Benchmarking the Business of
Agriculture
Using Indicators to inform better
Agricultural Policies : an opportunity for
a partnership between the WBG & and
the UK Development Sector
Grahame Dixie
Agribusiness Adviser
World Bank
June 26th
Benchmarking the Business of Agriculture Components
BBA
components
Deep Dives
Studies
Doing Business
in Agriculture
Agribusiness
Indicators (ABI)
Doing Business
2
Doing Business Project
Results show strong convergence across economies since 2005
3
Benchmarking the Business of Agriculture (BBA) as
part of the larger “Agricultural Transformation Index
(ATI)
ATI
ATI
ATI
ATI
BBA
Productivity
Sustainability
Gender
Etc..
Overview of Benchmarking the Business of Agriculture (BBA)
Objective: “To inform & to leverage policy reforms which lead
to a more modern agriculture sector, built primarily on the basis
of commercially viable family farms”
Key elements
– Focusing on 8 strategic areas: inputs, finance, transport, energy,
communication, markets, land & water
– Will benchmark countries on short term regulatory and
implementation issues, plus longer term policy, investments &
important metrics
– Program will operate over a purposeful sample of 80 countries,
1st year pilot : will fine tune the process & indicators in 10 countries, prior
to large scale roll out
What is Doing Business in Agriculture (DBA)?
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Focuses on laws and regulations affecting the business of agriculture and their
enforcement
Provides actionable indicators, which are consistent over time and comparable
across economies
DBA indicators allow countries to benchmark their agricultural regulatory
framework on the books and in practice
What are the Deep Dives?
•
•
•
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Builds on the lessons from Agribusiness Indicators (ABI) project on productivity,
market access, and policy environment for agriculture
Take a broader and longer term view , beyond regulatory items aim to shape future
policies
Identify presence or absence of key policies and the policy setting process,
Generate key metrics which to enable policy makers to better understand, measure &
benchmark their county’s position & tracks change over time
Highlight successful examples of positive policy induced change
Benchmarking Business of Agriculture - Transporting Agricultural Goods
 Licensing of trucking
operations
 Restrictions on foreign
transport competition
 Legislative framework
for rural road financing
 ….
Integrated
approach
Synergies
Doing Business in
Agriculture
 Access to quality rural
roads
 Public expenditure on road
maintenance
 % of rural population
within a certain number of
hours to urban market
 ….
Deep Dives Studies
new actionable indicators on rural transport
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The agro-industry supply chain helps understand key drivers for a
commercial agricultural sector in the future
1
INPUTS
Seeds
Fertilizers
Mechanization
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LAND
PUBLIC GOODS
Water
Electrification
Roads
ENABLERS
Transportation
Finance
ICT
MARKETS
Contract farming
Dist. Infrastructure
“Regional’ trade
Project Plan
Policy Priorities:
 Facilitating access to Market Opportunities,
 Needs strong, competitive, professional, & market orientated
farming base,
Effected by:
A country’s position on the path of transition from agriculturally
based to urban based economies.
Country segmentation based on agriculture’s role in the national economy,
provides deeper insights into the transformation of the agro-industry
agriculture role
as an engine of
growth& poverty
reduction
Ag based
Urbanizing
Trans. 2
Trans. 1
Developed
Agriculture’s role direct
producer/ agribusiness
relationships & creating
good jobs
Source WB, FAO CIA
Encourage growth
in agriculture &
the rural non-farm
economy
WB Development
Report 2008
Regions are at very different stages of agro-industry transformation – SSA,
and to a lesser extent EAP and SA, are at the earliest stages
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14
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Source; BBA team calculations
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Urban Pop
Non Farming
Rural Pop
Farming
Pop
Growth in AgriIndustry
Static growth in
Farming
Source: WB, USDA; NOTE: 2000 data
Global food demand on agro-industry supply chains will be
shaped by urbanizing populations & richer diets in
developing regions
Global Food Demand
~ +70%
2050 VS 2010
FAO
Urban food demand will be the predominant challenge for future
agro-industry supply chains in developing regions
Source: BBA Team extrapolation of UN population and FAO per cap kcal forecasts
Who will supply this demand: the need to segment Smallholder farmers as
they are not a homogenous supply base, but when area farmed plus marketable
surplus are overlaid, the large and medium scale small holders offer the greatest
potential
Marketable surplus
Large SHF
80% +
Medium SHF
30-50%
Small SHF
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FAO, multiple research papers
10 -15%
The urban food market provides an exciting opportunity
but:
 Without a strong & competitive supply base:
 Producers increasingly distanced from urban demand:
 Poverty will increasingly be an urban issue:
 The key driver is outside the control of agriculture:
Key elements in the improving enabling policy
environment
• Capable and competitive farm base - credit for investment, access to
improved inputs, greater skills, mechanisation
• Market Insights - market knowledge, strengthened producers
organisations,
• Market access infrastructure – roads, distribution, market places
• Land, water, energy availability - regulations to facilitate a secure &
efficient land market, access to irrigation, electricity
• Agribusiness capability - enabling business environment, access to
finance, electricity, water, contractual relationship for raw material
• International, regional market capability – facilitating trading across
borders, harmonised quality standards,
Time Line :
July
Sept
Dec
March
June
Preparation
Field Work
Analysis
Expert Review
Dissemination
Feed back
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Country selection,
Refinement of indicators, additions, refocus,
Local collection of information,
Creation of cadre of country respondents,
Capacity building program, use of indictors to inform policy
& empirically based policy dialogue
And if you have been . . .
Thanks, for listening
Area
Priority Policy Outcomes
Access to
Markets
•Ability of farms & firms to respond to domestic urban demand growth
• Enablement of producer organizations to participate in domestic market supply
• Maximization of regional trading opportunities
Land
• Ability for farm land consolidation & expansion
• Certainty & enforcement of tenure security and rights
Access to
Finance
• Lender flexibility to serve small/medium farms &firms sufficient protection for
loans
• Increased collateral flexibility for small farms and SME agro-enterprises t
• Increased availability of institutionalized credit support services
Transport
• Access to quality rural and trunk road infrastructure
• Efficient transport services for agricultural goods
• Reduced transport prices and time-distance to markets
Water
• Adequacy of farmer access to irrigation
• Efficient use and equitable affordability of irrigation
• Adequacy of industrial water supply
Electrification
• Adequacy of farmer & agribusiness access to electricity
• Efficient use and equitable affordability of power supply
• Reliable and consistent power supply
Area
Priority Policy Outcomes
ICT
• Expansion of ICT services to farmers & agro-enterprises
• Increased innovation in ICT services & expanded applications for
agriculture & agribusiness
Communication
Seeds
• Systematic ‘refreshing’ of quality commercial seed varieties
• Ability to source & access best commercial seeds from all potential
supply sources (including foreign suppliers)
• Favorable business environment conducive for private sector
participation
Fertilizer
• Affordable access to soil testing
• Adoption of appropriate nutrient programs , macro & micronutrients
• Sufficient; accessible and affordable nutrient supply for all commercial
farmers
Mechanization
• Affordable, access to mechanization services for all farmers
• Ability to sustainably achieve expected performance
• Increased innovation in locally relevant mechanization
ASFG Pillars: Recommended Policy Focus - 1
Topic
Equitable free market
agriculture
Smartly supported
SHF agriculture
State defined
agriculture
Sustainable
agriculture
LAND
• Land title, registration
• Recognition of customs,
international guidelines
• Tenure security, esp.VGs*
• Sustainable mgmt. of
common property
resources
WATER
• Infrastructure $$
• Water use policies
• Governance of private
water resources
• ‘Land grab’ implications on
water rights
• VG H2O rights protection
• Development of onfarm water management
and water harvesting
technologies
INPUTS ,
CREDIT
• Access by women farmers
• Recognition of SHF voice
SEEDS
• Rights to access own seeds
• Right to breed freely
• Support to entrepreneurs
• Incentives for innovative
products (e.g. contracts as
collateral)
• Parastatal access to
inputs
• Access to ‘climate
smart’ seeds
• Incentives for wide(st)
fertilizer distribution and
advisory services
FERTILIZERS
CREDIT
• ‘Smart’ SHF support (e.g.
smart subsidies)
• Incentives for SHF financial
literary training
• Incentives for SHF friendly
products (e.g. agricultural
development banks)
* VGs – Vulnerable Groups – women, other disadvantaged
• ISFM R&D
• ISFM supply incentives
• Smart subsidies for
agro- eco technologies
ASFG Pillars: Recommended Policy Focus - 2
Topic
Equitable free market
agriculture
Smartly supported
SHF agriculture
State defined
agriculture
MARKETS
• Boost local demand
• Fair international trade
(West’ subsidies, tariffs,
production incentives)
• Public extension service
training on contracts,
international markets
participation
• Preferential
procurement of SHF
output, especially VGs
R&D
• % Ag budget for R&D
• Incentives for private sector
R&D
• SHF recognition in R&D
agenda
COLLECTIVE
ACTION
• R&D for sustainable
agriculture
• Up to date extension
curriculum, e.g. climate
smart, gender, mkt access
• Public extension service
coverage, incentives for
private alternatives
EXTENSION
SERVICES
• Governance of producer
organizations
• Protection of ‘non-legal’
cooperatives’ rights
• Recognition of VGs*
Sustainable
agriculture
• Incentives for SHF
collaboration and collective
action
* VGs – Vulnerable Groups – women, other disadvantaged
• Legal requirement and
incentives to include VGs
in producer organizations
• Legal requirement to
assess SHF impact of
economic reforms
Benchmarking the Business of Agriculture: integrated approach
Integrated
approach
 benchmarks of
regulatory environment
0n business of
agriculture
 Comparable across
economies over time
Synergies
 In-depth metrics of a
broader range of
factors
 Comparable across
countries, but greater
flexibility
Deep Dives Studies
Doing Business in
Agriculture
new actionable indicators for policy makers, public officials, and private
sector investors; Leverages policy change
26
The urban food market provides an exciting
opportunity but:
Without a strong & competitive supply base:
 easily lost to imports ,
 Agri-processing cannot establish without raw material suppliers,
Producers increasingly distanced from urban demand:
 Market servicing becomes more important, & difficult,
 Transport and post harvest gain greater significance,
 As does quality, quality standards , food safety & changing demand ,
 Market Knowledge is vital
Poverty will increasingly be an urban issue:
 provision of staple foods at sensible prices ever more critical,
 absolute need secure & stable supplies
The key driver is outside the control of agriculture:
 The money in the system – growth in larger economy