How to Improve International Agricultural Development Programs
American Enterprise Institute
July 05, 2022
Key Points
- Aid intended to increase farm productivity in developing countries is poorly targeted when focused on small farms and would go further if aimed at improving operations on midsize farms.
- High overhead costs for program delivery, political capture in recipient countries, and congressional earmarks are among the reasons that the share of international aid dollars that actually benefit farmers directly is small (less than 10 percent of allocated funds).
- Interventions that may improve the effectiveness of international agricultural aid include capping overhead costs, limiting contracts to nonprofit partners, partnering with institutions in the target countries, and engaging third-party evaluators to improve the quality and relevance of program performance assessment.
Introduction
The US Agency for International Development’s (USAID) agricultural development programs face two major issues in their attempt to aid developing economies. These forces have been at work for several decades. To a great extent, they reflect political economic forces from within agencies responsible for managing international aid programs and external pressures from interest groups promoting the status quo.
The first issue concerns the foundational paradigm of smallholder productivity that underpins many agricultural development assistance programs. The second involves how efficiently agricultural development programs are delivered. Concerns about both aspects raise serious questions about the effectiveness of current US international agricultural development and assistance policy.