19 October 2007
As the World Bank launches its latest flagship World Development Report, this year on "Agriculture for Development," the Independent Evaluation Group's report clearly acknowledges that the Bank's engagement with the most important sector in its highest-priority region has largely been a failure.
The World Bank's Independent Evaluation Group (IEG) has released a substantial study of the Bank's agriculture programs in sub-Saharan Africa between 1991 and 2006. In its 200-plus pages, the report (The World Bank's Assistance to Agriculture in Sub-Saharan Africa: An IEG Review) affirms many of the criticisms that civil society has long made of Bank agriculture policy. At the outset, the report announces that "the central finding of the study is that the agriculture sector has been neglected by both governments and the donor community, including the World Bank." It criticizes the lack of a unifying perspective on agricultural development: "The lending support from the Bank has been "sprinkled" across various agricultural activities such as research, extension, credit, seeds, and policy reforms in rural space, but with little recognition of the potential synergy among them to effectively contribute to agricultural development." The reports finds, in fact, that "none of the top 10 borrowers…had received consistent and simultaneous support across all critical subsectors."
Among the specific oversights catalogued by the IEG are limited support for irrigation, despite recognition of its importance to farmers; lack of attention to the challenges posed by the great diversity of agro-ecological conditions in Africa; failure to devise effective strategies for countries to maintain their own food security; and inadequate resource provision for expanding small farmers’ access to credit and for creating and maintaining transport infrastructure.
Most telling, perhaps, is the report's treatment of the World Bank's efforts to "structurally adjust" agriculture sectors during the 1990s: "Though results have been variable across countries, the Bank's effort has contributed to improving the macroeconomic environment and fiscal discipline in several countries. However, these changes were not enough to stimulate private sector investments in several critical areas from which the public sector withdrew. Consequently, most countries in Africa face exorbitant fertilizer prices, inadequate seed production, poor transport, and limited credit access" (emphasis added).
This description manages to at once concede the catastrophic consequences of adjustment policies in the agricultural sector and to underplay their impact by framing them as the downside of an effort that had its share of success in restoring "fiscal discipline." Structural adjustment programs demanded an abrupt end to countries' interventions in the agriculture sector, eliminating subsidy regimes and marketing boards that were frequently ineffective and subject to corruption. These rapid reforms threw countries' food economies into chaos, with the skyrocketing costs for inputs noted by IEG and an incursion of parasitic middlemen who exploited producers and consumers alike. Prices rose, but the only beneficiaries were brokers and dealers.
The "shock therapy" to which African agriculture was subjected in the late 1980s and 1990s was one of the most damaging instances of the application of "market fundamentalism" to vulnerable economies: the Bank apparently believed that if government was simply removed from the equation, market forces would rush in and apportion resources fairly and efficiently. As the IEG now acknowledges, this was far from the case. But free-market assumptions are still evident in the IEG’s report, with unqualified references to the Bank’s success in "improving policy environments" during the structural adjustment period, despite the admittedly negative outcomes for agriculture.
The New York Times accorded the IEG report prominent coverage, with a long feature article on page 3 of its October 15 edition. Author Celia Dugger quotes Columbia University economist Jeffrey Sachs, himself a former supporter of "shock therapy," labeling the report "a blistering, devastating critique." Sachs depicted the history of the Bank's agricultural policy in Africa in stark terms: "The whole thing was based on the idea that if you take away the government for the poorest of the poor that somehow these markets will solve the problems," Professor Sachs said. "But markets can't step in and won't step in when people have nothing. And if you take away help, you leave them to die."
The IEG report was released a week before the October 19 publication of the 2008 World Development Report, "Agriculture for Development." Draft copies of the WDR share with the IEG report some notable gaps and assumptions. The success of agricultural policy is gauged by (a) its adherence to established market orthodoxy, and (b) gross output. Seldom, if ever, are questions asked about how agricultural policy, or the production it results in, are contributing to (or detracting from) rural people's well-being and living standards. The unique status of the food economy – of the typically labor-intensive production and distribution of the most basic human necessity – is ignored, with agriculture instead treated as just one more component of the national economy. (It remains to be seen if the final version of the WDR includes a more complex analysis.)
Entirely absent from the IEG report is any reference to the challenges that climate change poses for African agriculture. This is a particularly interesting omission when so much attention is being focused on the Bank's responses to climate change, and when it is becoming clear that Africa will be among the most affected – with increasing incidence of drought and famine in a region that was already vulnerable to those phenomena.
The IEG's recommendations to the World Bank range from the uncontroversial – more attention to innovative irrigation programs – to the questionable – the increased use of "public-private partnerships" to increase availability of inputs such as fertilizers, pesticides, seeds, credit, and even water at more reasonable cost. The IEG admits that the market-based reforms promoted by the Bank in the 1990s had little demonstrated success, and indeed pushed up the cost of inputs in Africa. One wonders, then, whether relying on private sector involvement again today is the most promising remedy to this critical problem.
In the end, for all its 200-plus pages, the IEG report contains only a short list of concrete recommendations. Could it be that for all the trial-and-error and ponderous analysis devoted to agricultural policy over the last 15 years, the World Bank is still stuck in the predicament described in the New York Times by former World Bank economist William Easterly: "Here's your most important client, Africa, with its most important sector, agriculture, relevant to the most important goal — people feeding their families — and the bank has been caught with two decades of neglect."
Resources
- World Bank neglects African farming, study says by Celia Dugger, New York Times, October 15, 2007 (NYT website)
- World Bank Assistance to Agriculture in Sub-Saharan Africa, Independent Evaluation Group, October 2007 (World Bank website)
- World Development Report 2008: Agriculture for Development, World Bank, October 2007 (WB website)
- Ivorian Prime Minister admits failure of Bank/IMF cocoa sector reforms, Bank Information Center, August 11, 2006 (BIC website)