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I would like to pick up on comments by Michael Wales identifying the weakness of Ministries of Agriculture, particularly in Africa, as a key obstacle to agricultural sectors fulfilling their potential as drivers of growth and poverty reduction. Michael notes that many Ministries of Agriculture retain a production orientation and have little instinctive sympathy for poverty reduction agendas, so are incapable of making a persuasive case for scarce funds from Ministries of Finance. He also suggests that, because of these same weaknesses, without projects or earmarking, it is difficult to ensure that agricultural sector programmes target poverty reduction. Hence, the current trend towards direct budgetary support represents a threat to the chances of using public investment to promote agricultural-led growth. Whilst my understanding is that direct budgetary support is still not a major part of any donor's bilateral assistance budget (am I right here?), it is high time that thoroughgoing reform of Ministries of Agriculture rises to the top of the rural development agenda. Let me list just two reasons why I think this should be so. Firstly, complementing what Michael has already said, my limited familiarity with PRSP documents suggests that the importance of agriculture to the national economy is often recognised, but that this is rarely translated into additional expenditure on agriculture or priority actions being identified from within the sector. This may be because the Ministry of Agriculture is unable to argue a compelling case before the Ministry of Finance or perhaps because influential donors (for all the rhetoric about national ownership about PRSPs) do not trust the Ministry of Agriculture, so are unwilling to support significant additional expenditure on agriculture that will inevitably go through it. Secondly, I believe that there is a key strategic role for the Ministry of Agriculture in promoting agricultural growth, even in the era of market liberalisation. Intensification of smallholder agricultural production - in my view, a key driver of rural economic growth and poverty reduction - will almost inevitably be service-intensive. Smallholders wishing to adopt higher productivity cropping mixes and practices will need access to technical advice, to inputs (new seed varieties, fertilisers, crop protection chemicals) and possibly to finance, although there are as yet few, if any, replicable models of seasonal finance for crop production in Africa outside of export cash crop sectors. They may also need some assistance in linking up to new market channels or markets for new products. Many of these services are best provided by the private sector, although I remain sceptical about effective demand for private extension prior to significant production intensification and see a "public" role (possibly performed by NGOs) in assisting farmers to link up to new markets. However, even where some services are best provided by the private sector, the role played by the state is critical to investment outcomes. Passively, state agencies need to provide credible signals to private investors that they are not going to intervene in markets (e.g. by suddenly distributing subsidised inputs or credit) if private investors are to invest. More pro-actively, when an area starts with a low level of marketed surplus, there may be a key coordination role - a public role - to be played in encouraging complementary investments by different private, NGO and public service providers, so as to raise production to levels at which competitive markets for support service will emerge. This is because, for example, the return to investment in input supply is likely to depend on farmers' ability to access technical advice on efficient input use, perhaps also credit and certainly their ability to link up to remunerative output markets with some degree of confidence. (A similar argument can be made for investment in any of the required support services). Hence, unless providers of several services invest around the same time, it is quite likely that none will invest. This calls for decentralised agricultural/rural development planning, which can only happen if the Ministry of Agriculture is structured so as to support such activity. Support might include both active participation from district-level staff (preferably able to draw on technical expertise from the centre) and organising research and extension capability so that it can respond to locally identified priorities, rather than working to a centrally-determined agenda. I would love to see a debate within this forum on what radically reformed Ministries of Agriculture might look like and do. Perhaps they might not even be called Ministries of Agriculture any more, but rather Ministries of Rural Development. However, let me see whether others will set this ball rolling. On a more modest note, it seems to me that an immediate priority is to start to demand greater accountability from Ministries of Agriculture to other stakeholders in the rural development field (farmers, private sector, NGOs..). DFID and other donors that realise the importance of investing in agriculture could increase the incentives for this by making their investment conditional on there being a broadly agreed sectoral (or local) development strategy to invest into, with clear indicators by which the performance of the Ministry of Agriculture can be monitored being an integral part of the strategy. Ideally, such a development strategy (whether sectoral or local) should be produced through a consultative process involving farmer and private sector representatives and NGOs. Supportive donors would then commit to supporting such nationally/locally owned plans, subject to ongoing performance reviews. Returning to Michael's contribution, this would avoid some of the biggest problems of a donor-project-based approach, although it is more "earmarked" than direct budgetary support. I would be interested in knowing how many countries in Africa have a credible national agricultural strategy at all, let alone one that conforms to the criteria laid out above, and I suspect that there are few indeed that have moved onto local level development planning consistent with a broad national strategy. Meanwhile, just having to try to meet, and report on, agreed performance indicators could - if the financial incentives were strong enough - trigger some desirable reforms from within Ministries of Agriculture themselves. Might Ministries of Finance be persuaded to get on board with such an approach for inducing better performance from Ministries of Agriculture? Colin Poulton
Please visit dfid-agriculture-consultation.nri.org.