Benchmarking the Business of Agriculture

1. 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

2. Benchmarking the Business of Agriculture Components

3. Doing Business Project Results show strong convergence across economies since 2005

5. Benchmarking the Business of Agriculture (BBA) as part of the larger “Agricultural Transformation Index (ATI) ATI ATI ATI ATI BBA Etc.. Gender Productivity Sustainability

6. 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

7. 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 frameworkon the books and in practice What are the Deep Dives? • 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

8. 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 • Synergies new actionable indicators on rural transport

9. The agro-industry supply chain helps understand key drivers for a commercial agricultural sector in the future 1 2 LAND MARKETS Contract farming Dist. Infrastructure “Regional’ trade INPUTS Seeds Fertilizers Mechanization PUBLIC GOODS Water Electrification Roads ENABLERS Transportation Finance ICT

10. 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.

11. Ag based Country segmentation based on agriculture’s role in the national economy, provides deeper insights into the transformation of the agro-industry Trans. 2 Urbanizing Trans. 1 Developed agriculture role as an engine of growth& poverty reduction Agriculture’s role direct producer/ agribusiness relationships & creating good jobs Encourage growth in agriculture & the rural non-farm economy WB Development Report 2008 Source WB, FAO CIA

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 9 14 19 Source; BBA team calculations

13. Source WB, ILO and FAO

14. Urban Pop Non Farming Rural Pop Farming Pop Growth in Agri-Industry Static growth in Farming Source: WB, USDA; NOTE: 2000 data

15. 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

16. 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

17. 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 80% + 30-50% 10 -15% Large SHF Medium SHF Small SHF FAO, multiple research papers 17

18. 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:

19. 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,

20. Time Line : Preparation Field Work Analysis Expert Review Dissemination Feed back July Sept Dec June March • 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

21. And if you have been . . . Thanks, for listening

24. ASFG Pillars: Recommended Policy Focus - 1 * VGs – Vulnerable Groups – women, other disadvantaged

25. ASFG Pillars: Recommended Policy Focus - 2 * VGs – Vulnerable Groups – women, other disadvantaged

26. 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 • Synergies • new actionable indicators for policy makers, public officials, and private sector investors; Leverages policy change

27. 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