Global Donor Platform for Rural Development

Platform Policy Brief

No. 8 // October 2012

Platform policy briefs outline the rationale for choosing a particular policy alternative or course of action in a current policy debate. They guide decision makers with their choices and advocate for a position.

T Donor methods to prioritise and investments in agricultural research

development
POLICY CONTEXT
Agricultural research is essential to achieve the transformative change in agricultural productivity and dietary diversity needed to meet future global demand for nutritious and safe food. Faced with the potential of limited growth in development assistance budgets, it is increasingly important to improve the effectiveness of investments in agricultural research, including how to prioritise research investments, and to compare investments in research with other nonresearch investments. Further, the recent increase in donor interest in agricultural research for development (AR4D) brings the potential for overinvestment in priority areaspotentially saturating the capacity of the research infrastructure to absorb these resources, and leaving other important areas underfunded. Thus, understanding not only how priorities can be determined to facilitate individual donor portfolio development, but also how donors portfolios can be complementaryespecially given the range of mechanisms donors use to deploy AR4D investmentsis a key objective of this brief.

// Objectives
The detailed synthesis paper that this brief refers to aims to inform members of the Global Donor Platform for Rural Development about approaches, methods and tools to assess and prioritise research investments by presenting an academic review as well as case studies on how priorities have been assessed. It provides knowledge on how to articulate these processes into existing programming mechanisms. The comparative analysis of donor methods to allocate investments in agricultural research is beneficial to present the range of possible approaches and identify strengths and gaps among the greater donor community. Greater collaboration among donors may help to build and promote the use of some objective methods and technical tools of mutual benefit. The synthesis paper that this brief refers to Describes the context in which investments are selected in agricultural research Reviews methods for agricultural research prioritisation Describes mechanisms donors use to program agricultural research resources Suggests how donors might adjust their prioritisation strategies to improve coordination and potentially increase impacts of their portfolios
Neil Palmer (CIAT)

About the authors This policy brief was drafted by Jennifer Long (USAID), Clara Cohen (USAID) and Nikita Eriksen-Hamel (CIDA) on behalf of the Platforms agricultural research for development thematic stream. It is a summary of a synthesis paper with the same title written by George W. Norton and Jeffery Alwang. Download at: www.donorplatform.org/load/ 11834

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Global Donor Platform for Rural Development Tackling rural poverty, together

T ANALYSIS
// Current donor approaches to investment prioritisation
Informal consultations were held with representatives from seven donor organisations to discuss their current priority setting mechanisms. Representatives were interviewed from BMZ, CIDA, DFID, EC, GIZ, OECD, USAID and the Bill and Melinda Gates Foundation. Most donors reported using informal processes to set priorities because they lack capacity, resources or staff time to conduct formal, technical priority setting exercises. Some donors have at times engaged in formal priority setting, but not on a regular basis. Donors indicated that the provision of reliable evidence is their most important criterion in evaluating priority setting mechanisms. Several interviewees hinted that easier-touse methods might lead to more widespread formal priority setting. Donors had a favourable impression of analytical methods, but none use them on a regular basis. Some stated that increased sharing of experience among donors and formal collaboration with other donors might improve their

ability to utilise these methods. Few have inhouse capability to conduct the exercises. Some were concerned that the evidence basein favour of agricultural researchis weak for nonefficiency objectives. They felt that much of the academic priority setting literature focused too closely on efficiency, while many politicians currently favoured nonefficiency objectives. Donors are concerned about tradeoffs between objectives and would like means of evaluating these tradeoffs when setting research priorities. In addition, there is a need to consider aid effectiveness principles and to ensure that objective priority setting methods address the needs of development partners. A challenge for donors will be to ensure that analytical priority setting processes complement the priority setting processes of local, national, regional and global research partnersi.e. GCARD, CAADP, CGIAR, SROs etc. Given the feedback through donor interviews, the following distillation of the complete report may provide insights on ways to more effectively use systematic approaches to priority setting for agricultural research and nonresearch investments.

TRECOMMENDATIONS
THE HOW-TO OF INVESTMENT PRIORITY SETTING
Most donors employ informal, semi-structured processes to set agricultural research prioritiesand lack capacity, resources or time to conduct formal, technical priority setting exercises. However, it is possible to improve the priority setting process and facilitate greater coordination and cooperation among donors. To that end, the authors recommend that donors Systematise the prioritisation process Make use of accepted theory and available information Use quantitative tools where practical and credible 3. Project contributions of research topics (institutions) to the goals 4. Consider tradeoffs associated with alternative priorities 5. Compare priorities to the current portfolio of topics or institutional investments and vet any changes against political acceptability Projecting contributions of research to specific goals can be accomplished by applying a subset of impact assessment tools, can make use of the results from meta-analyses of previous research on the topics, or can make use of indicators or theory. A formal prioritisation process is not completed each year but should be undertaken when a new strategic plan is developed or at least every five years. Adjustments to priorities can be made more frequently, and targeted impact assessments can be undertaken to inform those changes. To effectively prioritise research investments, it is critical to understand potential impacts for different research investments by using various methods for research impact assessment (table 1).

// Systematise the prioritisation process

A five-step sequence of practices can be useful for setting priorities for most donors 1. Identify goals donorplatform.org 2. Specify potential alternatives (topics or institutions) to be prioritised

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Table 1. Methods for assessing impacts of agricultural research
Method Goals most easily addressed Ease of use for research impact assessment Medium-high High Reliability of predicted impacts Global Donor Platform for Rural Development Tackling rural poverty, together

Meta-analysis Congruence analysis

All goals Productivity, income, food security Productivity, income, food security Environmental

Medium-low Medium-low

Benefit-cost and Economic Surplus Analysis Nonmarket valuation methods Disability-adjusted life years Poverty rate analysis Randomised Control Trials

Medium

Medium

Medium-low

Medium-low

Health and nutrition Distributional Productivity health, environmental

Medium Medium-low Low

Medium-low Medium High

Econometric impact models

Productivity

Medium-low

Medium

Simulation/math programming Changes in indicators Scoring indices

Income, environmental, distributional All goals

Medium-low

Medium-low

High

Low

All goals

High

Low

// Make use of accepted theory and available information

Even without quantitative tools, donor priority setting processes could make additional use of available information and theory. Income and productivity effects of research are driven to a large extent by base value of production associated with a commodity, the expected per unit cost and yield changes if the research is sucessful, the likelihood of research success, projected adoption rate of the results and their timing. Poverty is highly geographic and, for producers, affected by the value of the products produced and by the risk. Urban poor are affected significantly by the price of the food products they consume most. Poor women especially are affected by low food prices. Improvement in one goal can mean sacrifice in another, and the tradeoff can be quantified if quantitative tools are used when evaluating impactsor at least discussed if only qualitative methods are used.

// Use quantitative tools where practical and credible

For the goal of improving agricultural productivity, income growth, and food security, economic surplus and benefit cost analyses are time-tested methods that can be combined with other methods to provide donors with projected benefits and tradeoffs. Application of these tools can be externally contracted during priority setting exercises. For impact assessment in other areassuch as nutrition, health, poverty reduction, or environmental goals other factors can be used to quantify research benefits. Examples of key determinants of research contributing to achieving donor goals are elaborated in table 2. The synthesis paper that this brief refers to builds on this information through a comparison of models available to donors and provides an example of how to use one model, the tradeoffs model, that is both rigorous and easy to use.

donorplatform.org

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Table 2. Key factors that determine contributions of a research project toward achieving donor goals
Goals 1. Agricultural productivity gains, income increases, and food security Key determinants of research impacts Value of production Yield and cost changes Odds of research success Likely technology adoption Timing of benefits and costs

2. Nutritional and health improvements

Size of target group Incidence of problem Mortality rate or degree of disability associated with the problem deficiency Effects of research on reducing the specific nutrient problem Effects of research on food prices Effects of research on incomes of poor Number of poor in target audience Depth of poverty Income provided by the research results or technology Adoption of the technology by the poor Effects of research on food prices Depends on aspect of the environment, hence on changes in specific physical measures related to pesticide use, soil erosion, carbon sequestration etc.

3. Poverty reduction

4. Natural resource sustainability/environmental improvement

18] IFPRI, 2009 19] IFPRI, 2009 20] See compilation of studies in Farnworth, C.R. (2008) Module 5: Gender and Agricultural Markets. In Gender in Agriculture Sourcebook. World Bank. http://worldbank.org/genderinag 21] Kitinoja, Lisa. 2002. Identifying Scale-Appropriate Postharvest Technology. In Postharvest Technology of Horticultural Crops, 3rd ed., ed. Adel A. Kader, 48190. Oakland,CA: Division of Agriculture and Natural Resources and University of California. 22] Gurung, 2006. The role of women About us C.,and vegetable supply chain in the fruit Thein Maharashtra and Tamil Nadu India: Global Donor Platform for the new and expanded a network Rural Development issocial and economic opportunities for vulnerable of 34 bilateral andunder the Women groups task order multilateral in Development IQC. Washington, DC: donors, international financing USAID. institutions, intergovernmental organisations, and development 23] USAID, Gender and Economic Value Chains: Members share a agencies. Two Case Studies from the GATE Project, common vision that agriculture, www.usaid.gov/our_work/cross-cutrural development and food ting_programs/wid/eg/gate_valuechai n.html.security (ARD and FS) is central to poverty and Agriculture Organization, 24] Food reduction, and a con2009. The sustainable and viction that state of food insecurity in the World 2009. Rome. efficient development requires a http://www.fao.org/docrep/012/i0876e coordinated global approach. /i0876e00.htm Following years of relative decline 25] DFID/DEFRA (March 2010) DFID/Defra in investment in the sector, the Policy Narrative on Global Food Security and created in 2003 to Platform was Sustainable Agriculture. increase andC.R. (2010) the quality improve Zambia 26] Farnworth, of development assistance in ARD Country Report: Sida UTV Working andPaper 2010:8 FS.

TINVESTMENT
ALLOCATIONS
RESEARCH VERSUS NONRESEARCH ALTERNATIVES
Though immediate humanitarian outcomes and development goals might be well served with a 100 per cent allocation to nonresearch programming, long-term sustainability of agricultural productionespecially in a context of highly uncertain future economic, social, climatic conditions, market systems, and attainment of development goals, requires research investments. Research and nonresearch activities differ in their efficiency in achieving specific donor goals. The decision to fund agricultural research versus other interventions can be guided by the need to evaluate donor investments in terms of their expected contributions to goals, the comparative advantage of agricultural research compared to other interventions, the order of the decision process, the complementarity of investments, differences in the time periods for investments,

and the riskiness of investments. The complete synthesis paper offers more information on approaches to address this question, such as discounted cash flow, decision analysis, and finance theory and real options approaches.

TNEXT STEPS
Defining priorities for agricultural research is essential to target finite resources yet achieve the transformative change in agricultural productivity and dietary diversity needed to meet future global demand for nutritious and safe food. Donor research priority assessment is a collaborative process that builds on other priority setting processesboth research and nonresearch, at the local, national, regional and global levels. The synthesis paper contributes to donor and development partner decisionmaking by providing concrete guidance on methods and approaches to more effectively target scarce resources to make greater progress in poverty reductionand improvements in agricultural productivity, human health and nutrition and environmental sustainability.