Methodology: Defining agriculture and food security

Methodology: Defining agriculture and food security

In its most recent assessment, the OECD-DAC includes activities in agriculture, forestry and fisheries in its definition.⁷ This is problematic when applied to donor commitments. For example, many components of forestry cannot be said to contribute to food security. Further, the individual purpose codes⁸ that make up fisheries do not enable separation of aquaculture – which many would consider a rural livelihoods-based agricultural activity – from marine fishing, which is not.

This report, therefore, takes only the agricultural component of the OECD-DAC definition as its point of departure, as reported through the CRS. This includes support to (See annex for definitions of these activities):

• 
  agricultural sector policy, planning and programmes;
  
• 
  agricultural land and water resources;
  
• 
  agricultural development and inputs;
  
• 
  crops and livestock production;
  
• 
  agricultural credit;
  
• 
  cooperatives;
  
• 
  agricultural education;
  
• 
  training and research;
  
• 
  institutional capacity building and advice, and
  
• 
  alternative agricultural development to displace narcotics cultivation
  

This analysis, therefore, will also consider other codes outside agriculture, including rural development and budget support. For reference, it will also trace wider investments such as agro-industries and transport and storage infrastructure, the latter of which has been identified as one of the CAADP pillars.

Finally, the analysis will also consider a range of broader activities including emergency and development food aid, basic nutrition and social welfare. Donor investments in these areas were assessed in the Expert Group’s assessment on G8 efforts to address food security, presented at the 2009 L’Aquila summit (cited above). It is the view of this paper that these activities were included to capture and assess previous (largely qualitative) commitments on ‘short term’ measures addressing food security, while medium and long-term measures, the focus of L’Aquila itself, should only consider agriculture (see above).

This analysis will detail current patterns of agricultural development assistance, and consider trends from 2000-2008. It asks what has happened to:

• 
  volumes of agricultural assistance,
  
• 
  geographical distribution of assistance
  
• 
  use of agricultural development assistance
  
• 
  relevant DAC non-agricultural codes, and their significance relative to agricultural aid
  

References to ‘agricultural assistance’ refer to the above definition unless otherwise stated. When related to overall aid, ODA volumes exclude debt relief. Sectoral data is limited to commitments rather than disbursements.¹¹ Comparisons over time therefore take averages – 2000/03 and 2005/08 in order to smooth the effects of lumpy commitments that may be disbursed over a number of years.

Global volumes

General agricultural trends: In 2008 agricultural ODA was USD 6.3 billion, a 74% increase over 2000 levels in real terms. This compares to an 88% increase in total ODA assistance over the same period.¹² Between 2000-03 and 2005-08 there has been, on average, a 32% increase in agricultural aid. Since 2000, assistance to the agricultural sector has remained consistently below 5% of total ODA (with the exception of 2001), falling from 4.9% in 2000 to 4.5% in 2008 as ODA growth has outpaced agricultural aid (Figure 2).

Figure 2: Global agricultural aid and proportion of total ODA 2000-2008



Bilateral and multilateral aid: Bilateral agricultural aid has increased at a greater rate than that of multilateral: an average of 42% between 2000-03 and 2005-08, compared to 18% for multilateral aid. This period has witnessed a degree of volatility in bilateral and multilateral aid, such that bilateral agricultural aid as a proportion of total agricultural aid has fluctuated between 48%-66% over the period. Aid commitments are characteristically ‘spiky’ as the full value of a commitment is recorded in the year it is made, regardless of the duration of the investment. Large infrastructural investments, such as irrigation schemes exacerbate this. When smoothed using a 3-year rolling average bilateral and multilateral proportions fluctuate less dramatically - between 54%-63% (Figure 3).

Figure 3: Bilateral and multilateral agricultural aid 2000-08



Top Bilateral Donors: Over the 2005-08 period, the top 5 bilateral agricultural donors included the United States (annual average of USD 1.02bn, 31.2% of all bilateral agricultural aid), Japan (USD 506m, 15.6%), France (USD 372m, 11.4%), Germany (USD 229m, 7.0%) and the United Kingdom (USD 194m, 5.9%). Of these, however, only France and Japan appear as one of the top 5 bilateral donors of agricultural ODA as a proportion of their total aid. These include: Belgium (6.8%), Denmark (6.2%), France (5.7%), Canada (5.1%), and Japan (4.7%).

Top donors (total): Including imputed multilateral ODA from the multilateral agencies providing the bulk of agricultural aid (see below), total agricultural ODA from the top 5 donors are United States (USD 1.2bn), Japan (USD 750m), France (USD 561m), Germany (USD 489m) and United Kingdom (USD 483m).

Table 1: Bilateral agricultural aid, 2005-08

Bilateral donor	Ave. 2005-08 bilateral aid ($m 2007 prices)	% of all bilateral agricultural aid	% of donor’s total aid
Australia	85.23	2.6%	3.5%
Austria	11.46	0.4%	2.5%
Belgium	92.72	2.8%	6.8%
Canada	151.25	4.6%	5.1%
Denmark	90.31	2.8%	6.2%
Finland	20.91	0.6%	2.8%
France	372.28	11.4%	5.7%
Germany	229.21	7.0%	3.2%
Greece	2.21	0.1%	0.9%
Ireland	33.63	1.0%	4.5%
Italy	41.91	1.3%	4.0%
Japan	506.38	15.6%	4.7%
Luxembourg	9.15	0.3%	3.7%
Netherlands	88.86	2.7%	1.5%
New Zealand	6.37	0.2%	1.9%
Norway	73.57	2.3%	2.6%
Portugal	2.26	0.1%	0.5%
Spain	83.66	2.6%	3.0%
Sweden	81.75	2.5%	3.0%
Switzerland	62.25	1.9%	4.6%
United Kingdom	193.64	5.9%	2.8%
United States	1,016.85	31.2%	3.9%

Multilateral Donors: 5 multilateral agencies constitute the bulk of agricultural aid: IDA, EC, IFAD, African Development Fund and the Asian Development Fund¹³ (see table).

Table 2: Multilateral agricultural aid, 2005-08

Multilateral agency	Ave. 2005-08 Multilateral aid (2007 prices)	% of all Multilateral Agricultural aid	% of agency’s total aid
AfDF	162.01	8%	9%
AsDF	151.20	8%	10%
EC	374.70	19%	3%
IDA	1,087.03	55%	11%
IFAD	192.55	10%	39%

Channels of Delivery: Aid to the agricultural sector is mainly channelled through public sector institutions – 53.3% in 2008. 7.4% went through Multilateral Organisations, 6.3% went through NGOs and Civil Society, and 29.6% of aid going to agriculture was not clearly defined in terms of how it was delivered.¹⁴

Figure 4: Channel of Delivery of Agricultural Aid, 2008



Grants and Loans

Over the last decade aid to agriculture has been increasingly characterised by grants rather than loans. The proportion of grants particularly increased after 2003, when only half of agricultural ODA was in grant form. Proportions increased again in 2008, constituting 74% of agricultural aid. Over the two periods, 2000-03 and 2005-08, ODA grants to agriculture rose from 54% to 67% (Figure 5).

The majority of bilateral donors now only provide grants within their agricultural programmes. However, a few large donors also provide assistance through concessional loans. Most prominent is Japan, delivering 63% of agricultural assistance through such loans in 2008. France and Germany also provide soft loans, constituting 19% and 3% respectively of agricultural aid in 2008.

Multilateral ODA is more characterised by concessional loans. Almost all agricultural assistance via the Asian and African Development Funds are in this form (as would be expected). IDA delivered 73% of agricultural aid via loans in 2008. Increased grant elements from IFAD in the last two years has reduced its soft loan component to 65% in 2008, down from near 100% prior to 2007.

Figure 5: Grants and Loans in Agricultural Programmes

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