World Bank Group interventions to increase agricultural productivity, improve social inclusion, and mitigate and adapt to climate change reached many countries that needed them. However, Bank Group support to increase access to agricultural finance, improve the enabling business environment, and enhance food safety standards did not reach enough countries with relevant needs, suggesting room to scale up support. Moreover, the World Bank’s productivity-enhancing investments are not sufficiently diversified beyond major staples and some livestock toward high-value, nutritious products that are in high demand and offer multiple benefits to farmers, small and medium enterprises, and the population living in low-income countries.

The intensity of Bank Group support (the number of interventions per country) for enhancing food safety standards, social inclusion, and climate change mitigation and adaptation was commensurate with need. By contrast, the intensity of Bank Group support to increase agricultural productivity, enhance access to agricultural finance, and improve the enabling business environment was not commensurate with country needs, suggesting room to improve the targeting of support.

Only about two-thirds of countries with multiple constraints on agrifood system development received the appropriate mix of interventions, underscoring the need for better targeting. For example, productivity-enhancing measures were often provided without support for agricultural finance in countries that needed both types of support.

Country Partnership Frameworks adequately covered core areas for agrifood system development, but about half did not treat them in an integrated manner. Country Partnership Frameworks also missed opportunities to address gender, food safety standards, and climate change mitigation strategically.

This chapter analyzes how relevant the Bank Group’s support for agrifood system development has been to client countries. Relevance means “doing the right things in the right places”—that is, deploying interventions that address countries’ needs to improve their agrifood systems. Such a deployment of interventions should be prioritized to align limited resources with each other and target important system constraints. To assess whether the Bank Group is doing the right things in the right places, we analyzed the reach of the Bank Group’s support to agrifood system development (how many countries received support), the intensity of its support (how many projects a country received), the mix of interventions (how many areas for agrifood system development the projects addressed), and the CPF coverage (whether CPFs reflected countries’ agrifood system development needs).

Reach and Intensity of World Bank Group Support

Reach and intensity measure to what extent the Bank Group provides support to countries in need and how much support it provides, respectively. If the Bank Group is doing relevant work, we would expect that its support for agrifood system development would reach a high share of countries that need it. Likewise, we would also expect that the Bank Group would provide more support to countries with relatively high needs and less support to countries with lower needs—that is, we would expect the intensity of support to be commensurate with country needs.

We assessed the reach and intensity of the Bank Group’s support across six areas that are core to improving the productivity, inclusion, and sustainability of agrifood systems. They are the following:

1. Interventions to increase the productivity of agricultural primary production and processing of agricultural products;
2. Interventions to improve the business environment of the agrifood system, which are crucial to enable the growth of farms and firms;
3. Access to finance interventions to allow farms and firms to increase their working capital and investments;
4. Social inclusion interventions to allow poor people, women, or marginalized individuals to derive better and more stable incomes as the agrifood system develops;
5. Interventions to improve food safety standards, which are important for farms and firms to integrate into value chains and to access both domestic and export markets;
6. Interventions to improve the climate mitigation and adaptation capacities of agrifood systems.

Table 2.1 includes selected indicators that we have identified as proxies to measure country-level reach and intensity in each of these six areas for agrifood system development.

Source: Independent Evaluation Group, based on global data from various sources.

Note: CO2 = carbon dioxide; FAO = Food and Agriculture Organization of the United Nations; GDP = gross domestic product; ND-GAIN = Notre Dame Global Adaptation Initiative; WDI = World Development Indicators.

To assess the reach of Bank Group support, we determined how many countries with high needs received Bank Group support. Those countries that scored below the global median on any of the above proxy indicators were considered countries with relatively high needs for support in that core area for agrifood system development. Countries that scored above the global median were considered countries with relatively low needs. The team then determined reach by calculating the percentage of countries scoring below the global median (as an indication of high need for support) that received at least one Bank Group intervention addressing that specific need. For enhancing food safety standards, for example, reach was 68 percent because 39 out of 57 countries that scored below the global median on food safety standards received at least one Bank Group project to improve them. The team considered reaching two-thirds (66 percent) of countries with relevant support an adequate benchmark for World Bank lending and advisory, and—because of the smaller portfolio of IFC—it considered reaching half (50 percent) of countries to be adequate for IFC investments and advisory. Reaching a much higher percentage would be difficult for IFC, considering that IFC takes the full commercial risk when engaging in financial intermediation without sovereign guarantees and because of the high number of countries that are small island states or are in fragile and conflict-affected situations (FCS).1 Because various instruments are complementary, we should not expect all of them to reach their respective benchmark but should instead look at the collective reach of the Bank Group as a whole. As an example, a relatively low reach of IFC investment complemented by a high reach of IFC advisory work (for example, on productivity and climate) may indicate that IFC is supporting reforms to create the enabling environment for future investment. Figure 2.1, panel a, provides an overview of the results, which are discussed in greater detail in the subsequent sections.

To assess the intensity of Bank Group support, we determined how many projects the Bank Group implemented for countries with high needs compared with those with low needs in each of the six core areas. For example, the 57 countries that scored below the global median on quality of food standards received 97 Bank Group projects (or 1.7 projects per country), compared with 13 projects in support of the 14 countries that scored above the global median on this indicator (or about one project per country). Given that the Bank Group allocated 1.7 times more projects to countries with relatively high needs than to countries with relatively low needs, the team concluded that the intensity of Bank Group support was commensurate with country-level needs. We measured the intensity of support at the Bank Group level (and not at the instrument level) because it would be unrealistic for the intensity of every instrument to reflect country-level needs. Figure 2.1, panel b, provides an overview of the results, which we discuss in greater detail in subsequent sections. We abstain from assessing funding levels because various factors influence them, and they would bias the analysis in favor of large economies or those with relatively large absorption capacity.

Figure 2.1. Reach and Intensity of World Bank Group Support to Agrifood System Development across Six Areas

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Figure 2.1. Reach and Intensity of World Bank Group Support to Agrifood System Development across Six Areas

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Source: Independent Evaluation Group.

Note: Seven areas are shown because the climate change area has been divided into two parts: mitigation and adaptation. Panel a shows the share of countries with high need for support that received at least one relevant project in the corresponding area. Because we were not able to classify World Bank ASA for two areas (access to finance and food safety standards), World Bank ASA is not included in the respective graphs. Because IFC investments do not actively support the creation of an agricultural business environment, they are not included in the respective graph. Panel b shows the ratio of Bank Group projects per country with high need for support to the number of projects per country with low need for support. ASA = advisory services and analytics; IFC AS = International Finance Corporation advisory services; IFC IS = International Finance Corporation investment services.

The analysis has several limitations. We measured the indicators at the country level. However, within one country, farms and agrifirms with high and low levels of productivity and market integration may coexist in different sectors or even in the same sector. The indicator-based assessment does not reflect such sector- and firm-specific circumstances. Nor does it consider broad factors such as political governance that can influence the implementation of reforms or sector-specific regulatory constraints (such as trade barriers affecting commodities). Indicators may not reflect the entire breadth of the Bank Group’s support; for example, the access to finance indicator (credit to agriculture by the Food and Agriculture Organization) does not account for public sector finance but captures only private finance.2 Bank Group interventions that fall outside the agrifood system portfolio (for example, provision of finance through IFC-supported aggregators or interventions that do not target the agrifood system but may still have effects on the entire banking system, or efforts toward electrification or building rural roads) are also not considered, even though they may be important for agrifood system development. The work of other development partners, which at times complements Bank Group efforts at the country level, is also not reflected in the analysis. Finally, the sparsity of data across areas of support and client countries—especially globally comparable data on the integration of small farms and firms into agribusiness value chains—limits the assessment.

Bank Group productivity-enhancing interventions reached most countries with low agricultural productivity, but the intensity of support was not always commensurate with the need. Productivity-enhancing interventions support access to crop and livestock technologies, inputs, and services for farms and agribusiness firms. Sixty-five percent of Bank Group client countries have low agricultural productivity—that is, they score below the global median in cereal yields.3 The Bank Group reached 87 percent of these countries with at least one productivity-enhancing intervention, and World Bank lending alone reached 77 percent. IFC’s reach was lower, both with investments (43 percent) and advisory services (51 percent). Despite the World Bank’s reach, the intensity of its support was not commensurate with country needs—the Bank Group provided 1.6 times more support to countries with agricultural productivity above the median. This mismatch raises the question of whether there is room for the Bank Group to further increase its focus in countries with low agricultural productivity. Box 2.1 provides examples of successful productivity-enhancing interventions supported by the World Bank and IFC.

World Bank support for improving productivity was insufficiently diversified across product types. The World Bank provides support primarily for basic staples and certain livestock; it has not sufficiently diversified toward high-value and nutrient-rich products with growing global demand (such as fruits and vegetables). In LICs, about 58 percent of the demand for fruits and vegetables is unmet, and animal source foods are also undersupplied and expensive (Headey and Alderman 2019; Vermeulen et al. 2020). About a quarter of the World Bank product-targeted interventions (26 percent) supported the production of basic staples. However, only 4 and 11 percent of the World Bank’s product-targeted interventions supported the production of fruits and vegetables, and grain legumes, respectively. At the same time, 43 percent of the World Bank’s product-targeted interventions supported livestock, with a focus on dairy (27 percent) and fish (34 percent), and only about 3 percent of projects explicitly supported production of small ruminants (such as sheep and goats) that provide livelihood opportunities and income-generating options for low-income farmers in drier areas and drought-prone environments (see appendix B).

Diversifying production offers multiple benefits to smallholder farmers, SMEs, and the general population. Supporting diversification of production, where feasible, toward resource-efficient (using less land and water) and higher-value foods such as vegetables, fruits, legumes, and silvopastoral livestock systems can offer multiple benefits to smallholder farmers and SMEs, including productivity, sustainability, and better resilience to climate change. It also offers benefits to the general population because it increases the supply of healthy and nutritious foods, which are in high demand in several countries and are critical for people living in LICs, including the rural and urban poor people (World Bank Group 2015b, 2016).

IFC interventions have been slightly more diversified than the World Bank’s. IFC’s support is more diversified toward fruits and vegetables (14 percent), processed foods and beverages, and other high-value commodities (such as cocoa, coffee, and sugar) compared with the World Bank’s interventions but is less diversified in food legumes, nuts, and oils. The higher level of diversification of IFC’s support is related to the fact that IFC’s core markets are middle-income countries, which are more likely to diversify beyond staple crops.

Bank Group support is not benefiting many countries with poor business environments. Bank Group support for enhancing the enabling business environment of the agrifood system allows farms and firms to access input and product markets, obtain permits and licenses, and join value chains, increasing productivity. Fifty-four percent of Bank Group client countries have poor enabling business environments for agrifood systems, based on the proxy indicator “agricultural policy costs” (table 2.1). Of the countries with low-quality business environments, World Bank lending and advisory services and analytics (ASA) reached a relatively modest 60 and 54 percent of countries, respectively, and IFC reached 32 percent with its advisory services. (IFC investments are not accounted for because they rarely engage in efforts to enhance the business environment directly.) Moreover, within this limited reach, 1.3 times more interventions per country were implemented in countries that already had better enabling business environments than in countries with poor enabling business environments. The disparity suggests that the intensity of Bank Group support for the enabling business environment is not commensurate with country needs. Compared with other instruments, World Bank ASA was generally more intensive in countries with poor business environments. World Bank ASA has also frequently been complementary to lending. For example, in Côte d’Ivoire, an ASA supported a lending operation to improve the market access and inclusion of smallholder farmers. Box 2.2 provides examples of successful business environment interventions supported by IFC and the World Bank.

Bank Group support to implement food safety standards reached relatively few countries, but within this limited reach, the intensity of support was commensurate with country needs. Food safety standards are important for farmers to sell their goods to regulated domestic and export markets and enter value chains. Eighty percent of Bank Group client countries have poor food safety standards; of these countries, only 56 percent obtained support through World Bank lending, 25 percent through IFC advisory services, and 18 percent through IFC investment. However, almost twice as many World Bank lending, IFC investment, and IFC advisory services projects to enhance food safety standards are implemented in countries that need this type of support more (those that have low food safety standards) as in those that need it less (those that have high food safety standards). In other words, the intensity of support was commensurate with country needs.

Bank Group support for enhancing social inclusion not only reached the majority of countries that needed this support but was provided at an intensity commensurate with countries’ needs. For agrifood system development to be socially inclusive (that is, to reach poor people and marginalized groups), interventions need to offer opportunities so groups can participate in productivity growth and share the benefits. Seventy-four percent of countries score above the global median on rural poverty rates and are therefore countries in need (table 2.1). Of these countries, the World Bank reached 82 percent with lending and 71 percent with ASA, a country reach above the benchmark of 66 percent. ASA often supported World Bank lending. For example, in Ethiopia, the Investment Climate for Small and Informal Enterprises ASA helped develop strategies targeting smallholders, women, and young people in support of the Agriculture Growth Program Project. IFC investments and advisory reached 59 percent and 36 percent, respectively, of countries with high rural poverty rates. Countries with high rural poverty rates received two to four times more Bank Group support on social inclusion than countries with low rural poverty rates, evidence that the intensity of support was commensurate with country needs.

Bank Group support to increase access to finance reached too few countries, and the intensity of support was not commensurate with countries’ needs. Access to finance is indispensable for farmers and firms to fund their working capital and investment needs (including technology upgrades). Fifty-four percent of Bank Group client countries have little access to finance—that is, they score below the global median when measured by their access to commercial credit to agriculture. The World Bank reached only 57 percent of these countries with lending to improve access to finance. IFC reached 43 and 48 percent with its advisory services and investments, respectively. All were below the respective benchmarks of 66 and 50 percent. In addition, the intensity of support was not commensurate with country needs regardless of the Bank Group instrument. World Bank lending, IFC investments, and IFC advisory services are all implemented to the same extent in countries with low access to credit as they are in countries with higher access to credit. Box 2.3 provides examples of successful access to finance interventions supported by IFC.

Bank Group interventions to address climate change adaptation and mitigation in agrifood sectors reach the majority of countries that need this type of support, and the intensity of this support is commensurate with countries’ needs. The World Bank reached 77 percent of countries with high climate vulnerability with at least one lending project aimed at reducing climate vulnerability by implementing adaptation measures, such as making infrastructure more resilient against extreme weather events. IFC reached 39 percent of countries with high climate vulnerability with investments and 53 percent with advisory services. On average, twice as many Bank Group climate adaptation projects are implemented in countries with high climate vulnerability as in countries with low vulnerability, suggesting that intensity of support is commensurate with country needs.

Overall, a considerable share of countries in need—including FCS, LICs, and countries at the traditional stage of agrifood system development—do not receive relevant support. World Bank lending interventions reached on average about 70 percent of countries that need support, most with at least one lending operation. However, this reach still leaves a considerable share of countries in need without support. In each area, between 20 and 59 countries that needed the support did not receive it. Many of them were LICs (20 percent), FCS (25 percent), and countries at a traditional stage of agrifood system development (34 percent). By comparison, IFC reached on average about 40 percent of countries that need support the most with both its investments and its advisory services, likely because of its overall smaller portfolio of investments (331) and advisory projects (210). For investments, this may also be because of IFC’s need to manage risks across its investment portfolio, which leads it to invest very selectively in structurally weaker economies and countries at the early stages of agrifood system development.

A high-level portfolio assessment indicates that MIGA generally reached LICs and Sub-Saharan Africa. It was not possible to cover MIGA in the relevance assessment because of the limited number of projects in the agrifood system portfolio. MIGA underwrote 21 guarantee projects in support of agrifood systems. In line with MIGA’s strategic priority to deepen its impact in LICs and FCS, MIGA’s agrifood system portfolio exhibited a strong focus on LICs (41 percent), the relative highest share of Bank Group institutions. MIGA’s presence was also particularly strong in Sub-Saharan Africa, with 85 percent of its projects located there in underwriting volume.

Assessing the Interventions Mix

Doing relevant work also implies providing countries with the right mix of interventions, reflecting the countries’ needs across multiple areas. To this end, the team assessed whether each country received at least one intervention in each area where it scored below the median. A country that received support in all areas where it scored below the global median has received the right mix of interventions.

Productivity-enhancing measures were often provided without support for agricultural finance in countries that needed both types of support. Looking across the six areas in agrifood system development (table 2.1), the largest share of countries (33 countries) exhibits low performance in two areas: productivity and credit to agriculture. Of these 33 countries, only 20 countries (60 percent) received Bank Group support in both areas, with 11 countries not receiving support for access to credit.

Only about two-thirds of countries with multiple constraints on agrifood system development received the appropriate mix of interventions. Nineteen countries suffer from multiple constraints (for example, low productivity, low access to finance, and low food safety standards). Only 13 countries, however, received support in all three areas where they face these challenges, and 19 countries did not benefit from a Bank Group response that would address their respective constraints. Support for improving food safety standards was missing in 4 of 19 countries, followed by support for improving access to finance (missing in 3 of 19 countries). Nine countries, mostly in Sub-Saharan Africa, perform inadequately in four areas: productivity, credit to agriculture, food safety standards, and business environment. Six of these countries have received support in all four areas, with the largest gaps in access to finance and food safety standards.

Country Partnership Frameworks and Analytical Work

CPFs have provided a detailed discussion of most of the policy issues relevant for agrifood system development. All CPFs reviewed by our team contained a substantive discussion on four of the six areas underlying productivity, inclusion, and sustainability. They did not, however, sufficiently cover climate change mitigation and sustainability standards and food safety issues. In the majority of the 38 CPFs reviewed (60 percent), the CPF also spells out how the future country program should be designed to address the identified policy issues.

The coverage of the agrifood system development challenges in CPFs was generally geared toward addressing country-level shortcomings. As country-level circumstances vary, CPFs can be expected to discuss areas at different depths. Generally, CPFs of countries that had significantly low performance in agrifood system development also had sufficiently deep assessments and discussions of the respective areas of concern. For example, all 19 countries with the lowest agricultural productivity had in-depth discussions of agricultural productivity in their CPFs. Eighty percent of countries (11 of 14) with the lowest financial inclusion rates had in-depth discussions of how to provide smallholder farmers and SMEs with financial products and services. Eighty-one percent of countries (13 of 16) with insufficient natural resource management based on their high land degradation had in-depth discussions of natural resource management issues. Looking across all areas and component areas, 87 percent of CPFs of countries with low performance on an indicator contained a substantive discussion of the underlying constraints.

CPFs discuss productivity, inclusion, and sustainability in an integrated manner in only about half of the cases. About half (53 percent) of reviewed CPFs had adequate coverage of all three areas and the corresponding component areas; the treatment of these policy areas in the CPF was commensurate with the severity of the country’s constraint. For example, the CPF for Ethiopia discusses all three policy areas in an integrated manner, outlining how to raise productivity while discussing social, financial inclusion, and sustainability issues (box 2.4).

A limited number of CPFs reflected food safety issues and related health and environmental sustainability standards in agrifood systems. Forty-two percent of the CPFs discussed food safety issues and sustainability standards, and only 21 percent provided guidance for operational programming. This omission was most pronounced in countries where food safety standards are a real constraint. For example, among CPFs for countries with the lowest quality of phytosanitary legislation (such as Burkina Faso, Liberia, and Niger), 60 percent did not prioritize the issue. This is of special concern for countries at the early stages of agrifood system development, as smallholder farmers seek entry into value chains and require support to comply with sustainability standards. A notable exception is China, where the CPF indicates that the Bank Group will expand support for food safety and quality by working with regulatory agencies to build capacity and risk-based monitoring.

The Bank Group could further deepen its strategic engagement on climate mitigation in agriculture. Many CPFs missed the opportunity to highlight the sector’s mitigation potential in countries with high greenhouse gas emissions from agriculture—even though adaptation and mitigation in agrifood sectors are generally geared toward countries that need this type of support the most. Only 58 percent of CPFs discussed climate change mitigation in agrifood sectors, and only 34 percent of CPFs outlined how programs would address mitigation in agriculture. The World Bank is addressing climate change mitigation in some countries with the highest greenhouse gas emissions from agriculture.4 For example, in Brazil and China, the World Bank works with the governments to expand low-carbon or sustainable agriculture practices. However, 37 percent of CPFs in countries with comparatively high emissions from agriculture (7 of 19 countries reviewed) did not cite climate change mitigation, including, for example, Argentina, where agriculture and cattle farming account for 28 percent of greenhouse gas emissions.

Gender is a critical aspect of social inclusion in agrifood systems, but there is inadequate coverage of this issue in CPFs. Although all CPFs discussed gender, fewer than half indicated how country engagements would explicitly address gender in the agrifood system (for example, meeting the needs of female smallholders, including accessing land and finance). The Argentina and Morocco CPFs aim to promote gender equity and empowerment broadly, but there is no reference to this in relation to agrifood systems. By contrast, the Nigeria CPF discusses the numerous constraints that limit female farmer productivity and their ability to engage in agribusiness.

CPSDs helped inform the articulation of agrifood system development in CPFs but did not include issues of climate adaptation and mitigation and food safety standards. CPSDs assess opportunities for private sector–led growth to inform CPFs on private sector development. As most actors in the agrifood system are in the private sector, CPSDs are important for agrifood system development. Fifteen of the 24 CPSDs we reviewed provided an in-depth analysis of the agrifood systems. When we reviewed 7 selected CPSDs and their corresponding CPFs, we found that CPSDs had an impact on articulating a market-led agrifood system development plan in CPFs. This was the case with issues that are core to private sector participation: enhancing agricultural and agribusiness productivity and value addition, improving the agribusiness environment, advancing financial inclusion, and increasing market participation. However, the CPSDs we reviewed were less effective in informing CPFs concerning sustainability issues, especially climate change mitigation and adaptation, sustainability standards, and food safety. The seven CPSDs we reviewed lacked details on climate change mitigation, and only three of them addressed climate change adaptation. Additionally, only three of the seven CPSDs discussed sustainability standards and food safety.