PKP2 - Understanding Aid To ARD and Food Security: World Bank

P PER ING A WORK LD BANK E WOR TH
Global Donor Platform for Rural Development
About the Platform Knowledge Piece series

The Global Donor Platform for Rural Development commissioned three comprehensive studies to capture Platform members knowledge on key issues affecting the delivery and impact of aid in ARD: PKP 1 PKP 2 PKP 3 Policy coherence for agriculture and rural development Aid to agriculture, rural development and food security Unpacking aid flows for enhanced effectiveness The strategic role of the private sector in agriculture and rural development
The PKPs are the products of extensive surveys of Platform member head office and field staff, visits to country offices, workshops dedicated to sharing findings and refining messages, and successive rounds of comments on drafts. On the basis of each PKP, separate policy briefs will be published. For more information on the PKPs visit donorplatform.org
This working paper is only available electronically and can be downloaded from the website of the Global Donor Platform for Rural Development at: www.donorplatform.org/resources/publications Secretariat of the Global Donor Platform for Rural Development, Dahlmannstrasse 4, 53113 Bonn, Germany Email: secretariat@donorplatform.org The views expressed herein are those of the authors and do not necessarily represent those of individual Platform members. All rights reserved. Reproduction and dissemination of material in this information product for educational or other non-commercial purposes is authorised, without any prior written permission from the copyright holders, provided the source is fully acknowledged. Reproduction of material in this information product for resale or other commercial purposes is prohibited without written permission of the copyright holders. Applications for such permission should be addressed to: Coordinator, Secretariat of the Global Donor Platform for Rural Development, Dahlmannstrasse 4, 53113 Bonn, Germany, or via email to: secretariat@donorplatform.org. Global Donor Platform for Rural Development 2011
Platform Knowledge Piece 2: Aid to agriculture, rural development and food security: Nicaragua working paper
Contents
Contents.......................................................................................................................................................... 1 List of figures and tables ............................................................................................................................... 4 Tables ......................................................................................................................................................... 4 Figures ........................................................................................................................................................ 4 Acronyms and abbreviations ......................................................................................................................... 6 Executive summary ........................................................................................................................................ 8 Introduction .................................................................................................................................................. 10 Background .............................................................................................................................................. 10 Aim ............................................................................................................................................................ 10 Methods .................................................................................................................................................... 10 Caveats ..................................................................................................................................................... 11 Report structure ...................................................................................................................................... 11 World Bank in perspective ........................................................................................................................... 12 Institutional set up ................................................................................................................................... 12 World Bank Group ............................................................................................................................... 12 Matrix management structure ............................................................................................................ 12 Regions ................................................................................................................................................. 12 Sectors.................................................................................................................................................. 13 Operations ............................................................................................................................................ 13 Collaboration within WB ...................................................................................................................... 13 Resources ................................................................................................................................................. 14 IBRD ...................................................................................................................................................... 14 IDA ........................................................................................................................................................ 14 Other resources ................................................................................................................................... 16 Policies in support of ARD&FS ................................................................................................................ 16 Corporate policy and strategy processes ........................................................................................... 16 Corporate strategies in ARD ............................................................................................................... 17 Scale and scope of the current ARD strategy .................................................................................... 19 Aid instruments and support to ARD&FS ............................................................................................... 19 Investment instruments .......................................................................................................................... 20 Specific Investment Loan .................................................................................................................... 20 Adaptable Programme Loan ............................................................................................................... 20
Learning and Innovation Loan ............................................................................................................. 21 Emergency Recovery Loan .................................................................................................................. 21 Other investment instruments ............................................................................................................ 21 Programme lending instruments ........................................................................................................... 21 Development Policy Loans .................................................................................................................. 21 Aid flows to ARD&FS .................................................................................................................................... 23 Definitions of agriculture and rural development.................................................................................. 23 World Bank definition .......................................................................................................................... 23 IFC definition ........................................................................................................................................ 23 Trust funds ........................................................................................................................................... 23 World Bank aid to ARD ............................................................................................................................ 23 Trends within World Bank lending to the agriculture sector ................................................................ 26 Global flows to ARD ............................................................................................................................. 26 Regional trends in aid to agriculture .................................................................................................. 27 Reporting World Bank aid flows .................................................................................................................. 29 How aid data are coded ........................................................................................................................... 29 CRS ....................................................................................................................................................... 29 World Bank Project Database ............................................................................................................. 29 Comparing CRS with World Bank Project Database ......................................................................... 30 Mapping World Bank data to CRS ....................................................................................................... 30 Problems with mapping to CRS .......................................................................................................... 31 The use of codes .................................................................................................................................. 32 Limitations to the coding ..................................................................................................................... 33 Comparing World Bank and AidData aid-flow data ........................................................................... 34 Comparing World Bank and CRS aid-flow data ................................................................................. 35 Comparing World Bank, CRS and AidData aid-flow data .................................................................. 35 Aid allocation vis--vis policy objectives .................................................................................................... 37 The role of corporate strategy and policy ............................................................................................... 37 Changes in aid allocation processes ...................................................................................................... 37 The changing role of country ownership ............................................................................................ 37 Lending projections ............................................................................................................................. 38 Focus on results .................................................................................................................................. 38 Translating strategies into lending ......................................................................................................... 39 Linking corporate strategies to lending ............................................................................................. 39
The role of Sector boards .................................................................................................................... 39 Other influences over allocations ....................................................................................................... 40 Does lending reflect corporate policy? ................................................................................................... 40 The impact of V2A and RDS ................................................................................................................. 41 The impact of crises ............................................................................................................................ 42 Conclusion ................................................................................................................................................ 42 Policy implications ....................................................................................................................................... 42 Conclusion .................................................................................................................................................... 46 Does aid reporting reflect the priorities of the World Bank? ................................................................ 46 Good practices for measuring, tracking and accounting for aid flows ................................................. 46 References ................................................................................................................................................... 47 List of people met ........................................................................................................................................ 49 Annex 1: World Bank lending instruments ................................................................................................. 50 Aid instruments and support to ARD&FS ............................................................................................... 50 Investment instruments .......................................................................................................................... 50 Specific Investment Loan .................................................................................................................... 50 Adaptable Programme Loan ............................................................................................................... 52 Learning and Innovation Loan ............................................................................................................. 53 Emergency Recovery Loan .................................................................................................................. 53 Sector Investment and Maintenance Loan ......................................................................................... 54 Programme lending instruments ........................................................................................................... 54 Development Policy Loans (DPLs) ...................................................................................................... 54 Annex 2: World Bank Project Database: lending to ARD, FY 1995 2010 (US$ million) ........................... 57 Annex 3 (a): AidData database on regional lending to ARD ....................................................................... 59 Annex 3 (b): World Bank Project Database on regional lending to ARD ................................................... 60 Annex 4: Definition of aid to agriculture, rural development and food security....................................... 61
List of tables and figures

Tables
Table 1. World Bank IBRD and IDA lending to ARD&FS by theme and sector, FY 2005 10 (US$ million). ....................................................................................................................................................................... 15 Table 2. World Bank strategies in ARD. ...................................................................................................... 18 RS.................................................................... 31 Table 4. World Bank reporting on sectors and themes, FY 2010. ............................................................. 33 Table 5. Summary policy implications. ....................................................................................................... 44
Figures
Figure 1. Total and Specific Investment Lending (SIL) to ARD&FS, FY 1995 2010 (constant year 2000 US$). ............................................................................................................................................................. 20 Figure 2. World Bank lending for emergencies, FY 1995 2010 (constant year 2000 US$). ..................... 21 Figure 3. World Bank lending through Structural Adjustment Loans (SALs) and Development Policy Loans (DPLs), FY 1995 2010 (constant year 2000 US$). ............................................................................ 22 Figure 4. World Bank lending to ARD, FY 1995 2010 (constant year 2000 US$). ..................................... 24 Figure 5. IDA lending to agriculture, forestry and fishing using narrow definition (AFF) and broader definition (ARD&FS) (constant 2000 US$). .................................................................................................. 25 Figure 6. IBRD and IDA lending to ARD&FS, 1995 2009 (constant year 2000 US$). ............................... 25 Figure 7. IDA lending to ARD&FS, 1995 2009 (constant year 2000 US$). ................................................ 26 Figure 8. AidData and CRS (AFF and ARD&FS) calculations of IDA lending to agriculture, 1995 2009 (constant year 2000 US$). ............................................................................................................................ 27 Figure 9. World Bank regional lending to ARD&FS according to data from AidData (constant year 2000 US$). ............................................................................................................................................................. 28 Figure 10. World Bank regional lending to ARD&FS according to data from the World Bank Project Database (constant year 2000 US$). ........................................................................................................... 28 Figure 11. Comparison of World Bank and AidData figures for ARD&FS, FY 1995 2009 (constant year 2000 US$)...................................................................................................................................................... 34 Figure 12. Comparison of aid flows to ARD recorded by the World Bank Project Database and CRS (constant year 2000 US$). ............................................................................................................................ 35 Figure 13. World Bank, CRS and AidData aid-flow data compared (constant year 2000 US$). .............. 36 Figure 14. World Bank lending and strategies. .......................................................................................... 41 Figure A1. Total and SIL lending to ARD&FS, FY 1995 2010 (constant year 2000 US$). ......................... 51
Figure A2. Lending through SILs by region, FY 1995 2010. ...................................................................... 52 Figure A3. World Bank lending for emergencies, FY 1995 2010 (constant year 2000 US$). .................. 54 Figure A4. World Bank lending through SALs and DPLs, FY 1995 2010 (constant year 2000 US$). ...... 55 Figure A5. World Bank lending through DPLs by region, FY 2005 10. ..................................................... 56
Acronyms and abbreviations

AAA AAP AFF AFTAR APL ARDD ARD ARD&FS ASIP CAADP CAS CD CDD CRS DAC DDO DPL ED ERL ESW FY GAFSP GDP GEF GFRP IATI IBRD ICSID IDA IEG analytical and advisory activities Agriculture Action Plan (World Bank, 2009a) agriculture, forestry and fishing Agriculture and Rural Development Department, Africa Region (World Bank) Adaptable Program Loan Agriculture and Rural Development Department agriculture and rural development agriculture, rural development and food security Agriculture Sector Investment Program Comprehensive Africa Agriculture Development Programme Country Assistance Strategy Country Director Community-Driven Development Creditor Reporting System Development Assistance Committee (OECD) deferred drawdown option Development Policy Loan Executive Director Emergency Recovery Loan economic sector work fiscal year Global Agriculture and Food Security Program gross domestic product Global Environment Facility Global Food Crisis Response Program International Aid Transparency Initiative International Bank for Reconstruction and Development International Centre for Settlement of Investment Disputes International Development Association Independent Evaluation Group
IFC LIL M&E MDG MDTF MIGA NEPAD NGO ODA OECD OOF OPCS P4R PRS PRSC RDS SAL SASKI SIL SIM SWAp T&V TAL TF TG TTL USAID V2A VP WB WBG WDR
International Finance Corporation Learning and Innovation Loan monitoring and evaluation Millennium Development Goal multidonor trust fund Multilateral Investment Guarantee Agency Development non-governmental organisation Official Development Assistance Organisation for Economic Co-operation and Development Other Official Flows Operations Policy and Country Services (World Bank) Program-for-Results Poverty Reduction Strategy Poverty Reduction Support Credit Rural Development Strategy (World Bank, 2003) Structural Adjustment Loan Sustainable Agriculture Systems, Knowledge and Institutions (Thematic Group) Specific Investment Loan Sector Investment and Maintenance Loan sector-wide approach training and visit extension model Technical Assistance Loan trust fund Thematic Group Task Team Leader United States Agency for International Development From Vision to Action (World Bank, 1997) vice-president World Bank World Bank Group World Development Report
Executive summary
A number of donor case studies, of which the World Bank was one, were carried out as part of a larger examination of aid to agriculture, rural development and food security (ARD&FS) which aims to contribute to strengthening the basis for mutual accountability in the sector by improving the understanding and handling of information on aid flows to the sector. The broad context of the study is to assess the extent to which aid data reflect the policy priorities of donors and recipients. Also, whether there are accepted good practices for measuring, tracking and accounting for aid flows that serve to strengthen coherence between policy, planning and resource allocation and thereby enhance development effectiveness. The World Bank Group operates through the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for the Settlement of Investment Disputes (ICSID). The World Bank Group delivers aid (according to the Organisation for Economic Co-operatio definition of official development assistance (ODA), which is concessional loans with a grant element of at least 25%) to the agriculture and rural development (ARD) and ARD and food security (ARD&FS) sector through IDA. , which result in policies and strategies for different sectors, are perceived to be objective and have become the reference point for many other agencies. In the Bank, sector strategies, which have a life span of five to seven years in one or more phases, go through a rigorous process of lesson learning, analysis, consultation, review and evaluation. or ARD were: Rural Development: From Vision to Action (V2A) launched in 1997; Reaching the Rural Poor A Renewed Strategy for Rural Development2 (RDS) (2002 07); and the Agriculture Action Plan3 (AAP) (2010 12), which is the current strategy. The main co have remained largely unchanged. Having moved from traditional agriculture programmes to broader .
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Over the period from 1995, two main changes have occurred in the type of financing instruments available to the Bank. The first change was away from a simple, single sector or subsector project approach to more complex, multisectoral programmes. The second change is the replacement of Structural Adjustment Loans (SALs) by Development Policy Loans (DPL). The low point of Bank lending to ARD was in fiscal year (FY) 2000 at US$1.8 billion, and the peak was in FY 2009 at US$5.3 billion. The lending projection for the AAP of US$6.2 8.3 billion per year is to be delivered by IBRD, IDA and IFC.
1 World Bank (1997). 2 World Bank (2003). 3 World Bank (2009a).
The World Bank has its own coding system stored in its Project Database. Each operation is coded according to sector and theme. The two main aid flow data sources are the DAC Creditor Reporting System (CRS) and AidData. The World Bank started reporting to CRS in 2009, but has reconciled data from 2000. The AidData database is based on CRS and elaborated by assigning a sector code to each project. CRS is more detailed and disaggregated than the World Bank coding system, with around 30 purpose codes that can be assigned to ARD&FS. However, sectoral codes and thematic codes are mixed. The power of the country directors in the process of sectoral resource allocation has meant that corporate-sector policy and priorities could not easily be translated into increased lending. The Bank is also driven by its annual World Development Reports (WDRs). WDR 2008, Agriculture for Development (formulated in 2007)4 proved to be extremely infl to the agriculture sector. The demand for results is also increasingly important in determining how resources are allocated. The main policy implications of the study are as follows: There is an imprecise link between corporate strategies on ARD&FS and World Bank lending to the sector. The volume of actual aid to ARD&FS revealed by aid-flow data is less important than the patterns that the data reveal. The growing importance of corporate policy and strategies underlines the importance of strengthening national systems. Actual allocation of resources to ARD is at least as much triggered by global crises as by deep analysis of the need. Expansion of aid to ARD without expansion of staff numbers or operating budgets threatens investment quality. In general, the ARD&FS sector is less able to demonstrate results and value for money than the social sectors. Governments need to be strategic in accessing different sources of external funding. CRS is an imprecise tool in reporting aid flows to agriculture. The crucial role of the private sector and private investment in generating growth in ARD is not captured by aid-flow data.
The main conclusions are: Reporting aid flows to CRS is not a priority. CRS underpport for ARD. The Bank has successfully channelled increased aid to ARD. Tracking aid flows must be consistent and the World Bank offers a good example. Reporting aid flows externally must reflect the different objectives an aid agency is seeking to achieve. The World Bank communicates to the outside world a coherent story about its development assistance. The Bank reports its aid flows responsibly.
World Bank (2007).
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Introduction
Background
The donor case studies are part of a larger examination of aid to agriculture, rural development and food security (ARD&FS) which aims to contribute to strengthening the basis for mutual accountability in the sector by improving the understanding and handling of information on aid flows to the sector. The broad context of the study is to assess the extent to which aid data reflect the policy priorities of donors and recipients. Also, whether there are accepted good practices for measuring, tracking and accounting for aid flows that serve to strengthen coherence between policy, planning and resource allocation and thereby enhance development effectiveness.
Aim
The aim of the five donor studies is to analyse how well aid reporting reflects donor policies and programmes in the sector and to identify good practice in measuring and accounting for aid. The case study on the World Bank (WB), along with one on the International Fund for Agricultural Development, complements three studies on bilateral donors. It aims to provide insights into the way multilateral financing institutions operate with respect to reporting aid data and the coherence between their policies and aid flows.
Methods
The case study was conducted through: A week-long series of interviews at WB headquarters in Washington DC with senior managers and staff in the Agriculture and Rural Development Department; regional departments, especially Africa (AFTAR); the Operations Policy and Country Services (OPCS); Development Data Group; and the International Finance Corporation (IFC). Review of ARD&FS reports, especially the main statements of WB policies and strategies with respect to ARD&FS, annual Reviews of the Agriculture and Rural Development Portfolio and evaluation reports. Analysis of figures for WB lending to ARD&FS for the period since 1995 obtained from the Creditor Reporting System (CRS) developed by the Organisation for Economic Co-operation and Development Assistance Committee (DAC) and from AidData. Accessing reports, press releases and other documents on ARD&FS on the extensive WB website.
The case study focuses on the aid operations in ARD&FS of the concessional part of the WB, that is the International Development Association (IDA). Lending by the non-concessional part of the Bank, the International Bank for Reconstruction and Development (IBRD), is covered in less detail. IBRD data are reported to CRS separately from IDA data agriculture and rural development (ARD) does not separate IDA grants and credits from IBRD loans. IFC does not report to CRS and its operations with respect to ARD&FS are dealt with only briefly. The operations of the Multilateral Investment Guarantee Agency (MIGA) are not covered. The main sources of data on aid flows are the OECD-DAC CRS, the AidData database and the WB Project Database. CRS reports on official development assistance (ODA) flows which, in the case of WB, relates to IDA. AidData is based on CRS but is elaborated through examining project data. The WB
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Project Database reports on both IDA and IBRD (non-concessional) aid. Much of the analysis in this donor study is drawn from the WB lending instruments.
Caveats
The WB is the leading development agency in conducting and learning from evaluations and operational research in ARD&FS at global, regional and country level. This produces a great mass of data and reports, only a small fraction of which could be reviewed. Although the WB is adept at presenting a coherent view of its policies and strategies in ARD&FS, it is not monolithic. Within the short time available it was only possible to capture a small part of the diversity that exists, especially at the regional level.
Report structure
describes the structure and institutions of the World Bank Group, focusing on IDA but also touching on the non-concessional arm, the IBRD, and the IFC. It also looks at the to ARD&FS and the different aid instruments that it deploys. examines actual aid flows and trends over the last 15 years. explores the way in which the Bank codes and reports its operations. --vis s on ARD&FS with the actual scale and trends in its lending. summarises the policy implications of the analysis
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World Bank in perspective

Institutional set up
World Bank Group The World Bank Group (WBG) operates through an array of institutions and instruments. The Group comprises IBRD, IDA, IFC, MIGA and the International Centre for the Settlement of Investment Disputes (ICSID). WBG delivers aid (according to the OECD-DAC definition of ODA, that is concessional loans with a grant element of at least 25%) to the ARD&FS sector through IDA. IDA provides grants and highly IBRD, which offers loans and risk management products to its member governments at close to market rates, deals with middle-income and creditworthy poor countries. Some countries qualify for a blend of IDA and IBRD credits. IBRD is a DAC member and reports its lending to the CRS, where it is recorded as Other Official Flows (OOF).5 IFC focuses on providing support to the private sector through a mixture of equity and loan guarantees, as well as providing advisory services. IFC does not report to CRS. IBRD and IDA, which comprise what is commonly called the WB, operate as one entity. The division between the provision of grants or loans, or indeed a mixture of the two, is determined by the income level and credit-worthiness of the country concerned. There are 79 countries that are eligible for IDA funding, most of which are in Africa (39). It provides around 20% of its aid in grants and the remainder as long-term (35 40 years) interest-free credits, with a 10-year grace period. WB/IBRD is governed a board of 25 Executive Directors (EDs). Five EDs are appointed, representing the five countries holding the largest number of shares, whilst 20 EDs are elected by the other member countries. The same EDs are also on the boards of IDA and IFC. MIGA has a separate board. Matrix management structure WB operates through a complex matrix management system which means that each sector (such as agriculture and rural development) and region (such as Africa) is represented by a distinct unit. Overlaying the sector and regional structure are Networks, the most important of which are the Sustainable Development Network, to which ARD belongs, the Human Development Network and the Poverty Reduction and Economic Management Network. In addition, there are over 90 Thematic Groups (TGs) that serve to link knowledge activities both in sectors and regions. For example, in ARDrelated areas there are TGs in Sustainable Agriculture Systems, Knowledge and Institutions (SASKI), Rural Policies, Community-Driven Development (CDD), Gender and Rural Development, Rural Infrastructure, Markets and Finance, and Natural Resource Management. Regions There are six regions: Africa (sub-Sahara), South Asia, East Asia/Pacific, Latin America/Caribbean, Middle East/North Africa, and Europe/Central Asia. The WB has aggressively decentralised over the
OOF are transactions by the official sector with countries on the List of Aid Recipients which do not meet the conditions for eligibility as ODA or Official Aid, either because they are not primarily aimed at development or because they have a grant element of less than 25%.
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last 15 years. It now has offices in over 120 countries. The staffing of the country offices reflects the nature of the portfolio of the Bank in each location. The heads of country offices are Country Directors (CDs), most of whom are resident in country although some are based in Washington. In some cases, one CD may be responsible for WB offices in a number of neighbouring countries. Sectors Each sector is overseen by a Sector Board, comprising the managers for the sector in each region. The Sector Boards ultimately manage the processing and implementation of operations. They also manage and own corporate policies and strategies for their respective sectors and oversee analytical and advisory activities (AAA) and economic sector work (ESW). WB operations are increasingly multisectoral. At the initiation of an operation, the sector which has the predominant allocation of resources expected by component agriculture, roads, social protection, for example determines which of the different Sector Boards (such as education, health etc.) takes on this responsibility. For this reason, the operations for which the Agriculture and Rural Development Sector Board is responsible in effect defines the scope of the sector as far as the Bank is concerned. The Sector Board serves as a vital link in turning policy into operations and in monitoring the quality of the operations, including disbursements. Within agriculture and rural development, there is a central unit the Agriculture and Rural Development Department (ARDD), which provides policy and technical backstopping to the operational units dealing with agriculture and rural development in the different regions. It is also responsible for the formulation of corporate policy and strategy for the sector through the ARD Sector Board and for producing an Annual Portfolio Review of ARD. Operations The lending operations of the Bank are managed by regional sector units, for example, Africa Agriculture (AFTAR). The operational units in the agriculture sector are responsible for managing the process of identifying and formulating projects and programmes in ARD&FS, presenting them to the WB Board and then supervising implementation through to completion. Each unit comprises a manager and regular full-time staff, most of whom will have a background in agriculture. They are supplemented by short- and long-term consultants in the specific technical areas that are required at the time. The operational units in the Bank also manage over 2000 trust funds (TFs) on behalf of other development agencies and foundations, many of which are in the ARD sector. Although some TFs include WB resources, there are increasing numbers of multidonor trust funds (MDTFs) which are financed by several donors, where the Bank provides management services but does not necessarily contribute funding. Collaboration within WB senior management is increasingly committed to enhancing collaboration between the different members of the Group. Although IBRD and IDA operate as a single entity, the links with IFC have never been strong. Efforts are being made to strengthen the links between the two, for example, by committing both Bank and IFC to delivering on common policies and strategies, and by greater sharing of information.
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Resources
IBRD IBRD raises funds for its lending operations by issuing bonds on international capital markets. It can raise funds on very favourable terms because of its AAA-rated status. For example, in 2010 it raised the equivalent of US$34 billion in 28 currencies on medium to long maturities. Although broad guidelines exist regarding allocation by sector, it is essentially driven by demand from governments. Although not classified as ODA, WBG resources available from IBRD and IFC contribute enormously to the overall external financing of the agriculture sector. WB data on IBRD as well as AidData document the extent of non-ODA funds targeting the sector. IDA IDA -loan facility. Its resources are replenished every three years. Over the last five replenishments, IDA has seen a massive expansion, especially since IDA-13 which started in fiscal year (FY) 2003 (see Table 1). At the beginning of the century this expansion was driven mainly by the commitment of the donor community to poverty reduction and the achievement of the Millennium Development Goals (MDGs). The continued expansion under IDA-15 was driven by the global food, fuel and financial crises. The surge in IDA resources after the global food price crisis of 2007 08 has especially benefited sub-Saharan Africa and South Asia. There are also indications that increased contributions to IDA by certain donors, for example the United Kingdom, reflect their individual commitment to reaching the aid target of 0.7% of gross domestic product (GDP) and the willingness to channel much of the extra resources through multilateral agencies including WB. The latest IDA replenishment (IDA-16) was completed in December 2010 (for FY 2012 to FY 2014) for US$49.3 billion. This is 12% higher than IDA-15 6 billion. IDA-13 was less than half the size of IDA-16. The case for the IDA-16 replenishment was particularly strong because of the fact that there are only four years remaining to 2015, the target year for achieving the MDGs. mainly from donor governments (60%) but also from nts from IFC and IDA repayments from the 27 countries that have graduated from IDA. IDA is the largest single source of concessional financing to developing countries where people earn less than US$2 per day. It provides finance for around 20% of all development programmes in IDA countries. It provides resources for agriculture through long-term development programmes and through emergency responses, such as the Global Food Crisis Response Program (GFRP). Its longterm investments in agriculture particularly target smallholder farmers and support a wide range of actions which are currently defined to include: increasing productivity; linking farmers to markets; building rural roads; strengthening producer organizations; reducing risk and vulnerability, including provision of safety nets; enhancing non-farm income; and, overcoming barriers to entry in carbon tor are also priorities.
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Table 1. World Bank IBRD and IDA lending to ARD&FS by theme and sector, FY 2005 10 (US$ million). FY05 IDA-13 Theme: Rural Development Sector: Agriculture, fishing, forestry Total lending: Themes and Sectors Of which: IBRD IDA 2,802.2 FY06 IDA-14 2,215.8 3,175.7 2,276.8 FY07 FY08 FY09 IDA-15 4,298.6 5,003.7 FY10
1,933.6
1,751.9
1,717.4
1,360.6
3,400.0
2,618.3
22,307.0
23,641.2
24,695.8
24,702.3
46,906.0
58,747.1
13,610.8 8,696.2
14,135.0 9,506.2
12,828.8 11,866.9
13,467.6 11,234.8
32,910.8 13,995.2
44,197.4 14,549.7
Source: World Bank Annual Report 2010.
The allocation of IDA resources between eligible countries follows a performance-based allocation system. This includes country performance ratings of IDA countries which are assessed annually using country policy and institutional assessment ratings. This comprises 16 criteria grouped into four equally weighted clusters covering policy and institutional factors: (i) economic management; (ii) structural policies; (iii) policies for social inclusion and equity; and (iv) public sector management and institutions. The overall aims of IDA are to help the poorest countries meet the MDGs, respond to climate change, promote socially and environmentally sustainable development and to better manage risk. One of the five key priority areas of support is for Creating opportunities for growth through promoting agriculture and food security .6 At global level, WB does not set sectoral allocations for the use of IDA funds. However, actual allocations are expected to be broadly in line with the Bank s long-term strategy, Meeting the Challenges of Global Development, which was defined in 2007.7 Once a country IDA allocation has been determined, using the performance-based system described above, the core IDA sectoral allocations are largely set through a process of consultation between the Bank, government and national stakeholders. This takes place through the process of drawing up a Country Assistance Strategy (CAS). CASs are intended to enable countries to align external assistance to their national development priorities. All CASs are results-based and identify specific results for each area of support. The CAS, which usually has a three-year horizon, is developed through broad, stakeholder consultation. It is ultimately a reflection of government-perceived priorities for the economy as a whole and the role envisaged for financing from WB. As a result the CAS has become the gateway for
6 7
World Bank (2011a). World Bank (2007a).
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operations at the country level. For IBRD countries, the equivalent mechanism is the Country Partnership Strategy. Other resources Trust Funds. The Bank also manages a large number of TFs, the most important in the sector being the Global Agriculture and Food Security Program (GAFSP). Others include carbon offsets, the Global Environment Facility (GEF) and recipient-executed activities. IFC. IFC has a growing programme in the agro-industries sector. It operates in over 100 countries. In FY 20 s (US$536 million). It explicitly engages in food security by supporting agribusiness value chains from farmer to consumer. In FY 2010 it invested US$2 billion in lending across the agricultural supply chain. It also provides advisory services, about 30% of which are aimed at investment climate work. Although part operations are in the form of equity and long-term loans, the fastest growing part of its portfolio is in loan guarantees, which make up 31% of its products in FY 2010.8 The main part of its contribution to achieving the goals of the Agriculture Action Plan (AAP)9 is in this form. IFC in effect reduces the risk of private-sector investment in agriculture, especially agro-processing, by providing loan guarantees. In this way, it is able to leverage large amounts of private-sector investment that would not otherwise be made in the sector. This is not only in line with the overall rhetoric that private investment is crucial to the development of agriculture, but it also offers the opportunity to ensure a more balanced financing of the sector by using domestic and external (aid) public funds to leverage private domestic and foreign investment.
Policies in support of ARD&FS

Corporate policy and strategy processes As a multilateral organisation, the Bank is under less pressure to respond to the political imperatives of its members than bilateral agencies although some members of the board may seek to exert influence on controversial decisions. Bilateral aid organisations necessarily reflect the political agenda of the government in power. For this reason, country, regional and sector analyses and evaluation processes which result in policies and strategies for various sectors are perceived to be objective and have become the reference point for many other agencies. Along with many major donors and international financing institutions, WB puts considerable staff time and resources into formulating corporate strategies and policies to guide its work in different sectors. In the Bank, such strategies, which have a life span of five to seven years in one or more phases, go through a rigorous process of lesson learning, analysis, consultation, review and evaluation. It invests a lot of effort on systematic programme supervision, mid-term reviews and implementation completion reports which are geared towards learning lessons that can be applied as good practice to its operations. There is also the Independent Evaluation Group (IEG) which reports to ible for providing an objective assessment of the results of WBG work in order to identify and disseminate lessons learned from experiences.
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IFC (2011). World Bank (2009a).
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Although offensive and are strongly oriented to its partners, clients and the development community, they are ultimately judged by the extent to which they can be translated into programmes that achieve corporate goals and objectives in the sector concerned. One indicator of success is the volume and quality of lending operations that occur in the sector. In addition to periodic sector strategies, the different sectors and even TGs such as SASKI carry out annual portfolio reviews which are used to fine-tune current and pipeline operations. However, given the long time lag between conception of a lending operation and its effective starting date which can often be two years or more the impact of a specific strategy upon aggregate lending in the sector is not immediately evident. Corporate strategies in ARD ARD have been guided by three different corporate strategies as well as by global crises, evaluations of the portfolio and by strongly articulated priorities expressed by senior management. Rural Development: From Vision to Action10 (V2A) was launched in 1997 after several years of consultation across the globe. Reaching the Rural Poor A Renewed Strategy for Rural Development 11 (RDS) came into operation in 2002 and continued through 2007. The Agriculture Action Plan12 is the current strategy (by a different name); it has a shorter, three-year life span (2010 12).
the course of the last 15 years have remained largely unchanged, it has nuanced the theme in several ways (see Table 2). Before V2A, the Bank was rather narrowly focused on agriculture in the traditional definition of the term, often funding commodity-specific projects. For a decade, V2A and RDS (1997 2007) broadened the scope of the strategy to be more rural, coining the phrase rural space to avoid calling rural development a sector. After 2000, in response to the MDGs and Poverty Reduction Strategy (PRS) processes, the focus was to make the strategy more oriented towards poverty reduction. More recently, triggered by the global financial crisis and especially by the global hike in rice crisis was at least in part the consequence of decades of underinvestment in agriculture, and that cereal yields were stuck, especially in Africa, led to the formulation of the AAP which has brought agricultural productivity to the fore as a target for Bank operations in ARD. The shift in thinking is also reflected in the titles of the documents, where rural (in V2A and RDS) has been replaced by agriculture, and in the priority themes addressed.
10 11
World Bank (1997). World Bank (2003). 12 World Bank (2009a).
18
Table 2. World Bank strategies in ARD. Rural Development: From Vision to Action (1997 2001) Rural strategy and policy formulation Agricultural systems intensification Reaching the Rural Poor: A Renewed Strategy for Rural Development (2002 07) Enabling environment for broad-based and sustainable rural growth Enhancing agricultural productivity and competitiveness Non-farm economic growth Agriculture Action Plan (2010 12)
Raising agricultural productivity
Linking farmers to markets and strengthening value addition
Management of natural resources and forestry Water allocation and management Local and community development and rural infrastructure
Reducing risk and vulnerability
Social well-being, managing risk, reducing vulnerability Sustainable management of natural resources
Facilitate agricultural entry and exit and rural non-farm income Environmental services and sustainability
As can be seen in the table, enhancing agricultural productivity has been central to all three strategies. The management of natural resources has also been a consistent theme, although in AAP this takes on a new guise in the form of agriculture as a provider of environmental services (following the approach set out in WDR 2008).13 Supporting non-farm growth and income is common to RDS and AAP, as is attention to risk and vulnerability. However, novel features of AAP are the focus on linking farmers to markets, strengthening value chains and value addition. The idea that exit strategies are needed for some rural people, incorporated into AAP, marks a major shift of thinking from earlier strategies, which were based on the premise that rural development is a way of keeping people in rural areas and reducing migration to towns. It is clear that AAP shifts the focus of Bank strategy back towards agriculture. This is reflected not only in the title of the document, but also in the emphasis of the content, focusing on enhancing agricultural productivity (receiving 74% of lending in FY 2010) and value chains (17%). However, softer components continue to find a place in the strategy through addressing risk and vulnerability (6%), rural non-farm income generation (9%) and environmental services (14%). AAP has a shorter time horizon than earlier strategies just three years which is designed to coincide with the threeyear CAS cycle. The shift in emphasis is also reflected in the change in institutional architecture from the time when agriculture did not feature in the name of any unit and the sector was managed by a Rural Sector Board to the present ARDD and the Agriculture and Rural Development Sector Board. AAP was formulated through close collaboration with the regions. It is now being translated into Action Plans for each region. The Action Plan for the Africa region was launched in early March 2011, but other regions have not yet formulated Action Plans. The scope and content of each regional Action Plan is strongly influenced by the three rural worlds depicted in WDR 2008 agriculture-based,
13
World Bank (2007).
19
transforming and urbanized. The Action Plan for Africa is a potentially powerful mechanism for ensuring that corporate policy is translated into lending because it is completely congruent with the four pillars of the Comprehensive Africa Agriculture Programme (CAADP) developed by the New , the continentally-accepted framework for the development of the sector. This is perhaps the first time that the Bank has so thoroughly aligned itself legitimising CAADP in the donor community and the active support it provides through its own lending programme and in managing MDTFs that provide support to CAADP processes. The Africa Agriculture Action Plan ,14 launched in March 2011 as a 10both of which agriculture has a place: Competitiveness and Employment , through agricultural productivity and diversification, with indicators being the rate of growth of agriculture value added and cereal crop yields; and Vulnerability and Resilience , including improved resilience to climate change. Scale and scope of the current ARD strategy T for ARD have always included the operations of IDA, IBRD and IFC. However, the emphasis on IDA-eligible countries was always clear. It was not until the formulation of the current AAP that lending projections for all three were formally presented together. The lending projection for AAP of US$6.2 8.3 billion per year (in terms of commitments) is to be delivered by all three institutions. IBRD and IDA are not formally separated in AAP and for the first time the IFC contribution to the sector US$1.7 1.9 billion is included. At one level the presentation of WB and IFC jointly in AAP is intended to demonstrate that different parts of WBG are working together better. However, there is also a clear commitment to strengthening the way IBRD/IDA and IFC activities complement each other, especially now that there is a clear focus on private-sector-driven growth, which is IFC s standard modality.
Aid instruments and support to ARD&FS

Since 1995, two main changes have occurred in the type of financing instruments available to the Bank and the way they have been used. The first change reflects the shift from the simple, single-sector or subsector project approach to more complex, multisectoral programmes. The second change is the replacement of Structural Adjustment Loans (SALs) by Development Policy Loans (DPL). This marked the shift away from non-sector lending built around conditionalities controversially associated with the structural adjustment era towards jointly agreed country policy reform underwritten by DPLs. A more detailed discussion of the different lending instruments is contained in Annex 1. Although the Bank has employed 13 different lending instruments during this period, the most important distinction is between investment loans, of which there are six main types Specific Investment Loans (SILs), Learning and Innovation Loans (LILs), Adaptable Program Loans (APLs), Emergency Recovery Loans (ERLs), Sector Investment and Maintenance Loans (SIMs) and Technical Assistance Loans (TALs) and development policy instruments SALs (until FY 2005) and DPLs (from FY 2005 to present). Investment loans are used to finance specific project investments, such as extension, markets or roads. Development policy loans are in effect budget support tied to specific policy actions that may be sector-specific but often cover reforms in several sectors. The data for this
14
World Bank (2011b).
20
analysis have come from the WB Project Database of Agriculture + 3 .15 Over the period, the ARD Sector Board has been responsible on average for around 84% of all lending to the sector. Its share was smallest in FY 2009, when it fell to 69%.
Investment instruments
Specific Investment Loan The main instrument for projects is SIL, which is defined as being to support the creation, rehabilitation and maintenance of economic, social and institutional infrastructure. Over the 15-year period studied, SILs have made up around 70% of all lending (Figure 1). The shift away from simple ARD-sector projects to multisectoral projects has meant that financing is invariably shared with other sectors. Although these supporting investments are designed to contribute directly to the sector development goals, they might not be captured in the reporting system for ARD. Figure 1. Total and Specific Investment Lending (SIL) to ARD&FS, FY 1995 2010 (constant year 2000 US$). 4500 4000 3500 US$ million 3000 2500 2000 1500 1000 500 0 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 SIL TOTAL
Source: World Bank data for Agriculture +3 plus other sectors.
Adaptable Programme Loan APLs provide phased support for long-term development programmes. They involve a series of loans, each usually of three to five years duration, that build on the lessons learned from the previous loan in the series. Successive phases of an APL are usually triggered by the achievement of specific milestones that are taken as indicators of success. Since FY 1995, APLs have comprised 5.9% of all lending commitments.
15
e. = agricultural extension and research; animal production; crops; livestock; forestry; irrigation and
forestry; agricultural marketing and trade; and agro-industry.
21
Learning and Innovation Loan The Bank also adopted a series of new lending instruments which were intended to mitigate its earlier tendency to finance only large and bankable projects with short duration the classic US$50 million or more project with a five-year implementation period. LIL was created as a way of financing projects of US$5 million or less, and in areas that could be considered experimental, risky and/or timesensitive. Since FY 1995 LILs make up only 0.2% of all lending commitments. Emergency Recovery Loan ERLs support economic and social recovery immediately after an extraordinary event, such as war, civil disturbance or natural disaster. In the Bank, as with almost all providers of ODA, there has been a marked increase in the volume of emergency funds over the last 15 years (Figure 2). Since FY 1995 ERLs have averaged 4.7% of all commitments. However, during the last five years they have averaged 6.1%, compared with just 2.8% for the five years from FY 1995 to 1999.
Figure 2. World Bank lending for emergencies, FY 1995 2010 (constant year 2000 US$). 700 600 500 US$ million 400 300 200 100 0 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 ERL
Other investment instruments SIMs focus on public expenditure programmes in specific sectors. A SIM was used to finance the first of the Agriculture Sector Investment Program (ASIPs) in Zambia in the mid-1990s which were, in effect, the precursors of sector-wide approaches (SWAps) in agriculture. A TAL is used to build institutional capacity in the borrower country. It may focus on organizational arrangements, staffing methods and technical, physical or financial resources in key agencies.
Programme lending instruments

Development Policy Loans DPLs started in FY 2005. In many ways, they replaced the SALs that were used during the 1980s and 1990s and ended in FY 2005 (Figure 3). Taken together, since FY 1995 SALs and DPLs have accounted for over US$4.4 billion of lending to ARD or almost 10% of all commitments to the sector. Since they
22
were introduced, DPLs have come to play an increasingly important role in total lending. Over the last five years they have averaged 15.9%, peaking at 27.7% in FY 2009 following the world food and financial crises. Figure 3. World Bank lending through Structural Adjustment Loans (SALs) and Development Policy Loans (DPLs), FY 1995 2010 (constant year 2000 US$). 1400 1200 1000 US$ million 800 DPL 600 400 200 0 SAL
FY00
FY95
FY96
FY97
FY98
FY99
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
Source: World Bank Project Database.
A DPL is generally provided through a programmatic series of successive development policy operations. Some development policy operations in IDA-eligible countries support the implementation of a country's PRS and are called Poverty Reduction Support Credits (PRSCs) or grants.
FY10
23
Aid flows to ARD&FS

Definitions of agriculture and rural development
World Bank definition The WB has different definitions of ARD depending upon the audience that is being addressed. In part, this reflects the way the separated sets of codes for the sectors and for themes. Each data set sums to 100% and each activity has a set of sector and thematic codes. In WB Annual Reports a mixture of data on sectors and themes is presented, but reporting on thematic areas is clearly more interesting for a public communication document. The current categorisation of commitments in ARD is presented in AAP as Agricultural production and markets , representing the sum of agriculture, fishing and forestry together with agriculture markets, trade and agro-industry. In WB Annual Reports, agriculture, fishing and forestry are called Agriculture . AAP includes Special Financing and various other investments and newly emerging areas that fall under the ARD Sector Board, such as land administration, agricultural agency reform, agricultural and rural finance, and market roads. IFC definition IFC operates a completely separate system of codes from WB. In the area of ARD&FS it includes: Agribusiness production and processing Agri-related trade finance Fertilisers Agri-logistics and infrastructure Food retail
Trust funds Trust funds are not reported as part of WB aid flows but are comparatively small, amounting to US$132 million in 2006 08. The largest TF is GEF, which accounts for 70% of the total.
World Bank aid to ARD

The following figures (and associated data tables in Annex 2) present the aid flows from WB to ARD over the period since FY 1995, using figures from the WB Project Database. Some comparisons are made between the different aid flow sources WB Project Database, CRS and AidData and the different definitions of ARD and ARD&FS16 (see Methodological Note in the main report). In the data reported to CRS there is almost no difference between the narrow definition of agriculture, forestry and fishing (AFF) and the broader one (AFF+) (see footnote 16) because the Bank has not reported
The narrow definition of agriculture, forestry and fishing (AFF) uses CRS purpose codes 311, 312 and 313. The broader definition (AFF+) includes rural development (code 43040) + development food aid (52010) + emergency food aid (71010). The still-broader definition adopted by the Overseas Development Institute (ODI) (ARD&FS) also includes social mitigation of HIV/AIDS (16064), 10% of banking and financial services (240), 10% of business support services (25010), 20% of trade policy (33110) and trade facilitation (33120), 10% of general budget support (51010) and 10% of support to non-governmental organisations (920).
16
24
against rural development (since 1998), development food aid or emergency food aid. It is only when examining the ARD&FS definition that differences can be seen. Project Database provides its own interpretation of the aid flows, which includes lending by IDA and IBRD (Figure 4). The definition by WB, which follows the definition of the sector by the ARD Sector Board, includes agriculture, forestry and fishery as well as ARD-related lending within other sectors such as health, industry (agro-industry), trade and public administration. This shows that the low point of Bank lending was in FY 2000 at US$1.8 billion, and the peak was in FY 2009 at US$5.3 billion. In real terms, the peak in FY 2009 was no higher than the peak 12 years before, in FY 1997. The intervening years saw a precipitous decline to FY 2000 and slow recovery in lending since then.
Figure 4. World Bank lending to ARD, FY 1995 2010 (constant year 2000 US$). 4500 4000 3500 3000 US$ million 2500 2000 1500 1000 500 0 95 96 97 98 99 0 1 2 3 4 5 6 7 8 9 10
IBRD & IDA
Using CRS data for IDA, it is possible to compare AFF with the broader definition (ARD&FS. Figure 5 shows that the two definitions run closely in parallel, with AFF totalling around 27% more than ARD&FS over the period 1995 2009. The gap in 1997 and 1998 is because, after 1999, the Bank no longer reported to CRS under rural development (43040), budget support (51010) and material relief assistance (72010).
25
Figure 5. IDA lending to agriculture, forestry and fishing using narrow definition (AFF) and broader definition (ARD&FS) (constant 2000 US$). 2000 1800 1600 1400 US$ million 1200 1000 800 600 400 200 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 ARD&FS AFF
Source: CRS.
Using AidData and the AFF+ definition, a different picture is presented (Figure 6). In particular, the dramatic increase in lending over the period FY 2005 to FY 2009 is not evident. It is not clear if the explanation for this discrepancy lies in the fact that only a part of IBRD operations possibly only the near-concessional items are captured by AidData.
Figure 6. IBRD and IDA lending to ARD&FS, 1995 2009 (constant year 2000 US$). 6000 5000 4000 3000 2000 1000 0 IBRD IDA Total
US$ million
2003
2006
1995
1996
1997
1998
1999
2000
2001
2002
2004
2005
2007
2008
Source: AidData.
2009
26
Trends within World Bank lending to the agriculture sector

Global flows to ARD The data presented in this section are primarily drawn from AidData and the WB Project Database. The primary source for the AidData database is CRS and the following graph compares the two and shows them to be relatively similar and of the same scale with respect to IDA flows. A comparison of the WB Project Database and the AidData database (for IDA and IBRD combined) is shown in Figure 6. The figures for IDA alone show no particular trend in lending over the last 15 years (Figure 7). Figure 7. IDA lending to ARD&FS, 1995 2009 (constant year 2000 US$). 1600 1400 1200 US$ million 1000 800 IDA 600 400 200 0
1998
1995
1996
1997
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Source: AidData.
Figure 8 compares figures for IDA lending to agriculture based on the narrow definition (AFF) and broad definition (ARD&FS) derived from CRS with the figures from AidData. Although there are some distinct differences between the data sets, in general they are quite similar in pattern.
2009
27
Figure 8. AidData and CRS (AFF and ARD&FS) calculations of IDA lending to agriculture, 1995 2009 (constant year 2000 US$). 2,000 1,800 1,600 1,400 US$ million 1,200 1,000 800 600 400 200 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 AidData AFF ARD&FS
Regional trends in aid to agriculture Regionally, the two data sets (AidData and WB Project Database) show a relatively similar breakdown. However, there are differences, not least due to the two incompatible definitions of regions. The data in both AidData and the WB Project Database show a similar transition from a dominance of lending in East Asia during the 1990s to increasing volumes in South Asia and Africa and most recently Latin America and Caribbean (See Figures 9 and 10). The strong growth of investment in the sector in recent years is captured only in the WB Project Database and is shown to be largely driven by lending in Africa region and Latin America (see Annex 3(a) with AidData figures and Annex 3(b) with the WB Project Database figures).
28
Figure 9. World Bank regional lending to ARD&FS according to data from AidData (constant year 2000 US$). 5000 4500 4000 3500 US$ million 3000 2500 2000 1500 1000 500 0
South of Sahara South America South & Central Asia Oceania North of Sahara North & Central America Middle East Far East Asia Europe Africa
Figure 10. World Bank regional lending to ARD&FS according to data from the World Bank Project Database (constant year 2000 US$). 3500 3000 2500 US$ million 2000 1500 1000 500 0
SAR MNA LCR ECA EAP AFR
29
Reporting World Bank aid flows

How aid data are coded
WB has its own coding system stored in the Project Database. WB started reporting to CRS in 2009, and has also reconciled data from 2000. The AidData database is based on CRS and elaborated by assigning a sector code to each project, following an examination of all aid projects. CRS CRS is the standard international vehicle for reporting aid flows. In agriculture, the narrow definition (AFF), which is almost always used when reporting aid to agriculture, uses three main sector codes for agriculture (311), forestry (312) and fishing (313). DAC also uses a broader definition (AFF+) which adds rural development (43040), food security programmes (52010) and emergency food aid (72040). It is possible to construct a further expanded definition of the sector ARD&FS by selecting the appropriate CRS five-digit purpose codes (see Annex 4). The expanded definition adopted by this study includes: Agricultural production, processing and marketing (three sector codes + 19 purpose codes) Rural socio-economic development (four purpose codes) Emergency relief and welfare (three purpose codes)
World Bank Project Database The system of recording codes at the Bank is managed by the OPCS department, which is an independent arbiter of the way each operation is coded. There is a Sector and Theme Governance Group which meets annually to discuss changing codes. The system is resistant to changing the codes so as to avoid any undue influence of lending fashions. OPCS also meets regularly with DAC to discuss coding and is currently proposing changes to the way Bank codes are mapped to CRS. OPCS is responsible for reporting to OECD (and the International Aid Transparency Initiative IATI). OPCS scrutinises the documents for each operation in order to verify the coding that has been assigned by the Task Team Leader (TTL). It dialogues with the TTLs and sector managers concerned immediately prior to Board approval if adjustments to the coding are thought to be needed. In the WB coding system, each operation can only be coded with up to five sector codes and five thematic codes. The responsibility for assigning codes to each operation at the beginning of its cycle (the Activity Initiating Summary) rests with the TTLs in the operational units. TTLs appear to give little thought to the task of coding and generally use the codes with which they are familiar. There are proposals by OPCS to add codes or layers of codes that would be recorded by TTLs. For example, in response to the emphasis on climate change and environment, there is a proposal to ask TTLs to record (at the beginning of the cycle) the percentage of an operation that addresses adaptation and the percentage on mitigation measures. Sector codes have remained more or less constant over the years, whilst thematic codes appear and disappear according to corporate priorities or fashions. For the sector, agriculture uses Agriculture +3 codes which comprise six core AFF codes, ublic administration minus agriculture, fishing and forestry plus two codes classified under industry and trade Agricultural marketing and trade and Agro-industry (see Table 3). However, within any single operation there could be codes related to any
30
of the other sectors including finance, health, energy and mining, transportation, water, sanitation and flood protection. DPLs, which can account for from 25% (IDA) to 45% (IBRD) of the portfolio, are coded in a rather ad hoc manner since they tend to support economy-wide policy reforms as well as sectorspecific programmes. only to commitments, which are recorded at the moment that the operation is approved by the Board. This results in a very lumpy or spiky pattern of aid flows since a single large commitment in one year may produce a spike when compared with the neighbouring years when smaller or fewer commitments might be made. A persistent issue is that whilst the sector codes allocated to an activity rightly add up to 100%, the thematic codes are also defined to sum to 100%, leading to the underreporting of commitments in some sectors in the WB Annual Reports. Although this does not appear to be a serious problem for agriculture when compared with health, for example, it is one which has been raised on many occasions. In the APR for FY 2005, attention was drawn to a major discrepancy between the figures reported under the rural theme (US$2.8 billion) and ARD review (US$8.7 billion) and that lending to agriculture could be underreported because all lending for agency reform is allocated to the law and justice sector. Comparing CRS with World Bank Project Database CRS is clearly more detailed and disaggregated than the WB coding system, having around 30 purpose codes that can be assigned to ARD&FS. However, this advantage is confounded by having both sectoral codes and thematic codes mixed, which could result in some double counting or at least difficult choices to be made when mapping Bank codes to CRS. CRS includes codes which are sectoral (such as agriculture), thematic (such as rural development) and for financing instruments (such as budget support) which cut across the two separate sets of Bank codes. The WB coding system is more internally consistent than CRS because it has separate and clearlydefined sector and thematic coding. However, the restriction of a maximum of five sector codes and five thematic codes for each operation is a limitation since nowadays most operations are multisectoral. This can pose a dilemma for TTLs when coding an operation at the beginning of its process. Mapping World Bank data to CRS All WB grants and IDA credits are classified as ODA. All IBRD lending reported to CRS is classified as OOF. Until 2009 WB did not provide reports to DAC in a standard format but instead DAC staff downloaded data from available Project Database and assigned codes according to mapping that had been discussed. Dissatisfaction with the way the data were transformed to CRS codes led OPCS to begin its own mapping exercise. From 2009, OPCS has been reporting to OECD with CRS codes already selected. The records taken from the Project Database were also reformatted to meet DAC reporting requirements. CRS mapping takes account of only recorded in markers used by DAC to aggregate general themes such as gender or environment. This meant that reports of other donors.
31
The Bank has retrofitted its data to the agreed CRS codes for the period 2000 to 2008. It covers commitments (net of cancellations), gross disbursements and net disbursements. However, since disbursements are not recorded by sector or theme, the figures are merely allocated according to the share recorded at commitment stage. Data on commitments and all project information come from the publicly available projects database. Data on disbursements, repayments etc. come from the Business Warehouse. All lending instruments are treated in the same way with no distinction between DPLs and investment loans. An OECD working party on statistics17 reported that there has been a match between the CRS and DAC data since WB started reporting its concessional and non-concessional flows at the detailed activity level in 2009 in full compliance with the requested CRS++ reporting format. This allows users to easily go from the aggregate-level statistics to analyses of aid at the detailed activity-level, which marks a significant improvement in reporting. Problems with mapping to CRS The CRS uses a five-digit code to describe sector and purpose. At the three-digit level, the codes are similar to those of WB five-digit level, CRS is certainly more detailed than is intended to foster. In contrast, WB ector codes indicate only the part of the economy supported. Development goals are captured by thematic codes. This divergence can lead to incorrect mapping. However, CRS allows only five sector codes and five thematic codes assigned. For proper mapping, Bank projects have to be subdivided and unique CRS codes assigned to each part, which is a lengthy manual process. r example, the Bank assigns part of the commitment in each sector-specific project to government administration, which is not in line with the CRS rationale for using purpose codes. In the Bank codes, this tends to be a catch-all code. In ARD this code is BL Public Administration agriculture, fishing and forestry . In some sectors, for example in health and trade but not agriculture, detailed. Bank codes labelled General such as AZ General agriculture, fishing and forestry are mapped to CRS codes 10 which are intended for broad policy and administrative management.
Table 3. World Bank Agriculture + 3 codes mapped to CRS. WB sector code AB WB sector WB theme code ALL WB theme CRS code 31166 CRS sector
AJ
Agricultural extension and research Animal production
ALL
Agricultural extension
ALL
ALL
31163
Livestock
17
OECD-DAC (2010).
32
AH AT
Crops Forestry
ALL ALL
ALL ALL
31161 31210
Food crop production Forestry policy and administrative management Agricultural water resources Agricultural policy and administrative management Agricultural policy and administrative management Agricultural services
AI AZ
Irrigation and drainage General agriculture, fishing and forestry
ALL ALL except 68 and 41 ALL
ALL All except Nutrition and food security and Small and medium enterprise support ALL
31140 31110
BL
YA
Public administration agriculture, fishing and forestry Agricultural marketing and trade
31110
ALL except 45, 50, 49, 47
YB
Agro-industry
ALL
All except Export development and competitiveness, Other trade and integration, Trade facilitation and market access, Regional integration All
31191
32161
Agro-industries
The use of codes Although OPCS does not have a direct vested interest in the way operations are coded, there appears to be implicit pressure in the system to report up sectors or themes that are high in the senior There is also implicit competition for the share of codes between sectors, especially when, as currently, the agriculture sector has a target for lending each year. Within the Bank, there is little interest at sector/region level in disbursement figures, unless a specific operation encounters serious delays in disbursement and falls into the category of problem project. The system for recording disbursements is completely separate from the coding of commitments. Disbursement figures are submitted to DAC in a very crude way, by allocating actual expenditures pro rata according to the share of codes used for the original commitment. Consequently, the disbursement figures reported provide only a reasonable picture of the different time profiles between commitments and disbursements at aggregate level. The profile is distorted, however, by the fact that DPLs, which make up 25% of IDA aid and often even more of IBRD aid, are reported as disbursing 100% at the moment they are approved. Few staff know about or are concerned with reporting to CRS. Bank staff treat its own internal coding system seriously since it is used in reporting to senior management and impacts the way performance of different sectors and units is assessed. It is also perceived as being important because it conveys important communication messages through the way it is translated into statements of performance reported in the Annual Report. In contrast, the way data are reported to DAC for CRS reporting out is largely unknown by staff and is the domain of a small number of experts whose task is to carry out the mapping exercise.
33
The main outside users of the coding system are civil society, which constantly monitors the way Bank resources are allocated, and the Sector Boards, which own subsets of codes and are accountable for commitments made. Concerns about discrepancies between reporting by sector and theme are serious because the figures feature in reports to the WB Board and in the Annual Report. The WBG Annual Reports report on both sectors and themes. Agriculture refers simply to agriculture, fishing and forestry but does not include agricultural markets, trade and agro-industry, which are routinely coded under the ARD Sector Board. The difficulty of combining sectors and themes is illustrated in Table 4. Table 4. World Bank reporting on sectors and themes, FY 2010. Rural development theme Agriculture sector Share of total IBRD and IDA lending (%) 14 5 15 10 5 2 3 1 10 9 3 7
Region Africa East Asia/Pacific Europe/Central Asia Latin America/ Caribbean Middle East/North Africa South Asia
Total lending (US$ billion) 11.44 7.52 10.82 13.91 3.74 11.33
Source: World Bank Annual Report, 2010.
From this report, total commitments by IBRD and IDA to agriculture in 2010 amounted to US$2.6 billion whilst rural development was US$5.1 billion. Of total commitments, this was equivalent to 4.4% going to agriculture and 8.6% to rural development. Limitations to the coding The Bank does not intend -specific surveys, evaluations and reporting that provide management with a vast array of data and assessments that inform policy and operational decisions. In addition to reporting by thematic codes, commitments to measures such as gender integration in lending to agriculture generate specific data that can be used to monitor performance on a regular basis.
illustrated in the portfolio reviews. For example, in FY 2010, 25% of all commitments are recorded under General agriculture, fishing and forestry which captures operations that are not otherwise captured, including DPLs.
it provides in support of private-sector investment in the agribusiness supply chain make a large contribution to growth in the sector. IFC made agribusiness a priority from FY 2007 and has increased its commitments from an average of US$257 million (FY 2000 02) to US$2 billion in both FY 2009 and FY 2010. It includes support for production, increases liquidity, improves logistics and distribution and expands access to credit for small farmers. In AAP the IFC is targeting commitments of US$1.7 1.9 billion per year. Its main instruments are long-term loans and equity. However, a growing share of
34
this perhaps 55% is represented by Rural and Trade Finance, which is in effect a loan guarantee fund. The IFC will also manage the private-sector window of GAFSP, providing innovative financing aimed at increasing the commercial potential of small and medium-sized agribusinesses and farmers by connecting them with value chains. The exclusion of IBRD and IFC lending operations in the sector from the information reported to DAC gives a distorted picture of total external resources flowing to the sector from WBG. Over the period from 1995 to 2009, IBRD lending constituted 57% of total lending to agriculture (and related sectors) by WB (IBRD + IDA), and in some years reached as much as 70%. The Bank also reports on the Bank-funded parts of the large number of TFs that it manages. However, the most important of these in the sector, including GFRP and GAFSP, have their own reporting channels. It is not clear how other externally funded activities such as carbon offsets, GEF and recipient-executed activities, which amount to around 3% of WBG commitments, are reported. Comparing World Bank and AidData aid-flow data Although AidData draws its figures from CRS and the publicly available WB Project Database, there are some year-to-year discrepancies in the figures (Figure 11). Figure 11. Comparison of World Bank and AidData figures for ARD&FS, FY 1995 2009 (constant year 2000 US$). 6,000 5,000 4,000 3,000 2,000 1,000 0 AidData WB
US$ million
Especially notable, is the fact that from FY 2000 AidData has consistently underreported total WB lending to ARD&FS. Part of the difference is accounted for by the fact that the WB data covers IBRD as well as IDA. It is also possible that AidData, which applies a single code to each project, is missing the details of the figures that appear in the WB Project Database, where multisectoral projects the majority are coded according to the detailed level of purpose. In other words, AidData reports only projects where the major share of commitments is identified as going to ARD&FS. Again, the surge in lending in FY 2009 recorded by the WB Project Database is missed by AidData.
FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09
35
Comparing World Bank and CRS aid-flow data Figure 12 compares the aid flows reported by the WB Project Database and the figures reported in CRS. The figures reported in CRS refer only to IDA grants and loans (ODA) against the broad definition (ARD&FS), whilst the WB Project Database records both IDA and IBRD lending. It is interesting to note that although the patterns are somewhat similar over the period from FY 1995, the total flows recorded by WB are substantially greater. In particular, the surge in lending recorded in FY 2009 is barely registered in CRS. The most likely explanation for this is the fact that the main component of the increase was programme lending by IBRD to the sector in the wake of the 2008 food and financial crises.
Figure 12. Comparison of aid flows to ARD recorded by the World Bank Project Database and CRS (constant year 2000 US$). 4500 4000 3500 3000 US$ million 2500 2000 1500 1000 500 0 1995 1997 1999 2001 2003 2005 2007 2009 IBRD/IDA (WBPD) IDA-ARD&FS (CRS)
Comparing World Bank, CRS and AidData aid-flow data Figure 13 presents all three aid-flow data sources together.
36
Figure 13. World Bank, CRS and AidData aid-flow data compared (constant year 2000 US$). 6000 5000 4000 3000 2000 1000 0 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 IDA - CRS WB - PD AidData
US$ million
37
Aid allocation vis--vis policy objectives

The role of corporate strategy and policy
ARD&FS, described above, play several different roles in the way the Bank operates. At the global level, in the development community, the strategies are widely accepted as setting forth the state of the art in the sector, providing good practices and indicating the most effective ways of tackling currently perceived agriculture-sector priority issues. Part of this, especially through influential reports such as the WDR 2008, also involves global lobbying on behalf of the sector, encouraging the donor community to apply more resources to the sector and to following particular good practices and approaches. Within the Bank itself, a corporate strategy for ARD not only helps to set the technical agenda and priorities for support in Bank-funded programmes, but also serves as a lobbying mechanism with those who decide on the allocation of resources and those who take part in dialogue with governments. The corporate ARD strategy will be u as a benchmark against which to assess whether projects and programmes that are presented for approval conform to current good practice and models of change in the sector. At country level, the ARD corporate strategy will be used as a knowledge resource when CDs discuss with government and other stakeholders about the scale and content of resources allocated to ARD in a CAS. Also at country level, the corporate ARD strategy will be used to influence the technical content and direction of specific ARD-sector operations.
Changes in aid allocation processes

The changing role of country ownership Country allocations under IDA are determined by a set of performance-based criteria described above. Within the IDA country allocation for the three-year period, ARD must, in effect, compete with other sectors for a share. 18 country partner governments has been driven by the recommendations of the Wapenhans Report, which was an inwas a critical factor in determining the likely success of a Bank operation. This meant that, from the early 1990s, the main decisions about sectoral allocation at country level were largely in the hands of CDs. The CDs, in consultation with governments, had enormous discretion as to the scale and content of projects that were formulated. During the long period during which Bank lending to agriculture was declining, the routine response from senior management when questioned about the reasons for this national development banks, which had been active partners in channelling external resources to the agriculture sector, was also a factor. In the last few years there are indications that developing-country partner governments has begun to change. Rather than somewhat passively
18
World Bank (1992).
38
accepting the priorities of government which ultimately determine the share of resources going to each sector proactive approach: as a partner in development, it believes that the Bank has a responsibility to provide data and analysis to help inform government decisions about the size and scope of support it The Bank is not prescribing solutions. Rather, the Bank is using its knowledge assistance to nourish an evidence-based debate in countries on policy issues .19 This provides a far more explicit entry point for the ARD strategy to influence both the scale and content of Bank operations at the country level. However, there are likely to be differences in the way the dialogue based on the ARD strategy takes place between the Bank (CDs) and governments in IDA countries as opposed to countries which request IBRD loans and are prepared to pay close to market terms. In an attempt to encourage CDs to support the inclusion of agriculture programmes in the CASs, in 2010 the Africa Region Agriculture unit prepared briefs for each country outlining investment opportunities and their potential impact on growth and poverty reduction. In addition, AAA and ESW are designed to underpin the case for investing in agriculture and for identifying the most effective sources of growth in the sector. Lending projections Following the logic of adopting a more proactive stance in discussing sector allocations with governments, under the current AAP, for the first time for many years, the agriculture sector (along with the infrastructure sector) sets out an annual lending projection, which acts almost as a target. This inevitably puts pressure on operations staff to achieve the target level of commitments each year. In practice, the achievement of the target is divided between agriculture and other departments. For example, in FY 2010 of the US$1 billion committed to agriculture in Africa the AFTAR was responsible for delivering around US$750 million and other sector departments some US$250 million. Focus on results As noted above when describing the resource allocation process, the WB is increasingly driven by both country performance and by the results its lending achieves. As noted in the launch of IDA-16, the relentless focus on results In the preparations for the IDA-16 replenishment,20 the Bank th, road transport and water supply. Disturbingly, despite ARD accounting for around 8% of IDA-15, it did not report on core sector indicators for agriculture. The Bank is currently discussing the introduction of a new lending instrument that will further strengthen its focus on results. The Program-for-Results (P4R) would disburse upon achievement of tangible results.21 make development finance much more results-focused, responsive to client partners and much more focused on strengthening the country institutions that deliver results. Funds will flow when the results
19 20 21
Africa Region Strategy, January 2011 (draft). The IDA 16 Replenishment Implementation Framework, IDA/OPCS, May 2010.
World Bank Press Release, 23 February 2011.
39
of programmes defined by the countries themselves are achieved and verified.22 It will focus on building client institutional capacity so that their own systems can be used. P4R would pose a considerable challenge to ARD where the link between public investment and results is long and complex and because ARD-sector ministries are notoriously poor at measuring results. Reflecting this state of affairs, although several disbursement-linked indicators were used as examples in launching the P4R concept, none of them related to ARD.
Translating strategies into lending

Linking corporate strategies to lending The Bank has an only indirect system for translating corporate policy into lending operations. Corporate policy extends from the President, Vice-Presidents (VPs) and Directors to the different sector managers and ultimately the Sector Boards in the case of agriculture the ARD Sector Board. The power of the CDs in the process has meant that corporate sector policy and priorities could not easily be translated into increased lending. At the country level, the fact that the Bank is only one of many donors and financing institutions operating in the ARD sector also limits its ability to translate its strategy into lending operations. Notwithstanding the trend towards measures to ensure greater aid effectiveness, governments do not always discourage competition between donors in providing funding. For many years the Bank has called itself the lender of last resort . This reflects the fact that, although it is often accepted as the lead agency in many sectors including ARD, governments often use Bank borrowing strategically. For example, a government might turn to a WB project in an area where its technical expertise is prized, whilst securing outright grants from a bilateral donor or foundation for agricultural inputs. The role of Sector boards Sector Boards ultimately manage the processing and implementation of operations. The ARD Sector Board in effect defines the scope of the sector by reference to the scope and content of the projects and programmes for which it is responsible. In FY 2010 for example, there were 51 projects under the ARD Sector Board but 89 projects in total across all sector boards in which there were new commitments to agriculture. The Sector Board serves as a vital link in turning corporate policy and strategies into operations and in monitoring the quality of the operations, including disbursements. It does this through an ARD Annual Portfolio Review which analyses current projects and their performance and highlights the features of new commitments. In practice, it appears that there is a structural disconnect between ARD (and the ARD Sector Board) and the operational units that manage the lending programme. Operations staff, for example, do not perceive AAP as being central to what they do or they way they do it. Many are only vaguely aware of the earlier rural development strategies V2A and RDS. This reinforces the impression that such corporate statements are first and foremost part of the corporate communications strategy to the outside world rather than a way of providing shape to the lending programme. The way the lending programme in the sector evolves seems to be driven more by the lending instruments that become available, the perceptions and interests of the CDs and the entrepreneurialism of individual TTLs than by the development model that is expressed in the strategies.
22
Under a normal project operation, such as a SIL, the Bank reimburses a government against evidence of expenditure according to disbursement categories set out in the credit agreement.
40
Other influences over allocations In addition to fully formulated strategies, the Bank is also driven by the themes and recommendations of the annual WDRs. WDR 2008, Agriculture for Development (formulated in 2007) proved to be release coincided with the global food crisis and the sudden realisation that part of the cause was that there had been decades of underinvestment in the sector. This was the first WDR to focus on agriculture since 1982. WDR 2008 drew the attention of the development community at large to the central role that the sector plays in both economic growth and poverty reduction. Within the Bank it also triggered a renewed interest and focus on the sector by senior management, reflected in a variety of follow up actions aimed at implementing the main policy recommendations contained in the report. Since its publication, almost all Bank operations in the sector refer to their alignment with the analysis, conclusions and recommendations contained in WDR 2008. Periodic pronouncements from the President and VPs also determine the priorities of staff at policy and operations level and can yield spikes in commitments to the sector. The most recent example is, of course, the food price crises in 2007 08 and in 2010, which brought agriculture and food security to prominence globally and within the Bank itself. The food price crises resulted in the GFRP in 2008 with US$1.2 billion in available funds, managed by the Bank with both Bank and other donor resources. need to increase food productivity and production in developing countries urging the G-20 to "put food first".23 The content of agriculture sector operations can also influence the scope and scale of lending. For example, the training and visit (T&V) extension model pioneered by the Bank which held sway across the world in the 1980s and much of the 1990s could be readily scaled-up globally and replicated from country to country and came to dominate projects in the sector. When T&V was discredited, it was replaced by a multitude of different approaches which could not be replicated so easily. This has meant that there has been a general reduction in the number of projects targeting agricultural advisory services. Another example is CDD. This approach was tested and Bank systems of reporting and accountability were adjusted to enable it to be scaled up. It currently accounts for one third of lending to the sector.
Does lending reflect corporate policy?

1995 and FY 2009 (Figure 14). The extent to which corporate strategy has been translated into lending operations is ambiguous from the data sets available. Using the AidData figures, although the collapse of lending from FY 1998 to FY 2000 is clear, corresponding to the period of the V2A strategy, there has only been a hesitant recovery from FY 2000 to FY 2007, despite the effort behind RDS. Using WB Project Database, however, a clearer picture emerges. These data show a much stronger response in lending to the adoption of RDS. However, the immediate incentives to increase lending to the sector, in the form of projections (or targets) each year, was not introduced until FY 2010.
23
Zoellick statement in Newsweek, February 2011.
41
Figure 14. World Bank lending and strategies.
The period since 1995 has witnessed a decline from a recent high point in lending of over US$3.3 billion in 1997 98 (US$2.3 billion from IBRD and US$1.0 billion from IDA) (using AidData figures) when V2A started to an all-time low point of lending to agriculture of just over US$1 billion by both IBRD (US$653 million in 2000) and IDA (US$478 million in 2002) during the time when RDS was the strategy. The main goal in the formulation of RDS was to address the fact that V2A had largely failed to deliver. However, in view of the inevitable time lag between strategy formulation and lending, it must be assumed that the recent upturn in lending is due at least in part to the momentum created by RDS. The impact of V2A and RDS An evaluation of V2A in 2000 and the rationale for the following RDS concluded that although it had had a decisive influence on global thinking, it had had disappointing results on the ground. The diagnosis of its failure included problems with decision-making at the client level; the need to focus more on the neglected political voice of the rural poor; and that its actions were often narrowly defined and tended not to address the broader needs of rural development. Overall, there was a failure to systematically implement the vision, and it was not integrated into the strategies of most Bank client countries. Inside the Bank, rural projects were perceived as being cost, complex, risky, small and slow disbursing. There was also a criticism, which particularly accords with current development effectiveness thinking, that the lack of baseline data and clear outcome indicators for V2A limited the value and impact of the monitoring and review processes. Interestingly, the evaluation recommended redesign of the budget coding system, to reflect the Bank's work in rural areas.
42
The dilemma faced by the Bank in delivering on its corporate strategies and policies is reported by a recent evaluation (2011) by IEG of the Africa Action Plan.24 The evaluation of the Plan, which was ...did not make a significant difference to the prioritization of Bank Group support, accountability for results, strategic partnerships, harmonization with donors, or aid effectiveness. The plan also did not succeed in catalyzing a significant increase in resource floes to Africa. The impact of crises Crises can, in the short term, dramatically change the type of lending undertaken, favouring fastdisbursing instruments such as DPLs. For example, before the food and financial crises, around 25% of IBRD funds and 17% of IDA funds were allocated to DPLs. During the crisis period this rose to 45% for IBRD and subsequently fell back to 20%, responding to client demand. IDA resources for DPLs fluctuate less falling from 17% to 13 14% over this period. This is because IDA resources are fixed in volume for the period of each replenishment and cannot be readily expanded in response to shortterm needs.
Conclusion
The recent upturn in lending for agriculture which is evident from Bank data and from CRS is real, suggesting that the Bank has been successful in translating its strategy into increased lending. The largely independent coding of commitments and the stickiness of the system makes it unlikely that any targeted changes in the way commitments are reported have occurred. The upturn is underpinned by the current AAP annual lending projection of US$6.2 8.3 billion. Although the upturn in Bank lending for agriculture is likely to be sustained as a result of the lending projections (targets) that have been set, there is a growing risk to the quality of the lending programme because this is being managed with smaller operating resources. At the same time as lending is expected to increase two- or threefold over the average level of commitments of 5 10 years ago, the number of Bank staff assigned to the sector has fallen from 470 in FY 1997 to 234 in FY 2011. In addition, operating budgets (which are not available for scrutiny) are said to have also declined substantially. The implications of this, of which senior staff are fully aware, are that there will be a bias towards larger projects since the overhead costs of processing a small loan are similar to those of processing a large one. In addition, the analytical (AAA) preparatory work for a project is likely to be reduced: as a percentage of lending, AAA has fallen from 0.59% (average FY 2006 08) to 0.29% (FY 10). Both of these factors are likely to have repercussions on the quality of operations in the sector. However, these financing constraints have prompted the exploration of partnerships with other organisations, in particular the United States Agency for International Development (USAID) and the International Food Policy Research Institute (IFPRI), to conduct analytical work jointly.
Policy implications
There is an imprecise link between corporate strategies on ARD&FS and WB lending to the sector.
24
World Bank (2011c).
43
global commitment to poverty reduction and in response to the food crises, there is no guarantee that overall lending will change as a result. Indeed, there is a risk that if the food crisis is replaced by some other urgent priority such as climate change agriculture could once again fall off the development agenda. Consequently, there is at least as much pressure as before on ARD and developing-country partner governments to strengthen their advocacy for the sector and to ensure that it continues to feature in their national priorities. The aid-flow data on the volume of actual aid to ARD&FS is less important than the patterns that the data reveal. If the figures from the WB Project Database are compared with AidData over the period from FY 1995, the WB reports that almost 20% more aid is flowing to the sector from the Bank than is recorded outside. However, the broad patterns of lending from year-to-year and from regionto-region are quite similar. The growing importance of corporate policy and strategies underlines the importance of strengthening national systems. There are signs of a general strengthening of the influence of corporate policy and strategies as WB becomes more results-oriented and less explicitly driven by country ownership. In order to maintain ownership of national policies and strategies, countries need to enhance their capabilities in sector analysis and investment planning as well as strengthening national monitoring and evaluation (M&E) and statistics so as to be able to show solid evidence of the impact of ARD on poverty reduction and growth and to engage in effective dialogue with donors. Actual allocation of resources to ARD is at least as much influenced by global crises as by deep analysis of the need. Lending to the sector appears to have become increasingly erratic, driven by the response to global issues such as the food and financial crises and emergencies. There is a real risk that the expansion of aid to the sector based upon such factors could be short-lived. Indeed, there is even a tacit acknowledgement in the Bank signalled by the reluctance to expand staff numbers and operating budgets that the increase in lending triggered by global events could represent a campaign surge rather than a long-term sustained allocation of Bank resources. This underlines the continued importance of generating solid evidence in the sector about its role in poverty reduction and growth. Expansion of aid to ARD without expansion of staff numbers or operating budgets threatens investment quality. With an expansion of aid to ARD of two or three times as much that of a decade ago at the same time as agriculture-related staff numbers have shrink by 50% means that there is a real risk that the quality of lending operations in the sector will suffer. In the interests of efficiency as well as harmonisation, WB should quickly expand its partnerships with other donors and agencies to conduct analytical work in the sector. In general, the ARD&FS sector is less able to demonstrate results and value for money than the social sectors. The pursuit by the Bank (along with most other donors) of concrete results for their investments, and the introduction of new instruments such as P4R, makes it important that developing-country partner governments strengthen their results management in the sector. This includes being ruthless in defining a proper role for the public sector, giving greater priority to establishing sound M&E and results frameworks and to strengthening financial management and accountability in the sector.
44
Governments need to be strategic in accessing different sources of external funding. For example, regular IDA funding can be complemented by a range of trust funds that target agriculture and food security and might be less rigorously assessed. Similarly, opportunities to exploit possible synergies between different sources of external financing for the sector should be taken. For example, there will be resources under the GAFSP that target the private sector. Similarly, IFC loan guarantees can be an effective way of encouraging private-sector investment, especially in agro-industries. CRS is an imprecise tool in reporting aid flows to agriculture. Each system the WB Project Database, AidData and CRS has its limitations and these will not be easily rectified. In particular, important new areas of lending to ARD&FS and new instruments are not captured in data reported to CRS, although the CRS policy markers are an attempt to rectify this weakness. To the extent that there is any planning or allocation of aid resources globally, CRS is not a particularly useful tool. However, through collaborating closely with DAC, the WB has been able to ensure that, in general, there is a close correspondence between WB data as recorded through its internal coding system and published CRS data. The Bank seriously attempts to map its codes to CRS. However, there are large areas where it is unable to do this, for example when reporting on budget support or DPLs. The crucial role of the private sector and private investment in generating growth in ARD is not captured by aid-flow data. There is an increasing awareness of the central role that the private sector and private investment play in the sustainable development of the sector. Linking farmers to ess and trade, it is the private sector that will determine whether a particular set of policies and public investments will generate growth in the sector. This means that the Bank needs to explore ways of working more effectively with the private sector. It needs to support governments in creating an enabling environment that will foster private-sector development in rural areas, as well as strengthening collaboration with IFC and its private-sectorfocused aid modalities. At present, little of the private-sector-targeted support flows is captured in aid-flow data. Table 5. Summary policy implications. Conclusions Imprecise link between corporate strategies and lending Implications Countries: it remains as important as ever to ensure that Ministry of Finance is strongly behind the agriculture sector; cannot rely upon strategies of the international financial institutions to ensure resources are allocated Donors: Need to focus on capacity development in M&E and agricultural statistics Countries: Need to strengthen management in the sector, including M&E, planning, budgeting and implementation Donors: Operating at the country level in an environment where there are often many sources of funding, donors should aim for greater harmonisation of strategies for ARD Countries: Whilst tailoring funding sources to
ARD&FS sector is less able to demonstrate results and value for money than the social sectors
Governments need to be strategic in the way different sources of external funding are accessed
45
different needs, countries should encourage donors to harmonise their aid for the sector CRS is an imprecise tool for reporting aid flows to ARD Donors: Although flawed, CRS is the best system that has collected aid-flow data consistently and over many years. Donors should report aid flows to CRD responsibly and work to collectively enhance its methodology Donors: Should attempt to present a full picture of the aid going to the sector in all forms. The actual volume of aid is less important than the patterns Countries: Should take a more pragmatic way of assessing the commitment to agriculture. For example, achieving the Maputo 10% is only part of the argument Countries: Governments must enhance their ARDsector analytical and planning capabilities as well as strengthening M&E and statistics Donors: Should be more transparent when making pledges in response to emergencies or crises Countries: Aid for agriculture is just as fragile as ever and governments must remember that pledges do not always mean commitments or disbursements and pledges are not necessarily additional funds Donors: WB and all donors need to collaborate more on analytical work and develop partnerships to do it, e.g. WB with USAID, IFPRI etc. Countries: Ministries of Agriculture need to be far more focused on formulating results frameworks and establishing effective M&E systems that will be able to demonstrate results Donors: If the rhetoric about the importance of the private sector is valid, support for the sector through ODA should be complemented by other forms of assistance that can directly leverage private-sector investment, such as IFC loan guarantees Countries: Should reassess the role that ODA can play in creating an enabling environment for the private sector and encourage other forms of assistance that will foster private-sector development in ARD
Broadening definition of aid to agriculture shows that at least twice as much is going to the sector as is portrayed in advocacy
Corporate policy and strategies are growing in importance, underline the importance of strengthening national systems Actual allocation of resources is at least as much triggered by global crises as by deep analysis of the need.
Tighter operational budgets mean that the level of analysis is probably less than before WB along with all other development agencies is far more focused on showing tangible results for the aid delivered The crucial role of the private sector and private investment in generating growth in ARD is not captured by aid-flow data
46
Conclusion
Does aid reporting reflect the priorities of the World Bank?
Reporting aid flows to CRS is not a priority. It is clear that the reporting of aid-flow data to CRS is not a priority for WB. Whatever its limitations in terms of level of detail and the conflicting figures serves its own purposes well. The figures reported in the global standard mechanism for aid reporting, CRS, under is that CRS is mainly restricted to reporting ODA. Although IBRD is a DAC member and reports to CRS, only part of its aid flows are captured. The Bank has successfully channelled increased aid to ARD. Despite the challenges of country ownership and the often weak domestic constituency behind ARD and rural areas in general, the Bank has been able to use its powerful analytical and advocacy skills to increase the flow of aid to ARD. Its ARD sector strategies have played an important part in this, as well as analytical and sector work and WDR 2008.
Good practices for measuring, tracking and accounting for aid flows
Tracking aid flows must be consistent and the World Bank offers a good example. WB has established and maintained for several years an internal aid-data recording system that serves its internal management processes and is defined in a stable manner at the sector level. The system is admirably sticky when it comes to adding new codes. Reporting aid flows externally must reflect the different objectives an aid agency is seeking to achieve. Through its separate sectoral coding system and reporting by themes, WB is able to communicate to the outside world a coherent story about its development assistance. In this story, the absolute volume of aid is only a small part and it is deemed to be more important to be able to monitor , such as climate change. The Bank reports its aid flows responsibly. Although reporting to CRS is not a priority, it has made a serious effort to enhance its reporting both to CRS and IATI in accordance with good donor practice. By setting up an independent mechanism for coding all operations, it has insulated the process from possible political influence or public communications bias. By collaborating closely with DAC, the Bank has ensured that, for the most part, the aid flows recorded are fairly close to its own figures.
47
References
Fan, S., Omilola, B. and Lambert, M. (2009) Public Spending for Agriculture in Africa: Trends and Composition. ReSAKSS Working Paper No 28. Washington DC: Regional Strategic Analysis and Knowledge Support System. IFC (International Finance Corporation) (2011) Where Innovation Meets Impact: IFC Annual Report 2010. Washington DC: IFC. OECD-DAC (Organisation for Economic Co-operation and Development-Development Assistance Committee) (2010a) . Working Party on Statistics. Paris: OECD. OECD-DAC (Organisation for Economic Co-operation and Development-Development Assistance Committee) (2010b) Measuring Aid to Agriculture. Paris: OECD. World Bank (1982) World Development Report 1982. Oxford: Oxford University Press for World Bank. World Bank (1992) Effective Implementation: Key to Development Impact. Report of the World Bank's Portfolio Task Force (The Wapenhans Report). Washington DC: World Bank. World Bank (1997) Rural Development: From Vision to Action A Sector Strategy. Environmentally and Socially Sustainable Development Studies and Monographs Series No 12. Washington DC: World Bank. World Bank (2003) Reaching the Rural Poor Bank. A Renewed Strategy for Rural Development. Washington DC: World
World Bank (2007a) Meeting the Challenges of Global Development: A Long-Term Strategic Exercise for the World Bank Group. Washington DC: World Bank. World Bank (2007b) Agriculture and Rural Development at the World Bank FY03 FY06: Rural Strategy Implementation Mid-Term Review. Washington DC: World Bank. World Bank (2007c) Review of Agricultural Innovation System (AIS) Supporting Investments in the World Bank's Agricultural Knowledge and Information Systems (AKIS) FY90 06 Portfolio. Washington DC: World Bank. World Bank (2007d) World Development Report 2008: Agriculture for Development. Washington DC: World Bank. World Bank (2009a) Agriculture Action Plan, 2010 2012. Washington DC: World Bank. World Bank (2009b) Sustainable Agricultural Systems, Knowledge and Institutions (SASKI), FY08 Portfolio Review. Washington DC: World Bank. World Bank (2010a) Annual Report 2010. Washington DC: World Bank. World Bank (2010b) Agriculture: An Engine for Growth and Poverty Reduction. IDA at Work. Washington DC: World Bank.
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World Bank (2010c) Community Driven Development Work. Washington DC: World Bank.
Empowering People to Lead their Development. IDA at
World Bank (2010d) The IDA16 Replenishment Implementation Framework Report. Operations Policy and Country Services (OPCS). Washington DC: World Bank. World Bank (2010e) Updated IDA16 Financing Framework and Key Financial Variables. IDA Resource Mobilization Department (CFPIR). Washington DC: World Bank. World Bank (2010f) Reviews of the Agriculture and Rural Development Portfolio, FY05 FY10, Agriculture and Rural Development (ARD). Washington DC: World Bank. World Bank (2011a) IDA16: Delivering Development Results. Report from the Executive Directors of the International Development Association to the Board of Governors. Additions to IDA Resources: Sixteenth Replenishment, Washington DC, March 2011. World Bank (2011b) F Support to it. Washington DC: World Bank.
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List of people met

Uranbileg Batjargal Karen Brooks Mark Cackler Leena Chaukulkar Statistical Officer, Development Data Group Sector Manager, Africa Region Agriculture and Rural Development Sector Manager, Agriculture and Rural Development Department Senior Operations Officer, Delivery and Results Management, Operations Policy and Country Services Agriculture and Rural Development Department Strategy and Policy Adviser, Agriculture and Rural Development Department Aid Transparency, Operations Policy and Country Services Senior Communications Officer, AgriBusiness Department, IFC Program Manager, Agriculture and Rural Development Department and GDPRD Focal Point
Sanjiva Cooke Chris Delgado
Alma Kanani Irina Likhachova Fionna MacDonald
Stephen Mink Neena Munshi David Nielson Nwanze Okidegbe Eija Pehu Riikka Rajalahti Eric V. Swanson Robert Townsend Africa Region Agriculture and Rural Development Africa Region Agriculture and Rural Development Agriculture and Rural Development Department Agriculture and Rural Development Department Agriculture and Rural Development Department Senior Advisor, Development Data Group Agriculture and Rural Development Department
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Annex 1: World Bank lending instruments

Aid instruments and support to ARD&FS
Since 1995, two main changes have occurred in the type of financing instruments available to the Bank and the way they have been used. The first change reflects the shift from the simple, single-sector or subsector project approach to more complex, multisectoral programmes. The second change is the replacement of SALs by DPLs. This marked the shift away from non-sector lending built around conditionalities controversially associated with the structural adjustment era towards jointly agreed country policy reform underwritten by DPLs. Although the Bank has employed 13 different lending instruments during this period, the most important distinction is between investment loans, of which there are six main types SILs, LILs, APLs, ERLs, SIMs and TALs and development policy instruments SALs (until FY 2005) and DPLs (from FY 2005 to present). The data for this analysis has come from the WB Agriculture + 3 .25 Over the period, the ARD Sector Board has been responsible on average for around 84% of all lending to the sector. Its share was smallest in FY 2009, when it fell to 69%.
Investment instruments
Specific Investment Loan The main instrument for projects is SIL, which is defined as being to support the creation, rehabilitation, and maintenance of economic, social and institutional infrastructure, although they may also finance consultant services and management and training programmes. Over the 15-year period studied, SILs have made up around 70% of all lending (Figure A1). The years when SILs represented the smallest share of lending were FY 2002, when they accounted for 45% of lending mainly because of large structural adjustment lending, and FY 2009, when they were 53% due to a series of large DPLs following from the world food and financial crises and large ERLs. Although straightforward investment projects are still important in the portfolio for ARD&FS, the nature of the projects themselves has changed. Pure agriculture-sector projects, for example targeting investments in improving a particular commodity subsector such as coffee or livestock, have largely disappeared. They have been replaced by multisectoral projects which attempt to address agricultural production, market linkages or, broader still, livelihoods in rural areas and all the supporting services and infrastructure that are deemed necessary. The shift away from simple ARD-sector projects to multisectoral projects has meant that financing is invariably shared with other sectors. Although these supporting investments are designed to contribute directly to the sector development goals they might not be captured in the reporting system for ARD.
25
irrigation and drainage; and general agriculture, fishing a agriculture, fishing and forestry; agricultural marketing and trade; and agro-industry.
51
Figure A1. Total and SIL lending to ARD&FS, FY 1995 2010 (constant year 2000 US$). 4500 4000 3500 US$ million 3000 2500 2000 1500 1000 500 0 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 SIL TOTAL
The shift from simple ARD-sector projects has also been driven by the change in focus within the Bank and all other donors towards poverty reduction, which accompanied the declaration of the MDGs and the launching by the Bank of the PRSP process and the associated debt cancellation for heavily indebted poor countries. Apart from moving the focus towards social sectors, at least in the first round of PRSs, it also meant that even projects in ARD had a more poverty-reduction-oriented focus, including components for community-driven development and social protection such as food- and cash-for work in rural areas. SILs are used in all regions, although the Middle East/North Africa and Europe/Central Asia regions have lower volumes, but this is proportionate to their relative share of the total lending to agriculture (Figure A2).
52
Figure A2. Lending through SILs by region, FY 1995 2010. 1400 1200 1000 US$ million 800 600 400 200 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 AFR EAP ECA LCR MNA SAR
Adaptable Programme Loan APLs provide phased support for long-term development programmes. They involve a series of loans, each usually of three to five years duration, that build on the lessons learned from the previous loan in the series. Successive phases of an APL are usually triggered by the achievement of specific milestones that are taken as indicators of success. Since FY 1995, APLs have comprised 5.9% of all lending commitments. APLs were originally conceived in response to the criticism of earlier Bank projects that the typical five-year time horizon for an ARD project, for example, was far too short to be able to plan, agree and implement policy or institutional reforms that are essential to achieving growth in the sector. APLs have been used in almost all regions for agricultural extension and research and for community development projects such as the Social Action Fund in Malawi and the Community Action Program in Niger. APLs have also been the favoured instruments for water resources and irrigation sector management programmes, even at regional level, such as the Africa Niger River Basin Water Resources Program. The subregional agricultural productivity programmes that have been formulated under CAADP have also been financed by APLs, including the West Africa Agricultural Productivity Programme and Eastern Africa Agricultural Productivity Programme associated with CAADP Pillar 4. In recognising the long-term horizon needed for agricultural development, APLs have certainly encouraged the adoption of a longer vision of development in the sector. By recognising from the start that implementing a long-term vision needs a time horizon of up to 15 years and that financing for this period can be reasonably assured, APLs have shifted the emphasis away from quick fixes and towards more sustainable programme designs with clearly-defined intermediate outcomes. Through their multiphase process, APLs have also made financing for the ARD sector more secure in the longer term.
53
Learning and Innovation Loan The Bank also adopted a series of new lending instruments which were intended to mitigate its earlier tendency to finance only large and bankable projects with short duration the classic US$50 million or more project with a five-year implementation period. LIL was created as a way of financing projects of US$5 million or less, and in areas that could be considered experimental, risky and/or timesensitive. Since FY 1995 LILs make up only 0.2% of all lending commitments. They have been used to pilot promising initiatives and to build consensus around them, as well as experimenting with new approaches in order to develop locally based models before moving to a larger-scale intervention. LILs are predominantly used in sectors or situations in which behavioural change and stakeholder attitudes are critical to progress, and where prescriptive approaches might not work well. By encouraging risk-taking by governments and WB staff in ARD, LILs have contributed to pioneering new approaches and have laid the foundations for scaled-up investments. Emergency Recovery Loan ERLs support economic and social recovery immediately after an extraordinary event, such as war, civil disturbance or natural disaster, that seriously disrupts a borrower's economy or support programmes to avert deterioration in economic and social services in the face of imminent emergency. They are also used to strengthen the management and implementation of reconstruction and recovery efforts and to develop disaster-resilient technology and early warning systems to prevent or mitigate the impact of future emergencies. ERLs have been typically used to support recovery after earthquakes, floods, hurricanes and tsunami. They have even been used for the demobilisation of soldiers following peace, as in Eritrea. In each case there will be elements of the recovery large or small that target the farming community. In some cases the emergency is more immediately related to agriculture, such as the extensive use of ERLs for avian influenza, African locust outbreaks and disease outbreaks such as foot-and-mouth disease in Uruguay. In Africa, ERLs have been used in many countries for drought recovery programmes which affect farmers and pastoralists. In the Bank, as with almost all providers of ODA, there has been a marked increase in the volume of emergency funds over the last 15 years (Figure A3). Since FY 1995 ERLs have averaged 4.7% of all commitments. However, during the last five years they have averaged 6.1%, compared with just 2.8% for the five years from FY 1995 to 1999. Although such financing helps the essential recovery of the agricultural sector and rural areas, it is not part of the longer-term and sustainable development of the sector that is so badly needed. It is not clear to what extent, if at all, funding for emergencies displaces longerprogramme its contribution to aid in the sector is reduced.
54
Figure A3. World Bank lending for emergencies, FY 1995 2010 (constant year 2000 US$). 700 600 500 US$ million 400 300 200 100 0 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 ERL
Source: World Bank data for Agriculture +3 plus other sectors
Sector Investment and Maintenance Loan SIMs focus on public expenditure programmes in specific sectors. They aim to bring sector expenditures, policies, and performance in line with a country's development priorities by helping to create an appropriate balance among new capital investments, rehabilitation, reconstruction and maintenance. They also help the borrower develop the institutional capacity to plan, implement and monitor expenditure of an investment programme. A SIM was used to finance the first of the ASIPs in Zambia in the mid-1990s which were, in effect, the precursors of SWAps in agriculture. A SIM has also been used to finance the Zambia Agriculture Development Support Program in FY 2006, which is a successor of the ASIP. SIMs have also been used for land reform in Brazil, privatisation of irrigation in Turkey, rehabilitation of pump stations in Egypt and cotton sector reform in Benin. This instrument is explicitly aimed at enhancing coherence in the sector. Technical Assistance Loan A TAL is used to build institutional capacity in the borrower country. It may focus on organizational arrangements, staffing methods and technical, physical or financial resources in key agencies.
Programme lending instruments

Development Policy Loans (DPLs) DPLs started in FY 2005. In many ways, it replaced the SALs that were used during the 1980s and 1990s and ended in FY 2005 (Figure A4). Taken together, since FY 1995 SALs and DPLs have accounted for over US$4.4 billion of lending to ARD or almost 10% of all commitments to the sector. Since they were introduced, DPLs have come to play an increasingly important role in total lending. Over the last five years they have averaged 15.9%, peaking at 27.7% in FY 2009 following the world food and financial crises.
55
Figure A4. World Bank lending through SALs and DPLs, FY 1995 2010 (constant year 2000 US$). 1400 1200 1000 US$ million 800 DPL 600 400 200 0 SAL
FY00
FY95
FY96
FY97
FY98
FY99
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
A DPL is generally provided through a programmatic series of successive development policy operations. Each operation in the series must be approved by the Board. The first operation in the series describes the indicative sequencing of future policy actions and expected end-of-programme results. Programmatic development policy operations in IDA-eligible countries that support the implementation of a country's PRS are called PRSCs or grants. DPLs can also be provided as supplemental financing to countries already implementing programme supported by Development Policy Operations and facing an urgent and unexpected financing gap (resulting from commodity price shocks, natural disasters etc.). A DPL with a deferred drawdown option (DDO) allows IBRD borrowers to postpone disbursement of a loan for a defined period, instead of drawing down funds immediately after approval. A DDO for catastrophe risk is a DPL that provides liquidity immediately after a natural disaster that results in a declaration of a state of emergency and supports a disaster risk management programme. A special DPL is also available to IBRD countries that are approaching or are in a macroeconomic crisis, contingent on a disbursing IMF programme being in place. The majority of DPLs are connected to PRSCs under the Public Sector Governance Board. The main sector boards that operate DPLs are Poverty Reduction, Economic Policy, Environment, and Social Protection. Comparatively few DPLs are managed by the ARD Sector Board. A few notable exceptions are the forestry and environment in Cameroon, natural resources management in Gabon, irrigation in Punjab, Pakistan irrigation and drainage, animal production, markets and trade and forestry. Apart from the sector-specific DPLs, DPLs that are listed as including some contribution to ARD (that is, managed sector boards other than the ARD Sector Board) will have multiple policy reform objectives. Reforms in the agriculture sector could be one of five or more objectives in the DPL and it is not clear how the total financing provided is attributed to each objective. Anecdotal evidence
FY10
56
suggests that the allocation is calculated roughly with 20% of the funds.
in a DPL with five objectives each will be attributed
Regionally, the use of the different modalities varies substantially. The use of DPLs (Figure A5) is relatively constant in Africa and South Asia, suggesting it has a consistent role in the portfolio of CASs in these regions. However, the use of the instrument in other regions is highly erratic, suggesting it is not only used in regular policy but is also deployed in particular situations such as shocks.
Figure A5. World Bank lending through DPLs by region, FY 2005 10. 1400 1200 1000 US$ million 800 600 400 200 0 AFR EAP ECA LCR MNA SAR
1999
2005
1995
1996
1997
1998
2000
2001
2002
2003
2004
2006
2007
2008
2009
Although the value of the analysis and leverage to undertake policy reforms in the agriculture sector through a DPL should not be underestimated, the actual financing for example through a PRCS is direct to the national treasury in one or more tranches and there can be no way of knowing which sector directly benefits.
2010
57
Annex 2: World Bank Project Database: lending to ARD, FY 1995 2010 (US$ million)
FY95 Agric. ext. & research Agric. market & trade Agro-industry Animal production Crops Education Energy & mining Finance Forestry Gen. agric./fish./forest. sec Health & social services Industry and trade Info. & communication 291 171 49 36 24 45 77 46 80 435 305 24 247 FY96 126 126 62 239 197 FY97 121 90 124 102 108 24 449 128 59 631 FY98 420 55 70 91 47 4 22 61 293 327 FY99 250 206 6 67 307 16 3 242 81 751 64 75 362 FY00 48 27 11 90 17 32 FY01 112 89 166 8 34 10 52 32 11 333 FY02 73 221 69 28 487 32 6 231 128 205 60 166 660 FY03 48 72 4 23 96 64 FY04 117 85 24 62 80 43 20 103 29 331 FY05 247 95 94 32 64 17 7 9 63 458 FY06 423 139 42 145 50 13 25 20 131 604 FY07 156 55 35 37 141 21 31 45 149 325 FY08 121 66 90 68 139 31 38 238 161 408 FY09 185 223 169 120 821 65 145 171 495 1,261 FY10 200 115 59 146 166 59 18 79 203 755
77 118
53 6
176 137
126 120
59 39 3
138 14 1
189 5
160 9
207 120 1
130 12 7
26
102 26
222 149
166 9
259 27
232 11 4
20
58
FY95 Irrigation & drainage Public admin. agric. Public admin. law Transportation Water/sanit./flood protection TOTAL 327 106 179 2,546 488
FY96 419
FY97 585
FY98 835
FY99 724
FY00 261
FY01 197
FY02 341
FY03 220
FY04 770
FY05 1,069
FY06 403
FY07 912
FY08 471
FY09 586 280
FY10 1,148 229 215 176 323 4,138
300 88 181 2,371
457 117 491 3,799
461 132 62 3,125
441 94 191 3,480
232 115 304 1,792
333 174 104 1,850
397 47 29 2,462
316 46 180 2,283
198 46 76 2,133
232 144 64 2,625
553 72 106 2,873
649 107 263 3,295
305 104 210 2,625
161 135 166 5,269
59
Annex 3 (a): AidData database on regional lending to ARD

1995 Africa East Asia and Pacific Europe and Central Asia Latin America and Caribbean Middle East and North Africa South Asia Grand Total 462 490 325 476 1996 369 855 286 292 1997 217 1,298 832 818 1998 279 1,143 153 418 1999 248 1,379 360 617 2000 212 421 537 198 2001 440 236 424 438 2002 506 474 784 225 2003 436 250 391 525 2004 365 520 230 514 2005 367 347 199 262 2006 830 497 427 407 2007 665 476 369 271 2008 604 452 179 543 2009 1,727 599 50 1,683 2010 801 1,202 221 411
234
145
185
114
454
153
75
12
229
45
240
29
228
60
136
558 2,546
424 2,371
449 3,799
1,017 3,125
423 3,480
271 1,792
237 1,850
460 2,462
452 2,283
458 2,133
1,211 2,625
682 2,873
1,286 3,295
845 2,625
1,150 5,269
1,367 4,138
60
1995 Africa Europe Far East Asia Middle East North & Central America North of Sahara Oceania South & Central Asia South America South of Sahara Grand Total 56 694 18
1996
1997
1998
1999
2000 0
2001 0 697 291 15
2002 1 201 157 34
2003 0 334 231 22
2004 65 394 105 36
2005 2 156 535 123
2006 0 138 266 17
2007 41 140 261 0
2008 0 316 139 12
2009 241 121 572 0
506 622 43
593 574 72
402 1,659 0
256 700 0
370 86 21
151 203 0 576 514 353 2,565
132 41
120 140
572 202 0
118 37 1 328 139 176 1,756
107 155 0 347 264 302 1,653
38 79 17 379 276 302 2,094
435 1 0 363 206 200 1,597
360 126 0 535 110 391 2,108
48 0 0 900 157 360 2,065
136 106 0 681 172 292 2,203
152 51 0 573 212 443 1,852
35 120 25 966 238 415 2,241
34 40 0 508 395 778 2,222
59 0 20 664 56 338 2,070
Annex 3 (b): World Bank Project Database on regional lending to ARD
262 449 193 2,248
765 570 356 3,189
942 461 285 4,523
61
Annex 4: Definition of aid to agriculture, rural development and food security

The principal data used in this study are taken from the purpose codes from the OECD/DAC Creditor Reporting System (CRS). The narrow definition of aid corresponds to the CRS definition of sector-allocable aid to agriculture, forestry and fishing (DAC codes 311, 312 and 313) (here called AFF). A broader definition includes the CRS purpose codes for rural development (code 43040), development food aid (52010) and emergency food aid (71010) (here called AFF+). The broadest definition (here called ARD&FS) includes a share of additional industry codes, banking and financial services, business support services, trade, general budget support and support to nongovernmental organisations (NGOs). The ARD&FS definition, with purpose codes indicated in parenthesis, includes the following components: Agricultural production, processing and marketing Agriculture, forestry and fishing (codes 311, 312 and 313) Agro-industrial and export crops (31162) Industry codes that include forest and livestock products (32161, 32162 and 32163) Land and water resources management (31130 and 31140) Research, plant and animal health and regulatory services (31182, 31192 and 31195) Extension and education services (31166 and 31181) Agricultural inputs, animal husbandry and animal feed aid and fertiliser plants (31150, 31163 and 32165) Banking and financial services (240) 10%, approximating the share of agricultural GDP in national GDP for low- and middle-income countries Business support services (25010) 10% Trade policy (331120) and facilitation (33120) 20% General budget support (51010) this is sector-unallocable, so assume the average proportion of public agricultural spending in total spending (10%) Support to NGOs (920) 10%
Rural socio-economic development Rural development (43040) Non-agricultural alternative development (43050) Women's equality organisations and institutions (15170) Food aid/food security (52010)
62
Emergency relief and welfare Emergency food aid (71010) Material relief assistance and services (72010) Basic nutrition (12240) Social mitigation of HIV/AIDS related to food security and rural employment
Prepared by: Platform Secretariat Published by: Global Donor Platform for Rural Development c/o Federal Ministry for Economic Cooperation and Development (BMZ) Dahlmannstrae 4, 53113 Bonn, Germany Study conducted by: Overseas Development Institute, London Author: Michael Wales Photo credits: www.istock.com/Gnter Guni/skyhouse; www.fotolia.com/africa/Ivan Gulei/lul; www,pixelio.de/hjrdis Kozel/Rauner Sturm August 2011

PKP2 - Understanding Aid To ARD and Food Security: World Bank

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P PER ING A WORK LD BANK E WOR TH

Global Donor Platform for Rural Development

About the Platform Knowledge Piece series

List of tables and figures

Acronyms and abbreviations

1 World Bank (1997). 2 World Bank (2003). 3 World Bank (2009a).

World Bank (2007).

World Bank in perspective

Source: World Bank Annual Report 2010.

World Bank (2011a). World Bank (2007a).

Policies in support of ARD&FS

IFC (2011). World Bank (2009a).

World Bank (1997). World Bank (2003). 12 World Bank (2009a).

Raising agricultural productivity

Linking farmers to markets and strengthening value addition

Reducing risk and vulnerability

World Bank (2007).

Aid instruments and support to ARD&FS

World Bank (2011b).

Source: World Bank data for Agriculture +3 plus other sectors.

forestry; agricultural marketing and trade; and agro-industry.

Source: World Bank data for Agriculture +3 plus other sectors.

Programme lending instruments

Source: World Bank Project Database.

Aid flows to ARD&FS

World Bank aid to ARD

IBRD & IDA

Trends within World Bank lending to the agriculture sector

SAR MNA LCR ECA EAP AFR

Reporting World Bank aid flows

Agricultural extension and research Animal production

Irrigation and drainage General agriculture, fishing and forestry

ALL ALL except 68 and 41 ALL

ALL except 45, 50, 49, 47

Source: World Bank Annual Report, 2010.

Aid allocation vis--vis policy objectives

Changes in aid allocation processes

World Bank (1992).

World Bank Press Release, 23 February 2011.

Translating strategies into lending

Does lending reflect corporate policy?

Zoellick statement in Newsweek, February 2011.

Figure 14. World Bank lending and strategies.

World Bank (2011c).

Empowering People to Lead their Development. IDA at

List of people met

Sanjiva Cooke Chris Delgado

Alma Kanani Irina Likhachova Fionna MacDonald

Annex 1: World Bank lending instruments

Source: World Bank data for Agriculture +3 plus other sectors.

Source: World Bank data for Agriculture +3 plus other sectors

Programme lending instruments

Source: World Bank Project Database.

in a DPL with five objectives each will be attributed

FY09 586 280

FY10 1,148 229 215 176 323 4,138

300 88 181 2,371

457 117 491 3,799

461 132 62 3,125

441 94 191 3,480

232 115 304 1,792

333 174 104 1,850

316 46 180 2,283