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Low levels of investment into modern technologies, and limited use of measures that have low monetary cost but the potential for high yields, are often regarded as obstacles to further agricultural development. This paper investigates farmers’ demand for one such measure, namely agricultural advisory services. These have modest (most frequently zero) monetary user cost but, according to some recent research, have the potential to result in large increases of yields. Yet, demand for these extension services is often low. This study proposes that costly attention may be part of the explanation for this. In the model, advisory services are available free of charge, but positive effects on production are only realized if farmers devote attention to listening to and implementing the provided advice. Modeling farmers as rational decision makers facing scarce attention, the study identifies the circumstances under which farmers may optimally abstain from demanding advisory services. The model complements the insights of other theories commonly used to explain suboptimal farm decisions and outcomes, and generates testable predictions, which are consistent with empirical evidence based on a large farm-level panel dataset from Sub-Saharan Africa.

This report aims to present the rationale for digitization of agribusiness payments in Sub-Saharan Africa (SSA), assess the current status of digitization using demand and supply-side data, and identify key actions that can help accelerate digitization. The report draws on an analysis of financial-inclusion data from the Global Findex database, a survey administered to select agribusinesses active in SSA (henceforth referred to as the Africa Agribusiness Payments Survey, or AAPS), and case studies of select agribusinesses that responded to this survey. The Findex data analysis leverages questions in the survey that identify whether the respondent had received payment against the sale of an agricultural good; how the payment was received, in cash or through a digital means, defined to include an account at a bank or non-bank financial institution, mobile money account, or a card, and, if an account holder, whether the account was opened to receive an agricultural payment. The AAPS was administered to purposefully selected agribusinesses active in SSA, with either a regional or national scope. Some firms were added to the survey since they were known to have an active digitization program, but this was not a requirement for inclusion in the survey.

In March 2018, Uganda's Ministry of Finance, Planning and Economic Development (MoFPED) formally requested technical assistance from the World Bank Group (WBG) to conduct a technical and diagnostic review of the Uganda Agricultural Insurance Scheme (UAIS) with the objective of providing recommendations to enhance the scalability and sustainability of the scheme going forward. This technical report covers the rapid assessment of agriculture finance and its recommendations, the findings of the situation and gap analysis of the UAIS, and where appropriate, presents the WBG’s recommendations for strengthening the scheme; it also includes a proposal for two additional insurance programs, one for crop and one for livestock, targeted at small-scale farmers. Section one is comprised of four chapters that provide important background information: chapter one provides context for the study; chapter two describes the agricultural sector in Uganda, including the constraints and risk exposure faced by small-scale farmers; chapter three offers an overview of the agriculture finance landscape; and chapter four describes past and present agricultural insurance initiatives, including the UAIS. Section two includes the remaining chapters that present findings and make recommendations for scaling up agriculture insurance in Uganda and making programs sustainable. Specifically, chapter five describes in detail the situation and gap analysis carried out for UAIS insurance products, operating systems and procedures, and underwriting results, and it identifies possible ways to strengthen the scheme for the public-private partnership (PPP) stakeholders to consider. Chapter six presents options for the development of large-scale Area Yield Index Insurance (AYII) to complement the existing UAIS crop insurance products and programs, and it includes fiscal costings for GoU to consider. Chapter seven presents options for the development of large-scale Satellite-Based Pasture Drought Index Insurance (SPDII) for open-grazed livestock in semi-arid regions of Uganda, most notably the Karamoja subregion.

Current levels of investment in agricultural value chains are insufficient to achieve key development goals including ending poverty and hunger, boosting shared prosperity through more and better jobs, and better stewarding the world’s natural resources by 2030. Crowding-in private investment to help achieve these goals and optimizing the use of scarce public resources will be needed, as will the continued promotion of good governance and environmental and social sustainability. Increasing private sector investment and associated financing will require identifying and understanding market failures currently leading to the sub-optimal private provision of goods and services needed to achieve key development goals. Where the private sector is already investing in agricultural value chains, promoting responsible investment can help increase development impacts. Crowding-in more private investment requires increasing the space for private sector activity, improving the policy and regulatory environment, and considering options for using public financing to improve private incentives and to reduce transaction costs and risks, including blended finance solutions. While these actions can help induce more private investment, there is still a critical need for public resources to finance essential public goods and services such as human capital, agricultural research, and complementary public infrastructure

Côte d’Ivoire has the world’s largest cocoa sector, producing over 1.4 million metric tons of raw cocoa per year, accounting for thirty two percent of world production. Harvest payments often arrive late due to the complex logistics of cash-based payments and, it is not uncommon for the amount farmers receive to be somewhat below market value due to high commissions taken by chains of intermediary middlemen. Cognizant of these costs and inefficiencies, many actors in the cocoa value chain are exploring alternatives. One such alternative is paying farmers through Digital financial services (DFS). This research focuses specifically on mobile money accounts and discusses, first, how these have already expanded financial inclusion in Côte d’Ivoire and, secondly, how mobile money could help deliver products to cocoa farmers that meet their needs. The study is a knowledge product of the Partnership for Financial Inclusion, a joint initiative of IFC and The MasterCard Foundation to expand microfinance and advance digital financial services in Sub-Saharan Africa. It is organized as follows: The first section reviews the financial inclusion landscape in Côte d’Ivoire, revealing that DFS has unusually high penetration in rural areas. The second section analyzes the specific financial behavior of cocoa farmers based on new data collected by IFC,and is followed by a third section presenting a framework for how DFS could help improve farmers’ lives. The report concludes with a call to stakeholders to keep piloting and innovating with products and payment channels that cater to the financial needs of rural communities in Côte d’Ivoire and beyond.

This paper investigates the use of early warning tools as part of Ethiopia's Disaster Risk Management framework. Analyzing, in particular, the Livelihoods, Early Assessment and Protection tool, Livelihood Integrated Assessment and Hotspots Assessments, the paper delineates the scope and objectives of existing early warning tools, their commonalities and limitations. From a disaster risk financing and insurance perspective, the paper investigates possible enhancements in the existing early warning framework and its use that could facilitate greater timeliness of drought response. The paper argues that based on the existing early warning instruments and continued improvements to the early warning systems, it is possible to enable early action during the onset of a drought.

The Government of Uzbekistan (GoU) has recently adopted a policy to mechanize the cotton harvest as part of its drive to modernize the agricultural sector. Under Uzbekistan’s state-order system it is compulsory for many farmers to grow cotton. They are contractually obligated to produce stipulated quantities that are annually set by the government, and must sell these to the GoU at a price fixed by the government. Almost all cotton in Uzbekistan is harvested by hand, even though mechanization existed during the Soviet period. An estimated 2.2–3 millio

Since 2013 The World Bank Group has partnered with the Global Facility for Disaster Reduction and Recovery and the U.K. Department for International Development to address some of these gaps in evidence and methodologies. The Disaster Risk Finance Impact Analytics Project has made significant contributions to the understanding of how to monitor and evaluate existing or potential investments in disaster risk finance from a development perspective, and to the evidence base for where such investments have development impact.This note summarizes the findings of this project, presenting the key messages of a book, a technical report, and 14 research papers, categorized into four themes.

Random forest is in many fields of research a common method for data driven predictions. Within economics and prediction of poverty, random forest is rarely used. Comparing out-of-sample predictions in surveys for same year in six countries shows that random forest is often more accurate than current common practice (multiple imputations with variables selected by stepwise and Lasso), suggesting that this method could contribute to better poverty predictions. However, none of the methods consistently provides accurate predictions of poverty over time, highlighting that technical model fitting by any method within a single year is not always, by itself, sufficient for accurate predictions of poverty over time.

This paper uses panel data to analyze factors that contributed to the rapid decline in poverty in India between 2005 and 2012. The analysis employs a nonparametric decomposition method that measures the relative contributions of different components of household livelihoods to observed changes in poverty. The results show that poverty decline is associated with a significant increase in labor earnings, explained in turn by a steep rise in wages for unskilled labor, and diversification from farm to nonfarm sources of income in rural areas. Transfers, in the form of remittances and social programs, have contributed but are not the primary drivers of poverty decline over this period. The pattern of changes is consistent with processes associated with structural transformation, which add up to a highly pro-poor pattern of income growth over the initial distribution of income and consumption. However, certain social groups (Adivasis and Dalits) are found to be more likely to stay in or fall into poverty and less likely to move out of poverty. And even as poverty has reduced dramatically, the share of vulnerable population has not.

In the agricultural sector, risks are inherent and ubiquitous, posing potentially serious consequences for stakeholders and consumers. Risks disrupt supply chains, causing extensive financial and economic losses. Agricultural risks are also the principal cause of transient food insecurity, creating a poverty trap for millions of households across the developing world that enforces a vicious cycle of shock and recovery. Climate change is exacerbating this cycle by shifting the frequency and intensity of weather related risks and increasing uncertainty. Effective agricultural risk management (ARM) is crucial to increasing economic growth, improving food security, and reducing poverty. Although levels of risk vary within and between countries, lower-income and highly agriculture-dependent countries are more vulnerable to agriculture-related risks. In these countries, there is an urgent need to better assess risks, understand the interconnections between different types of risk, and improve agricultural risk management strategies.

Mali is a vast, land-locked country in West Africa with a population of approximately 14.9 million, and a GDP per capita of USD480. The economy is largely rural, with over two-thirds of the population living off agriculture, notably cotton. Gold is the country’s largest export, though production has been declining and the industry faces an uncertain future as proven reserves are limited. The service sector, which represents 40 percent of GDP, is dominated by trade and commerce. Mali’s dependence on crops and gold makes it vulnerable to terms of trade shocks. Industry, which employs just 3 percent of the active population, consists largely of small-scale food processing and textile plants. The overwhelming majority of the population (over 90 percent) works in the informal sector. The FSAP Development Module focused on: i) the banking sector and legal framework (credit to the economy); ii) microfinance; iii) agricultural finance; iv) insurance; and v) housing finance2. The mission carried out in-depth assessments on each topic and provided recommendations aiming at mitigating financial vulnerabilities and supporting the development of the financial sector (i.e. development the credit to the economy while insuring financial stability).

The performance of the Malian economy is largely dependent on the performance of the agricultural sector. The overall good growth in the Malian economy over the last several years is attributed to the agricultural GDP growth. Since 1995, the economy grew at about 5 percent per year until 2010, but a global recession, the military coup and terrorist activity caused a noticeable slowdown in GDP to about 1.2 percent in 2011-2012. The economic growth has resumed at a slow pace since 2013 and is currently estimated around 4.5 percent for 2014-2015. Agricultural development in general and agricultural finance in particular is hampered by a lack of quality data on the sector. Although improving, reliable statistical information is still lacking in Mali. There are often inconsistencies in agricultural data presented in the various reports available in the country. Although data on the main food crops and cotton are readily available, quality information on the high potential value chains, like mango and meat and dairy value chains, is less frequently provided. The lack of quality agricultural statistics makes public planning and analysis difficult and deters private sector investment.

The purpose of this note is to provide policy recommendations to improve access to credit of rural populations and small agricultural producers under financially sustainable schemes. Although the agricultural sector remains an important source of employment, agricultural credit is a small fraction of commercial credit in Colombia. The share of agricultural credit in Colombia is below levels observed in other countries in the region. Colombian commercial banks have limited credit volume in rural areas, concentrating their lending activities on more profitable urban populations. General deposit warehouses and the agricultural commodity exchange (Bolsa Mercantil de Colombia (BMC)) provide funding for agricultural activities, but they are underdeveloped compared to regional peers and serve medium and large size producers. Overall use of mobile- and internet-based payment financial products remains low in rural Colombia. According to 2014 Findex survey data, just two percent of adults report using mobile banking, defined as a mobile platform for making transactions from an account at a financial institution. Public credit guarantee system (FAG) coverage should be modified to incentive the use of mobile guarantees and agricultural insurance. This will ensure that financial institutions have only covered tail risks, providing incentives to use mobile guarantees.

Agriculture is the dominant sector of the economy, contributing a third of the country’s gross domestic product (GDP) and about half of Rwanda’s export earnings. The government of Rwanda has therefore made agricultural development a priority and allocated significant resources to improving productivity, expanding the livestock sector, promoting sustainable land management, and developing supply chains and value-added activities. At the same time, Rwanda’s agriculture sector faces a series of challenges. Agriculture is dominated by small-scale, subsistence farming under traditional agricultural practices and rain-fed agriculture. As a result, average crop yields are low compared with potential yields, and exposed to risks such as weather related shocks and pest and disease outbreaks. The purpose of this report is to assess existing risks to the agriculture sector, prioritize them according to their frequency and impacts on the sector, and identify areas of risk management solutions that need deeper specialized attention. Three levels of risks are assessed: production risks, market risks, and enabling environment risks to selected supply chains. The report takes a quantitative and qualitative approach to risks. The report is structured as follows: chapter one gives introduction. Chapter two provides an overview of Rwanda’s economy and the role and structure of the agriculture sector. Agriculture sector risks (production, market, and enabling environment risks) for the selected food crops, export crops, and livestock are analyzed in chapter three. Analysis of the adverse impacts of agricultural risks at aggregate and provincial levels, along with a stakeholder risk assessment and a discussion of particularly vulnerable groups, is presented in chapter four. Chapter five prioritizes identified risks, discusses potential solutions areas, summarizes feedback from consulted stakeholders, and recommends solutions areas for further assessment.

At the request of the government of Kenya and under its guidance, a team of national and international experts conducted an appraisal of different agricultural insurance options for Kenya.This appraisal, as set out in this document and the accompanying technical analysis, lays out the costs and benefits of developing large-scale agricultural insurance that involves both the public and private spheres.The analysis considers potential structures for large-scale agricultural insurance in Kenya, the fiscal cost to the government of Kenya, and the economic benefits for farmers and pastoralists. In order for it to partner with the private sector to prepare and implement a large scale agricultural insurance program, the government should consider taking the following next steps.The government of Kenya may build on there commendations by the Program Steering Committee to take the lead in formulating a national policy on agriculture insurance, in cooperation with county administrations and private insurance companies. The government of Kenya may develop a road map for establishing the institutions required for large-scale agricultural insurance programs, with the goal of covering at least a fifth of Kenya’s agricultural producers. As next steps for establishing livestock insurance, the government of Kenya may decide how to integrate the proposed insurance product with other existing protection mechanisms. As next steps for crop insurance, the government of Kenya may seek consultations with agricultural banks and work with private sector insurers to develop a data audit system acceptable to international reinsurers.

Almost a decade after large land-based investment for agriculture increased sharply, opinions on its impact continue to diverge, partly because (positive or negative) spillovers on neighboring smallholders have never been rigorously assessed. Applying methods from the urban literature on Mozambican data suggests that changes in the number and area of large farms within 25 or 50 kilometers of these investments raised use of improved practices, animal traction, and inputs by small farmers without increasing cultivated area or participation in output, credit, and nonfarm labor markets; or, once these factors are controlled for, yields. The limited scope and modest size of the estimated benefits point toward considerable unrealized potential. The paper discusses ways to systematically explore the size of such potential and the extent to which it is realized.

The performance of Senegal’s agricultural performance exemplifies the impact of unmanaged risk on productivity among vulnerable smallholder crop producers and pastoralists. The government of Senegal has historically responded to drought and other shocks with direct financial support to farmers as well as general assistance to the rural population. The World Bank, with support from the group of eight (G-8) and the United States Agency for International Development (USAID) and in collaboration with the Ministry of Agriculture and Rural Equipment (MARE), commissioned the present study. The objective of this assessment was to assist the government of Senegal to: (1) identify, analyze, quantify, and prioritize principal risks facing the agricultural sector; (2) analyze the impact of these risks; and (3) identify and prioritize appropriate risk management interventions that may contribute to improved stability, reduced vulnerability, and increased resilience of agricultural supply chains in Senegal. This report presents a summary of the assessment’s key findings. Chapter one gives introduction. Chapter two provides an overview of the agricultural sector in Senegal and a discussion of key growth constraints. An assessment of the main agricultural risks is presented in chapter three. Chapter four analyzes the frequency and severity of highlighted risks and assesses their impact. Chapter five presents some stakeholder perceptions of risks and evaluates levels of vulnerability among various livelihood groups. The study concludes in chapter six with an assessment of priorities for risk management and a broad discussion of possible risk management measures that can help to strengthen the resiliency of agricultural supply chains and the livelihoods they support.

Agricultural risk management is a central issue that Mozambique faces in development, and multiple stakeholders have analyzed this challenge, sometimes with different terminology and focusing on varying aspects. The government of Mozambique has adopted the strategic plan for agricultural development (PEDSA 2010-19) that focuses on: (i) increasing the availability of food in order to reduce hunger through growth in small producer productivity and emergency response capacity; (ii) enlarging the land area under sustainable management and the number of reliable water management systems; (iii) increasing access to the market through improved infrastructures and interventions in marketing; and (iv) improving research and extension for increased adoption of appropriate technologies by producers and agro-processors. The World Bank’s agriculture sector risk assessment takes a holistic approach and relies on long time-series historical data to arrive at an empirical and objective assessment of agricultural risks and their impacts on Mozambique. This assessment will form the basis of the second step, solution assessment, whose final findings will inform National Investment Plan for the Agrarian Sector in Mozambique (PNISA). This document considers the many aspects of assessing risk in the Mozambican agriculture sector. Chapter one gives introduction and context. Chapter two introduces the major characteristics of the agricultural system leading into chapter three, which presents a comprehensive picture of the risks that exist in the sector. Chapter four, in quantifying the risks that have been observed, comments on the losses that have been incurred by the sector because of production risks, whereas chapter five provides a qualitative discussion of how risk has an effect on the different stakeholders present in the sector. Chapter six delves into the risk prioritization carried out by the team and then comments on various management measures. The report concludes with chapter six, in which recommendations are provided for improving risk management in Mozambique.

This study aims to achieve a better understanding of the agricultural risk and risk management situation in Tanzania with a view to identifying key solutions to reduce current gross domestic product (GDP) growth volatility. For the purpose of this assessment, risk is defined as the probability that an uncertain event will occur that can potentially produce losses to participants along the supply chain. Persistence of unmanaged risks in agriculture is a cause of great economic losses for farmers and other actors along the supply chains (for example, traders, processors, and exporters), affecting export earnings and food security. The agricultural sector risk assessment is a straightforward methodology based on a three-phase sequential process. Phase analyzes the chronological occurrence of inter-seasonal agricultural risks with a view to identify and prioritize the risks that are the drivers of agricultural GDP volatility. This report contains the findings and recommendations of the first phase and includes the identification, analysis, and prioritization of major risks facing the agricultural sector in Tanzania, as well as recommendations regarding key solutions. Chapter one gives introduction and context. Chapter two contains an overview of the agricultural sector and its performance, as well as a discussion of key agro-climatic, weather, and policy restrictions and opportunities. Chapter three includes an assessment of major risks (that is, production, market, and enabling environment risks) facing key export and food crops. Chapter four presents an estimate of historical losses due to realized production risks and a correlation of such losses with production volatility. Chapter five provides insights into the exposure to risks by different stakeholders and their actual capacities, vulnerabilities, and potential to manage agricultural risks. Chapter six presents a risk prioritization by different supply chains and discusses the possible solutions, as well as specific recommendations for the agricultural sector development program (ASDP).

Better insurance against rainfall risk could improve the security of hundreds of millions of agricultural households around the world. However, customers have shown little demand for stand-alone insurance products. This paper theoretically and experimentally analyzes an innovative financial product called a Weather Insurance Savings Account (WISA), which combines savings and rainfall insurance. The paper uses a standard model of intertemporal insurance demand to study how customers demand for a WISA varies with the amount of insurance offered. A laboratory experiment is then used to elicit participants valuations of pure insurance, pure savings, and intermediate WISA types. Contrary to the standard model, within-subjects comparisons show that many participants prefer both pure insurance and pure savings to any interior mixture of the two, suggesting that market demand for a WISA is likely to be low. Additional experimental and observational evidence distinguishes between several alternative explanations. One possibility that survives the additional tests is diminishing sensitivity to losses, as in prospect theory.

This paper uses a stochastic dynamic programming model to characterize the optimal savings-consumption decisions and the role of livestock inventories as a buffer stock in rural Ethiopia. The results show that relatively land-rich households use accumulation and liquidation of cattle and other animal inventories for partial consumption smoothing, while low-income households appear not to do so. The results highlight the need for improvement in livestock markets, which are often affected by high transaction costs and price risk, and for investigation of other approaches to risk management.

The magnitude of risks facing Mongolian agriculture has made the sector’s development extraordinarily volatile over the last 25 years as it underwent decollectivization. Livestock in particular has seen rapid and largely unsustainable rates of growth in terms of numbers of animals and herders, and in so doing has become acutely vulnerable to the severe winter weather events known as dzuds. Periodic droughts and other production risks have also affected the country’s much smaller crop agriculture, much of which is geared for the production of feeds. And price volatility poses serious systemic risks which affect large proportions of the rural population. This study was undertaken to assess the systemic risks facing Mongolian agriculture and to identify gaps in current risk management practices within the sector.

Productivity in the agricultural sector is inherently dependent on weather, such as variations in rainfall and temperature. As a result, weather risk events can cause losses in yield and production that translate into economic losses for producers, as well as other sector stakeholders that depend on income from agricultural trade, transport, processing, or export. This document is a guide for development practitioners and strategically presents a variety of mapping techniques for agricultural risk management and illustrates the application of these techniques for informing public and private sector development strategies. The introduction places weather risk mapping within the broader context of agricultural risk, explaining how mapping can enable risk identification, assessment and management activities, and each chapter elaborates on one or more of the technical components. A basic definition of agro-meteorology is provided, along with a discussion of different mapping techniques. The guide presents the available remote (satellite) databases of agro-meteorological variables that can be used for the purpose of weather risk mapping, assessing the advantages and drawbacks of each database and their suitability for different purposes. The document reviews current risk mapping analyses based on historical weather observations, which are typically used for risk identification and assessment, including climatologies, hazard and risk maps, climate regionalizations and agro-ecological zones (AEZ). The document also reviews forward-looking mapping techniques, known as diagnostic and forecasting analyses, specific examples of which are drawn from the United States, the European Union, and Australia. Finally, the guide provides instruction on how and why to conduct agro-ecological zoning, a technique that can be used to assess land-use types, land resources, land suitability, and climatic and agro-climatic regionalizations, as well as to inform land use recommendations. The concluding chapter demonstrates a step-by-step application of agro-ecological zoning in a case study of Mozambique.

This paper builds on the global experience and Mali s context to identify an effective nutrition approach as well as costs and benefits of key nutrition programs, as part of a resilience agenda after the crisis. It is intended to help guide the selection of the most cost-effective interventions as well as strategies for scaling these up. The paper looks at both relevant nutrition-specific interventions, largely delivered through the health sector, and at multisectoral nutrition-sensitive interventions delivered through other sectors such as agriculture, social protection, and water and sanitation that have the potential to strengthen nutritional outcomes in Mali. We first estimate that the costs and benefits of implementing 10 nutrition-specific interventions in all regions of Mali would require a yearly public investment of $64 million. The expected benefits are large: annually about 480,000 Disability-adjusted Life Years (DALYs) and more than 14,000 lives would be saved and over 260,000 cases of stunting among children under five would be averted. However, because it is unlikely that the Government of Mali or its partners will find the $64 million necessary to reach full national coverage, we also consider three potential scale-up scenarios based on considerations of their potential for impact, the burden of stunting, resource requirements, and implementation capacity. Using cost-benefit analyses, we propose scale-up scenarios that represent a compromise between the need to move to full coverage and the constraints imposed by limited resources. We identify and cost six nutrition-sensitive interventions that are relevant to Mali s context and for which there are both evidence of positive impact on nutrition outcomes and some cost information. These findings point to a powerful set of nutrition-specific interventions and a candidate list of nutrition-sensitive approaches that represent a highly cost-effective approach to reducing child malnutrition in Mali.

Cambodia’s rice harvests have been rising significantly since 2005, powered by improved and expanded irrigation and attractive farm gate prices. In 2010, the Cambodian government announced an export target of 1.0 million tons of milled rice by 2015. This analysis, which updates reports prepared in 2009 and 2011, seeks to identify short-term policy measures that can assist Cambodian exporters in boosting exports in the near term. This report examines new and expected investments in the larger rice mills and polishing factories, export trends, recent changes in milling costs, and provides a look at logistical costs and some alternatives. Additionally, import trends are examined in two current markets - the European Union (EU) and Russia, and in three other key markets - Indonesia, the Philippines, and China. Finally, an analysis is provided of the current Thai rice policy which impacts on local prices and investment interests by Thai rice exporters.

Legislation based on international standards and harmonized between trade partners facilitates trade and enables products from developing countries to be competitive in the international market. Countries looking to export to the EU should aim to harmonize legislation with EU rules. If exporting to EU markets is not a priority, countries should follow requirements of the WTO SPS agreement and thus ensure that their products can access markets of all WTO member states. Both the EU and WTO legislative models for food safety require a risk-based approach to food safety controls, prioritizing funds and activity on the most risky areas. Reforms in this area should be primarily focused on ensuring food safety, although ensuring that consumers are receiving the quality of food that they expect is also a consideration. When planning legislative reform, the burden on business should be carefully considered, and consultation with the business community is strongly recommended to obtain a good understanding of the business perspective. Public awareness on the need for reforms can be important and it is essential to outline the benefits of improved food safety legislation to consumers and their representative bodies as they can help to support reforms and sustain their results.

The authors present a randomized field experiment measuring the direct impact and social network spillovers of providing financial literacy and discount vouchers on farmers decision to purchase index-based drought insurance. To examine this, the authors form clusters by grouping together geographically proximate households. Clusters were then randomly assigned to receive either a high or low intensity of each of the following treatments: financial literacy materials and discount vouchers off the price of insurance. The authors find social network spillovers to the provision of financial literacy materials but no spillovers to the provision of discount vouchers on farmers decision to purchase insurance. Specifically, receiving financial literacy materials when 60% or more of their neighbors also receive financial literacy materials, increases the likelihood that a farmer will purchase insurance by 4.3 percent (s.e. 2.5 percent) while receiving a financial literacy materials when 40 percent or fewer of their neighbors also receive financial literacy materials, decreases the likelihood that a farmer will purchase insurance by 2.6 percent (s.e. 2.5 percent). Looking at the discount vouchers, we find significant own effects of receiving discounts off the price of insurance on farmers take-up decision but negligible social network effects. Our results provide suggestive evidence that financial literacy materials are efficacious in encouraging take-up when farmers social contacts are similarly receive access to financial literacy materials.

Agriculture and agribusiness play an important role in the Zambian economy, contributing around 20 percent of gross domestic product (GDP) in recent years and about 12 percent of national export earnings. Agriculture employs nearly 70 percent of the labor force and remains the main source of income and employment for most of the people living in rural areas. The objective of the Zambia agribusiness indicators (ABI) country report is to examine factors that have affected agricultural productivity, market access, and the policy environment for agriculture in Zambia. This report presents findings of a data collection exercise carried out to compile a set of pilot ABI for Zambia. The pilot indicators presented are based on a review of the literature, government statistical bulletins, and primary interviews in the seed, fertilizer, mechanization, agricultural finance, and transport subsectors. The resulting indicators are presented in matrix form, together with notes indicating the specific data source (or sources) used for each indicator. A set of questionnaires was developed for this part of the exercise based on guidelines. Perception indicators on the quality of road infrastructure and other transport sector issues were added to supplement the checklist guidelines. The anticipated impact of the presentation of country performances will be to raise the competitiveness of African agriculture by bringing into sharper focus measures of how individual countries are transitioning towards a more commercial agriculture. This report consists of following seven chapters: chapter one gives introduction; chapter two presents access to and use of improved seed; chapter three focuses on fertilizer access and availability; chapter four focuses on access to farm machinery and tractor hire services; chapter five presents access to agricultural and agri-enterprise finance; chapter six gives cost and efficiency of transport in Zambia; and chapter seven presents policy and enabling environment for agribusiness development.

With this first Zambia economic brief, the World Bank is launching a series of short economic updates that will be produced twice a year. Each brief will include two sections: the Bank's assessment of recent economic developments and outlook in the short to medium term; and its analysis on a specific development topic or theme. The authors expect these briefs to support evidence-based policy debate in the country, strengthen public demand for good policies and outcomes, and inform government policies and programs. In this brief, first section reports on Zambia's continued robust growth, fiscal outcomes, and capital inflows at the end of 2012 against the backdrop of performance of other Sub- Saharan and global economies. It stresses the need for the government to spend borrowed and own resources more prudently. While acknowledging continuing strong prospects for growth, the analysis highlights considerable downside risks emanating from global uncertainties. Second section covers basic human opportunities for children in Zambia. The opportunities approach is premised on the notion that predetermined circumstances such as gender, ethnicity, place of birth, and family origins should not determine people's economic, social, and political success. A person should not have fewer opportunities in life just because she is a girl or born in a rural area. This is the core principle behind the concept of equality of opportunity and it is also the framework adopted in this report for Zambia. The analysis shows the extent to which basic opportunities for education, health, and infrastructure services in Zambia are influenced by circumstances in which children find themselves.

In the future scenario for livestock development, there is a continuing role for smallholder producers, particular for dairy and small ruminants, relying heavily on grass and crop-residues, however in a growth mode, intensifying production, and enhancing the efficiency of resource use (less land, labor and feed resources per unit product). In particular improving the efficiency of converting feed into milk and meat will be critical to increase their income. Ensuring that happens will require technical solutions, in ensuring that feed rations are adequately balanced with the appropriate feedstuffs of adequate quality, and institutional solutions on how to provide smallholders access to high quality information and reliable supplies of sufficient quality feeds. Investment strategies will need to be purposefully tailored to fit these specific contexts. This study assesses where the demand for feed is likely to change the most, and where investments in feed are most likely to increase animal productivity and improve the livelihoods of those who raise livestock. The study focuses on smallholder ruminant-based livestock systems because they have potentially major transformative effects on the livelihoods of producers and others engaged in the related value chains. While pig and poultry enterprises typically play an important role in livelihoods at very low input levels, such as backyard scavenging poultry, they tend to be replaced very quickly by larger scale commercial units. In India for instance, broiler production moved from a few hundred birds per unit to units with a weekly turnover of ten to twenty thousand between 2001 and 2006.

Agriculture in Tanzania accounts for 28 percent of the country's Gross Domestic Product (GDP) and employs 80 percent of its labor force. The sector is also an important source of export revenues. The data and findings presented in this report provide a summary of the performance of the agriculture sector in Tanzania using a set of indicators covering six areas. These are: 1) access to and availability of certified seed; 2) availability of and access to fertilizer; 3) access to farm machinery, particularly tractor hire services for land preparation; 4) access to agricultural and agro-enterprise finance; 5) the cost and efficiency of transporting agricultural commodities; and 6) measures of policy certainty and uncertainty as perceived by private investors and the effects these have on the enabling environment for producers and agribusinesses. The Agribusiness Indicators (ABI) team conducted interviews with Government agencies, private firms (fertilizer importers, seed companies, tractor importers and distributors, transporters), commercial banks, farmer-based organizations, donors, and Non Governmental Organizations (NGOs). The ABI program is pilot testing an initial set of indicators on the ease (or difficulty) of operating agribusinesses in African countries. The indicators are used to assess whether the countries have an enabling environment that is conducive to agribusiness investment, competitiveness, and ultimately agriculture-led growth.

Africa's growing demand for food has been met increasingly by imports from the global market. This, coupled with rising global food prices, brings ever-mounting food import bills. In addition, population growth and changing demand patterns will double demands over the next 10 years. Two key issues must be addressed: (a) establishing a consistent and stable policy environment for regional trade in fertilizers; and (b) investing in institutions that reduce the transaction costs of coordination failures. Many countries have enacted new fertilizer laws in recent years, but few have provided the resources to define and enforce regulations through standards and testing capacity. This report shows that reducing regulatory burdens on fertilizers and the consequent increase in use of fertilizers will have substantial impacts on returns to farmers, with consequent impacts on poverty. The report highlights the range of barriers to food trade in Africa along the entire value chain. The issues pertain to many ministries and agencies within government: trade, agricultural, health and safety, transport, and finance. This in turn requires a "whole of government' approach to freeing up food trade, which will require strong and effective leadership to articulate the rationale and sustain the momentum for reform. Leaders must also address the hard choices that will arise in dealing with the political economy constraints that have until now blocked the capacity of Africa to exploit its enormous potential to feed Africans.

Mozambique, the only Lusophone country covered in the agribusiness indicators initiative, has had a turbulent history since independence. Civil unrest over some 20 years and frequent drought in southern Mozambique, coupled with floods near the many waterways that transect the country (mainly east-west), have inhibited an agricultural transformation. Even so, Mozambique could be a regional breadbasket. The country has much potentially usable arable land, along with access to river water for irrigation in many agricultural production zones, particularly in central and northern Mozambique. Sesame, pigeon peas, and cashew exports are significant and rising, not to mention exports of industrial crops such as cotton, leaf tobacco, and sugarcane, yet production of grain and most other food crops remains stagnant. Irrigated area is way below what is possible and needed to increase yields and total agricultural output.

Because agriculture is the economic backbone of most countries in Sub-Saharan Africa, including Ethiopia, any meaningful sustainable development program in the continent must therefore be anchored in the sector. The concept for this study on agribusiness indicators was based on the vital role that agribusiness plays in agricultural development. The study focuses on agribusiness indicators (ABI) to identify and isolate the determining factors that lead private investors and other stakeholders to participate in agribusiness and to engage in discourse regarding its development. A more thorough empirical understanding of these determinants in turn can usefully inform the types of policy reforms that can promote agribusiness in Africa. In Ethiopia, the ABI team focused on the following success factors: a) access to critical factors of production of certified hybrid seeds, fertilizer, and mechanical input; b) enabling environment in terms of access of credit and transportation; and c) government expenditures on agriculture, and trade and regulatory policies that currently influence the agribusiness environment. The factors and indicators that the research team has included in this study are not exhaustive but rather are intended to serve as a pilot that could be scaled up to include more variables and countries. The findings of the study revealed the dominant role of the government in the seed and fertilizer markets. In the seed sub-sector, perennial shortages of both basic and certified seeds have greatly limited agricultural productivity in Ethiopia.

This paper is a distillation of the findings of the work undertaken by the World Bank. It is deliberately not a collation of case studies, but rather a practical overview of the subject. The purpose of this paper is to introduce task managers and development professionals, who are not insurance sector specialists, to weather index insurance. Ultimately, the paper seeks to take the reader through the main decision points that would lead to a decision to embark upon a weather index insurance pilot and then assists them to understand the technical procedures and requirements that are involved with it. In addition, the paper seeks to advise the reader of the practical challenges and implications that are involved with a pilot of this nature and what they might expect to encounter during the initial stages of implementation. The very nature of an index based product creates the chance that an insured party may not be paid when they suffer loss and/or that they may receive a payment when they have suffered no loss. This paper also does not seek to delve deeply into the technical details and science that lie behind the 'black box' that is at the heart of the index.

Reforestation measures for degraded lands, strategies for the sustainable management of forest resources, and agroforestry practices that incorporate trees into farming systems are increasingly demonstrating their promise for producing commercialized tree products. Although the level of investment so far has remained modest, the challenge is to find ways to scale up promising investments in a way that will have a clear impact at the landscape level. These types of investments can help achieve the triple wins of climate-smart agriculture: increased incomes and yields, climate change adaptation and greenhouse gas mitigation.Market trends are promising for a wide range of tree-based technologies, including tropical fruits, cashews, honey, timber and wood products, lipids, gums and resins, tree crops, and agroforestry systems. In many cases, African entrepreneurs, farmers, civil society, and governments have responded dynamically to the widespread challenge of land degradation. The continent is dotted with landscapes where production of trees on farms and in managed forests has grown dramatically to meet market and subsistence needs; sustainable agricultural practices and revegetation have restored soils and watersheds; and key conservation areas are being protected. However, this is not happening at the scale required by societal needs in Africa. In part, this is due to a lack of strategic cooperation and coordination between private sector investors and land managers (who are focused on realizing profitable opportunities and meeting their own needs) and public and civil society actors (who are focused on restoring forest cover and ecosystem services). Such coordination is only possible when the biophysical potential for landscape restoration, private sector investment opportunity and incentives, and societal demand for multiple benefits converge. Much can be learned from examples of large-scale landscape restoration in Ethiopia, Kenya, Niger, Tanzania, and Zambia, and the variable roles of the private sector, farmers, government, and civil society in supporting and undertaking investment.

Adaptation to human-induced climate change is currently receiving a lot of attention in international development circles. But throughout human existence, natural resource-dependent people have exploited and coped with the effects of climate variability on the ecosystems from which they derive a living. Learning from this experience can help inform the design of appropriate policies for responding to human-induced climate change. This paper presents the results of a World Bank study which sought to better understand the role of local institutions in supporting adaptation to climate variability and change in Ethiopia, Mali and Yemen. The study raised three questions. First, what strategies have been adopted by rural households in the past to adapt to climate variability? Second, to what extent do institutions of various sorts assist households in adopting adaptation strategies? And third, what are the factors that prevent households from adopting appropriate adaptation strategies? For the purposes of this paper, institutions are defined as structured, formal or informal organizations. The study followed a three-step approach. First, drawing on original data from field surveys, focus group discussions and institutional stakeholder interviews, household vulnerability to climate variability was characterized in terms of its three constituent elements: exposure to climate-related shocks and stresses, and sensitivity and adaptive capacity in the face of such stressors. Sensitivity refers to the degree to which people are affected by climate variability and change. High levels of exposure and sensitivity and low levels of adaptive capacity generally result in high levels of vulnerability. But a high level of exposure need not necessarily result in a high level of vulnerability if the household's adaptive capacity is also high.

Nonfarm sector development in rural Ethiopia is central to generating employment and income and thereby reducing poverty. The improved investment climate could facilitate investments in farm and nonfarm sectors by contributing directly and indirectly to the generation of additional employment for women and men. Ethiopia Industrial Development Strategy 2003 involved efforts to create an enabling environment for the private sector to be a driving force for economic development. The sectoral focus of the strategy is on the development of agro-based industries and on strengthening nonfarm sector. The sustainable support system for rural women entrepreneurs is based on five main components: (i) women's economic empowerment, (ii) market development, (iii) access to markets, (iv) business management support services, and (v) access to credit. Necessary conditions to support nonfarm economic activities, such as physical market development, feeder roads, and transport, will also benefit agriculture and create a virtuous circle of increasing farm and nonfarm income. Women are more likely to be involved in and benefit from nonfarm enterprise activities. Although the system proposed could be targeted at men and women, women could be the main beneficiaries of the support system. This sustainable system is new and innovative in directly supporting the rural poor and women by building the capacity of entrepreneurs and supporting institutions linked to the existing projects. This system may derive maximum synergy effects by integrating with the Agricultural Growth Project (AGP) and the Household Assets Building Program (HABP) of the Productive Safety Nets Project (PSNP) in a complementary relationship.

The objective of this report is to identify and evaluate best practices in smallholder private irrigation in West Africa. The report is based on a comparative assessment of the smallholder private irrigation subsector in Burkina Faso, Mali, Niger, and Nigeria, which included a literature review, field visits, and workshops at both national and regional levels. The task lists for the assessment is provided in annex one. This report first presents the main features of smallholder irrigation and the development projects that have promoted its use in West Africa in chapter two. The authors then describe the low-cost technologies available for this type of irrigation, including drilling, pumping, and water distribution in chapter three. Chapter four reviews the successes and remaining challenges of the development projects involving smallholder private irrigation in West Africa. Chapter five draws the lessons learned from these experiences and proposes recommendations for future investments, including more support to the development of a supply-chain for low-cost irrigation technologies, the adoption of a programmatic approach, and the necessity for a comprehensive investment package including environmental impact mitigation to sustainably support smallholder irrigators.

This report is the outcome of assessment and is intended as an advisory note to the Ministry of Agriculture (MoA) and Guyana Rice Development Board (GRDB) to enable them to identify a strategy and potential public investments to improve current risk-management practices in the rice supply chain. This report identifies the major risks facing the rice supply chain, ranks them in terms of their potential impact and frequency, and offers a framework for improving current risk-management practices. The recommendations and findings will provide a basis for follow-up planning work by the Government of Guyana (GoG), the World Bank, and other development partners. The findings and analysis of this initial assessment are based on a methodology designed by the Agricultural Risk Management Team (ARMT) for assessing risks in agricultural supply chains. This report provides an indicative list of potential solutions to address the dominant risks in the rice supply chain; however, the assessment or evaluation of the individual solutions was beyond the scope of this exercise. To ensure the greatest return on future public investments in implementing risk management solutions, GRDB and MoA need to undertake an exhaustive cost-benefit assessment of different options. This will enable MoA to identify and implement the necessary activities to reduce the vulnerability of the rice supply chain in Guyana.

The objective of this study is to evaluate the World Bank Group's (International Bank for Reconstruction and Development [IBRD], International Development Association [IDA], and International Finance Corporation [IFC]) effectiveness in promoting growth in agricultural productivity in Azerbaijan, and to derive lessons that may be relevant for the World Bank Group's future engagement in Azerbaijani agriculture. The study covers the World Bank's entire agricultural lending and analytical portfolio, and the full period of the Bank's involvement with Azerbaijan's rural sector, commencing in 1997 when the first agricultural project was launched, to 2010. The report begins (section one) with an overview of agriculture's role in Azerbaijan's economy, the strategic need for increased agricultural growth and the technical, economic and policy constraints impeding growth. Section two reviews the Bank's lending program and analytical work, and considers the appropriate balance between lending and analytical activities. Section three assesses the Bank's impact on agricultural productivity, and section four considers how environmental management, social welfare and agricultural growth can be mutually complementary. Section five and six reviews cross-cutting aspects of the Bank's work in Azerbaijan's agriculture sector, including the Bank's effectiveness as an innovator and as a partner with the government in agricultural reform. And section seven assesses the impact of the Bank's own institutional structure and practices on its operational effectiveness promoting agricultural productivity. Concluding the report, Section 8 highlights the main areas where the Bank could have had greater impact on the country's agricultural productivity, and the lessons thereby emerging for the Bank's agricultural role in Azerbaijan in future years.

This report is the final product of a country case study prepared in the framework of the comparative analysis of organization and performance of cotton sectors in Sub-Saharan Africa, a study published by the World Bank in 2008. The objective of the overall study was to carry out a comparative analysis of the links between sector structure and observed performance outcomes on a sample of nine of the major cotton exporting countries of Sub-Saharan Africa, and draw lessons from each country's experience that can provide useful guidance to policy-makers, industry stakeholders, and interested donors agencies in the design of future cotton sector reform programs. This paper describes and reviews the situation of the cotton sector of Cote d'Ivoire, as well as the reforms that the sector has undergone since the mid-1990s.

This report is the final product of a follow-up study undertaken after the completion of the comparative analysis of organization and performance of cotton sectors in Sub-Saharan Africa, a study published by the World Bank in 2008. The objective of this complementary study is to assess the advantages and disadvantages of the main available technologies to separate the lint from the raw cotton, roller ginning and saw ginning, and carry out an economic analysis of the respective benefits of these two technologies for cotton producing countries of Sub-Saharan Africa. The study shows that the choice of ginning technology is an important factor of performance and is in turn influenced by the cotton sector structure. The type of ginning technology also has an impact on lint quality, and, as roller ginning is less damaging to the fiber than saw ginning, it can generate a price premium. The overall economic advantage of roller gins vs. saw gins appears to be significant in the Sub-Saharan African context, and likely to increase in the future as the demand for quality is becoming more and more stringent. Thus, although there are technical and organizational issues to address in order to fully capture the benefits of the technology, the introduction of roller ginning is likely to improve the competitiveness of African cotton and facilitate the transition towards more competitive cotton sectors.

This report presents findings of an impact evaluation of a rural irrigation investment program with multiple components in coastal Peru. It addresses three questions: whether the program was effective, whether the program’s multicomponent design contributed to its effectiveness, and whether the program had spillover effects. The primary audiences for this report are development practitioners engaged in designing similar projects, evaluators interested in using similar methodology, and the general evaluation community. The rest of this report is organized as follows. Chapter 1 briefly explains how irrigation projects transmit their impacts, identifies potential areas of concern for this type of project, and illustrates these with experiences in water-related projects around the world. Another section in this chapter provides some necessary background on the agricultural sector in Peru, past and present, and a brief description of the irrigation program and each of its components. Chapter 2 discusses the mixed-methods approach used in the impact evaluation, focusing on data description. Chapter 3 elaborates on the technical strategy used to identify impacts. Chapter 4 presents and discusses the findings. Chapter 5 presents concluding remarks.