Approximately two-thirds of sub-Saharan Africa's population is dependent on agriculture and the sector is responsible for generating one-third of the continent's GDP. With its vast arable land, Africa has the potential to not only feed its citizens but to export food to other regions of the world. It is therefore astonishing that Africa must import food and rely on food aid to feed its people. The majority of poor subsistence farmers lack the income to buy seeds, fertilizers and tools and the resources to set up even the simplest irrigation system. Development assistance for agriculture could help provide the resources and the technical expertise to move smallholder farmers out of poverty, but development assistance for agriculture has declined dramatically in the last two-decades. Land-use policies and climate change have exacerbated the dire situation, as have the recent global food and financial crises.
ONE urges development partners to implement the following recommendations:
The financial commitments made at the 2008 Toyako G8 Summit were primarily directed to short term assistance. The G8 should commit to scaling up to provide at least $10 billion per year for medium and long-term agricultural initiatives in Africa that boost agricultural productivity and support technically sound, country-led plans. In 2007, the G8 spent $1.6 billion on medium- and long-term agricultural development. The G8 should commit to spending at least $5 billion on medium- and long-term agriculture development in 2010, while making provisions for a scale-up to $10 billion annually. In addition, the G8 should:
The G8 should also improve the quality and effectiveness of short-term assistance by including local purchase initiatives and food voucher schemes, rather than shipping food produced in developed countries all the way to Africa.
In sub-Saharan Africa, approximately two-thirds of the population is dependent on agriculture, and the sector is responsible for generating one-third of GDP. Most of these people are women who depend on agriculture to feed themselves and their families. Africa is home to extensive arable land and has the potential to not only feed its citizens but to export food to other regions of the world, yet it must currently import food, or rely on food aid, to feed its people. The reality is that instead of enabling the move of millions of agricultural producers out of poverty, the continent is home to regular famines and malnutrition, and majority of those engaged in agriculture still live in poverty.
Farmers in Africa lack the inputs, such as seeds, fertilizers, and tools, the technical know-how and/or the access to markets needed to capitalize on their labors. Under-investment in agricultural initiatives that support productivity, capacity building, and farmer training, means that farmers are struggling to produce enough to feed themselves and earn an income, while stifled market access prevents those who can from marketing their products. These under-investments are coupled with inadequate legal frameworks that allow land tenures for smallholders, and environmental challenges, including that of climate change, which exacerbate the situation for farmers, pushing them towards hunger and disabling them from taking economic/commercial advantage of their food production.
The situation has been exacerbated over the past 18 months by the global food crisis. According to the World Bank, commodity prices rose by more than 80 percent in 2008 and continue to remain high, while the UN Food and Agriculture Organization (FAO) reports that an additional 40 million people became hungry between 2007 and 2008, bringing the global total to 963 million hungry people.
Investments in Agricultural Development
For the last two decades, Official Development Assistance (ODA) for agriculture globally has been on a steady decline. This despite the fact that the World Bank estimates that growth in the agricultural sector is twice as effective at reducing poverty than growth in other sectors.
Just in the past few years, ODA to support agricultural development in Africa has begun to increase and as part of NEPAD's Comprehensive Plan for African Agriculture (CAADP), African governments have pledged to commit 10% of national budgets to agriculture and reach the goal of an increase of 6% in agricultural productivity by 2015. In addition, the 2008 G8 Summit in Hokkaido and the January 2009 UN summit on food security signaled the urgency of both short-term and long-term needs in food security and agricultural productivity. The UN's Comprehensive Framework for Action (CFA) lays out a set of actions for donors and international financial institutions to act upon, which have been reiterated at these international fora.
Despite the momentum, such efforts have been insufficient. According to the CFA, an additional $25 to $40 billion per year globally is needed to increase agricultural productivity enough to spur economic growth and food security, and maintain progress towards meeting the first Millennium Development Goal of halving hunger and poverty by 2015. The CFA notes that at least half of this will be needed for agriculture, transportation, and market systems for both short- and long-term support for smallholder farmers. A robust investment in agriculture, including the provision of technical assistance to reform land-use and other systemic challenges, could help Africa spark its own economic growth and could also have positive impacts on other nations in need of food imports.
Considering the magnitude of funds needed, and the importance of the success of these initiatives to the livelihoods of many people, this assistance should fund initiatives that use aid effectively. To this end, it is essential that all initiatives are aligned with the African countries' own development strategies and coordinated across other donors, consistent with the Accra Agenda for Action and the Paris Declaration.
What needs to be done?
A comprehensive approach that deals with the range of challenges that African farmers face is essential for assistance in the agriculture sector. With significant investments in medium and long-term initiatives that will provide resources and technical assistance to boost agricultural productivity, Africa will benefit from increased economic growth and food security. Implementation of initiatives such as the Alliance for a Green Revolution in Africa (AGRA), and policy frameworks, especially the NEPAD Comprehensive African Agriculture Development Plan (CAADP), that are ready for support, expansion, and assistance should be encouraged.
Provide adequate medium-term assistance to prevent a descent into hunger and poverty and create economic opportunities for subsistence farmers, including:
Increase investment in agricultural infrastructure and agro-processing industry development, including:
Improve access to local, regional and global markets for farmers in poor countries, including:
Provide more funding for research and training to address the needs of smallholder farmer populations, like that conducted through AGRA and CGIAR, including:
Increase technical assistance that creates an environment in which smallholder farmers can best take advantage of agricultural development, including:
The above approach places the emphasis on long-term agriculture development, but we recognize the need for short-term food aid for vulnerable populations. Donors should emphasize increasing the quality and effectiveness of emergency food assistance through initiatives like local purchase schemes or the use of food vouchers. The WFP faces a food aid gap as a result of the financial crisis which has resulted in an increased demand for food assistance from countries in need. These gaps should be filled, but at the same time, the funding available for long-term sustainable agricultural development must be increased.
The vehicle for delivery: A Global Financing Mechanism for Agriculture:
Efforts to scale up funding for agriculture in the developing world should be coordinated through a centralized funding mechanism which monitors need, identifies sources of additional financing, and standardizes policy approaches. This mechanism should be designed through consultation with African agriculture experts and should take into account lessons learned from similar existing funds. Various sectors have seen success in developing countries thanks to coordinated funding disbursed through finance coordinating mechanisms like the Education for All Fast Track Initiative (FTI) and the Global Fund for AIDS, Tuberculosis, and Malaria. These mechanisms ensure funding for vetted plans, provide opportunities for multi-lateral and bilateral disbursement, hereby attracting more donors, provide donor harmonization and coordination, and focus on accountability and results.
Through a like mechanism for agriculture, donors should commit to provide all African countries that have sound, costed and transparent plans to scale up agricultural productivity with the necessary resources to implement these plans. At the same time, African countries should be encouraged to further refine their own plans to link agriculture to overall poverty reduction strategies. This process emphasizes country-ownership, and donor harmonization and coordination.
Potentially building on existing programs or mechanisms, such as the Global Food Response Program or the International Fund for Agricultural Development (IFAD), this entity would establish a technical review panel to ensure that country plans are independently validated and technically sound. Once endorsed, it would ensure that resources from IDA, the AfDB, AGRA, IFAD, foundations and other bilateral and multilateral sources are coordinated around a country's plan. In addition to espousing country-ownership and donor harmonization and coordination, the mechanism would provide results-based financing and include mechanisms to hold both donors and countries accountable to providing necessary funding and fulfilling country agriculture plans.
Multilateral development banks, particularly the African Development Bank, through their concessional lending facilities, may play a large role in financing large-scale infrastructure projects. Debt sustainability concerns must be adequately addressed in such lending activities. For economically viable projects, the scope for public private partnerships must be explored and promoted.
For immediate short term needs such as fertilizer and seeds, a coordinated effort should leverage emergency resources across donors and work to ensure effective, flexible procurement and delivery. Furthermore, for global goods such as research and infrastructure, this central entity could coordinate ongoing efforts to identify critical gaps as well as resources to fill those gaps. This mechanism would also establish an independent monitoring body to ensure funds are effectively used.
What size investment is needed?
Currently, ODA for African agriculture is a grossly inadequate $2 billion a year and less than $4 billion globally. The 2008 Toyako Communiqué highlighted commitments by the G8 which amounted to over $10 billion since January 2008. However, in the midst of the food crisis, the vast majority of these were directed to short-term emergency food assistance. On the other hand, the CFA notes that at least half of the suggested $25 to $40 billion will be needed for agriculture, transportation, and market systems for both short- and long-term support for smallholder farmers. The International Food Policy Research Institute (IFPRI) estimates that at least an additional $15 billion per year is needed in public investment in agriculture for the world's poorest countries; this does not include private funding. Through the CAADP initiative, African governments have committed to spending 10% of their national budgets on agriculture but even if this commitment was fulfilled, there would still be a substantial external financing gap.
ONE advocates for solid commitment from G8 donors to scale up funding to at least $10 billion per year for medium and long-term agricultural initiatives (excluding emergency food assistance) in Africa and support to technically sound, country-led plans. In 2007, the G8 spent $1.6 billion on medium- and long-term agricultural development. The G8 should commit to spending at least $5 billion on medium- and long-term agricultural development in 2010, while making provisions for a scale-up to $10 billion annually. To this end, ONE welcomes the recent US announcement to double its long-term agricultural development funding to more than $1 billion annually. ONE urges the other G8 countries to follow suit and commit similar funding towards agricultural development.
Even if delivered in full, this proposal would not address all of the needs related to agricultural development in Africa. Additional investments in infrastructure development, capacity-building, nutrition, among others will be required. Both donors and implementing organizations must ensure that all of these policies are coherent so that, for example, the gains made in the agricultural sector are not undone by trade or domestic agricultural policies or aid and loan conditionalities from the international financial institutions.
 World Development Report 2008: Agriculture for Development. World Bank. Washington D.C. 2008. p. 6
 , CFA is a document compiled by the UN High Level Task Force on the Global Food Crisis to examine the food crisis and its possible solutions.