Module 12 - Agriculture Sector Program Lending

The approach broadens sources of funding, makes coverage of the sector more comprehensive, brings ongoing projects into line with the sector policy, and develops common procedures. It provides policy makers and practitioners the opportunity for systematic and comprehensive review of the public expenditure program, ensuring that priority programs are supported effectively and are appropriately sequenced. When successful, sector programs focus discussions between donors and government, link policy and implementation, balance investment and operating expenditure, and improve service coverage and quality (Foster, Brown, and Naschold 2001).

ASPs will not be appropriate in all countries, especially where serious macroeconomic problems exist, where there is not broad agreement on the aggregate pattern of priority public expenditure, and where institutional capacity to formulate, implement, and monitor programs is weak. ASPs cannot be thought of as substitutes for sound adjustment policies.

Design and Implementation Issues

Multiple stakeholders and cross-sectoral issues. The agriculture sector has many stakeholders, including private sector entities, multiple government agencies, and numerous donor organizations and NGOs (box 12.14). Many government functions of greatest importance to agriculture (for example, trade policy, or the regulation of transport and trade) are located outside of the agriculture ministry itself. This situation makes it difficult to develop consensus among stakeholders and to concentrate public sector initiatives. For improved coordination, governments and donors must seek consensus and a common agreement on the most suitable structure (and ministry) to lead public sector reform and program initiation.