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About Agribusiness Indicators

Background and Rationale

In October 2009 the Agriculture and Rural Development (ARD) Department of the World Bank signed a trust fund agreement with the Bill and Melinda Gates Foundation to undertake action research that will develop proxy indicators to inform success factors for doing agribusiness in Sub-Saharan Africa. These indicators will cover a subset of features of the agricultural economy, the agribusiness policy and regulatory environment, and public agricultural sector investment priorities that most affect the competitiveness of agro-based enterprises in Sub-Saharan Africa (SSA). This pilot program was inspired by the very successful and widely cited Doing Business surveys and reports of the World Bank/IFC, which focus on 10 broad indicators (and up to 41 sub-indicators) designed to capture general business conditions facing urban-based enterprises in 183 countries.  The Doing Business project has informed or inspired over 220 reforms in 65 countries. (Doing Business: An Independent Evaluation, Independent Evaluation Group, World Bank, 2008)  

Developing country governments and donors generally would like to foster more rapid agricultural growth through a combination of public and private investment. Yet there has been too little investment aimed at improving the rural enabling environment and stimulating rural-based agro-enterprise. There is no readily accessible and generally accepted approach that prioritizes the critical factors most often associated with success in rural-based, agro-enterprise development. As a result, policy-makers in African governments, regional organizations, and donor agencies are not certain where best to intervene to improve the probability of success, nor how to compare the effects of change against absolute or relative indicators. This pilot seeks to fill those gaps in development information and decision-making tools.  It should also provide useful input into planning food security and rural poverty reduction interventions consistent with the African Union’s CAADP.

While firm-level internal success factors in commercial agriculture and related agribusiness are quite well-known, many factors external to a specific agro-enterprise significantly affect its success.  One is a proper enabling environment, which should be characterized by political and economic stability, a favorable business climate, appropriate macro-economic and agricultural sector policies, respect for contracts and the rule of law, effective provision of essential public goods, including rural infrastructure, and no urban or anti-export biases.  Another is the availability of ancillary business development services (BDS), such as financial, legal and accounting services, providers of storage and equipment, and suppliers of market information, extension, and technology.

Project Objectives

The Agribusiness Indicators (ABI) program is developing, testing, and will disseminate an approach for assessing ease of doing agribusiness in selected Sub-Saharan African countries that is expected to highlight key constraints that can be resolved through policy and regulatory improvements and better targeted public investment.  Data gathered on these indicators will assist African governments, donor agencies (particularly the World Bank regional units and country offices), and development practitioners to identify areas where policy and regulatory reforms and changes in public investment priorities are most required.  If this pilot effort is successful, the WBG and the Gates Foundation will invite other donors to support scaling it up from seven initial countries to African and perhaps other developing countries. 

ABI has developed and is pilot testing a set of proxy indicators that cover the following areas:

  • access to and availability of improved seed;
  • availability of and access to fertilizer;
  • access to farm machinery, particularly tractor hire services;
  • access to agricultural production and agro-enterprise finance;
  • cost of transport, particularly trucking;
  • various policy measures (public expenditure on agriculture, private agribusiness advocacy, tariffs on imports of capital goods and spare parts for tractors); and,
  • measures of the consistency of the enabling environment for agribusiness.

This set of indicators is not intended to be comprehensive, as it was developed after an initial investigation in Ghana that undertook a broader examination of the agribusiness enabling environment such as access to critical inputs and important supporting services, as well as a representative set of enabling environment issues.

Target Countries

The project is undertaking pilot studies in at least seven IDA countries in SSA (Burkina Faso, Ethiopia, Ghana, Mozambique, Kenya, Tanzania and Zambia), which is designed to achieve geographic spread, variations in agro-ecology, both differences and similarities in agricultural sectors, and diversity of development history and the current situation in terms of Bank’s engagement. The initial short list of countries was based on a combination of eligibility and selection criteria, followed by close consultation with regional and country-level World Bank staff from AFTAR (Agriculture and Rural Development, Africa Region) and AFTFP (Finance and Private Sector Development, Africa Region).

Approach

The initial research will rely heavily on secondary data available from government and international sources, as well as structured informal interviews with key informants, who will include participants in the agribusiness system, as well as 

  • providers of finance, equipment, and improved technology;
  • providers of ancillary services such as transport, warehousing, and cold storage entities, and testing/certification units;
  • leaders of farm organizations, commodity-based associations, and interprofessional organizations;
  • public officials, researchers, and extension agents;
  • NGO leaders and field project managers; traditional district/village leaders;
  • donor agency analysts; and,
  • other knowledgeable observers of the agribusiness system. 

These informal interviews will be probed and conducted by strong local and ABI team analysts.

Primary Audience
The primary audience for program outputs will be World Bank staff in the country and Africa region, policy-makers in African governments and regional organizations, private sector advocacy groups (typically producer and commodity/trade associations) , and other donors.  It is intended that development practitioners and stakeholders of all kinds will use the findings during and after the project to inform public-private dialogue, shape policy reform, and guide both public and private investment.
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