Donor in the Dark: Putting a spotlight on UK aid to small-scale farmers

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The UK is the sixth largest donor to agriculture in sub-Saharan Africa. And, this year, the IF campaign is calling on the UK government to increase its annual support for sustainable small-scale food production by £425 million: a fair share of the public spending needed in agricultural and rural development to achieve the ambitious goal of zero hunger by 2025. But what are the UK government’s agriculture priorities? What is the impact of the UK’s aid to agriculture on those who need it most – small-scale food producers? And, is the current approach the most effective one? With these critical questions in mind, Concern Worldwide - UK, Oxfam GB, and Self Help Africa conducted research into how much of the UK’s aid goes to agriculture, particularly small-scale farmers, and the impacts of this aid. We found that it is nearly impossible to know how much aid to agriculture is spent on small-scale farmers, and nearly as difficult to find the impact of the aid on poor farmers. The result is a set of key recommendations to DFID for prioritizing investment in small-scale agriculture and achieving the best value for money through their agricultural aid.
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  Donor in the Dark Putting a spotlight on UK aid to small-scale farmers Monique Mikhail, Claire Hickson, and Robin Willoughby 1   Josephine Mukambanda, mother and mushroom farmer, Rwanda. Photo: Simon Rawles  INTRODUCTION Food security and agriculture are once again centre stage in the global political discourse, and there is growing consensus that support for small-scale producers is critical to achieving food security for poor people in developing countries. 2  The scale of the problem is magnifying: we are experiencing a record number of food emergencies; food stocks are at their lowest in years; major droughts in the US, Russia, and elsewhere have caused food prices to rise dramatically once again; and the weather patterns we are now seeing are consistent with climate change predictions. While donors and developing country governments have been stepping up support to food security, agriculture, and nutrition since the food price rises of 2008, it is not nearly enough to match the need. In addition, the global and European financial crises continue to constrain government budgets, increasing the gravity of public spending decisions. Despite the struggle at hand, the UK Government has committed to reaching the target of spending 0.7% of GNI on development in 2013, and food security seems to be rising on the agenda. The 2013 joint NGO campaign on food and hunger will be calling for an annual increase of £425 million in support of sustainable small-scale production as the UK’s fair share of the public spending needed in agricultural and rural development to achieve the ambitious goal of zero hunger by 2025. This only represents 21% of the spending gap to reach 0.7%. Further, the UK’s announcement at Rio+20 to provide up to £150 million to support climate change adaptation for small-scale food producers in Africa shows recognition of the importance of supporting small-scale food production, particularly in Africa.From 2008-10, total bilateral and multilateral UK commitments to agriculture in sub-Saharan Africa were US$182.8 million, making the UK the 6th largest donor to the agricultural sector in the region. To ensure that this money is having the greatest possible impact, a number of questions are raised: What are DFID’s agriculture priorities? What is the impact of the UK’s aid to agriculture on those who need it most - small-scale food producers? And, is the current approach the most effective one?With these critical questions in mind, three organizations (Concern Worldwide - UK, Oxfam GB, and Self Help Africa) commissioned desk research to gain a clearer picture of the amount of UK support to agriculture in Africa, particularly small-scale agriculture. Finding that the lion’s share of UK aid to agriculture in Africa is channeled through multilateral organizations (primarily the World Bank, EU, the African Development Bank, and IFAD), we also conducted a review of available evaluations of the impact of these institutions’ agriculture programmes on small-scale producers. (See Annex 1 on the back page for a description of the methodology used.)Our research revealed that finding answers to these questions is challenging due to the lack of publicly available data. As a donor committed to results, and in order to achieve the best value for money, the UK needs to address some shortcomings in the transparency and accountability of its agricultural aid commitments. Therefore, to encourage a fruitful dialogue on UK support to small-scale agriculture, we highlight four critical recommendations to DFID, and identify six outstanding questions: RECOMMENDATIONS ã  Set goals & pathways on agricultural investment: DFID should provide a clear statement of intent on what it wants to achieve through its support to agriculture, including small-scale agriculture, and how it will achieve it through its future investments. ã Become an active fund manager: Assuming that the bulk of DFID’s agricultural investment will continue to be channelled via multilateral agencies, DFID should become a more active ‘fund manager’, engaging in greater dialogue with partners to ensure its funding delivers on its own objectives and improve the impact of donors’ collective investments in small-scale agriculture. ã Improve effectiveness and evaluation: DFID needs to work with other donors to set clear targets, timelines and impact indicators for their support to small-scale food producers and to improve the evaluation of this support. These impact indicators should be measured against poverty, food security, and nutrition goals. ã Evaluate aid to small-scale producers: DFID and other major bilateral and multilateral donors should commission a joint evaluation of agricultural programmes and specifically their support to small-scale food producers to identify ways to make it more effective in the future. OUTSTANDING QUESTIONS ã  Fit for purpose: What is the current administration’s policy on agriculture and does it match DFID’s ambition? ã Policy framework: How is the UK using the EU Food Security Policy Framework vs. pre-existing DFID policy on agriculture to guide its agricultural investments? How is it changing its practices to follow the new framework? ã  Bilateral vs. multilateral spending:   Is the current bilateral/multilateral split in the best interests of small-scale food producers? Is there a need for a rebalance? Or, can DFID demonstrate that giving more to multilaterals works? ã  Setting the multilateral agenda: Perhaps there is a vast source of information that is unavailable publicly which could shed light on the impact of multilateral programmes on small-scale food producers’ livelihoods and food security. Is DFID fully aware of the impacts multilateral programmes are having? Is it actively engaged in setting the agenda for and evaluating multilaterals’ programmes? DONOR IN THE DARK 1  ã Monitoring, evaluating and reporting: How does DFID monitor, evaluate, and report the impacts and effectiveness of its agricultural investments, and particularly those that target small-scale food producers? ã Tracking aid to small-scale food producers: With the accounting systems at hand, we can only come to minimum and maximum estimates that are wildly different and subject to high levels of uncertainty. Why isn’t ODA to small-scale agriculture accounted for properly, and what problems does this raise? How can the tracking of ODA to small-scale producers be improved?’ THE STORY OF AID TO AGRICULTURE Donor aid to agriculture: a checkered past 3   Agricultural aid has had a checkered past. In the 1970s, donors encouraged small-scale agriculture as a way to address hunger, placing a strong emphasis on state delivery of agricultural services, which mirrored the successful model of agricultural development that had been used in now-developed economies. However, partly due to disappointing results based on poor design and unrealistic expectations, declining quality of governance in parts of Africa, and limited state budgets, the 1980s saw a shift in development thinking. A new emphasis was placed on a greater role for the private sector, support for rural diversification and livelihoods, and a restriction of support to government’s core functions of regulation and funding public goods. As a result, over the next few decades, many public sector funding gaps were left unfilled, causing agricultural development to stagnate as donor aid and developing country government support both declined. 4  The UK was no exception (see Figure 1). Declining focus on agriculture Agriculture’s fall from grace led to its unique profile among UK aid to social sectors. Not only does the overall spending lag significantly behind other sectors but it is channeled predominantly through multilateral commitments instead of administered bilaterally (see Figure 2). 5  The un-earmarked funding to multilateral agencies 6  as a proportion of total UK aid to agriculture in sub-Saharan Africa has been growing - from 65% in 2000-02 to 84% in 2008-10 – and is higher than both the total ODA proportion (43%) and that of other sectors (education 28%, health 29%, and water and sanitation 43%). While the underlying causes of a lack of emphasis on agriculture have already been described, the focus on multilateral channels is likely due to the 2008 Accra donor commitment to consider their respective comparative advantage in various sectors. Clearly, on agricultural aid, the DONOR IN THE DARK 2 “Agriculture fell out of favour with DFID and other donors in the 1990s and, since then, the plight of poor farmers has worsened. Today, most small- scale farmers are unable to access the basic services which could help them increase their productivity and forge a sustainable livelihood from agriculture. Despite the obvious contribution of agriculture to poverty reduction, DFID has been slow to re-engage with the sector but is now showing a willingness to do so. “ House of Commons International Development Committee review of DFID’s Agriculture Policy, 2004 1%0%2%3%4%5%6%7%8%9%199619971998199920002001200220032004200520062007200820092010 Figure 1: UK aid commitments to agriculture Agriculture as a % of total ODA (3 year rolling average)  UK has identified multilateral organisations as having that comparative advantage. Food aid over agricultural investment Agriculture has also fallen in prominence within the realm of food security spending. Over the past decade, as food security has risen on the global agenda, the UK’s food security spending in sub-Saharan Africa has increasingly favoured short-term food aid versus long-term aid to small-scale food producers which could build their resilience to shocks. Between 2000-02 and 2008-10, emergency food aid grew by 100% while agriculture aid grew by only 17%. This shift in priorities to favour emergency food aid over agricultural support has been mirrored by all DAC donors (see Figure 3.) While it is commendable that the UK and other donors help vulnerable people in times of food crises, and it is critical that this support continues, the frequency and magnitude of these crises have been rising and are expected to continue rising. If the UK were to emphasise the building of small-scale food producers’ adaptive capacity to address such shocks, it is likely that smaller increases in emergency food aid would be necessary. Lack of clarity in agricultural policy DFID agricultural policy evaluations were conducted 3 times in the past decade – 2003-4, 2005, and 2009 – which all call for a greater emphasis on the lagging agricultural sector, and particularly a focus on small-scale producers as the path to food security success. Unfortunately action on these recommendations has been slow. Further, in 2011 the UK agreed to use the EU Food Security Policy Framework, which strongly supports sustainable, equitable, and resilient small-scale food production, as its guiding policy. It would be useful to clarify which of these policies DFID is following through its agricultural aid, and if progress is being monitored. Searching for the smallholder needle in the haystack In order to place greater emphasis on support to small-scale producers, it is necessary to provide a snapshot of the current reality of aid to this critical group of entrepreneurs. Further clarity is also needed on the impact that aid is expected to achieve. With the current publicly available monitoring, evaluation, and reporting information (DFID and OECD-DAC), it is almost impossible to reliably account for how much support small-scale food producers actually receive. Data on aid intended for small-scale food producers is not transparent and is largely dependent on inconsistently reported project level descriptions. This means that in order to assess the quantity directed towards small-scale food producers, major assumptions are inevitable, and this in turn skews the data. Given these limitations, our best estimates of support to small-scale food producers range from 30% to 58% of total UK aid to agriculture in sub-Saharan Africa. While the amounts are not insignificant, the margin of error in the range is indicative of the inadequacy of measurement. Further, the UK’s aid to small-scale food producers is extremely fragmented and from the recipient perspective, not Figure 2: Average 2008-10 UK bilateral and multilateralcommitments for social sectors 1000200300Agriculture MULTILATERAL EducationHealthWater & Sanitation BILATERAL 84%18324728522228%29%43%     U    S    $   m    i    l    l    i   o   n    (   c   o   n   s    t   a   n    t    2    0    1    0   p   r    i   c   e   s    ) DONOR IN THE DARK 3
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