Development partnerships in agriculture: supporting inclusive economic growth, food security and nutrition

1. Tristan Armstrong, Agriculture and Food Branch
DFAT
tristan.armstrong@dfat.gov.au
Aug 2015
Development partnerships in
agriculture: supporting inclusive
economic growth, food security and
nutrition

2. 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

3. 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

4. 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.

5. 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.

6. 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

7. – 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

8. 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

9. 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’

10. 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

11. 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

12. 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.

13. 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 prizePay only for results
Why Pull Mechanisms?

14. - 14 -
ClientConfidential
AgResults Projects
Zambia Biofortified
Maize Pilot
Kenya On-Farm
Storage PilotUganda 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

15. 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 5Year 1Design 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

16. 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 4Year 1Design 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:

17. 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 5Year 1Design 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

18. 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 5Year 1Design 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

19. Tristan Armstrong, Agriculture and Food Branch
DFAT
tristan.armstrong@dfat.gov.au
Aug 2015
Thanks