Table Of ContentAgriculture Investment Sourcebook
The World Bank
The World Bank
Agriculture Investment Sourcebook
Agriculture and Rural Development
© 2005 The International Bank for Reconstruction and Development / The World Bank
1818 H Street NW
Washington DC 20433
Telephone: 202-473-1000
Internet: www.worldbank.org
E-mail:
CONTENTS
Foreword vii
Preface ix
Acknowledgements xii
Acronyms and Abbreviations xiv
Introduction xvii
Module 1: Building Agricultural Policy and Institutional Capacity 1
Agriculture Investment Notes 12
Preparing a National Agricultural Development Strategy 12
Developing Capacity for Agricultural Sector Policy Formulation 17
Reform of Agriculture Subsidy and Protection Policy 22
Facilitating Efficient Adjustment to Liberalized Trade 27
Adjustment Lending for Agriculture Policy Reform 32
Improving Animal Health Services Through Public/Private Partnerships 37
Strengthening Farmer Organizational Capacity to Influence Agriculture Policy 42
Innovative Activity Profiles 47
Bulgaria: Adjustment Lending in a Transitional Economy 47
Ecuador: Commodity Chain Consultative Councils for Policy Formulation 49
Turkey: Hybrid Adjustment/Investment Lending 51
Guinea: Livestock Sector Partnership—Public Sector Herder Organization
and the Private Sector 53
Module 2: Investments in Agricultural Science and Technology 55
Agriculture Investment Notes 68
Competitive Research Funds 68
Strengthening Public Research Institutes 73
Enhancing University Participation in National Agricultural Research Systems 78
Local Agricultural Research Committees 83
Biotechnology, Biosafety, and Agricultural Development 88
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Innovative Activity Profiles 93
Brazil: Spill-ins from Foreign Research and Development Laboratories 93
Colombia: Decentralized, Demand-Driven, Competitive Technology Generation 95
Ecuador: Strategic International Alliances for Capacity Building and Research 97
India: Focus on Biotechnology 99
India: Revitalizing Institutional Capacity in Forestry Research 101
Senegal: Making Research Demand Driven 103
Module 3: Investments in Agricultural Extension and Information Systems 105
Agriculture Investment Notes 118
Contracting Extension Services 118
Decentralizing Agricultural Extension and Information Services 124
Client Groups as Key Intermediaries in Extension 129
Mass Media and Communications Technologies in Extension 135
Estonia: Transition to Private Extension Advisory Services 140
Innovative Activity Profiles 142
India: Participatory and Decentralized Agricultural Technology Transfer 142
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Russian Federation: Using Information and Communications Technologies for
Rural Information Services 144
Uganda: Extension Decentralization, Privatization, and Reform 146
Venezuela: Contracting Decentralized Extension Services 148
Module 4: Investments in Sustainable Agricultural Intensification 151
Agriculture Investment Notes 163
Market-Driven Diversification 163
Smallholder Dairy Production 169
Aquaculture Production Systems 174
Organic Agricultural Production Systems 179
Urban and Periurban Agriculture 184
Conservation Tillage 189
Integrated Pest Management 194
Integrated Nutrient Management for Sustaining Soil Productivity 199
China: Fruit Promotion in the Mid-Yangtze 204
Innovative Activity Profiles 206
India: Community Organization for Sodic Lands Reclamation 206
India: Income Generation through Aquaculture 208
Module 5: Investment in Sustainable Natural Resource Management for Agriculture 211
Agriculture Investment Notes 223
Community-Based Natural Resources Management 223
Watershed Management for Agricultural Development 228
Agroforestry Systems 233
Pastoralism on Arid and Semi-Arid Lands 238
Integrated Livestock-Wildlife Management 243
Innovative Activity Profiles 248
Brazil: Participatory Microcatchment Strategy for Increased Productivity and Natural
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Resource Conservation 248
China: Commercial Plantations to Help Conserve Forests 250
Egypt: Matruh Resource Management to Ensure Sustainable Livelihoods for Remote
Bedouin People 252
Latin America and Caribbean: Payments for Environmental Services in Silvopastoral
Systems 254
China: Watershed Management Approach to Optimizing Incomes and Ecology in Poor
Highlands 256
Module 6: Investment in Agribusiness and Market Development 259
Agricultural Investment Notes 270
Supporting Market and Supply Chain Development 270
Horticultural Exports from Developing Countries 275
Private Seed Enterprise
Development 280
Promoting Private Sector Fertilizer Distribution Systems 285
Getting Markets Right in the Post-Reform Era in Africa 290
AGRICULTURE INVESTMENT SOURCEBOOK
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Innovative Activity Profiles 295
Bangladesh: Autonomous Organization for Facilitating Market-led Export 295
China: Smallholder Cattle Development for Import Substitution 297
Colombia: Productive Agribusiness/Farmer Partnerships 299
Mali: Building Export Mango Systems 301
Module 7: Investments in Rural Finance for Agriculture 303
Agriculture Investment Notes 314
Microfinance Institutions Moving into Rural Finance for Agriculture 314
Financial Services through State Banks 319
Production Credit from Input Suppliers, Processors, and Buyers 324
Membership-Based Financial Organizations 329
Innovative Activity Profiles 334
Vietnam: Mobile Banking for Rural People 334
Zimbabwe: AGENT Program 336
India: Piloting of Smart Cards in Rural Areas 338
Madagascar: Microleasing for Agricultural Production 340
Ghana: Inventory Credit for Small-Scale Farmers 342
Module 8: Investments in Irrigation and Drainage 345
Agriculture Investment Notes 355
Investments to Empower Farmers to Manage Irrigation and Drainage Systems 355
Investments in Irrigation for Crop Diversification 360
Investments in Waterlogging and Salinity Control 365
Investments in Shallow Tubewells for Small-Scale Irrigation 370
Innovative Activity Profiles 374
China: Consumptive Use in Water Resource Management for Productivity, Equity, and
the Ecology 374
Egypt: Improving Agricultural Production Through Better Drainage 376
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India: Rationalized Public, Private, and Farmer Roles in Groundwater Management 378
Mali: Institutional Reform to Focus Public Role on Essential Public Goods 380
Niger: Tailoring Irrigation Technology to Users’ Needs 382
Module 9: Investments in Land Administration, Policy and Markets 385
Agriculture Investment Notes 397
Investments in Systematic Land Titling and Registration 397
Community-Managed Land Reform 402
Innovative Activity Profiles 407
Armenia: Benefits of Securing and Registering Land for Rural Development 407
Brazil: Participatory Negotiations and Market-Assisted Land Reform 409
The Lao People’s Democratic Republic: Preserving Women’s Rights in Land Titling 411
Module 10: Managing Agricultural Risk, Vulnerability, and Disaster 413
Agriculture Investment Notes 422
Commodity Price Risk Management 422
Agricultural Insurance 427
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Responding to Disaster with Seed Distribution 432
Innovative Activity Profiles 437
Kenya: Community-Based Drought Management 437
Mongolia: Sustaining Livelihoods in Areas with High Natural Disaster Risk 440
Tanzania: Accessing Market-Based Price Risk Management Instruments 442
India: Innovative Rainfall-Indexed Insurance 444
Module 11: Scaling Up Agricultural Investments in the Bank’s Changing Internal
Environment 447
Agriculture Investment Notes 459
Targeting Agricultural Investments to Maximize Poverty Impacts 459
Nine Lessons for Improving Project Design for Better Investment Performance 465
Agriculture Sector Program Lending 470
Community-Driven Development for Increased Agricultural Income 475
Monitoring and Evaluation: Measuring and Assessing Agricultural Development
Programs 480
Innovative Activity Profiles 485
Mozambique: Harmonized Donor Funding Around Principles 485
Brazil: Empowering Rural Communities for Poverty Reduction 487
Uganda: Cross-Sectional Programmatic Adjustment Lending Focusing on
Poverty Reduction 489
Appendix: Key Websites 491
Index 495
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AGRICULTURE INVESTMENT SOURCEBOOK
FOREWORD
vii
The World Bank’s new rural strategy, Reaching the Rural Poor, commits the Bank to five core areas of rural
development:
• fostering an enabling environment for broad-based and sustainable rural growth;
• enhancing agricultural productivity and competitiveness;
• encouraging non-farm economic growth;
• improving social well-being, managing and mitigating risk, and reducing vulnerability; and
• enhancing sustainability of natural resource management.
Underlying all of the goals is support to agricultural growth that benefits the poor, for without a renewed
effort to accelerate growth in the agricultural sector, few countries will be able to reach the Millennium
Development Goals, especially the goal of halving poverty and hunger by 2015.
While developing the new rural strategy, the need to better articulate good practice in agricultural policies
and investments became clear. This is especially so, since the nature of donor supported investments in the
sector, and the instruments for channeling those investments, has changed drastically over the last
decade. This first edition of the Agriculture Investment Sourcebook, responds to that need, by compiling a
wide range of emerging good practice and innovative approaches to investing in the agriculture sector.
The first edition already provides a rich menu of options for profitably investing in the agricultural sector,
but it is a work in progress. There are still important gaps that need to be filled, and good practice is
constantly evolving as knowledge and experience accumulate. Our partners in other multilateral and
bilateral institutions, national organizations, and civil society organizations possess much of the knowl-
edge on how to get agriculture moving, and that has not been captured in this edition. We, therefore, plan
to update of most of the modules in this Sourcebook annually.
Our challenge now is to build on this edition of the Sourcebook by intensifying our efforts to evaluate,
learn, and share knowledge in ways that promote the agricultural agenda and the welfare of rural people.
Kevin Cleaver Sushma Ganguly
Director Sector Manager
Agricultural and Rural Development Agricultural and Rural Development
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AGRICULTURE INVESTMENT SOURCEBOOK
PREFACE
ix
nvesting to promote agricultural growth and poverty reduction is a central pillar of the World Bank’s
current rural strategy, Reaching the Rural Poor, which was released in 2003. One major thrust of the
I strategy outlines the priorities and the approaches that the public sector, private sector, and civil
society can employ to enhance productivity and competitiveness of the agricultural sector in ways that
reduce rural poverty and sustain the natural resource base. These actions involve a rich mixture of
science, technology, people, communication, management, learning, research, capacity building, institutional
development, and grassroots participation.
This Sourcebook has been prepared to help in implementing the rural strategy, by sharing information on
investment options and innovative approaches that will aid the design of future lending programs for
agriculture. The Sourcebook provides generic good practices and many examples that demonstrate that
investment in agriculture can provide rewarding and sustainable returns to development efforts. The
contents have been assembled from all regions and thematic groups of the Bank, and from the experi-
ences of many partners.
