EUROPEAN DONOR REVIEW: A PRELIMINARY ANALYSIS OF EUROPEAN ASSISTANCE TO AGRICULTURE IN SUB-SAHARAN AFRICA (2010)

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Bruce Hearn
Department of Management, University of Leicester

Veli Koc
Centre for Environmental Policy, Imperial College London

Jenifer Piesse
Department of Management, King’s College London
Department of Agricultural Economics, University of Stellenbosch

Colin Thirtle 
Centre for Environmental Policy, Imperial College London
Department of Agricultural Economics, University of Stellenbosch

Summary

1. Since the mid 1980s, bilateral aid to agriculture has halved, to $3.8 billion in 2007, with the share of Development Assistance Committee (DAC) aid going to agriculture falling sharply, from 17% in the late 1980s to 6% in recent years, reflecting the neglect of the sector. However, this decline seems to have ceased since 2002 and even been reversed slightly by 2007.

2. DAC EU members’ aid to SSA agriculture is available only from 2002 and the most noticeable feature is that about half of the agricultural aid goes to SSA.

3. For 2006-7 $3.8 billion was bilateral aid from DAC members and $2.4 billion was from multilateral agencies. Two thirds of the total came from four donors: the US (22%), Japan (20%), France and the EU institutions (11% each).

4. The largest donor by a large margin was France, which devoted 11.7% of its aid to agriculture and accounted for 37.6% of the DAC total.

5. The second largest donor is the European Commission (EC). At the other end of the scale, the UK devotes less than 1% of its aid to agriculture and its contribution of $23 million is only 2.8% of the DAC total. It is small countries like Denmark that contribute most as a percentage of GDP. Denmark is top with 0.024% of GDP being given in agricultural aid.

6. If all agriculture and food-related aid is included, which adds rural development, developmental food aid and emergency food aid, the DAC total rises to $7.5 billion and the multilateral agencies to $4.4billion, giving a total of $11.9 billion.

7. UK gives five times as much food aid as it does to agriculture, which in part accounts for its low ranking. Similarly, the US gives over 17 times as much in food aid as it does to agriculture.

8. Most EU countries give the majority of aid to SSA (sub-Saharan Africa). Exceptions are: Denmark and Finland which give most aid to Asia, Ireland which gives 80% of its aid to Europe and Spain, which gives over 50% to the Americas.

9. The largest SSA recipient of DAC funding to agriculture is Madagascar with nearly $70 million; the smallest is Namibia with under $4 million.

10. Former colonial powers tend to focus agricultural aid on ex-colonies.

11. The largest share of agricultural aid is devoted to agricultural research, which accounts for almost 30% of the DAC total. For the EC, agricultural policy and research receive far less; services, such as extension, far more; and fisheries and forestry almost nothing. Individual countries vary considerably. Over 80% of French aid goes to agricultural research and almost all the rest to the production, environment and miscellaneous categories. The UK bias is towards policy, as is the US but more extreme, spending over 60% of its aid on policy issues and most of the rest on the environment.

12. The top DAC countries, when imputed contributions to multilateral agencies are included, are the USA, Japan, France, Germany, the EC and the UK, which is more in line with country size.

13. One cause of disagreement in aid statistics is that countries frequently do not do what they say they will, sometimes falling short and sometimes exceeding their commitments.

14. An alternative analysis is to calculate different priorities from the recipients viewpoint. A comparison of three recipients shows half the agricultural aid to Mozambique is specifically for policy, and then for environment with 20%; Ghana has the same policy bias (48%), followed by research and forestry (14% each), then environment (8%), while for Uganda although policy is still the biggest item, it accounts for less than one third of aid, the next largest share (23%) going to agricultural services inputs.

15. So far we have only scratched the surface and done no serious analysis. We still have little idea as to the most successful types of aid. These data could be further analysed to provide such information.