grahame dixie agribusiness adviser world bank june 26th benchmarking the business of agriculture...
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Grahame Dixie Agribusiness AdviserWorld BankJune 26th
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
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Benchmarking the Business of Agriculture Components
Deep Dives Studies
BBA components
Doing Business in Agriculture
Agribusiness Indicators (ABI) Doing Business
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Doing Business Project
Results show strong convergence across economies since 2005
Benchmarking the Business of Agriculture (BBA) as part of the larger “Agricultural Transformation Index
(ATI)
ATI ATIATIATI
Productivity
BBA
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)?• 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
• 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
What are the Deep Dives?
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Benchmarking Business of Agriculture - Transporting Agricultural Goods
Integrated approach
Licensing of trucking operations
Restrictions on foreign transport competition
Legislative framework for rural road financing
….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
Synergies
INPUTSSeedsFertilizersMechanization
MARKETSContract farmingDist. Infrastructure“Regional’ trade
PUBLIC GOODSWaterElectrificationRoads
ENABLERSTransportationFinanceICT
LAND
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The agro-industry supply chain helps understand key drivers for a commercial agricultural sector in the future
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.
Source WB, FAO CIA
Ag based
Trans. 1
Urbanizing
Developed
Trans. 2
agriculture role as an engine of
growth& poverty reduction
Encourage growth in agriculture &
the rural non-farm economy
Agriculture’s role direct producer/ agribusiness relationships & creating
good jobs
Country segmentation based on agriculture’s role in the national economy, provides deeper insights into the transformation of the agro-industry
WB Development Report 2008
Source; BBA team calculations 12
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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Source WB, ILO and FAO
Non Farming Rural Pop
Urban Pop
Source: WB, USDA; NOTE: 2000 data
Growth in Agri-Industry
Static growth in Farming
Farming Pop
Global food demand on agro-industry supply chains will be shaped by urbanizing populations & richer diets in developing regions
~ +70% 2050 VS 2010
FAO
Global Food Demand
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
17FAO, multiple research papers
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
80% +
10 -15%
30-50%
Marketable surplus
Large SHF
Medium SHF
Small SHF
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 :
Preparation
Field Work
Analysis
Expert Review
Dissemination
Feed back
July Sept March JuneDec
• 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 Communication
• Expansion of ICT services to farmers & agro-enterprises• Increased innovation in ICT services & expanded applications for agriculture & agribusiness
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
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 on-farm water management and water harvesting technologies
INPUTS , CREDIT
• Access by women farmers• Recognition of SHF voice
• ‘Smart’ SHF support (e.g. smart subsidies)
• Parastatal access to inputs
SEEDS• Rights to access own seeds• Right to breed freely• Support to entrepreneurs
• Access to ‘climate smart’ seeds
FERTILIZERS• Incentives for wide(st) fertilizer distribution and advisory services
• ISFM R&D• ISFM supply incentives• Smart subsidies for agro- eco technologies
CREDIT
• Incentives for innovative products (e.g. contracts as collateral)
• Incentives for SHF financial literary training• Incentives for SHF friendly products (e.g. agricultural development banks)
* VGs – Vulnerable Groups – women, other disadvantaged
ASFG Pillars: Recommended Policy Focus - 1
Topic Equitable free market agriculture
Smartly supported SHF agriculture
State defined agriculture
Sustainable 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
• R&D for sustainable agriculture
EXTENSION SERVICES
• Up to date extension curriculum, e.g. climate smart, gender, mkt access• Public extension service coverage, incentives for private alternatives
COLLECTIVE ACTION
• Governance of producer organizations• Protection of ‘non-legal’ cooperatives’ rights• Recognition of VGs*
• Incentives for SHF collaboration and collective action
• Legal requirement and incentives to include VGs in producer organizations• Legal requirement to assess SHF impact of economic reforms
ASFG Pillars: Recommended Policy Focus - 2
* VGs – Vulnerable Groups – women, other disadvantaged
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Benchmarking the Business of Agriculture: integrated approach
Integrated approach
benchmarks of regulatory environment 0n business of agriculture
Comparable across economies over time
Doing Business in Agriculture
In-depth metrics of a broader range of factors
Comparable across countries, but greater flexibility
Deep Dives Studies
new actionable indicators for policy makers, public officials, and private sector investors; Leverages policy change
Synergies
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
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