lanka); and services for the collaborative development and support the rehabilitation of post-conflict areas application of new agricultural technology in (Afghanistan and Sri Lanka). India136 and Bangladesh.137 100. Focus of new commitments: The focus of new 135 http://www.fao.org /fileadmin/templates/es/ Hunger_ commitments over the next three years, including Portal/MDG_Progress_per_country.pdf response to the evolving context, will be on (i) 136 India, National Agricultural Innovation Project (P092735). Water resources management and rainfed agri- 137 Bangladesh, National Agricultural Technology Project (P084078). culture, with priority to lagging regions, through Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 67 providing support for comprehensive integrated (e.g., Nepal Poverty Alleviation Fund, commu- water resources management, increased effi- nity challenge fund for nutrition, India Agricultural ciency of water use, substantial reform of the Competitiveness projects). water resources departments, and broader land- scape approaches to watershed management 102. IFC : Complementing the Bank’s work in the to reduce soil erosion and harness rainwater and region, IFC priorities include supporting inclusive groundwater resources (e.g., in Karnataka, Andhra business models that reach smallholder suppliers Pradesh, and Uttarakhand); (ii) Addressing risk and consumers. A major component of this effort and vulnerability, including nutrition, with more to reach the “base of the pyramid� is focused on emphasis on supporting better management increasing access to finance, inputs (including of food reserves (e.g., through support to grain irrigation), and extension services for farmers. storage in Bangladesh and Afghanistan), agricul- New products and services are in development tural inputs supply (Afghanistan), targeted support to support increasing demand from food retailers to the most food insecure regions (e.g., in Nepal to develop sustainability standards to increase through GAFSP support), piloting support for productivity and develop sustainable supply chains. improved nutrition (e.g., through community action For example, one of the leading potato and onion in Nepal and increasing milk production in the companies has worked with IFC advisory teams poorest regions of India), rehabilitation of flood- to create its own product standards, based on damaged water infrastructure, upgrading flood GLOBALGAP. In the first year, almost 350 farmers forecasting and early warning systems (India), were certified in what is rapidly emerging as an and disaster risk mitigation in cyclone prone areas entry standard for GLOBALGAP in India. (Bangladesh); (iii) Improving market access and competitiveness through expanded investments East Asia and Pacific along various value chains to foster private sector growth and higher rural incomes (e.g., building 103. Economic transformation is driving resources and strengthening horticulture and livestock value (labor, land, water, food, and public budgets) to chains in Afghanistan, expanding commercial agri- urban areas, with 46 percent of the 1.9 billion culture opportunities in Nepal, and supporting people in the region now living in urban areas.138 diversified and high-value agriculture in Pakistan); Agriculture needs to facilitate this transformation, and (iv) Improving rural livelihoods through support while still providing food security, poverty reduc- to raising rural incomes through community-driven tion, and environmental services for all. In addi- livelihoods approaches (e.g., Bhutan). tion, improved agriculture performance can help reduce the widening rural-urban income gap and 101. Analytical work : Building on recent regional work associated political and social tensions. There on food prices, climate change, gender, nutrition, is wide heterogeneity across EAP countries, and country-specific work on lagging regions (Sri which requires differentiated approaches, and the Lanka), agricultural competitiveness (Pakistan), evolving world context of more food price uncer- financial services (India), and forestry (Nepal), the tainty and climate change requires better risk focus over the next three years will be additional management and more resilient systems. work on nutrition (Bhutan, India, and Afghanistan) and gender (Bhutan and Maldives), on agricul- 104. Implementation of ongoing undisbursed commit- tural productivity (India), the dynamics of rural ments: The ongoing IDA/IBRD program (undis- growth (Bangladesh), facilitating trade (regional), bursed balance) gives priority to infrastructure green growth (Himachal Pradesh), and agriculture 138 However, the share of the population in rural areas varies sector reviews (e.g., Afghanistan). We will also significantly across countries in the region, from 80 initiate impact evaluations of our interventions percent in Cambodia to 32 percent in Malaysia. 68 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Figure 8: EAP Composition of Current IDA/IBRD (27 percent of program) and irrigation and drainage Program: Undisbursed Balance (19 percent of program) (figure 8). The composition of support is differentiated across country group- Rural ings within EAP in response to their wide hetero- non-farm Agricultural extension Finance 5% and research 5% geneity. The focus of the $2.4 billion ongoing IDA/ 2% Crops 2% IBRD is on the following: Irrigation Infrastructure �� For the emerging middle-income countries and drainage 27% 19% (China, Indonesia, Malaysia, Philippines, Thailand, and Vietnam, which account for Animal production 90 percent of the ongoing EAP program, of Agro-industry, 4% marketing, which China accounts for half), the focus is on and trade 3% Forestry improving the efficiency of agricultural product 6% Public administration: markets and food safety (e.g., the food safety other 6% General agriculture project in China), improving social equality and Public administration: 14% agriculture 7% lagging regions through better infrastructure and services (e.g., sustainable development Rasing Agricultural Productivity Linking Farmers to Markets focused on poor regions of China, Mindanao Facilitating Rural Non-farm Income in the Philippines, and the Northern Mountains and Central Highlands in Vietnam), releasing agricultural land and other resources to urban reengagement being to support the agricultural uses (e.g., Vietnam), improving environmental sector to help raise farm incomes. management of agricultural resources (e.g., forestry in China and Vietnam), supporting cli- �� For the Pacific Islands, the focus is on niche mate change mitigation and adaptation (e.g., opportunities in agriculture and on assistance Vietnam), and agricultural and rural develop- to cope with climate change (with projects in ment institutions in the context of decentraliza- Samoa on agricultural competiveness and in tion (e.g., Indonesia and Philippines) the Solomon Islands on rural development), with technical assistance on a financing mech- �� For the low-income countries (Cambodia, the anism for catastrophic losses. The Bank has Lao People’s Democratic Republic, Myanmar, also prepared a fisheries sector engagement Papua New Guinea, Timor-Leste, and Mongolia, strategy to guide our future support in this area. which account for 6 percent of the ongoing EAP program), the focus is on improving the produc- 105. Focus of new commitments: The focus of new tivity of primary agriculture, the stability of food commitments over the next three years, including markets, agriculture-led growth and poverty in response to the evolving context will be on: reduction, and targeting emerging opportuni- (i) Agricultural productivity (more climate-smart ties for agricultural exports (e.g., food security systems) with a focus on water resource manage- and rice productivity projects in Lao PDR; live- ment (Vietnam, Mekong Basin, and China); climate- stock and sustainable livelihoods in Mongolia; smart agricultural practices (selected areas of and smallholder development and productivity China139 ); development and adoption of new tech- partnerships in Papua New Guinea). We will nologies (Indonesia); improving land tenure security also reengage in Myanmar, a country that has been closed to the outside world for decades, 139 Includes measurement of evapo-transpiration by satellite to with a primary focus of the Bank’s overall better control and manage water usage in northern China Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 69 and land administration services (the Philippines and (Vietnam, the Philippines, and Indonesia). In addition, Vietnam); scaling up participatory forest manage- a regional flagship study on Farmgate-to-Market in ment (Lao PDR); and helping to optimize sustain- East Asia is planned to be carried out in FY2013. able economic benefits from Pacific Island fishery resources; (ii) Strengthening value chains, with a 107. IFC: Complementing the IDA/IBRD work in the focus on building competitiveness and local entre- region, IFC activities also follow a country-differ- preneurship through support for productive partner- entiated approach. For example, in China, efforts ships with the private sector, public infrastructure, with major food processors to promote food and institutional capacity building (Indonesia); safety standards complement targeted invest- enhancing competitiveness, sustainability, and inclu- ments in frontier regions to further rural econ- siveness of commodity value chains in targeted omies, while resource efficiency investments areas (the Philippines); and improving public support responsible energy and water use. services through improvement of prioritized infra- Meanwhile, in Vietnam, agri-finance schemes structure in selected small towns (Jiangxi Province and extension services for farmers complement of China). (iii) Reducing risk and vulnerability, with a nascent activities to develop warehouse finance focus on support to institutional mechanisms that systems via regulation and warehouse training reduce vulnerability of communities (e.g., pasture programs. Initiatives in low-income countries management in Mongolia, alternative aquaculture emphasize increased productivity and access to livelihoods in Indonesia); strengthening capaci- both markets and financing for farmers. ties for natural disaster prevention, preparedness, and mitigation (Vietnam, China, Vanuatu, Samoa, Latin America and the Caribbean and Solomon Islands); targeted support to poor regions to foster private investment and job creation 108. While the region is increasingly urbanized (79 (Aceh and Nias in Indonesia); support for employ- percent of the population lives in urban areas), ment and occupational skills training for local youths it has favorable natural resource endowments, (and others) for construction and maintenance providing the potential to not only meet domestic of productive community infrastructure (access demand but also to expand agricultural exports. roads, terracing, and irrigation); and support to The region as a whole is a major contributor to youth groups and others to form cooperatives or global soybean exports, accounting for about small enterprises for future work in rural infrastruc- 40 percent. Some countries such as Argentina, ture contracting (central highlands of Vietnam); and Brazil, Uruguay, and Chile are already producing (iv) Environmental sustainability and services with food competitively for the rest of the world and a focus on forest restoration and management to are leading net food exporters. Other coun- strengthen resilience and enhance carbon seques- tries have not yet fulfilled their potential (e.g., tration (China Hunan Province); and support for Nicaragua), while a third group have more adopting policies and strengthening institutional limited food production potential for exports capacity to promote climate-resilient, lower carbon (e.g., Mexico) or are likely to remain net food intensive development, and integrated coastal zone importers, such as most Central American and management (Vietnam). Caribbean countries. Inequality is very high, especially in poor rural areas, and persists in 106. Analytical work : The analytical work will focus on land distribution (Argentina, Paraguay, Peru, and water resource management (Indonesia, Vietnam, Venezuela). The focus in LCR will be to increase and the Philippines), trade and food safety (Mekong trade of agricultural products in countries with countries), climate change adaptation (China), rice competitive advantage, increase smallholder and food security policies (Vietnam, Indonesia, participation in value chains, and reduce the Lao PDR, and Timor-Leste), and rural connectivity environmental footprint of agriculture (increasing 70 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Figure 9: LCR Composition of Current IDA/IBRD markets and domestic value chains (Brazil and Program: Undisbursed Balance Honduras), securing livelihoods and food secu- Rural rity of subsistence farmers (Bolivia and the non-Farm Agricultural extension and research Finance 3% 5% Crops 1% Paraiba region of Brazil), improving irrigation 5% Irrigation & drainage 7% systems (Brazil and Peru), strengthening inno- Infrastructure Animal production vation capacity (Bolivia), and facilitating access 12% 5% of small farmers to productive resources (land in Honduras). For Haiti, where 88 percent of the Agro-industry, Forestry marketing, and trade rural population is poor, the focus of our support 12% 9% is on raising agricultural productivity through improving agricultural services (such as exten- Public administration: other 8% sion), and on facilitating labor mobility and rural Public administration: non-farm and community development. agriculture 4% General agriculture 29% �� For the slower-growing countries (Mexico and Rasing Agricultural Productivity Colombia), we will give support to transforming Linking Farmers to Markets public spending from subsidies to investments Facilitating Rural Non-farm Income (Mexico), inclusion of smallholders in new food markets (Colombia), strengthening resilience of subsistence agriculture (climate change adap- output per unit of water, reducing the rate of tation in Mexico, including support to forestry), deforestation, and reducing soil fertility loss). and territorial development and skills for the Emphasis will vary by country context. rural non-farm economy (Mexico). 109. Implementation of ongoing undisbursed commit- �� For the agricultural powerhouses (Argentina, ments: While the dominant focus of the IDA/IBRD Brazil, and Uruguay), the focus will be on better program in the region continues to be on agricul- aligning public support for agricultural produc- tural productivity growth (figure 9) (71 percent of tion to the current context such as sanitary and the program), a much greater attention is being phyto-sanitary standards, innovation, and trade given to agricultural markets (increasing from 14 policies (Brazil), enhancing resources to reduce to 26 percent of the program), consistent with the vulnerability (Argentina), improving trade infra- projected emphasis in the FY2010–12 AAP, which structure, minimizing the environmental foot- indicated the Bank would give greater emphasis print (Uruguay), and adapting to climate change to strengthening smallholder inclusion in agricul- (Uruguay). South-South partnerships (such tural markets and continued export growth. The as the Agricultural Marketplace developed thematic implementation focus of the IDA/IBRD between Brazil and Africa) are other mecha- $1.9 billion program over the next three years will nisms for engagement with these countries, be the following: opening sources of expertise and agricultural knowledge exchange. �� For countries with large pockets of rural pov- erty (Bolivia, Honduras, and Nicaragua, and in 110. Focus of new commitments: The focus of new poorer regions of larger countries such as north- commitments over the next three years, including east Brazil), the recently approved projects (large response to the evolving context of climate undisbursed balances) will be on strengthening change, private sector investment in supply chains, the role of smallholder farmers in domestic and support for global food production, will be Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 71 on: (i) Agricultural productivity, with emphasis on 111. Analytical work: Building on recent analytical improving land administration services (Nicaragua); work on low-carbon development (Brazil and support for adoption and development of tech- Colombia), agricultural trade (regional), climate nologies for crop and livestock activities for the change impacts on land use (regional), and land reduction of GHG emissions (Mexico); and irri- (El Salvador and Nicaragua), the analytical program gation and drainage (Brazil, Sierra region of Peru, will focus on low-carbon strategies (Costa Rica and Argentina); (ii) Market access, with a focus and Uruguay), Amazon forest protection, climate on support to productive alliances between change impacts on agriculture (Brazil), water small, organized rural producers and value-adding resources management and integrated aquacul- buyers; promoting smallholder market inclusion ture and fisheries (Brazil and Peru), land gover- through provision of competitive matching grants nance (Brazil), and agricultural public expenditure to producers to help them transition into more valu- reviews (Nicaragua). In response to food price able supply chains and access higher-priced and volatility, the program will give advice on improving more sophisticated markets (Bolivia, Brazil, Peru, current public policies to respond to systemic risks Argentina, and Mexico); and more attention on (Colombia and Honduras) and on commodity price improving food trade logistics and reducing post- and weather risk management (Mexico). harvest losses140 and on mainstreaming food safety; (iii) Rural non-farm income support to improve the 112. IFC : Complementing the IDA/IBRD work in the business climate and promote job creation by small- region, IFC activities aim to increase the produc- and medium-scale enterprises in growth poles tivity and efficiency of agricultural value chains in outside capital cities (Haiti); (iv) Environmental countries with competitive advantage, increasing sustainability and services, with a focus on technical smallholder participation in value chains where assistance to strengthen environment and natural applicable, and emphasizing sustainability prac- resources (Peru and Belize), for low-carbon develop- tices throughout. To promote inclusive growth, ment (Brazil—Rio de Janeiro), biodiversity conser- numerous initiatives aim to increase efficiencies in vation in productive landscapes (Mexico), and local value chains and provide nutrition-based prod- climate resilient infrastructure (Brazil); (v) Reduce ucts to reach both rural and urban poor. Meanwhile, risk and vulnerability including nutrition, with a IFC will continue its efforts to increase access to focus on promoting inclusion of the indigenous and finance primarily via rural financial institutions and poorest/most disadvantaged populations (Paraguay corporate intermediaries. and northeast Brazil); reestablishing agricultural productive environments in areas recently hit by 113. MIGA will increase foreign direct investment in the disasters (areas of the Serrana Region); support for private sector by providing (political) risk insurance developing agriculture insurance markets (agricul- to a bamboo cultivating and processing facility in ture and livestock insurance in Uruguay, Argentina, Nicaragua. Dominican Republic, Jamaica, and Guatemala), technical support to the development of commodity Middle East and North Africa exchanges (Colombia and Nicaragua) and evalua- tion of risk management tools (Mexico), and main- 114. The extraordinary recent period in the MNA region streaming nutrition into agriculture investments provides a unique opportunity for growth—if (Haiti) and promoting food safety. the Arab Spring is followed by sound transition to better governance structures and the benefit of reforms starts to accrue. Across the region, 140 Based on recent analytical work on High Food Prices: Latin America and the Caribbean Responses to a New Normal, the events of the last two years have disrupted Available at http://siteresources.worldbank.org/INTLAC/ economic activities, and substantial social and Resources/FoodPrices_english_V2_highres_.pdf. economic challenges remain. Across sectors, the 72 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Bank will continue to be responsive to client needs of life, including greater water and land produc- and flexible to ensure, through policy and tech- tivity, sustainable agriculture and desert ecosys- nical advice, that instability does not undermine tems, better access to markets, and improved the process of political reform and that macroeco- basic infrastructure services, as well as promoting nomic stability and social cohesion are sustained. job creation, including skills development and reform of labor markets to facilitate labor exit from 115. The MNA region faces two unique global chal- agriculture; (iii) increasing financial and infrastruc- lenges related to agriculture. The first chal- ture resilience also through the deployment of lenge is that it is the most water-scarce region, longer-term infrastructure and financial architecture with approximately one-tenth of the renew- necessary to increase local, national, and regional able water per capita relative to other regions. resilience to climate change and food price shocks; Climate change–induced variability is projected and (iv) strengthening institutions of new govern- to make the region hotter and drier in the coming ments and putting greater emphasis on the role decades. The looming crisis of water scarcity is of trade as a reduction in tariffs and subsidies will further complicated by rapid population growth help lower import costs, improve competitiveness and an increasingly agglomerated economic land- and redirect stretched budgets to areas that are scape. The second closely related challenge is viable in the long-run. There is an urgent need for that MNA imports 56 percent of its grain calo- the region to transition from nontargeted programs ries. MNA is, and will continue to be, the region (namely food and fuel subsidies) to targeted social in the world most dependent on food imports. safety net programs (such as cash transfers, child This makes it particularly vulnerable to interna- nutrition support, and public works). tional food commodity price volatility and supply shocks of the type experienced since 2008. Food 117. Different countries in MNA have different resource price shocks raise the threat of poverty for the rela- endowments, and this will shape their needs tively high share of MNA households living close to around the four themes of the regional strategy. the poverty line, and they can exacerbate already- Some countries are wealthy and have very limited high malnutrition rates in several countries of the rural populations (the Gulf Cooperation Council region. Vulnerability to events in world markets is countries and Libya). Others are middle income likely to increase going forward as a result of popu- and have large rural populations (Morocco, Tunisia, lation growth, urbanization, climate change, and Egypt, Iran, Iraq, and to a lesser extent Jordan and binding constraints on water. Lebanon), and yet others are low-income (Yemen and Djibouti). Overlaying the country typology with 116. The dual challenges of climate change and food the four themes suggests an emphasis on RTA security are not new to MNA. But the threat they related to safety nets and resilience in the wealthy pose to the livelihoods of the region’s people is countries; RTA, IBRD lending, and AAA on safety gaining momentum, and comprehensive solu- nets, rural livelihoods, and resilience in the middle- tions are now necessary to avoid significant costs income countries; and IDA credit and AAA on safety to current and future generations. The solutions nets and rural livelihoods in the low-income coun- can be grouped around four common themes tries. Operational work, including projects, AAA, embedded in the region’s strategy for inclusive partnerships, and RTA will be undertaken through growth: (i) strengthening safety nets, including the lenses of governance, economic and social short-term access to cash, nutritious food, and inclusion, jobs, and private sector–led growth. jobs that generate the income to buy food; (ii) improving livelihoods to provide rural people with 118. Implementation of ongoing undisbursed commit- medium-term opportunities to improve their quality ments: The ongoing IDA / IBRD program is Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 73 Figure 10: MNA Composition of Current IDA/IBRD providers on installation and repair of irrigation Program: Undisbursed Balance infrastructure (Egypt); and (vi) pilot schemes to demonstrate the value and benefits to be Infrastructure Public administration: 4% Agricultural extension and research 3% derived from the use of treated wastewater to other 2% Crops 1% Public administration: preserve and intensify agricultural production agriculture 3% systems on degraded lands (Tunisia). General agriculture 14% �� Agricultural research, extension, and inputs : (i) Forestry 1% support for adaptive research on water and land Animal management (Egypt), on fisheries (Yemen), and production Irrigation 2% for rehabilitation and strengthening veterinary and drainage 70% laboratories (Tunisia and Yemen); (ii) strength- ening linkages between research and extension (Iraq); (iii) on-farm demonstration of water con- Rasing Agricultural Productivity trol, irrigation, crops, horticulture, and climate- Linking Farmers to Markets resilient practices (Egypt, Iraq, and Tunisia); (iv) Facilitating Rural Non-farm Income training of farmers and extension staff (Egypt and Iraq); and (v) support for farmer-based seed dominated by irrigation and drainage (70 percent improvement and management (Yemen). of program) (figure 10), and a greater focus has been given to agriculture research and extension �� Linking farmers to markets : (i) construction and (increasing from 1 percent to 3 percent of the rehabilitation of rural feeder roads (Tunisia); (ii) program). The focus of the ongoing IDA/IBRD improved fisheries landing sites (Yemen); (iii) program in the region is on enhancing productivity support for partnerships between farmers and by improving irrigation application efficiency and agro-processors to securing markets for high- on managing water scarcity in the region. This will value crops, and helping implementation of a remain of particular importance since water scar- market information system (Morocco). city is projected to worsen due to climate change and the increasing demand of a growing popula- �� Environmental services and sustainability : (i) tion. The ongoing program focuses on: community-level subprojects on rangeland development through set-aside, reseeding, �� Water management : (i) rehabilitation and con- and shrub planting (Djibouti); (ii) improving the struction of irrigation canals and water har- status of selected forests through community vesting infrastructure (Djibouti, Egypt, Iraq, and forest management; and (iii) fisheries manage- Tunisia); (ii) support for high-efficiency drip irri- ment information systems (Yemen). gation (Morocco); (iii) establishment of sup- porting institutions (water users associations �� Risk transfer : (i) noncommercial (political risk in Egypt and Iraq, canal water boards in Egypt, insurance (via MIGA) to specific compa- basin water councils in Iraq); (iv) support for nies for investments in palm production and broader watershed management through con- export, as well as in vegetable and herb pro- struction of erosion control structures and man- duction for local markets and export (West agement and conservation of forest and range- Bank and Gaza), and floriculture for local mar- lands (Iraq); (v) support to strengthen irrigation kets (Morocco); and (ii) managing risks in inter- advisory and production support services, national food trade, including difficulties in including training of private sector service enforcing grain/food import contracts. 74 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 119. Focus of new commitments: The focus of new region, MIGA is pursuing noncommercial (political) commitments over the next three years, including risk insurance for several companies in dairy and response to the evolving world context will give vegetable production (West Bank and Gaza) and a more emphasis to (i) Agricultural productivity, vegetable farm (Tunisia). with support to provide irrigation access to small- holder farmers to grow higher-value crops, and Europe and Central Asia create employment opportunities, especially for women and youth (Lebanon); improving water 123. Agriculture in ECA has significant untapped poten- use efficiency (Morocco); improving the linkages tial. It has the potential to double its production among research, extension, and training activi- of food grains and animal products, and thus can ties (Morocco); and supporting integrated (public serve as a foundation for rural income genera- and private) system of delivering agricultural advi- tion and job creation. Moreover, it contributes sory services (Morocco); (ii) Linking farmers to to promoting national and global food security, markets through support to improve the efficiency with three of the largest food exporters located of domestic markets by reducing marketing costs in the region (Kazakhstan, Russia, and Ukraine) and improving marketing services in fruit, vegetable, and to reducing rural-urban income inequalities. and meat markets; smallholder inclusion through an ECA is also uniquely positioned to benefit from improved policy environment for contract farming large and fast-growing agri-food market oppor- (Morocco); improving food safety through support tunities, especially given its proximity to three of for policy regulations (Morocco), and export oppor- the largest world markets—the European Union, tunities with the EU (Egypt, Morocco); and (iii) Russia, and China—in addition to growing demand Environment services and sustainability support to for food at a global level. Improving food security develop strategic approaches to climate change (in terms of availability and access to nutritious (Morocco), and exploring carbon finance for conser- food) is a key global development challenge, and vation agriculture (Tunisia). the international community has high expecta- tions for ECA, and in particular the northern Black 120. Analytical work : Building on the analytical Sea Region. This is because ECA is perceived work undertaken on food import supply chains as having a strong comparative and competitive (regional), climate change adaptation (regional), advantage and a strong export position for some and rural finance (Tunisia), the focus of economic agricultural commodities, especially grains. For and sector work will be on food security (regional), ECA countries, improving agricultural productivity linking farmers to markets (Egypt), disaster risk and competitiveness translates to export reve- prevention and management (Morocco), and agro- nues, stronger sectoral contribution to economic industries (Algeria). growth, domestic surpluses and long-term food security. But to realize this potential, the countries 121. IFC : Complementing the IDA/IBRD work in the region, must improve their production, investment climate, IFC activities will aim to facilitate food trade financing and trade environment accordingly. In addition, and increase efficiencies in local food value chains. ECA has the largest forest cover of all the Bank’s Emphasis will be on improving water and energy effi- regions (accounting for more than 25 percent of ciency in production and processing activities, while the world’s forests), which is expanding, with continuing to work with governments to improve busi- potential for additional growth. ness enabling environments for the private sector. 124. Implementation of ongoing undisbursed commit- 122. MIGA : In line with MIGA’s MNA Initiative to ments : The focus of support of the WBG has been support investments in the politically turbulent on improving agricultural productivity, especially Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 75 through irrigation and drainage systems and Figure 11: ECA Composition of Current IDA/IBRD through making better use of underutilized high- Program: Undisbursed Balance potential land for rainfed production (figure 11). Finance Agricultural extension Consistent with the AAP FY2010–12, priority has 1% and research 4% been given to irrigation and drainage (increasing Infrastructure 20% from 13 to 28 percent of program), public admin- Irrigation istration (continuing to be about one-quarter of and drainage Agro-industry, 28% the program), and infrastructure (increasing from marketing, and trade 12 to 20 percent). Other investments are aimed 4% at assisting completion of the transition toward a Animal production 1% market economy and international integration as Forestry 2% Public administration: well as on better linking farmers to markets. The other 24% General agriculture ongoing program focuses on: 13% Public administration: agriculture 3% �� Agricultural productivity: (i) Irrigation and Rasing Agricultural Productivity drainage through rehabilitation and upgrade of Linking Farmers to Markets irrigation systems, especially for on-farm sys- Facilitating Rural Non-farm Income tems managed by water users associations (Armenia, Albania, Azerbaijan, Bosnia and food safety management and improve market- Herzegovina, the Kyrgyz Republic, Serbia, and ability and market integration of high-value agri- Uzbekistan); introduction of new technologies cultural production (Moldova and the Kyrgyz to promote water use efficiency (Azerbaijan, Republic). In support of country accession to the Bosnia and Herzegovina, and Uzbekistan); EU: knowledge transfer to farm operators, com- (ii) strengthening agricultural extension mercial and semicommercial agro-processing services (Armenia, the Kyrgyz Republic, enterprises, and municipal advisors to plan invest- Moldova, Montenegro, and Uzbekistan); (iii) ments and utilize financial support of future EU enhancing land tenure security through regis- grants schemes for Pre-Accession Assistance tration of property rights (Azerbaijan, Croatia, for Rural Development (Kosovo); and to improve Montenegro, Romania, and Tajikistan); policy, institutional development and delivery of govern- legislative, and institutional reforms aimed ment assistance for sustainable agriculture and at improving the capacity of cadastre offices rural development in a manner consistent with to deliver services (Kosovo); and develop- the EU’s pre-accession or membership require- ment of efficient land and real estate markets ments (Bosnia and Herzegovina, Macedonia, (Macedonia); (iv) improving livestock and pas- Montenegro, Serbia, and Romania). ture management (Armenia and the Kyrgyz Republic); and (v) improving farmers’ access �� Risk and vulnerability: Investments are assisting to credit to finance investments (the Kyrgyz farmers to deal with climate risk through Republic, Moldova, Tajikistan, and Uzbekistan). improved weather alerts (the Kyrgyz Republic, Moldova), reducing flood peaks and increasing �� Link farmers to markets: Support is being given the flood carrying capacity of reservoirs to pro- to village-level agribusiness and farmer groups tect the population in the Odra River Basin to develop new business opportunities, improve against loss of life and damage to property marketing, promote food safety practices caused by severe flooding (Poland), and non- (Azerbaijan, Bosnia and Herzegovina, the Kyrgyz commercial (political risk) insurance for pri- Republic, Moldova, and Uzbekistan), enhance vate sector investment in central and southern 76 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Russia that is producing, storing, processing, development (Uzbekistan). (iv) Addressing risk and selling grain and other crops such as barley, and vulnerability: More emphasis will be given to sunflower, and peas. prevention and management of flood, forest fires, and drought disaster risks (Poland, Bosnia and �� Environmental services: Continued support to Herzegovina, Russia, Bulgaria, and Kazakhstan), watershed management and community-based as well as to building climate change resilience by forestry by developing innovative financing helping farmers adopt sustainable land manage- mechanisms for sustainable forest management ment strategies and practices for agro-ecosystems (Albania and Kosovo), and better protection of in climate vulnerable sites (Tajikistan). forests from fire and pests (Russia). Continued support is given to improve protected area 126. Analytical work: The analytical work over the next boundary delineation and park management and three years will focus on agriculture productivity, to strengthen capacity for EU-compliant reporting especially on irrigation water use in Central Asia; and biodiversity monitoring (Croatia and Serbia). on the adaptation to climate change in agriculture (South Caucasus), and water resource management 125. Focus of new commitments : The focus over the (South East Europe). Further analytical work will be next three years will be to continue support for key done on land governance (Georgia and Moldova), productivity and competitiveness investments such agricultural trade (Moldova), food safety (Armenia as in irrigation and drainage, in land administration, and Turkey), and on forest governance and innova- and in linking farmers to markets. In response to tive sustainable forest management (ECA region), the global context, emphasis will also be given to including accounting for GHG emissions from forest the development of risk management products fires (Bulgaria).141 A significant share of support and to respond to climate change: (i) Agricultural is through technical assistance (for food safety in productivity: Irrigation and drainage: While irrigation Turkey) and FBS, which will likely increase. This infrastructure development and rehabilitation will includes a FBS project on the establishment of the continue to account for a significant share of the Eurasian Center for Food Security (Russia), four FBS program, increased support will be given to water projects with the Ministry of Agriculture and Rural user associations in developing and managing Development in Romania to help with strategic modernized systems, and to make more efficient and operational management of agricultural poli- use of the irrigated lands (Armenia, Azerbaijan, cies in an EU membership context, two FBS proj- Kazakhstan, the Kyrgyz Republic, Tajikistan, and ects with the National Cadastre Agency (Romania), Uzbekistan). Emphasis will be given to integrated and a FBS project to provide technical assistance for water resources management, including strength- programming of rural development policies in an EU ening of the sector’s legal, regulatory, and institu- membership context (Bulgaria). tional framework (Albania and Tajikistan). These investments can assist in increasing the predict- 127. IFC: Complementing the Bank’s work in the region, ability of food supply in the region. (ii) Land IFC activities will aim to increase productivity and tenure: Support to the development of a sustain- efficiencies of agricultural value chains, particularly able real estate registration system with harmo- in grain production and livestock sectors. An inte- nized land register and cadastre records (Bosnia grated approach with food processors promotes and Herzegovina). (iii) Linking farmers to markets: food safety improvements via financing, regulatory Continued support will be provided to food safety reform, and advisory services to corporate players. programs (Turkey), supporting value chain develop- ment (Azerbaijan, Tajikistan), livestock production (Armenia and Kazakhstan), and horticultural sector 141 This study is being supported by the Program on Forests (PROFOR). Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 77 Global principles apply to both financial and technical partnerships. First, the topic addressed must be 128. The evolving global context, with increased one of great priority for a significant subset of the food price volatility and climate change, calls WBG’s client countries, crossing regional bound- for stronger collective action to alleviate its aries. Second, it should be one that makes good impacts on the world’s poor. Some emerging use of the WBG’s status as a financial interme- issues of great policy and financial interest to diary governed by a Board that represents a global clients transcend national or regional dimensions, constituency. The WBG Board institutionalizes and are consistent with the special role of the a rare degree of international trust and coopera- WBG as an institution that is multilateral, multi- tion; as such, the WBG has a comparative advan- regional, multisectoral, and multidimensional, tage in concentrating its global partnerships on offering both financing and knowledge products. issues where such trust in governance is most This comparative advantage is relevant to cases as necessary. Third, while partnerships designed to diverse as dealing with the drivers and impacts of improve technical assistance can be successful the 2008 food price crisis or dealing with migratory without financing recipient-executed projects, they fish stocks. Other cases would be where the most tend to be even more successful if they can at the desirable knowledge transfers are interregional, same time help improve clients’ access to finance. as in food safety, or where efficiency mandates a Funding for clients is key for the WBG with respect scale of dedicated activities addressing a specific to both success in outreach and having a seat issue that surpasses what would be possible at at the table when the global issue in question is the national or regional levels, or by a single institu- discussed. Four additional principles apply to part- tion, as in some aspects of agricultural research or nerships that involve funding recipient-executed resource mobilization. In these cases, a global part- agricultural projects. First, a sufficient scale of nership approach may be indicated. Some global operations is needed to keep administrative over- partnerships focus on building technical consensus heads low. While the threshold level of operations on how to proceed with large amounts of technical for cost-effective technical assistance can be rela- consultations and assistance, and others focus tively low, it is much higher for recipient-executed on increasing the financial input to specific types lending or grants, possibly surpassing a bench- of solutions through recipient-executed projects. mark of hundreds of millions of dollars of lending Since 2008, the WBG has increasingly forged or grants to offset the costs associated with partic- partnerships of both sorts to address such global ipation in a global partnership dedicated to bringing issues in agriculture with a variety of local and about such additional lending. Second, the speed, global actors at the country and global level. These sustainability of effort, and impact of WBG public global partnerships complement our country-level sector projects financed through global partner- support and bilateral partnerships through provi- ships tends to increase if the additional financing sion of knowledge to help shape debate on global is well aligned to national priorities and to existing public goods (especially those that affect country- financing from other donors and IDA / IBRD. level programs); improved coordination of activi- Cofinancing of existing WBG projects is espe- ties and knowledge with global partners; continued cially helpful with regard to speed. Third, partner- consultations across stakeholders; and additional ships involving multiple stakeholders and resource resource mobilization. allocation decisions across countries and regions work best where governance is fully transparent 129. Experience suggests that the following sorts and all stakeholders feel that they have a say. of issues are especially appropriate for WBG Fourth, global partnerships under external gover- involvement in a global partnership. Three nance but housed at the WBG work best when 78 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 the coordination function is managed by acknowl- resources for food security. We will continue to edged technical experts in the topic of the part- focus on mobilizing additional resources, as was nership. The partnership itself gives the WBG an done effectively, for example, by the GFRP in 2008 opportunity for leadership, but this is not inherent with $560 million in Trust Fund resources (of which in an external governance structure. The combina- $358 million were external) that supported country- tion of technical expertise and transparent decision level Bank grants for rapid response in the most making gives a WBG Coordination Unit a much vulnerable countries through Bank-implemented, more significant say in influencing how the part- recipient-executed projects. The newer GAFSP, nership develops. on the other hand, focuses on targeting resources to governments of IDA-only eligible countries and 130. We will continue to strengthen our global firms that are most ready to make evidence-based programs and partnerships to address the and inclusive contributions to long-term and stra- priorities of clients where a global partner- tegic agricultural development and food security. ship approach is most efficient and most The Public Sector Window of GAFSP includes a appropriate, following the above principles. The broad external governance structure of donors, following three emerging topics, for example (not recipient representatives, and CSOs. It finances an exhaustive list), meet the criteria above. First, proposals from country-led plans based on pre- there is the continuing need to mobilize additional established criteria for need and readiness, and that resources targeted to the best examples emerging come from preexisting aid effectiveness processes from existing aid effectiveness processes at the at the country level, such as the CAADP in Africa. regional and national levels that emphasize stra- GAFSP provides incremental grant funding to poor tegic long-term approaches to increasing agricul- countries that, in effect, compete at being better tural production. These need to be country owned, in following existing aid effectiveness procedures evidence based, peer reviewed, and inclusive of than other countries, as determined by a credible civil society and the private sector. Second, lever- independent review process. GAFSP has to date aging increased private sector response to new mobilized $855 million in grants from nine donors opportunities and challenges in agriculture is crit- (with more than $600 million in additional pledges ical. Emerging interest among clients in promoting still to come) to finance country-led and private both domestic food safety and increased exports sector programs in agriculture and food security. To of perishable foods to developed country markets date, its Public Sector Window has made grants of with high food safety standards is an area where $658 million to governments in 18 IDA countries. the WBG is building a public-private global part- Supervision is provided by the World Bank, other nership to promote consensus on the best way Multilateral Development Banks, and IFAD for forward. Finally, there is widespread agreement public sector projects, with some technical assis- among clients and development partners about the tance supervision through FAO and WFP, and by need to improve nutritional outcomes, especially IFC for the private sector projects. GAFSP public for young mothers and infants. This objective is sector projects are subject to a rigorous program linked to the interest in increasing food production of impact evaluations that is improving the ability of and has led to a widespread interest in improving the participating Multilateral Development Banks, nutritional outcomes from agricultural investments. IFAD, and the Bank to jointly report progress. Examples of WBG efforts toward these three part- The World Bank directly supervises $300 million nership areas are given below. of these funds for public sector projects arising from existing aid effectiveness processes in 10 131. We will aim to improve aid effectiveness countries. The Private Sector Window of GAFSP in agriculture while mobilizing additional funds private firms and financial intermediaries Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 79 that operate in IDA-only countries and support to this funding, the World Bank has agreed to activities that are consistent with the national food provide $400,000 this year from its Development security or agriculture plan. Through this window, Grant Facility, with the potential of similar funding GAFSP to date has allocated $5 million to support amounts for the following two years. Capacity- an agribusiness firm in Bangladesh, and the loan building measures supported through the Global will be concurrent with IFC’s loan investment of Food Safety Partnership will be based upon inter- $10 million. The Private Sector Window is in the national standards, industry-defined operational midst of a new call for proposals and robust staff competencies and best practice, and applied inno- increases for scaling up activities. We will work to vation, and will be delivered in a contextually appro- achieve and report impact at scale. priate manner via the best available IT platforms. These activities will draw on a global network of 132. We are committed to working with the expertise from institutions and food safety profes- private sector and other key stakeholders to sionals mobilized to address high-priority risks and improve food safety. Globalization of the food threats identified at the country, regional, or inter- supply means that food safety risks are shared national level and to provide an essential resource across borders and increasingly across regions base of trainers. through the globalization of the food supply chain. Foodborne disease outbreaks have serious impli- 133. We are giving more emphasis to improving the cations for public health. Lack of food safety nutritional outcomes from agricultural proj- capacity also inhibits trade within and between ects. The WBG is cosponsor of a major global part- developing and developed countries, and results nership entitled the Scaling Up Nutrition Movement in lost opportunities for food and agribusiness (SUN) [box 18]. Agricultural projects in the WBG companies, farmers, and consumers. Food safety that address food production and distribution is increasingly a global public good, and addressing issues can contribute to the operationalization of it requires global solutions. Farmers, processors, SUN objectives through the inclusion of nutritional retailers, regulatory agencies, consumer advo- outcomes of the types prioritized by SUN in the cates, and technical service providers find it diffi- results frameworks of new project designs where cult to collaborate effectively to improve food feasible. SDN is committed to promoting good prac- safety in globalized food supply chains without tice in this area in the WBG Regions in the coming embarking on a high degree of formal vertical inte- three years, with the support and collaboration of gration that cannot fully cover all needs, especially HDN. In addition, the SDN co-chairs with HDN and in the poorer countries. Building on the work initi- PREM, a new SecureNutrition Knowledge Platform ated under the Asia Pacific Economic Cooperation’s (see paragraph 10) designed to create a community Food Safety Cooperation Forum, the WBG recently of practice inside and outside the Bank to improve helped launch the multistakeholder Global Food nutrition, specifically through adding nutritional Safety Partnership to deliver a five-year program objectives to agricultural projects. for training and capacity development, supported by a public-private partnership and funded by a 134. We are continuing to work with other multi- multidonor trust fund, with contributions from lateral agencies to reinforce multilateralism in both the public and private sectors anticipated to addressing current agricultural and food secu- reach approximately US$45.0 million. The initia- rity challenges and to leverage the impact of tive has already received $1 million in funding WBG contributions. The level and intensity of from contributors from both the public and the interactions since the onset of food crises in 2008 private sectors, which has enabled work to begin with multilateral organizations provide a clear indica- on an initial series of training programs. In addition tion that the Bank’s partnership in challenging issues 80 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 related to agricultural development and food secu- Steering Committee. AMIS aims to enhance food rity is appreciated and sought after beyond bilat- market outlook information, particularly for grain eral relationships with clients, which remain strong. and soybean stocks, and build capacity in devel- Examples of the WBG’s partners in this regard since oping countries by strengthening collaboration and 2008 are the G20 and the G8, the United Nations’ dialogue among countries. It was founded on the Rome-based food agencies (FAO, WFP, IFAD), the view that little is actually known reliably about how CGIAR institutes, the UN High Level Task Force much food there is in the world at any one time (a on Food and Nutrition Security, the Multilateral view shared by FAO and USDA, which both actively Development Banks, OECD, and regional economic support AMIS’s statistical function), and that crises institutions in developing regions. The newest such as the one in 2008 could have been largely example of the fruits of this form of collaboration avoided if an information and discussion platform is the Agricultural Market Information System plat- such as AMIS had been in place at the time. AMIS’s form (AMIS) at FAO, created by the G20 Agriculture associated “Rapid Response Forum� is composed Deputies under the French G20 Presidency and of senior agriculture officials from G20 and other big which the World Bank actively supports with grain importing and exporting countries that meet funding and staff time, as a member of both the when the Secretariat identifies disturbing trends Secretariat (composed of international organiza- in prices to discuss a common set of timely facts tions such as the Rome-based UN food agen- prepared by the Secretariat. cies, the WBG, OECD, and WTO) and of the AMIS Box 18 : Agriculture in the Scaling Up Nutrition (SUN) Movement The SUN movement was launched in 2010 in response to continuing high rates of global malnutrition. Since then, the SUN Framework for Action has been endorsed by over 100 partners worldwide, including devel- oping countries, academic and research institutions, civil society organizations, private sector companies, bilateral development agencies, United Nations agencies, and the World Bank. The Lead Group for SUN was formed in April 2012, composed of global leaders such as heads of states of SUN countries and representa- tives of organizations and sectors working to improve nutrition; the World Bank’s HDN Vice President is a member of the Lead Group. SUN promotes three key principles for improving nutrition outcomes : (i) country- level action, (ii) a focus on evidence-based and cost-effective actions, and (iii) a multisectoral approach. The last point recognizes that although many of the nutrition-specific interventions lie in the health sector, other sectors have a key role to play in scaling up the indirect or nutrition-sensitive interventions, including agri- culture. Leaders of partner developing countries (“SUN early riser countries�) are prioritizing nutrition as an investment in their nations’ development and are committing to implementation of national nutrition plans/ strategies at scale. The SUN movement seeks to support countries as they build political commitment within governments, establish multistakeholder platforms, promote goals and targets for reducing undernutrition, encourage coherence and support of country progress through a global coalition of partners, and mobilize support for effective joint action. Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 81 135. We are contributing knowledge and capacity out implementation of the GPO at an Oceans building to help clients deal with emerging Summit next year. issues in the global environment for food and agriculture. Global partnerships that focus on 136. The reformed CGIAR illustrates the bene- knowledge generation, knowledge dissemination, fits of a forward-looking global partnership and capacity building have the potential for signifi- approach in the provision of a key interna- cant eventual impact on country-level programs tional public good in developing countries. through (i) increased ability of clients to engage The CGIAR is the world’s premier global part- on significant global changes affecting them, (ii) nership in agricultural research, committed to improving effectiveness in reducing negative reducing rural poverty, increasing food security, externalities (from zoonotic or foodborne disease improving nutrition and health, and ensuring the outbreaks, climate change, excessive price vola- sustainable management of natural resources. tility, or depletions of fishery stocks, for example), The CGIAR mobilizes funding from the WBG and (iii) additional resource mobilization. An and 34 other donors, to support 15 international example is the new Global Partnership for Oceans research centers and 1,000 highly qualified scien- (GPO), a new coalition of over 100 governments, tists throughout the developing world. The CGIAR civil society organizations, private companies and Fund Council of donors is chaired by the Bank’s associations, research institutions, UN agencies, Vice President of Sustainable Development. The multilateral banks, and foundations with the objec- CGIAR offers a common set of goals and prior- tive of mobilizing significant human, financial, and ities and very significant economies of scale in institutional resources for effective public and research. Many developing countries may be private investments in healthier and more produc- too small to achieve efficient scale in research tive oceans. These investments will concentrate and development, except in adaptive research. on filling the current gap in the implementation of In addition, private sector research often does global commitments for (i) sustainable seafood, not focus on the most important crops for the better nutrition, and improved livelihoods from poor, such as cassava, millet, and beans. The capture fisheries and aquaculture; (ii) conserva- WBG has played a leadership role in the CGIAR tion of critical coastal and ocean habitats; and (iii) since its founding in 1971 and recently oversaw reduction of pollution into the ocean. The GPO its reform. Performance contracts between a builds on the reputation and trust built through new CGIAR Fund hosted by the World Bank and the relatively small Global Program on Fisheries the Consortium of CGIAR Centers now provides (PROFISH) and the ALLFISH (between them less opportunities for increasing World Bank invest- than $5 million in Trust Funds administered by ment in this global partnership. Performance the Bank). ALLFISH is a partnership between the contracts have been signed binding the CGIAR seafood industry, represented by the International Centers to the Consortium, and the Consortium Coalition of Fisheries Associations (ICFA); the to the Fund, as have agreements on the majority Bank; and the Global Environment Facility (GEF) of 16 new CGIAR Research Programs. These that has invested in building capacity and knowl- are expected to bring about increased coordina- edge in developing countries to participate in tion among donors and a more-upstream core more sustainable high-value chains for fishery research program. An Independent Science and exports. These programs have had considerable Partnership Council provides advice to the Fund. results thus far in improving fisheries manage- Success in reform has allowed the CGIAR to ment and developing new tools to measure prog- grow from a $500 million per annum organization ress such as new Fishery Performance Indicators. before the reform to one that is expected to grow Plans are to complete the design phase and roll to $800 million per annum by the end of FY2013. 82 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 137. We are committed to developing and using cooperation by strengthening a new trend in devel- new forms of global partnership for achieving opment cooperation in which emerging economies private sector and civil society innovation play an increasingly important role in global devel- in support of food security in developing opment practice. In the last three years, the Bank countries. The AgResults global partnership helped clients by catalyzing the sharing of country was launched by G20 Leaders at Los Cabos in experiences between practitioners. For example, June 2012. With a results-driven funding model Mali sought to draw lessons from India’s dairy that rewards innovators for tackling some of the revolution, Tajikistan and the Kyrgyz Republic have biggest problems in food security and agricultural learned from China’s experience with agricultural development, AgResults addresses global chal- value chain development, Nepal and Ecuador have lenges in food security and agriculture by gener- learned from the Philippines experience with risk- ating market-oriented solutions. It is administered sensitive land use planning, and Brazil is fostering by the WBG, which will outsource Secretariat technical cooperation and knowledge exchange functions while retaining a partnership role in the between Brazilian and African organizations in agri- Steering Committee. Australia, Canada, Italy, the culture. Many MICs are also benefiting from Bank United Kingdom, the US, and the Bill & Melinda brokered MIC-MIC exchanges, including Romania Gates Foundation are supporting this effort, with and Mexico on biogas from animal waste manage- a pledged funding level of up to $100 million. ment, Brazil and Indonesia on forest management, AgResults uses pull mechanisms to encourage and Turkey and China on watershed management. innovation and the adoption of new technologies Such South-South cooperation is a key instrument through results-based payments such as prizes that for scaling up impact of successful agricultural are typically paid out when certain objectives or development initiatives. milestones have been met. Such financing mecha- nisms have seen success in generating innovation and market-oriented solutions in other domains How We Will Implement such as health care, and AgResults aims to deliver The Program similar gains in global food security and agricultural development. In the coming years, AgResults will 139. To maximize the impact of investments under the launch a series of pilots representing a diverse mix AAP, we will focus on the following implementa- of agriculture and food security issues that can tion issues related to improving portfolio quality be addressed by new technologies and products and leveraging the resource of others, including from the private sector, testing different types of clients, the private sector, and donor partners. pull mechanisms in different regions globally. The initial set of pilots, focusing on maize production Areas we will emphasize more in in Sub-Saharan Africa, include incentivizing the implementation, and new areas development and adoption of on-farm storage technologies for smallholder farmers, encour- 140. Strengthen planning and investment prioriti- aging innovative distribution of a breakthrough zation in the poorest countries. A recent assess- technology to reduce aflatoxin contamination, ment of country proposals submitted for financing and building a market for new varieties of maize to the GAFSP showed that the poorest countries enhanced with vitamin A. Additional pilots will be had the least ready investment plans and country explored in the coming years. proposals.142 Supporting national processes and capacity in these countries—particularly through 138. We will support further South-South coopera- tion. The Bank will continue to facilitate South-South 142 Never theless, there remained investment- ready proposals that were not financed due to there being insufficient financing available. Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 83 the CAADP process, including its consultations— projects (to undertake feasibility studies, engi- can help to strengthen country plans and invest- neering designs, and preparation of safeguards ment prioritization in agriculture, and increase instruments) and land tenure projects (for study the likelihood of high-quality investments across and consultation on sensitive policy and institu- all sources of financing, including governments, tional aspects, and for technical, economic, and donors, and the World Bank. safeguard considerations), including PPPs, in AFR. These will help to facilitate additional scale-up Key actions: (i) Seek additional financing for the through financing costs extending beyond current CAADP Multi-Donor Trust Fund supporting capacity budget preparation norms. development for policy, planning, and investment prioritization through the Africa-led CAADP country 142. Better linking IDA/IBRD/IFC/MIGA support at processes; (ii) support the process through agri- the country level. The IFC and IDA have been cultural public expenditure reviews initiated in five working closely in Moldova with the IFC-supported countries (Burkina Faso, Senegal, Ethiopia, Togo, Investment Climate Reform Project complementing and Liberia), with work starting in six additional the IDA Development Policy Operation, and agri- countries (Central African Republic, Côte d’Ivoire, culture investment operation. A recent example Ghana, Guinea, Malawi, and Mozambique); and (iii) of regional collaboration between agriculture and implement the new initiative to expand IFC agricul- the Finance and Private Sector Departments was ture investment in Africa. on the analytical work on Agribusiness in Africa. Examples of potential collaboration include palm 141. Work with other development partners to oil in West Africa, where a prospective IFC invest- establish a project preparation facility for ment with a dedicated smallholder supplier compo- needed, but more costly to prepare projects nent is linking with a Bank-supported smallholder (such as irrigation and land projects, including program; Bank-IFC collaboration on Country PPPs), in AFR. Experience in AFR in the past Situation Analyses, which will precede new IFC three years has shown widely differing prepara- palm oil investments in line with the new WBG tion costs of programs. Agriculture technology and Palm Oil Strategy; and cocoa-related IFC invest- emergency response programs can be scaled up ments (traders and financial intermediaries) that fairly quickly within the budget preparation norms. integrate with Bank support to Côte d’Ivoire. In contrast, land administration and irrigation proj- ects (needed to attain growth objectives) require Key actions: (i) Strengthen internal platforms, feasibility studies, safeguard analyses, engineering such as the Global and Africa Region Agribusiness design, and preparation of procurement packages, Platform, which includes IFC and the WB regions’ which take more time and resources than envis- and the private sector development and agriculture aged in the norms for project preparation in the units, to capture country-level public and private Bank. Addressing these higher preparation costs investment opportunities in a more programmatic will be important to sustain and support any way through public-private partnerships and other increase in investments in AFR, as also acknowl- explicitly complementary IFC-Bank interventions; edged under the New Alliance for Food Security and (ii) strengthen linkages between public and and Nutrition adopted by the G8. private investments through GAFSP where invest- ments through the private sector window, admin- Key actions: Together with development part- istered by IFC, will be made in the same set of ners, led by USAID and the AfDB, we will work countries in which projects are financed through toward establishing a project preparation facility for the public sector window, in many of which the more costly to prepare projects such as irrigation Bank is the selected supervising entity. 84 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 143. Strengthen analytical work, including impact outcome rating fell from 85 percent for projects in evaluations to guide sector dialogue and FY2006–08 to 71 percent in FY2009–11. Yet the ex project identification. Time spent on analytical post economic returns remained relatively high (24 work and pipeline development over the last three percent median return). Portfolio quality of active years has declined as staff shifted to delivering the projects has declined, even though it is still in line existing pipeline and supervision of a growing port- with other sectors—reported reasons are being folio. This is reflected in less analytical products slow to proactively address the identified issues, and a lower outer year pipeline than was in place and declining budgets. Pro-activity (actions taken at the start of the AAP FY2010–12. Also, it has to address problem projects such as restructuring, meant a higher reliance on Trust Funds to finance closing, suspending, or partially or fully canceling AAA (increasing from 34 percent of the ARD AAA the project) has lagged behind targets, but is higher budget in FY2006–08 to 47 percent in FY2010– than pro-activity in other sectors in the Bank, and 12). Continued attention is needed to maintain the staff have provided more realistic assessments in quality of our program, including ensuring that our identifying problem projects in the agriculture and operations are built on a solid and consistent knowl- rural sector portfolio than other sectors in the Bank. edge base (annex 2). In addition, there are 20 impact Projects at risk exceeded the targets, but are less evaluations ongoing in our agriculture portfolio, half than the share at risk in other sectors. As agricultural through the Agriculture Adaptation Program, whose growth implies changes in land use, construction of results can help further guide program design. We large and small dams, water extractions, and activi- will do detailed in-depth impact evaluation on 10 ties in natural habitats, agriculture projects usually percent of our program, with more rapid assess- trigger multiple safeguard policies. More cost- ments for the remainder of the portfolio. effective and timely approaches to recognizing and managing these risks (currently managed through Key actions: (i) Strengthen partnerships (including the safeguard clearance process) are needed. through the SecureNutrition Knowledge Platform IFC has developed new tools designed to identify on Food Security and Nutrition, and for AFR, key environmental and social risks earlier at both through the ongoing work under the CAADP the country and commodity level to better inform process) to leverage knowledge and maintain our actions in the agriculture value chain to promote analytical base to guide sector dialogue and our sustainability. More use of a framework-based future project pipeline; and (ii) make strategic use approach to address issues as they arise during of impact evaluation (10 percent of new projects implementation of IDA/IBRD supported projects each year, which equates to about four per year) could also help. There are concerns that one of the and look toward supporting long-term pathways risks to successful implementation of the AAP is its for scaling up impact beyond the individual project. vulnerability to declining staff numbers. This will be reviewed on a region-by-region basis. For example, 144. Project quality. The size of the program under delivering the scaled-up program in AFR will require implementation has increased significantly from additional skills, including on irrigation and water $12.2 billion (undisbursed balance) in July 2009 to resources management, and on land administration. $14.7 billion (undisbursed balance) in July 2012. For In contrast, ECA is providing more support through closed projects, IEG’s outcome ratings for those fee-based services requiring skills in policy analysis managed by the Agriculture and Rural Development and dialogue, also with private sector partners. Sector Board declined in recent years, and to a slightly lower level than for the Bank as a whole. Key actions: (i) Ensure 80 percent of projects that The share of projects rated moderately satis- close in FY2013–15 have satisfactory outcomes; (ii) factory or better in terms of their development ensure 80 percent of projects with implementation Chapter 3: The World Bank Group Support for Agriculture FY2013–2015 85 issues or those not meeting their development Anchor Department into a new Agriculture and objectives have had corrective actions completed; Environmental Services Department, including the (iii) engage in ongoing revisions to the Bank establishment of a Sustainable Landscape Practice Safeguards, ensuring sector issues are addressed; that integrates agriculture productivity, livestock, (iv) align staff with size and composition of forestry, land tenure, biodiversity, and climate- support, including use of secondees, additional smart agriculture into one team and closely coordi- hires beyond current levels, and cross-regional nates with the Water Anchor and the Climate Policy support; and (v) realign the World Bank Agriculture and Financing Anchor to provide the overall stra- and Rural Development and the Environment tegic directions and guidance support to regions. 86 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Annex 1: Lessons from FY2010–2012 WBG Portfolio Performance and Portfolio Quality FY2010–2012 87 Annex 1: WBGPortfolio Performance and Portfolio Quality FY2010–2012 Lending 145. The actual level of WBG agriculture and related sector support in FY2010–12 is in line with initial projections. To support countries’ progress on the MDGs, the WBG AAP FY2010–12 projected an increase in agriculture and related sector lending (IBRD/IDA/IFC) from an average of $4.1 billion annually in FY2006–08 to $6.2–$8.3 billion annually in FY2010–12. The AAP’s low-end projection of $6.2 billion annually (50 percent increase over the FY2006–08 period) was met in FY2010–12, with a $7 billion annual average (Table 6). Overall lending lagged the high-end $8.3 billion projection, mainly due to higher demand in IBRD countries for development policy operations in response to the economic and financial crisis. The share of agriculture and related sector lending in overall IDA lending increased from 17 percent in FY2006–08 to 19 percent in FY2010–12; for IBRD lending the share declined from 8 percent to 5 percent. The global reach of IDA/IBRD has been large, supporting 232 projects in 76 countries in FY2010–12. IFC commitments more than doubled over FY2006–08 to $4.2 billion in FY2012 and averaging $2.7 billion over FY2010–12. Table 6: World Bank Group and Related Sector Lending by Subsector ($ millions) Annual Annual Average Average FY2006–08 FY2009 FY2010 FY2011 FY2012 FY2010–12 IDA/IBRD (by subsector) 2,931 5,269 4,138 3,591 5,117 4,282 Agricultural production and markets1 1,756 4,142 3,021 2,882 4,205 3,369 Agriculture, fishing and forestry 2 1,614 3,469 2,618 2,129 3,134 2,627 Agriculture markets, trade, 142 672 403 753 1,071 742 agro-industry, public administration Other agriculture-related investments 3 1,175 1,128 1,117 708 912 912 IFC 4 1,197 1,994 1,960 2,058 4,233 2,750 Total 4,128 7,263 6,097 5,649 9,350 7,032 1 The sum of agriculture, fishing, and forestry; and agriculture markets, trade, agro-industry, and public administration in agriculture. 2 As reported in the WBG Annual Reports as “agriculture.� 3 Includes investments under the oversight of the Agriculture and Rural Development Sector Board other than those coded under agriculture, fishing, and forestry; and agriculture markets, trade, and agro-industry and public administration in agriculture. These include related investments in land administration, agricultural and rural finance, and market roads. 4 Includes (i) agribusiness production and processing, (ii) agri-related trade finance, (iii) fertilizers, (iv) agri-logistics and infrastructure, and (v) food retail. 88 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 146. The thematic and geographic composition of 147. Gender equality has been reflected more in support has shifted. The thematic focus of the program design. Eighty-eight percent of agricul- program shifted in FY2010–12 more toward agri- ture and rural development projects (all agriculture cultural productivity, which now represents three- and rural development projects in the Africa region) quarters of the IDA/IBRD program. IFC’s support in FY2010–12 were gender informed (i.e., included also shifted more toward post-harvest handling gender in at least one dimension among analysis, and increased market access, with a greater focus actions, and M&E). In FY2012, 98 percent of all on smallholder inclusion. AFR and SAR accounted Bank-financed agriculture and rural development for 63 percent of the IBRD/IDA program in 2012 projects (and 100 percent in five of the six regions) (undisbursed balance), an increase from 53 were gender informed. percent in 2009. IFC’s agribusiness-specific invest- ments to Africa also increased from $186 million in 148. The focus of commitments on the ultimate FY2006–08 to $346 million in FY2010–12. These client has continued. Thirty-five percent of agri- shifts are consistent with the emphasis of the culture and rural development commitments in AAP FY2010–12. While these are regional aver- FY2010–12 used community-driven development ages, there is some lumpiness in investments. approaches, reflecting the AAP’s call for greater For example, in MNA, record agricultural lending farmers’ control over resource allocation decisions. of $350 million was delivered in FY2011, with only This was slightly lower than the 40 percent level $3 million in 2012 (table 7). Factors contributing over the baseline period of FY2006–08. to this decline included political disruptions asso- ciated with the Arab Spring, which dramatically 149. Public partnerships and private sector invest- affected larger clients of the Bank for agricultural ment have increased. Partnerships to help imple- lending (Egypt, Morocco, Tunisia, and Yemen). ment the agriculture agenda, including with private There was a shift in the priority of Bank lending foundations, have increased over the last three to development policy loans to assist govern- years through (i) a doubling of Trust Fund resources ment responses to their fiscal crisis in Egypt and focusing on agriculture and related sectors from Tunisia. This resulted in postponing potential and/ FY2006–08 to FY2010–12 amounting to 6 percent or pipeline lending for agricultural projects previ- of IDA/IBRD support for agriculture and related ously under discussion. Institutional instability and sectors and 24 percent of Bank-wide Trust-Funded rapid turnover in senior officials at the ministries grants executed by recipients143 (an increase from 11 of agriculture, particularly in Egypt, also affected percent in FY2006–08, and larger than the agriculture the ability to dialogue with the clients. In the case and related sector share of IDA/IBRD); (ii) support to of Yemen, security concerns on the ground and a CAADP in Africa, helping countries develop their own limitation on travel hampered dialogue with coun- agricultural investment plans, which have formed a terparts. Similarly in LCR, lending spiked in FY2009 common platform for better aligning all develop- due to high client demand to help cope with the ment partners’ support to country priorities; and (iii) global economic crisis and a sharp rise in food the share of IFC support in the overall WBG portfolio prices. In contrast, lending in FY2011 was lower on agriculture and related sectors increased from 29 than in FY2006–2008 as key clients requested that percent in FY2006–08 to 39 percent in FY2010–12 lending planned for the fourth quarter of FY2011 be reflecting a greater focus on private sector financing. moved to the first quarter of FY2012. This lumpi- ness is partially evened out at an aggregate level as the AAP considers the average lending over a 143 These include Carbon Offset, Global Environment Facility (GEF), Institutional Development Fund, and three-year period of implementation. Recipient Executed Activities. Annex 1: Lessons from FY2010–2012 WBG Portfolio Performance and Portfolio Quality FY2010–2012 89 Table 7: World Bank Group and Related Sector Lending by Region ($ millions) Annual Annual Average Average FY2006–08 FY2009 FY2010 FY2011 FY2012 FY2010–12 Africa 1,071 1,352 1,652 1,359 IDA/IBRD 700 1,727 801 1,162 1,066 1,010 IFC - - 270 190 586 349 East Asia and the Pacific 1,305 786 1,140 1,077 IDA/IBRD 475 599 1,202 681 602 828 IFC - - 103 105 538 249 Europe and Central Asia 743 610 1,229 861 IDA/IBRD 325 50 221 156 90 156 IFC - - 522 454 1139 705 Latin America and the Caribbean 1,207 1,020 2,186 1,471 IDA/IBRD 407 1,683 411 324 1,072 602 IFC - - 796 696 1114 869 Middle East and North Africa 283 810 521 538 IDA/IBRD 86 60 136 352 3 164 IFC - - 147 458 518 374 South Asia 1,489 1,024 2,622 1,712 IDA/IBRD 938 1,150 1,367 915 2,284 1522 IFC - - 122 109 338 190 Total 4,128 7,263 6,097 5,649 9,350 7,032 IDA/IBRD 2,931 5,269 4,138 3,591 5,117 4,282 IFC 1,197 1,994 1,960 2,058 4,233 2,750 The total includes an IFC global program amounting to $46 million. 90 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 150. In FY2009–11, outcome ratings for agriculture �� Emergency response: Operations under the and related sectors were less than the Bank GFRP (since inception) have reached over 66 average. The percent of projects with satisfac- million people in 49 countries. tory outcomes as rated by IEG was 71 percent (a decline from FY2006–08 and less than the 152. Returns to investment. The ex post economic target of 80 percent satisfactory outcome). More return to IDA /IBRD investment in agriculture than 80 percent of projects were rated as satisfac- and rural projects that closed in FY2009–11 was tory in two regions (ECA and MNA) in FY2009– estimated at 30 percent,145 indicating substan- 11, while in AFR and SAR this was the case for 67 tial returns to investments in the sector (median percent and 63 percent of projects, respectively. returns were 24 percent). These estimated returns These outcome ratings were better than other have improved over time. In FY2009–11, they were Bank projects in AFR, ECA, and MNA. similar to estimated returns of other Bank proj- ects, but as the benefits of agriculture projects are 151. Measured progress on irrigated areas, agricul- focused in rural areas where three-quarters of the tural management practices, technology adop- world’s poor reside, they had high poverty reduc- tion, and emergency response. A more concerted tion returns. effort is underway to develop and use more consis- tent institution-wide results indicators for agricul- ture. As part of the Bank-wide effort to improve World Bank Analytical and results reporting, several indicators have been iden- Advisory Activities tified for agriculture to include in the Implementation Status Reports of projects. Among those indicators, 153. Strong analytical underpinnings have long been there is available data related to improving water recognized as a critical success factor for the management (hectares with new or improved irri- Bank’s operational work and policy advice. This gation), improving farm management (number is confirmed by statistical analysis, carried out by of client training days), and technology adoption the Rural Policies Thematic Group, that shows that (number of farmers adopting improved technology). not only is the investment (spending) in AAA work Progress on these three areas has been as follows: positively correlated with lending volumes, but more importantly, AAA has a significant positive �� Irrigated area : 1.2 million hectares of new or impact on the quality of lending, in terms of quality improved144 irrigation and drainage services at entry and outcomes (as measured by IEG ratings resulted from project activities that closed in of project outcomes). Further, findings suggest FY2010–11. that country and ARD sector focused AAA has a significantly larger impact on ARD portfolio quality �� Agricultural management practices: 3 mil- and outcomes than regional or global AAA or lion client days of training to improve agricul- non-sector-specific (multi- or cross-sectoral) AAA. tural management practices. 154. Following the food price crises, in responding to �� Technology adoption: 0.5 million farmers food security concerns and the need to build longer- adopted new technologies (in projects that term resilience, the Bank has justifiably chan- closed in FY2010). neled its resources and lending in responding to strong demands from client governments to invest 144 Improved irrigation and drainage services refers to the upgrading, rehabilitation, and/or modernization of irriga- 145 Average of the subset of closed projects evaluated tion and drainage services in an area with existing irri- by the World Bank IEG that had ex post rates of gation and drainage services. return estimates. Annex 1: Lessons from FY2010–2012 WBG Portfolio Performance and Portfolio Quality FY2010–2012 91 in agriculture. This imperative with flat budgets, non-ARD tasks; as noted earlier, these do not seem however, has meant increasing demand on a limited to have the same impact on agriculture portfolio Bank budget. In the trade-off, spending on analyt- quality as focused country and sector studies. In ical work gave way to preparation and supervision of part, this is because the issues covered are either emergency and other investment lending of a rapidly regional or global in nature (when undertaken as increasing portfolio. The longer-term cost, however, part of regional or global studies), so the findings is potentially significant, as the much-needed invest- may often not be sufficiently country specific; ment in AAA had declined significantly. or the analyses are cross-sectoral and higher level (such as part of broader Country Economic 155. Trends in the amount of agriculture-focused AAA Memorandums, trade diagnostic studies, labor work (defined as economic and sector work and and migration studies) and as such do not delve technical assistance) show a dramatic decline into sector technical details as may be necessary since FY2006 (“ARD� in figure 12), with increases to provide policy advice or influence operational in FY2011 and FY2012. This is in sharp contrast designs suitably. to multisector AAA with agriculture components, (“Non-ARD Agriculture� in figure 12) (both in 156. The recent increase in ARD AAA needs to be main- volume and number of products). On the positive tained for two reasons. One is the potential impact side, increasing recognition of the importance of on the Bank’s lending and portfolio quality, as indi- ARD issues in broader economic assessments has cated by the positive impacts of AAA noted earlier. led to the inclusion of some agricultural issues in Second, faced with the risks associated with Figure 12: Volume of Spending on Analytical and Advisory Activities 25 300 250 20 200 15 $ millions $ millions 150 10 100 5 50 0 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 ARD Non-ARD Agriculture Other World Bank (right axis) 92 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 climate change—with potentially huge impacts on the targets, but are less than the share at risk in food security and on livelihoods of millions around other sectors. the globe, and in particular in the pockets of deep persisting poverty in AFR and SAR—as well as �� Pro-activity (actions taken to address problem the likely continued commodity price volatility and projects such as restructuring, closing, sus- degradation of the natural resource base in many pending, or partially or fully canceling the parts of the world, future agriculture will neces- project) has lagged behind targets, but is higher sarily have to be much more knowledge inten- than pro-activity in other sectors in the Bank, sive than the past. This means not only pushing and staff have provided more realistic assess- new technological frontiers, but also adapting to ments in identifying problem projects in the evolving agro-ecological circumstances, and the agriculture and rural sector portfolio than other need for deeper and more nuanced policy and sectors in the Bank. Pro-activity on resolving institutional reforms to address country and loca- issues related to problem projects is below tion-specific technical and economic issues and target, but this is at least partly due to internal constraints. This, in turn, calls for a substantial changes on how it is measured, rather than investment in the Bank’s knowledge base, partic- declines in actual pro-activity. The relatively low ularly if the Bank wants to exploit its comparative pro-activity across all Bank projects is partly a advantage in becoming a global knowledge Bank. reflection of changes implemented with the It is also necessary for the Bank to remain relevant internal investment lending reforms when pro- as a provider of sound technical advice and deliver activity scores began excluding actions taken projects and programs with likely positive impacts. on lower-level restructuring of problem proj- ects. Although there have been real declines in pro-activity, it remains higher than it is in other World Bank Portfolio Quality sectors in EAP, LCR, MNA, and SAR, but lower in AFR and ECA. Declining supervision budgets 157. Maintaining portfolio quality, with signifi- per project are a contributing factor. cantly scaled up lending has been a chal- lenge. For closed projects, IEG’s outcome ratings �� Projects-at-risk. General factors contributed, for those managed by the Agriculture and Rural such as country macroeconomic conditions Development Sector Board declined in recent (that were negatively impacted by the finan- years, and to a slightly lower level than for the cial crisis) and the riskier nature of agricul- Bank as a whole. Although the share of proj- ture projects relative to other sectors (being ects rated moderately satisfactory or better in more dependent on weather and price vola- terms of their development outcome rating fell tility). As the financial crisis eased, there was from 85 percent for projects in FY2006– 08 to a decline in the percentage of problem proj- 71 percent in FY2009–11, the estimated ex post ects from 17 percent to 13 percent, and proj- economic returns remained robust (and similar ects-at-risk from 26 to 20 percent. Specific fac- to other sectors) with a 24 percent median tors also contribute. For the overall IDA/IBRD return .146 Portfolio quality of active projects has portfolio, these include slow disbursements rel- declined, even though it is still in line with other ative to expectations at design (10 percent of sectors—reported reasons are slow pro-activity projects), financial management (8 percent of in addressing the identified issues, and declining projects), and procurement (7 percent of proj- supervision budgets. Projects at risk exceeded ects). Less common problems were with coun- terpart funds, safeguards, monitoring and eval- 146 Median of the subset of closed projects evaluated by the World uation, project management, and effectiveness Bank IEG which had ex post rates of return estimates. Annex 1: Lessons from FY2010–2012 WBG Portfolio Performance and Portfolio Quality FY2010–2012 93 delays. But the importance of these factors annual supervision budgets declined 6 percent varies across regions. In AFR, it is effective- (from $114,000 per project over FY2006–08 to ness delays, legal covenants, and slow dis- $108,000 over FY2010–12). This was most severe bursement; in SAR, financial management and in AFR, declining 32 percent (from $124,000 to slow disbursement; in MNA, procurement, $84,000), and in MNA declining 38 percent (from effectiveness delays, safeguards, and moni- $124,000 to $78,000). Meeting the ongoing chal- toring and evaluation; in LCR, financial man- lenge of “doing more and better,� will likely require agement, legal covenants, procurement, and a continued pressure on increasing project size, if slow disbursement relative to expectations budget pressures continue as they have. at design; and in EAP, financial management. More explicit attention will be given to these 159. Average processing time of agricultural elements in supervision of projects (team com- projects remained significantly higher than positions) and in upstream reviews. for other Bank projects due to the complex nature of the sector. Over the implementation 158. Average project size and the number of proj- period, average processing time (from project ects increased, while real average supervision concept review to approval) was 507 days for budgets declined. The median IDA/IBRD agricul- agricultural projects compared to 349 days for ture project size increased from $30 million to $43 other projects. However, additional financing million, but it is still smaller than the $50 million projects in the sector take roughly the same median project size for other sectors. The number number of days to process (194) as projects in of primarily agricultural projects under supervision other sectors. This reflects the fact that once has decreased slightly from 250 to 241 (with proj- the complex design process is completed in ects with some agricultural assistance decreasing the parent project, the provision of additional slightly as well from 338 to 333). Real average financing follows Bank norms. 94 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Annex 2: Lessons of the WBG Agriculture and Related Sector Program: FY2010–2012 95 Lessons of the WBG Agriculture and Related Annex 2: Sector Program: FY2010–2012 160. Lessons from the last three years of implementation include the IEG’s reviews on what worked and did not work; the importance of specifying lending projections; our knowledge base; on the need to balance the pressure for short-term results with longer-term agricultural development; and on managing project risks. 161. Independent Evaluation Group review of the WBG in agriculture147 and water.148 The IEG’s review of lessons over 1998–2008, recommended that to improve performance in the sector, the WBG should aim at: (i) fostering public-private partnerships and building synergies between the Bank and IFC to improve agri- culture and agribusiness outcomes, even in difficult business environments such as Sub-Saharan Africa; (ii) providing better support to research and extension through global research programs (e.g., through the CGIAR) focused on key strategic priorities, linked to national programs, and mainstream research results in country-level projects; (iii) encourage agricultural public expenditure analysis to assess the efficiency and equity of public spending allocations (of which the Bank resources are part), and for guiding future investment priorities in the sector; (iv) improve water, soil, and crop management in current rainfed areas to increase agricultural productivity; and (v) contribute to gender equality by improving economic opportunities for women through agriculture, which in turn will also increase agriculture productivity. In addition, the IEG water review recommended that to improve performance of irrigation, the WBG should give more attention to agricultural water resources management, including groundwater, (on which attention had declined while use of water for irrigation had increased) (see box 19 for more details). These recommendations are already being taken forward in the current AAP, which will continue in the AAP FY2013–15. 162. What worked well, and what did not work well. During the implementation period, two agricultural proj- ects that closed were rated highly satisfactory by IEG (Sri Lanka Community Development and Livelihood Improvement “GemiDiriya� Project149 and the Nigeria Second National Fadama Development Project150 ). Both projects used a community-driven development approach. The Nigeria project highlighted the need to harmonize development plans to achieve synergy and complementarity, and the importance of capacity building of community organizations and farmers to access credit. The Sri Lanka project notes that leader- ship by experienced community members in the development of procedures and transfer of knowledge to other communities is a highly effective and efficient method for scaling up. In addition, the involvement of women was noted as a key factor underpinning the integrity of implementation, especially in the community micro-financing institutions that are primarily managed by women. Similarly, youth groups have been espe- cially successful in fostering greater ethnic integration and identification of work opportunities. Both proj- ects emphasize a programmatic approach, with adequate flexibility to incorporate innovations and sufficient technical assistance for piloting and testing at each stage, which help in building the confidence of staff and communities, fine tuning the model, and enhancing prospects for achieving development outcomes. Four projects were rated unsatisfactory. In the Mexico Access to Land for Young Farmers Project,151 the main 147 World Bank (2011). Growth and Productivity in Agriculture and Agribusiness: Evaluative Lessons from WBG Experience. Independent Evaluation Group. Washington, DC. 148 World Bank (2010). Water and Development: An Evaluation of WBG Support, 1997–2007. Independent Evaluation Group. Washington, DC. 149 Sri Lanka, Community Development and Livelihood Improvement “GemiDiriya� Project (P074872). 150 Nigeria, Second National Fadama Development Project (P063622). 151 Mexico, Access to Land for Young Famers (P088732). 96 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Box 19 : Lessons from the Independent Evaluation Group Review of the WBG in Agriculture and Water Fostering an environment for public-private partnerships in project design and implementation can improve agriculture and agribusiness outcomes in difficult business environments such as in AFR. A review of the 25 Bank projects with the largest agribusiness components found that the Bank is largely supporting the enabling environ- ment for private sector development. The shortage of indigenous entrepreneurs, the small size of the potential invest- ments, and the lack of access to markets and infrastructure in Sub-Saharan Africa often limited IFC’s engagement and performance in agriculture-based economies. Coordinated and complementary public-private sector interventions by the IFC and the Bank, especially through public-private partnerships in water efficiency and irrigation infrastructure, enabled the private sector to target small-to-midsize companies; to focus core investments in agriculture growth and productivity (not only on niche markets such as rubber) and encourage the inclusion of cost-recovery options. Support to research and extension is more effective when global research programs focus on key strategic priorities, are linked to national programs, and research results are consistently mainstreamed in country- level projects. Both the Bank and IFC support research and extension—the Bank through support to global programs (most notably the CGIAR), to public systems in client countries, and to partnership arrangements with other stake- holders, and IFC through financing and advisory services to agribusiness trader-processors, who in turn assist their contract farmers. Greater results are achieved when collective effort is focused on major strategic high-impact research initiatives (e.g., addressing hunger and poverty in developing countries, while cushioning climate change impacts and curbing natural resource degradation). This also enables South-South cooperation to facilitate knowledge transfer while working with local and regional institutions to leverage local knowledge. The WBG needs to stay engaged in these areas at the country and global levels and continue to mainstream research results from CGIAR institutions in Bank projects at the country and regional levels. Positive correlations between good M&E and good project outcomes suggest that better building M&E into design and implementation could help improve project outcomes. To improve project effectiveness, adequate M&E frameworks should be included, with clear, relevant, and realistic objectives; thorough cost-benefit analysis; appropriate indicators; and adequate baseline data. M&E results will in turn improve institutional learning, especially when the use of the improved coding systems enables effectively monitoring and tracking of all agricultural activities (World Bank 2011). AAA, and particularly economic and sector work, are crucial to inform both policy advice and finance, improve lending outcomes and make an important contribution to the Bank’s knowledge base and repu- tation. A sample of AAA and economic and sector work was evaluated for quality and effectiveness in the context of country case studies within the overall IEG Evaluation on Growth and Productivity in Agriculture and Agribusiness. The Evaluation found that over 85 percent of the products addressed issues that had been identified as development constraints in earlier work or in policy dialogue with clients and that a full 77 percent of products were delivered in time to inform relevant policy decisions by the government. Lending operations informed by sound AAA achieved better outcomes, and demand-driven AAA had equally effective results as supply-driven AAA. To maintain portfolio quality, while meeting rising lending demand, resources should be provided for analytical work (World Bank 2011) Agricultural public expenditure analysis is critical for assessing the efficiency and equity of public spending allocations (of which the Bank resources are part), and for guiding future investment priorities in the sector. Increased attention is needed on enhancing the focus, quality, and appropriate scaling of public spending in agriculture, given that the agricultural policy environment has generally improved in the poorest countries; that many governments are scaling up their support for agriculture, particularly in the poorest countries, with greater recognition of the importance of agriculture, amplified by the global food price spike in 2008; and that donors are also scaling up support for agriculture, Annex 2: Lessons of the WBG Agriculture and Related Sector Program: FY2010–2012 97 Box 19 (continued) often with a shift to budget support, with more reliance on government budget processes. Given the dominancy of the private sector (farmers), the seasonal nature of production, and the multiplicity of subsectors, more attention is given to issues such as the roles of the private vs. public sector, timing of expenditure releases, breadth and depth of the coverage of analysis, and differentiation in expenditure tracking by subsector (World Bank 2011). Improving water management in rainfed areas needs to receive greater attention, including by tracking related activi- ties separately to allow the WBG to take stock of what works in addressing water management issues in these areas and contribute strategically to their development. About 85 percent of world arable land is rainfed, and 58 percent of world crop production comes from rainfed lands. The rainfed regions, home to most of the world’s poor, were largely bypassed by the Green Revolution. Though technology and other advances could raise yields further in irrigated areas, much of the increase in crop production may have to come from the drier, riskier production environments of rainfed lands. This will require the wider use of management practices that will improve efficiency of water use, such as conservation agricul- ture (that also plays a wider resource conservation role) and water harvesting techniques. The literature notes the greater marginal impact on agricultural production and poverty alleviation from an additional unit of investment in rainfed areas compared to irrigated areas (World Bank 2011). Effective management of agricultural water demand is one of the critical challenges worldwide in the face of increasing water scarcity. Efforts to limit demand in agriculture, the largest water-using sector, have had limited success so far. Efficiency-enhancing technologies alone do not necessarily reduce agricultural water consumption. Efforts to modulate demand with water charges encountered limited success. Fixing quotas for water use and enforcing them is a relatively recent measure and deserves careful evaluation. Overall, demand-management approaches should be closely monitored to identify aspects that are working or not working, and build on these lessons of experience going forward. This includes identifying ways to more effectively use fees and tariffs to reduce water consumption, and to assess the experience with quotas as a means to modulate agricultural water use (World Bank 2010). More effort is needed to improve cost recovery in irrigation and drainage projects. Cost recovery targets in Bank- supported projects have often been too ambitious and unrealistic. Projects that have succeeded have generally improved the efficiency of water institutions in collecting fees. Limited success has caused the Bank to moderate its approach without clearly identifying sources to finance the recovery shortfalls. However, the question of who will pay for uncov- ered costs needs to be addressed in order to ensure the sustainability of investments. To the extent that borrowers must cover the cost of water services out of general revenues, it will be important to share the lessons of international experi- ence so they can allocate partial cost subsidies most effectively (World Bank 2010). Water user associations are often promoted to better maintain and operate irrigation and drainage systems. A review of projects that created or supported water user associations during 1997–2007 drew the following lessons: (i) developing the capacity of water user associations is a long-term process that often cannot be completed within the span of one project; (ii) training is an integral part to the development of water user associations, and works best when it entails full participation of members in the activities that the association is responsible for, such as planning and operation and maintenance of the systems; (iii) water charges need to be realistic, and collection rates tend to improve with in-time water distribution and proper maintenance; and (iv) transfer of public water systems to user groups can create a sense of empowerment that can help improve system efficiency, but the transfer process will not be sustainable unless members of the user groups perceive real benefits, such as increased agricultural incomes (World Bank 2010). Source: World Bank (2011). Growth and Productivity in Agriculture and Agribusiness: Evaluative Lessons from World Bank Group Experience. Independent Evaluation Group. Washington, D.C.; World Bank (2010). Water for Development: An Evaluation of World Bank Support, 1997-2007. Independent Evaluation Group. Washington, D.C. 98 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 lesson was that containing political pressure to This comes at a time when many of our clients rapidly expand coverage (instead of restricting are reengaging in agriculture. The challenge is implementation of few States) proved very diffi- to balance the fixed administrative budget allo- cult. In the case of the Panama Land Administration cations among (i) new lending to deliver the Project,152 the combination of extreme complexity existing pipeline of projects, (ii) ongoing super- in institutional arrangements, competing devel- vision to deliver the existing projects, (iii) analyt- opment agendas, and factional divisions among ical work to inform focus and delivery of new indigenous groups led to unfulfilled project objec- lending (or to help clients improve the overall tives (e.g., limited merger between cadastre and policy environment), and (iv) pipeline develop- registry, untitled indigenous lands). The unsatisfac- ment, including for projects requiring costly tory performance of the two other projects were for feasibility studies, such as land administration disparate reasons: the Afghanistan Avian Influenza and irrigation. Currently, the trade-off has been Control and Human Pandemic Preparedness and delivery of a higher volume of new commitments Response Project153 used a template approach that and supervision of ongoing projects, at the did not take sufficient account of country’s level expense of analytical work. Continued attention of capacity or the security situation, while in the is needed to maintain the quality of our program, Tanzania Forest Conservation and Management including ensuring that our operations are built Project154 foreseen institutional reforms were not on a solid and consistent knowledge base. This realized, contributing to modest achievement of a may involve strengthening our partnerships number of key project objectives. (including through the Knowledge Platform on Food and Nutrition) to maintain both the quality 163. Specif ying lending projec tions helped of our operations, and to develop our future pipe- focused attention and provided a basis for line. Experience in Africa in the past three years monitoring progress. The lending projections has shown widely differing preparation costs specified in the AAP FY2010–12 document quanti- of programs. Agriculture technology and emer- fied the magnitude of the scale-up, focused atten- gency response programs can be scaled up fairly tion on how to deliver, and provided a basis for quickly within the budget preparation norms. monitoring progress. The lessons in setting the In contrast, land administration and irrigation projections are: (i) use the current project pipe- projects (needed to attain growth objectives) line (current client demand) to guide realism in the require more detailed feasibility studies, safe- three-year projections, and (ii) set high-case and guard analyses, engineering design, and prepara- low-case projections (a range), but clearly iden- tion of procurement packages, which take more tify risks of non-delivery. Frequent and detailed time and resources than envisaged in the norms updates on progress toward lending projections for project preparation in the Bank. Addressing were a useful guide for management. these higher preparation costs will be impor- tant in sustaining and supporting any increase in 164. More staff time and budgets focused on investments in Africa. increased lending has come at the expense of reduced analytical work and depth of 165. The pressure to report on short-term results client engagement on broader sector issues. needs to be balanced with the needed atten- tion on longer-term agricultural develop- 152 Panama, Land Administration Project (P050595). ment. Results reporting is needed, and more 153 Afghanistan, Avian Influenza Control and Human Pandemic systematic ways are being developed to effec- Preparedness and Response Project (P100935). tively aggregate and communicate results through 154 Tanzania, Forest Conservation and Management Project the Implementation Status Reports. This needs (P058706). Annex 2: Lessons of the WBG Agriculture and Related Sector Program: FY2010–2012 99 to be developed in a way that reflects short-term up pilot agri-insurance programs for farmers and results (outputs) that can be expected from longer- herders (as part of broader rural financial services) term agricultural programs, to reduce the risk of and providing tools for governments to better narrowing our focus only to projects with imme- manage their fiscal risk of production shortfalls 155 diate results. Continued efforts are needed to and/or price volatility (in cases of both extreme and better build relevant monitoring and evaluation less extreme events). into design and implementation to improve project outcomes. Ongoing efforts to scale up impact eval- 167. Managing project risks. Agricultural growth uation of agriculture projects by the Development implies changes in land use, construction of large Impact Evaluation Initiative (DIME) will more and small dams, water extractions, and activities systematically measure project outcomes and in natural habitats. More cost-effective and timely associated lessons. To improve project effective- approaches to recognizing and managing these ness, M&E frameworks should include clear, rele- risks (managed through the safeguard clearance vant, and realistic objectives; thorough cost-benefit process) are needed. IFC has developed new tools analysis; appropriate indicators; and adequate designed to identify key environmental and social baseline data. M&E results will in turn advance risks earlier and at a country and commodity level institutional learning, especially when the use of to better inform actions in the agriculture value the improved coding systems (such as the recently chain to promote sustainability. More use of a approved core indicators for agricultural extension framework-based approach to address issues as and research, and irrigation and drainage develop- they arise during implementation of IDA/IBRD- ment) enables effective monitoring and tracking of supported projects could also help. In addition, all agricultural activities. clear guidelines about how to design our programs to reduce the risk of fraud and corruption, and 166. Responses to food price spikes require both clarity on the standards used for the timing short-term measures, including emergency and extent of remedial actions can improve the assistance, and longer-term interventions. management of these risks. Short-term interventions need to be rapid and targeted toward the poor and vulnerable. The WBG short-term emergency response mechanisms are in place (box 20), drawing on lessons learned from the 2008 food price crisis response and comple- menting the WBG’s core focus on the longer-term agenda. In FY2009, when the food crisis was most severe, financing for short-term responses accounted for about 15 percent of the overall IDA/ IBRD program for the sector. This declined to less than 1 percent in 2010 as countries moved from mitigation aspects of emergency response under the GFRP to adaptation improvements for future resilience. Continued effort is needed on longer- term risk management. This includes both scaling 155 For example, immediate seed distribution versus devel- opment of new seed varieties; rehabilitation of existing irrigation versus development of new irrigation schemes; external technical assistance to speed implementation versus longer-term local capacity development. 100 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Box 20 : IDA Crisis Response Window and Immediate Response Mechanism When established in May 2008, the GFRP was an institutional innovation in emergency response that built on experience in dealing with avian influenza and focused on speed of response in providing policy advice and financial support. The experience of the GFRP shows that the WBG can (i) provide rapid response; (ii) target vulnerable households in vulnerable regions; (iii) initiate supply response; (iv) implement multisectoral programs across HDN, SDN, and the Poverty Reduction and Economic Management Networks; and (v) miti- gate the impacts of a crisis in a cost-effective way. Lessons from GFRP are being used to inform the design of emergency response policies that enhance speed, flexibility, and effectiveness. Emergency response in the Bank has now been mainstreamed through several instruments, including the recently set up IDA Crisis Response Window (CRW) and the recently approved Immediate Response Mechanism (IRM) that will provide the basis for immediate assistance in the future. The IDA CRW was approved in the course of the IDA-16 replenishment process. The CRW would provide IDA countries with timely access to additional resources to respond to the impact of severe economic crises or natural disasters, and strengthens IDA’s capacity to rapidly respond to such crises in collaboration with other agencies, development banks and donors. An amount of SDR 1,335 million was set aside to finance expenditures under this crisis window, which has been operational since July 2011. This amount would include an exceptional allocation of SDR 329 million for Haiti to support reconstruction after the earthquake in January 2010. Recently, a CRW allocation in the amount of US$250 million was approved by the Board in October 2011 to mitigate the impact of the drought emergency in the Horn of Africa. The IDA IRM was approved by the Board of Executive Directors in December 2011 in order to allow partici- pating IDA countries to have immediate access to a portion of the undisbursed balances of their IDA project portfolio in the event of an eligible crisis/emergency and thus shorten IDA’s response time. This objective would be achieved by adding, at the request of the borrower, contingent emergency response components into existing IDA investment projects, as well as mainstreaming such components in new investment oper- ations. With such components in place, IDA borrowers would be able to quickly draw down funds needed in the immediate aftermath of an eligible emergency. A secondary objective is to strengthen emergency preparedness and subsequent response in IDA countries. Annex 3: Agriculture Action Plan Scorecard 101 Annex 3: Agriculture Action Plan Scorecard 168. The AAP Scorecard follows the Bank’s overall Corporate Score Card156 and is designed to provide a snapshot of the Bank’s overall performance in implementing the AAP. The scorecard uses an integrated results and performance framework, which is organized in a four-tier structure that groups indicators along the results chain. Two of the tiers track elements of development results (Tiers I and II), and the other two capture elements of performance (Tiers III and IV). Tier 1 captures the development context of the AAP, Tier 2 the country results supported by the Bank, Tier 3 the development outcomes and operational effectiveness, and Tier 4 the organizational effectiveness in implementing the AAP. The Scorecard is a “living document� that will evolve and improve over time as our ability to report on results expands. The current indicators are aligned with the availability of data, and baselines for Tier 2 will be developed during the first year of implementation. The Scorecard will be available annually with all four tiers updated to the extent data are available. Table 8: Agriculture Action Plan Scorecard [Illustrative set of indicators] Tier 1: Development Context Baseline Indicators Unit Value Year Population below US$1.25 (purchasing power parity) a daya (%) 22.7 2008 Population below minimum level of dietary energy consumption (%) 13 2006–08 Prevalence of underweight children a (% of children under 5) 22.2 2009 Cereal yield a (kg per hectare) 3,114 2010 Agricultural value added per worker a (Constant 2000 US$) 759 2010 Agricultural GDP growth > 5 percent (Number of countries) 10 2010 Average annual deforestation (%) 0.2 2000–10 Tier 2: Country Results Supported by the Bank Unit Productivity Beneficiariesb (Number) Of which, women (Number) Area with new or improved irrigation or drainage a (Millions of hectares) Water users provided with new/improved irrigation and drainage services (Number) Of which, women (Number) Operational water user associations created and/or strengthened (Number) Agricultural technologies demonstrated (Number) a World Bank Corporate Score Card indicator b Projects under the responsibility of the Agriculture and Rural Development Sector Board only 156 http://corporatescorecard.worldbank.org/ 102 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Table 8: Agriculture Action Plan Scorecard [Illustrative set of indicators] Tier 2: Country Results Supported by the Bank Unit Collaborative agricultural research or extension subprojects (Number) Farmers adopting improved agricultural technology a (Number) Of which, women (Number) Client days of training on improved farm management practices (Thousands of days) People in targeted forest and adjacent communities with increased monetary or non-monetary (Number) benefits from forests Of which, (a) female (Number) (b) ethnic minority/indigenous people (Number) People employed in production and processing of forest products (Number) Of which, (a) women (Number) Target population with use or ownership rights recorded as a result of the projectb (Number) Land parcels with use or ownership rights recorded as a result of the projectb (Number) Land parcels with use or ownership rights of females recorded as a result of the project (Number) Target land area with use or ownership rights recorded as a result of the projectb (Hectares) Average number of days to complete the recordation of a purchase/sale of a property in the land (Number) administration systemb Markets Roads constructed or rehabilitatedab (Kilometers) Active Microfinance loan accountsab (Number) Of which, held by womenb (Number) Rural Non-Farm Active SME loan accountsb (Number) Cross-cutting: Vulnerability Pregnant/lactating women, adolescent girls and/or children under age 5 reached by basic nutrition (Number) Servicesb Cross-cutting: Environment Area restored or re/afforested (Hectares) Forest area brought under management plans (Hectares) Government institutions provided with capacity building support to improve management of forest (Number) resources Land area where sustainable land management practices have been adopted as a result of the (Hectares) projectb Land users adopting sustainable land management practices as a result of the projectb (Number) Land area brought under a catchment system as a result of the project b (Hectares) Cross-cutting: Other Countries with Bank-supported agricultural public expenditure reviews (Number) a World Bank Corporate Score Card indicator b Projects under the responsibility of the Agriculture and Rural Development Sector Board only Annex 3: Agriculture Action Plan Scorecard 103 Table 8: Agriculture Action Plan Scorecard [Illustrative set of indicators] Tier 3: Development Outcomes and Operational Effectiveness Baseline Performance Indicators Unit Value Year Standard Development Outcome Ratings of agricultural projects Satisfactory operation outcomes at completionab % IEG rating 71 FY09–11 80 IBRD countries % IEG rating 72 FY09–11 80 IDA countries % IEG rating 69 FY09–11 80 Operational Effectiveness of agricultural projects Active IDA/IBRD operationsb Number 242 End FY12 Monitored Gross IDA/IBRD agriculture and related sector disbursements $ billions 3.3 FY12 Monitored Recipient executed trust fund agriculture and $ millions 105 FY12 Monitored related sector disbursementsa Average time from project concept to approval Months 17 FY10–11 Monitored Average time from approval to first disbursementab Months 8 FY10–11 Monitored Problem projectsb % 13 End FY12 15 Projects at risk b % 23 End FY12 20 Realism b % 100 End FY12 80 Pro-activity b % 71 End FY12 80 New projects which include gender analysis in design b % 68 FY10–12 100 New projects with all three aspects of gender informed design % 46 FY10–12 75 (analysis, actions, M&E)b New commitments using community-based approaches % 35 FY10–12 Monitored Analytical and advisory activities objectives accomplished b % TBD 75 DOTS rating for Agribusiness and Forestry (IFC) TBD Monitored a World Bank Corporate Score Card indicator b Projects under the responsibility of the Agriculture and Rural Development Sector Board only 104 WORLD BANK GROUP AGRICULTURE ACTION PLAN: 2013-2015 Table 8: Agriculture Action Plan Scorecard [Illustrative set of indicators] Tier 4: Organizational Effectiveness and Modernization Baseline Performance Indicators Unit Value Year Standard Lending commitments (IDA/IBRD/IFC) to agriculture ($ billions) 7.0 Average Monitored and related sectors FY10–12 IDA/IBRD 4.3 Average Monitored FY10–12 IFC 2.7 Average Monitored FY10–12 Recipient-executed trust fund commitments to agriculture and ($ millions) 238 Average Monitored related sectors FY10–12 Average cost of preparing a project ab ($ thousands) 405 Average Monitored FY10–12 Average annual cost supporting project implementationab ($ thousands) 138 Average Monitored FY10–12 Speed of preparation from Concept Note to Approvalb (Days) 502 Average Monitored FY10–12 Expenditure on analytical and advisory activities ($ millions) 26 Average Monitored related to agriculture and related sectors FY10–12 Analytical and advisory activities related to agriculture (Number) 137 Average Monitored and related sectors FY10–12 ARD family Staff level (Number) 240 End FY12 Monitored Share of staff decentralized % Monitored a World Bank Corporate Score Card indicator b Projects under the responsibility of the Agriculture and Rural Development Sector Board only