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Tristan Armstrong, Agriculture and Food Branch DFAT
[email protected] Aug 2015
Development partnerships in agriculture: supporting inclusive
economic growth, food security and nutrition
Context • In 2014-15, Australia provided $5 billion in
aid, around $350 million in agriculture, fisheries and rural development.
• 2015-16 ? • Bilateral country programs, mostly in SHF focussed
AR4D and market development • Multi-donor/global programs, including GAFSP,
AgResults, AECF. • NGO’s
Context Aid approach post 2008-9 : – SHF agricultural productivity – Social protection – Nutrition – Largely public-sector support (e.g. GAFSP) Pan-Asia, Pacific, Africa 2013 Change of Government and new policy direction
New era
Reduced aid budget Reduced geographical focus Focus on Asia and (2/3 of the world’s 800
million hungry people, child malnutrition up to 40%, rising double burden) Greater focus on private sector, trade,
scale.
Current thinking Improving food security is a complex
systemic issue No ‘one model’ solution A mix of interventions from large scale
commercial to semi-subsistence are required to achieve food security. Optimising the productivity of all forms of
agriculture. reducing wastage along the supply chain.
New Strategy for Aid Investments in Agriculture
To ‘promote prosperity, reduce poverty and enhance stability’ through contributions to private sector development and human development. – increase contributions to national economic
output; – increase incomes of poor people; and – enhance food, nutrition and water security
– catalytic use of aid–leveraging private sector investment to generate change on a wider scale than is possible through ODA funding alone.
– Need for better market information – Increased market access and efficient
trade – Targeted infrastructure development
How? – Strengthening markets to increase SHF
economic participation and address constraints by leveraging private sector investment
– Innovating to improve productivity along food and agriculture value chains.
– Promoting effective policy, governance and reform to promote inclusive growth and open trade
Current examples 2015 -18 ‘Grow Asia’ partnership with the World Economic Forum and the ASEAN Secretariat OECD ASEAN Trade and Agriculture Policy Analysis AgResults – multi-donor financial ‘pull mechanism’
Grow Asia 2015 -18 ‘Grow Asia’ partnership with the World Economic Forum and the ASEAN Secretariat – increase inclusive agricultural development through
new ps investment and better regional cooperation. – Link investors, agribusinesses, government and civil
society to increase the scale and impact (in terms of poverty reduction, reduced ag inputs, better NRM & environmental outcomes) across ASEAN countries.
– Better linking small-scale farmers in ASEAN economies to larger regional and global markets
Grow Asia Poor small-holder farmer focussed increase incomes by 20% and reduce GHG emissions and other –ve impacts for 10,000,000 SHF’s by 2020 Approach – Enabling policy environment – Access to knowledge – Access to inputs – Access to markets
AgResults
$118USD Million Multi-donor Initiative to Implement Pilots that Incentivize High-Impact Agricultural Innovations in Three Areas
Overcome market failures by offering results-based economic incentives (“pull” financing) to promote the uptake of new agricultural technologies and/or practices
Test the effectiveness and efficiency of pull mechanisms in comparison to alternative development approaches
Objectives
Food Security
Through Increased Yield & Post-Harvest Loss
Reduction
Nutrition
Health through
Improvements in Livestock Mgmt.
Pull Mechanisms Address Important Social Issues through Performance-Based Funding of Innovative Solutions
“Pull” mechanisms incent market-oriented actors to invest in innovation where there are market failures and reward only those who are successful.
Contrasts with “push” mechanisms (e.g., grants), which finance solvers to accelerate R&D and lower costs before a product’s success can be determined.
Focuses Implementers and inspires risk taking
Tap top
talent from out-of-discipline
perspectives
Shine spotlight on
problem and opportunity
Stimulate private sector investment greater than the prize
Pay only for results
Why Pull Mechanisms?
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Clie
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AgResults Projects
Zambia Biofortified
Maize Pilot
Kenya On-Farm Storage Pilot Uganda Improved
Legume Seeds Pilot
Nigeria AflasafeTM Pilot
India Newcastle Vaccine Pilot
Vietnam GHG Emissions Reduction Pilot
Brucellosis Vaccine Pilot
(Global)
Newcastle Vaccine Myanmar Pilot
Pilots in Design Phase
Pilots in Implementation Phase
Large post-harvest losses due to spoilage and Larger Grain Borer (LGB).
Promote sales of quality on-farm storage devices to smallholder farmers (SHFs).
Provide prizes to storage device companies based on volume of storage sold to SHFs.
Problem:
Solution:
Incentive:
Reach approximately 480,000 SHFs, create at least 172,000 MT of new storage capacity and generate US$14 million in smallholder benefits.
Anticipated Impact:
Kenya On-Farm Storage Pilot Overview
Year 2 Year 3 Year 4 Year 5 Year 1 Design Pre-Launch
• Maize is grown by 79% of Kenya‘s 8.8 million households.
• Overall post-harvest losses in SSA are estimated at US$1.6 billion per year; about 13.5% of the total value of grain production ($11 billion). These losses further limits the overall supply of nutrients available to the SSA population, particularly for smallholder farmers.
• The Pilot aims to significantly minimize crop losses and enable smallholders to store maize throughout the year for food security and price speculation.
• It is estimated that the enhanced technology would reduce losses by 10-15%
• This technology avoids the use of storage pesticides which have an impact on nutrition and health
Pilot Highlights
Nigeria AflasafeTM Pilot Overview
Maize toxicity due to Aflatoxin from Aspergillus fungus that causes stunting and carcinogenic effects.
Cultivate Aflatoxin-free maize using AflasafeTM bio control product.
Provide per unit premium to out growers to incentivize production of AflasafeTM -treated maize among smallholders.
Problem:
Solution:
Incentive:
• Participating farmers obtained 13.2% over the prevailing market price.
• Aflatoxin concentration averaged less than 2 ng/g in 99% of maize grain lots harvested from AflasafeTM
treated fields; well below the 20 ng/g US acceptable limits and 4 ng/g European limits
• Initial yields showed more than twice the normal yield of 1.5 tons per hectare due to use of improved seeds, fertilizers and crop management practices
• Year 1 initial verification results show that 98.3% of samples from AflasafeTM treated fields met the minimum threshold
• In current Year 2, a total of 25 Implementers are working with 10,000 farmers
• 35,000 farmers are anticipated by Year 5. They are expected to sell 200,000 tons of high-AflasafeTM maize, roughly 3% of Nigeria’s total maize production, and keep roughly 60,000 tons for their own consumption
Pilot Highlights
Year 2 Year 3 Year 4 Year 1 Design Pre-Launch
Incentivize a total production of around 480,000 metric tons (MT) of high-AflasafeTM maize and deliver health benefits to around 70,000 smallholder family members, not including downstream maize consumers.
Anticipated Impact:
Demand uncertainty, barriers to capital constraining production of sufficient appropriate legume seeds.
Increase adoption of improved legume seed varieties.
Provide Volume Guarantees and End-of-Pilot Prize to incentivize seed companies to increase production and sales of improved legume seeds.
Problem:
Solution:
Incentive:
Cumulative 5,396 MT of additional legume seed sold, and up to a 40% increase in legume yields. Participating seed companies and farmers may reach a cumulative benefit of US$2.5 million and US$30.4 million, respectively.
Anticipated Impact:
Uganda Improved Legume Seeds Pilot Overview
Year 2 Year 3 Year 4 Year 5 Year 1 Design Pre-Launch
• While African agricultural output has grown, nutritional outcomes continue to be poor.
• Legumes are important to local smallholders farmers’ diets, contributing roughly 25 percent of per capita protein intake in Uganda.
• The pilot strives to increase the amount of quality non-maize seed available to small holder farmers
• Increasing the use of legumes has multiple proven impacts, including improving smallholder farmers’ income, nutrition, and soil health.
• Soil health also leads to improved harvest of crops, which generates additional nutritional benefits to consumers.
Pilot Highlights
Vitamin A deficiency in > 80% of Africa produces blindness and over 250,000 deaths annually.
Biofortified Pro-Vitamin A (PVA) maize provides high Vitamin A content from a natural source.
Provide prizes to milling companies for introducing and selling commercial volumes of PVA maize.
Problem:
Solution:
Incentive:
Pilot Highlights
Produce over 60,000 MT/year of biofortified PVA maize meal by the fourth year. Consumers receive an additional 124μg of Vitamin A per day, 24% of their average requirement.
Anticipated Impact:
Zambia Biofortified Maize Pilot Overview
Year 2 Year 3 Year 4 Year 5 Year 1 Design Pre-Launch
• Maize represents over 80% of the diet in Zambia • Significant Vit A deficiency exists in the country • Three bio fortified orange maize hybrids are used with beta carotene levels from 4.7 ppm to 7.8ppm and these levels will be increased over time • Greater than 90% of maize is produced by SHF who also keep the PVA maize for their home consumption • Natural sources of Vit A from biofortified maize self regulates and avoids toxicity issues
