Benchmarking the Business of Agriculture

Augusto López-Claros Director, Global Indicators & Analysis Department

Financial and Private Sector Development Vice Presidency World Bank Group

Washington DC April 19, 2013

Grahame Dixie Adviser, Agriculture & Environment Services Department

Sustainable Development Network World Bank Group

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Increasing food prices and expanding urban demand have heightened food security and agriculture as priorities for development

World Bank’s Spring Meetings in 2012 solidified support for agribusiness indicators G8 called for the World Bank “to develop options for generating a Doing Business in Agriculture Index”

World Bank Group’s Agriculture and Environmental Services (AES) and Global Indicators and Analysis Department (GIA) merge efforts to begin producing a “Benchmarking the Business of Agriculture” project

Convening in Copenhagen: Agriculture Transformation Index and agri-business component “fast-tracked", housed in the World Bank Group

Benchmarking the Business of Agriculture Background

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Benchmarking the Business of Agriculture Structure and Objectives

BBA’s integrated approach

Doing Business in Agriculture: • Will provide policymakers

with new benchmarks of the regulatory environment affecting the business of agriculture

• Comparable across many economies over time

Deep Dives: • In-depth metrics of a

broader range of factors that affect agricultural productivity

• Comparable across countries, but greater flexibility in reporting structure to analyze case studies of positive change

Objective: Leverage positive policy change for a stronger commercial agricultural sector

Synergies enable more

robust comparisons

between countries

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Benchmarking the Business of Agriculture Theory of Change

Doing Business Proven effectiveness in

catalyzing change in regulatory frameworks

that impact SMEs

Doing Business in Agriculture

ABI Proven utility in going beyond governments

and including the private sector

Deep Dives

• Smarter business regulation promotes economic growth. Informal economies tend to be smaller in countries where rules and regulations are strong and efficient.

• Some areas of legislation have a critical impact on the productivity of small-scale agribusinesses. Rules and regulations that directly impact medium to large-scale businesses can also significantly affect the profitability of small and medium-scale farmers.

BBA Will

leverage positive policy

change for a stronger

commercial agricultural

sector

Research findings: Better government policies can encourage transformative change to benefit agribusiness and informal smallholders

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Benchmarking the Business of Agriculture Context for BBA Indicators

Three key considerations

1. BBA indicators will serve as one component of the Agricultural Transformation Index

• BBA indicators should complement , not replicate, indicators of other ATI components

2. BBA indicators will provide guidance for building ‘supply chain quality’

• BBA will cover operational, economic and policy aspects of the supply chain

3. BBA indicators will target countries at different stages of overall and agricultural development

• Ag-based, transforming, urbanizing.

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Benchmarking the Business of Agriculture Raison d'être

Major implications for

improved market access in SSA

and India

Very significant increases in food demand in towns, key suppliers the larger scale small–holder farmers

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Inputs

Water

Land Handling, storage

Contract farming

Trade (exports)

Credit

Transport. services

Benchmarking the Business of Agriculture Research & Analysis Approach

“Transforming” agriculture will require recognition of the economic capacity within each grouping’s supply chain

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Sanjib & Raissa – Country Analysis

Valerie, James, Arnou & Niels– Inputs i.e. Seeds, Fertilizer, Mechanization

Thea & Nuria– Land Issues John, Yucheng & John - Markets & Trade John & Samjhana Rural Transport

Joanna & Samjhana Finance

Alva -Data Systems & Rural Energy/Communication

Melissa, Fedrica & Grahame Donors, Survey, Indicators & Outreach

? Water

Benchmarking the Business of Agriculture - The BBA Team

Who we are, what we do

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BBA

Deep Dives

Prepare paper on reasons for

inclusion/ exclusion

BBA

Pressure Test Indicators internal

Specialist + Advisors

BBA

2 nd Draft DBA & DD indicators

Consultation & Review Advisory & Core

Development Group

DBA in 10 countries

x 2 DD

Field testing

Review of 1st Field Surveys

DBA + 30

countries

x 3 DD

Research + Outreach to Advisors

1st Draft DBA & DD indicators

Jan April May June Jan 2014

Benchmarking the Business of Agriculture Our first year’s program Forming and merging teams, developing indicators, developing and testing them with key

advisors and the Core and Advisory Committee before field testing

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* % Rural Population could be replaced by % Labor Force in Agriculture

COUNTRIES % NosAdvanced 6% 5Urbanising 20% 16Transition 37% 30Agricultural 37% 30

Illustrate Split of Countries, which will be divided across regions

Need to generate a purposeful sample – distinct groupings based on economic importance of agriculture*

Benchmarking the Business of Agriculture Country Selection

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Ghana

Ethiopia

Mozambique Tanzania

Kenya

Nigeria

Burkina Faso Mali

Zambia

Syn-thesis report

TESTING

CONTENT

REPORTING

COMMUNICATION

Deep Dive

reports

The prototype of the Deep Dive reporting started in 2010 with 9 SSA country study of Agribusiness Indicators. This has generated a raft of new metrics to judge the enabling environment for agricultural commercialization.

Benchmarking the Business of Agriculture Deep Dives

Thank you

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ANNEX

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Doing Business Project

Results show strong convergence across economies since 2005