Food, Agriculture and Natural Resources Policy Analysis Network (FANRPAN) Food, Agriculture and Natural Resources Policy Analysis Network (FANRPAN)

Donor Consultation Workshop on WDR 2008
The Future Agricultures Consortium recently hosted a discussion workshop on the WDR 2008. The theme was "Politics and Policy Processes":
December 2006
Global Donor Platform for Rural Development

Acknowledgements: FANRPAN acknowledges the Global Donor Platform for Rural Development as the source of this report:

Download the whole minutes: Minutes Donor Consultation Workshop, Washington 2006

The Donor Consultation Workshop on World Development Report 2008, held on December 8, 2006, gave a good overview to latest on-the-edge findings of the WDR team and for the first time provided the opportunity for the wider donor community to directly interact with the team.

There was consensus among participants that the service of the Platform to collect best practice reports was a real added value to the team and its members. In the spirit of the Paris Declaration, participants decided to have the best practices featured as “no logo” – without the contributing organisations’ names and logos but only with the name of the Global Donor Platform. Further outcomes included the reaffirmed commitment of the Platform to provide its communication expertise to the team to contribute to a more holistic dissemination strategy, as well as the importance to closer interact with China as an emerging important player.

Minutes (with presentations to download)

The donor consultation workshop for the WDR 2008 was divided into four sessions:

The minutes follow this agenda. However, during the first session, various aspects were touched upon, such as the process of elaborating the report, its dissemination, and others.

A short summary of each presentation is given. When no presentation documents were provided, the summary in these minutes is more detailed.

The last paragraph highlights follow-ups for the Global Donor Platform for Rural Development.

Session 1

Current State and Story Line of WDR 2008

Derek Byerlee: Current State and Story Line of the WDR 2008

In the opening presentation, Derek Byerlee, co-editor of the WDR 2008, gave an overview on the time schedule for WDR 2008, its context, and the five roles of agriculture in development strategies. He presented the country categorization, the reports main messages and its six supporting messages. He also outlined the difficulties for the WDR-team to restrict on key aspects for A&RD and the challenge to handle any “hot potatoes”: controversial topics, such as trade reforms or GMOs.

Antti Seelaff: Platform Contributions to WDR 2008

The contributions of the Global Donor Platform for Rural Development to WDR 2008 include the information exchange between the WDR-team and the Platforms member organizations, the collection of best practices, the consultation process, and the dissemination of WDR.

Session 1 - Discussion Outcomes

General Remarks concerning the content of WDR 2008

Neglect of pastoralism: In the recent outline of the WDR 2008, so far, pastoralists are not covered. Since in Africa 40 % of the area are dry lands, and pastoralism is the most common and adapted livelihood strategies in these areas, participants noted that it should be reflected in the report.

Categorization of countries and producers: The country typology (Agriculture-based, transforming, and urbanizing Economies) meets the heterogeneity of nations and regions only insufficiently. One suggestion was, to categorize according to producer characteristics:

  • large-scale producers, with good infrastructural access, mostly producing for urban and export markets,
  • small-holders: economically active farmers, who have potential to tap markets, and might take advantage of entrepreneurial opportunities, and
  • chronically vulnerable farmers, subsistence farmers and pastoralists, often in marginalized areas, most vulnerable to shocks (e.g. climate variability)
The problematic categorization of smallholders into “classes” could also be overcome by using the framework of five rural worlds that are described in the OECD/DAC publications (e.g. OECD/DAC, 2006: Promoting Pro-Poor Growth – Agriculture).

Subsidies vs. public goods: How can donors engage in discussions (and partner government decisions) where public investments should be placed?

Example Nicaragua: A great tendency towards subsidies can be observed, which results in the risk that governments take the “old medicine”. Since the role of the state has been increasingly restricted to its core functions, basic “rural” public goods, such as rural infrastructure, experienced a lack of finances. In many cases the private sector is not strong enough to balance the lack of government investments in “rural public goods”, and therewith to support smallholders. If the state focuses on subsidizing market-oriented enterprises only, smallholders in marginalized areas, and chronically vulnerable farmers and pastoralists, somehow would totally be neglected.

Several participants mentioned that they would very much appreciate if the WDR would provide convincing argumentation and empirical evidence that state investments in public goods are necessary to foster agricultural and rural development, and are a more promising way than subsidies.

Forestry: A question arose around the neglect of forestry in the WDR definition of agriculture – it remains unclear how the problematic issue of converting forest lands into unsustainable land use systems will be dealt with?

General Remarks concerning procedure of writing and disseminating WDR 2008

Best practices: Participants suggested that in the spirit of harmonization, it would be good if cited best practice examples would not appear under the name and logo of the individual contributing agency, but under the logo of the Donor Platform. There was no objection to this comment for which reason the Donor Platform will work closely together with the WDR team in ensuring a “no logo policy” of contributions.

The WDR will be disseminated according to the standard procedure of the World Bank. However, as already discussed in a former meeting of the Donor Platform, members would perceive it as enormous added value if the there was a more holistic approach to the dissemination.

  • How can the main messages be transported to developing country governments without being too much of a donor product?
  • How can it reach decision-makers inside and outside of the A&RD sector to reflect the importance and relevance of A&RD for poverty reduction?
  • What kind of messages need to be developed? Who needs to be addressed?
While participants already quoted a few possible add-ons, the Donor Platform reaffirmed its suggestion to contribute to the dissemination of the WDR with its communication and networking experience. In the beginning of next year the Platform’s Communication Specialist would work closely with the WDR team to develop add-ons to the standard dissemination strategy.

Some more detailed comments:

One possibility would be to organize workshops with government (also decision-makers outside the agricultural sector) and donor representatives in the partner countries. In these workshops, the WDR 2008 should be presented, and its main messages should be compared with the countries situation. It should be discussed how the messages / recommendations of WDR 2008 could be applied to the countries development strategies, and, which of those could be integrated into the national strategies. The Donor Platform could be a major vehicle in this pro-active work at the national level.There was consensus that the best use of the WDR would be to convince decision-makers outside the agricultural / rural sector in not only, but especially Africa. Maybe the introduction of the WDR 2008 could be written by somebody from the African Union? This would indicate the political weight the report should gain, and show appreciation of the new African initiatives (CAADP).

Session 2

Critical Elements of a Strategy for Africa

Rob Townsend: Key Elements of an Agriculture-for-Development Strategy for Africa

The central position of the strategy, elaborated by the WDR-team so far, is the primacy of agriculture as a growth strategy that should, in first instance, focus on entrepreneurial smallholders in the best endowed regions to ensure success. Taking into account that state expenditures for growth often compete with those for food security, main components of the strategy are improvements of the macro-political environment, the broad sharing of growth benefits, and institutional development with respect to regionalization, decentralization and participation.

Michael Wales: Summary of the discussions on CAADP

From his key question “How to portray the CAADP initiative in the WDR without being too positive or too negative?”, Michael Wales pointed to the political economy of investments in A&RD: Long-term commitments of both partner governments and donors are necessary to realize a successful implementation of CAADP. With this framework, African governments have declared to invest 10% of their budgets for agriculture (which lacks a definition) to achieve at least 6% agricultural growth.

FAO, currently, supports the initiative with the development of investment strategies (How to implement with an overall budget estimation of 251 Billion USD?). Most recent development of CAADP is the organization of Partnership Platforms, and country implementation platforms.

The challenge of this ambitious, “continental” framework is its implementation at regional level – where the Regional Economic Communities should lead the process – and at national level.

The supreme umbrella to discuss the CAADP process within the global political context is the African Partnership Forum (AFP). The high level political Forum discusses all aspects and sectors of Africa and has developed a “scorecard” for assessing process in given areas, using a traffic light-scheme to express progress or stagnation. The most recent APF held in Moscow in October 2006 valuated the CAADP implementation process as four out of six analyzed aspects of CAADP were given a red light, two aspects got an amber light – meaning the implementation of CAADP is lagging significantly behind its schedule.

Session 2 - Discussion Outcomes

The CAADP Initiative

  • While the implementation of CAADP can be portrayed very critical, one also has to consider that it is a new initiative for developing agriculture in Africa, and that it represents the demanded African ownership; and
    1. Progress can be seen: there is increasing understanding of what needs to be done concerning political leadership, as also financial and technical support.
    2. CAADP has the potential to significantly increase financial resources for agricultural development.
    3. Most important seems to be a long-term commitment of donors to this process as well as the African ownership of this process.

  • The institutional landscape of the CAADP is a “moving target” and difficult to approach by the donors, but still, taking the framework with all its insecurity it appears to be a basis for enhancing African agriculture.

  • Still unclear is, which investments are included in the agricultural sector; no official agreement / decision has been formulated yet.

  • How can it be assured that agriculture is addressed appropriately in the national development strategies?
Quality of Growth

  • Example Mali: There has been fair growth rates in Mali, but it has not had effects in terms of poverty reduction, the “trickle-down” effects, favouring the poor, did not realize.

  • With respect to the target audience of WDR (with respect to senior policy makers in Africa), the wording in the report should be taken care of (farming vs. agriculture), meaning that use of the term “classes” when talking about smallholders is very critical; instead, the report should look at opportunities, not leaving out e.g. landless peasants (see also Session 1).
Productive safety nets

  • Food safety nets / productive safety nets have the potential to perpetuate the chronically vulnerable rural poor.
  • The assets of those relying on (food) aid need to be protected.

Session 3

Moving Forward on the Global Agenda – Better Coordination and Commitment

Christoph Kohlmeyer: Climate Change, Biofuels and Aid Coordination

The global agenda is complex (e.g. intellectual property rights) and partly unfinished (e.g. trade reforms); nowadays it appears almost overloaded with challenges affecting the whole population of our planet. The required efforts to deal with climate change are basically twofold:

  • mitigation of further emissions of green house gases, and
  • adaptation to the already appearing effects of climate change.
In a short-term perspective, the increasing weather variability makes traditional agricultural knowledge more and more obsolete. In order to adapt to this unreliability, agricultural innovation and extension systems need to be reformed and regional weather forecasts (incl. early warning systems) to be improved. Safety nets for the most vulnerable have to be extended and (weather) insurance systems for small-holders to be established.

Long-term requirements are the development of new crops, and new farming systems. Taking into account the time period (25 years) for the realization of research efforts, immediate action must be taken.

Although the hopefully increasing political weight of mitigation efforts prospects potential for biofuels and energy production in rural areas, the options within this upcoming sector are limited: the development of biofuel productivity cannot be foreseen, neither the development of other (competing) energy sources; the competition of food with energy production has to be observed critically, same counts for potential monocultures of energy crops without small-holder participation with its negative effects on biodiversity. With all these risks and potential negative impacts, safeguards need to be developed asap.

Aid coordination: Taking the Paris Declaration as a basis, key elements for its realization are increasing investments in the partner countries institutions, and the development of governance structures as well as human capacities. The obstacles for aid complementarity have to be reflected from the partner countries into the agencies headquarters. Other key issues are new directions of accountability (taxpayers; recipients; local populations), the optimal realization of new tools attached to the Paris Declaration (e.g. basket funding) which potentially are very powerful but also contain the risk of destructiveness, and their adaptation to the agricultural sector where state involvement is minimal.

Irina Klytchnikova: Preliminary messages of WDR on Climate Change and Biofuels

Agriculture is on the one hand a large contributor to climate change (emissions from ruminants, rice paddies) and it offers huge potential to reduce green house gas emissions, especially through reducing deforestation and land degradation. On the other hand climate change will have major impacts on agriculture. Therefore, adaptation efforts need to be scaled up urgently to reduce losses.

After giving an overview on the heated debate about possible benefits of biofuels, Irina Klytchnikova focused on the economic viability of biofuels, which depends on oil prices and feedstock prices. Since these are fluctuating, subsidies for biofuels are currently not justified by the benefits.

Session 3 - Discussion Outcomes
Climate Change

  • Climate change is strongly linked to variability of local climate conditions, thus to vulnerability of farmers; this link including its importance for social and productive safety nets should be stressed out, the WDR should not directly rush from climate change to weather insurances (the Asian Development Bank produced a good paper on insurances).
  • The Human Development Report 2006 focuses on water issues, there might be interesting issues for the WDR.

  • Instead of analyzing single uses of energy plants, a biomass strategy, taking into account heat energy and transport, seems more appropriate to analyze the potential of this sector.
  • The maximization of economic benefits is one important aspect of biofuels, but the economic viability of biofuels doesn’t only depend on the oil prices, the sector is strongly politically driven, synergies must also be taken into account (environmental costs, push for technology development through government subsidies).
  • When using the ESMAP-study, which calculates subsidies out, it should be considered that environmental costs are not included.
  • Bio-Energy and biofuels are not equal to “clean green energy”, there is a huge amount of fossil fuels required for the current technology for ethanol production! This aspect can be considered by looking at net emissions.
Harmonization and Alignment

  • New aid modalities (e.g. basket funding) and their application to agricultural/rural development (What are innovative modes of channelling funds into rural areas?) very interesting and challenging: Basket funds have been tried but didn’t really work out (main output: high transaction costs on side of the donors).
  • - With respect to Africa, new upcoming donors, such as China, need to be taken into account. On the CGIAR meeting Chinese representatives presented a “New Chinese Agricultural Policy for Africa”, and they show commitment (Maybe further information from S. Fan, IFPRI).

Session 4

Private Investments for Agriculture

Kees van der Meer: The Rural Investment Climate – It differs and it matters

Starting with the presentation of the origins of investment climate (IC) works, Kees van der Meer then pointed out the importance of the private sector development and rural non-farm activities, which has been acknowledged since the late 90s and let to detailed analyses of the rural investment climate. After emphasizing the linkages between IC and poverty, he summarized the results of a recent study that analyzed the rural investment climate in four countries, showing up constraints to rural business, mentioned by the interviewees.

Session 4 - Discussion Outcomes

Concerning the study Kees van der Meer presented

  • The study focuses on non-farming activities, i.e. the connection between farmers and markets through middlemen, processing, other services, etc., agricultural activities of households are not covered by the study.
  • The study does not take into account informal lending mechanisms.
Sources for Investments

  • In Tanzania only 1% of the investments origin from formal lending, about 75% of investments are financed through private savings. This leads to the conclusion that the importance of formal lending mechanisms (rural banks, micro-financing, etc.) might be overestimated.
  • One evaluation of microfinance in Africa came to the conclusion that there is no general lack of available credits, but the type of credits were important (the micro-finance scheme that won the Nobel-price for its success in Asia failed in Africa).
Other issues

  • If large enterprises are those that are growing faster than others, should development partners focus on those (with respect to employment effects)?
  • Required collaterals (strongly linked to land title issues) and high interest rates often impede the financing of investments.
Key message for WDR (van der Meer)

  • Governments and development agencies have more powerful means when improving the frame conditions – removing constraints for private investments in rural areas – than by direct interventions, such as subsidies.
  • This political decision on how to invest might be of enormous economic gains, the benefit may exceed returns of subsidizing investments of economic enterprises.
Follow-ups for the Global Donor Platform for Rural Development

Follow-up support to the communication and dissemination strategy for WDR 2008.

The Donor Platform will provide key experiences and resources to develop a more holistic dissemination strategy for the WDR, including its distribution to partner countries, development partners and key decision makers.

Update the draft on Donor Platform’s approach and lessons learned from the pilot countries.

Beginning of November the Platform Secretariat sent a first description of the Platform's approach, including first lessons from the pilot countries to the WDR team. A revised version with more detailed information especially from the pilot countries is currently elaborated.

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