Chapter 63 Development Aid and Agriculture

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This chapter is motivated by the question of whether development assistance directed at agriculture (“agricultural aid”) is effective. It argues that development assistance is continually changing as the ascendant visions of strong global leaders interact with theories of economic growth and evidence on the impact of past aid, and that agricultural aid has reflected similar continual changes in its composition and mode of delivery. The chapter briefly summarizes evidence on the contribution of aid to overall economic growth, then reviews the evidence of whether agricultural aid accelerates agricultural or economic development. It reviews evaluations of projects and sets of projects related to agricultural credit, integrated rural development, irrigation, research, extension, and higher education. However, except for the World Bank's Operations Evaluation Department (OED) work, most studies of agricultural aid fail to estimate economic rates of return or contributions to incomes of farmers or national economies. It is impossible to conclude, from the evaluation literature, whether agricultural aid accelerates economic development or not. The chapter shows that donors change the object of their assistance with great frequency. Economic growth takes time, and donors have not stayed committed to key activities for a sufficiently long time to achieve results. Aid to agriculture from nearly all donors fell precipitously beginning in the mid-1980s despite clear evidence that there was a continuing need for broad, long-term support for agriculture in sub-Sahara Africa. This review suggests that those with responsibility for allocating assistance across sectors do not understand the crucial importance of agriculture at the early stages of development, because the urge to fund new approaches dominates decisions rather than judgment of what is needed and what is likely to be effective. However, one may also understand the unwillingness of aid decision makers to place too much credence in the results of impact evaluation studies because there are few consistent results, whether on national economic growth or agricultural growth, and most studies stress the difficulty of attributing agricultural production growth to development assistance. JEL classifications: O130, O190, O220, O470, Q000