PKP2__ Understanding aid to ARD and food security: World Bank

7/30/2019 PKP2__ Understanding aid to ARD and food security: World Bank

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Global Donor Platformfor Rural Development

WORKING PAPER

THE WORLD BAN

K


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The Global Donor Platform for Rural Development commissioned three comprehensive studies to capture Plat-

form members knowledge on key issues affecting the delivery and impact of aid in ARD:

PKP 1 Policy coherence for agriculture and rural development

PKP 2 Aid to agriculture, rural development and food security Unpacking aid flows for enhanced

effectiveness

PKP 3 The strategic role of the private sector in agriculture and rural development

The PKPs are the products of extensive surveys of Platform member head office and field staff, visits to countryoffices, workshops dedicated to sharing findings and refining messages, and successive rounds of comments on

drafts.

On the basis of each PKP, separate policy briefs will be published.

For more information on the PKPs visit donorplatform.org

This working paper is only available electronically and can be downloaded from the website of the Global Donor Platform for Rural Development at:

www.donorplatform.org/resources/publications

Secretariat of the Global Donor Platform for Rural Development,

Dahlmannstrasse 4, 53113 Bonn, Germany

Email: [email protected]

The views expressed herein are those of the authors and do not necessarily represent those of individual Platform members.

All rights reserved. Reproduction and dissemination of material in this information product for educational or other non-commercial purposes is

authorised, without any prior written permission from the copyright holders, provided the source is fully acknowledged. Reproduction of material inthis information product for resale or other commercial purposes is prohibited without written permission of the copyright holders. Applications for

such permission should be addressed to: Coordinator, Secretariat of the Global Donor Platform for Rural Development, Dahlmannstrasse 4, 53113

Bonn, Germany, or via email to: [email protected].

Global Donor Platform for Rural Development 2011

About the

Platform Knowledge Piece series


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Platform Knowledge Piece 2:

Aid to agricult ur e, rural development and food securit y: Nicaragua working paper 1

Contents

Cont ent s .......................................................................................................................................................... 1

List of figures and tables ............................................................................................................................... 4

Tables ......................................................................................................................................................... 4

Figu r es ........................................................................................................................................................ 4

Acronyms and abbreviations ......................................................................................................................... 6

Executive summary ........................................................................................................................................ 8

Introduction .................................................................................................................................................. 10

Background .............................................................................................................................................. 10

Aim ............................................................................................................................................................ 10

Methods .................................................................................................................................................... 10

Caveats ..................................................................................................................................................... 11

Report structure ...................................................................................................................................... 11

World Bank in perspective ........................................................................................................................... 12

Institutional set up ................................................................................................................................... 12

World Bank Group ............................................................................................................................... 12

Mat r ix m anagem ent str uct ur e ............................................................................................................ 12

Region s ................................................................................................................................................. 12

Sectors.................................................................................................................................................. 13

Operations ............................................................................................................................................ 13

Collaboration within WB ...................................................................................................................... 13

Resou rces ................................................................................................................................................. 14

IBRD ...................................................................................................................................................... 14

IDA ........................................................................................................................................................ 14Other resources ................................................................................................................................... 16

Policies in support of ARD&FS ................................................................................................................ 16

Corpor ate pol icy and st r ategy pr ocesses ........................................................................................... 16

Corporate strategies in ARD ............................................................................................................... 17

Scale and scope of th e cur rent ARD st rategy .................................................................................... 19

Aid inst r um ent s and suppor t to ARD&FS ............................................................................................... 19

Investm ent inst r um ent s .......................................................................................................................... 20

Specific Investment Loan .................................................................................................................... 20

Adaptable Pr ogr am m e Loan ............................................................................................................... 20


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The role of Sector boards .................................................................................................................... 39

Oth er inf lu ences over all ocat ions ....................................................................................................... 40

Does len ding refl ect cor por ate pol icy? ................................................................................................... 40

The impact of V2A and RDS ................................................................................................................. 41

The impact of crises ............................................................................................................................ 42

Conclusion ................................................................................................................................................ 42

Policy implications ....................................................................................................................................... 42

Conclusion .................................................................................................................................................... 46

Does aid reporting reflect the priorities of the World Bank? ................................................................ 46

Good pr actices for m easur ing, tr acking and accountin g f or aid f lows ................................................. 46

References ................................................................................................................................................... 47

Li st of peopl e m et ........................................................................................................................................ 49

Annex 1: Worl d Bank len ding inst r um ent s ................................................................................................. 50

Aid inst r um ent s and suppor t to ARD&FS ............................................................................................... 50

Investm ent inst r um ent s .......................................................................................................................... 50

Specific Investment Loan .................................................................................................................... 50

Adaptable Pr ogr am m e Loan ............................................................................................................... 52

Learning and Innovation Loan ............................................................................................................. 53

Emergency Recovery Loan .................................................................................................................. 53

Sector Investm ent and Main ten ance Loan ......................................................................................... 54

Pr ogr am m e len ding inst r um ent s ........................................................................................................... 54

Development Policy Loans (DPLs) ...................................................................................................... 54

Annex 2: Worl d Bank Project Database: lendin g to ARD, FY 1995 2010 (US$ m ill ion) ........................... 57

Annex 3 (a): AidDat a dat abase on r egional len ding to ARD ....................................................................... 59

Annex 3 (b): Wor ld B ank Pr oject Database on r egional len ding to ARD ................................................... 60

Annex 4: Defin ition of aid t o agr icult ur e, r ur al developm ent and food secur ity....................................... 61


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List of tables and figures

Table 1. Worl d Bank IBRD and IDA lending to ARD&FS by theme and sector, FY 2005 10 (US$ m ill ion).

....................................................................................................................................................................... 15

Table 2. Wor ld Ban k str ateg ies in ARD. ...................................................................................................... 18

RS.................................................................... 31

Table 4. Wor ld Ban k r epor ti ng on sect ors and th em es, FY 2010. ............................................................. 33

Table 5. Sum m ar y poli cy im pli cat ions. ....................................................................................................... 44

Figur e 1. Total and Specific Investm ent Len ding (SIL) to ARD& FS, FY 1995 2010 (constant year 2000

US$). ............................................................................................................................................................. 20

Figur e 2. Worl d Ban k l ending f or em ergen cies, FY 1995 2010 (constant year 2000 US$). ..................... 21

Figure 3. World Bank lending through Structural Adjustment Loans (SALs) and Development Policy

Loans (DPLs), FY 1995 2010 (constan t year 2000 US$). ............................................................................ 22

Figur e 4. Worl d Bank lendin g to ARD, FY 1995 2010 (constant year 2000 US$). ..................................... 24

Figure 5. IDA lending to agriculture, forestry and fishing using narrow definition (AFF) and broader

def ini t ion (ARD& FS) (cons tant 2000 US$). .................................................................................................. 25

Figur e 6. IB RD and IDA l ending to ARD& FS, 1995 2009 (constan t year 2000 US$). ............................... 25

Figur e 7. IDA lendin g to ARD& FS, 1995 2009 (const ant year 2000 US$). ................................................ 26

Figure 8. AidData and CRS (AFF and ARD&FS) calculations of IDA lending to agricult ur e, 1995 2009

(constant year 2000 US$). ............................................................................................................................ 27

Figure 9. Worl d Bank r egional lending to ARD& FS according to data fr om AidData (constant year 2000

US$). ............................................................................................................................................................. 28

Figure 10. World Bank regional lending to ARD&FS according to data from the World Bank Project

Database (constant year 2000 US$). ........................................................................................................... 28

Figure 11. Compar ison of World Bank and AidData figures for ARD& FS, FY 1995 2009 (constant year

2000 US$). ..................................................................................................................................................... 34

Figure 12. Comparison of aid flows to ARD recorded by the World Bank Project Database and CRS

(constant year 2000 US$). ............................................................................................................................ 35

Figur e 13. World Bank , CRS and AidData aid- flow data com pared (constant year 2000 US$). .............. 36

Figur e 14. Wor ld Bank len ding and str ateg ies. .......................................................................................... 41

Figur e A1. Total and SIL lendin g t o ARD& FS, FY 1995 2010 (constant year 2000 US$). ......................... 51


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Figur e A2. Lending th r ough SILs by r egion, FY 1995 2010. ...................................................................... 52

Figur e A3. Worl d Bank lendin g for em ergencies, FY 1995 2010 (constant year 2000 US$). .................. 54

Figur e A4. Worl d Bank lendin g thr ough SALs and DPLs, FY 1995 2010 (constant year 2000 US$). ...... 55

Figur e A5. Worl d Bank lendin g thr ough DPLs by r egion, FY 2005 10. ..................................................... 56


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Acronyms and abbreviations

AAA analytical and advisory activities

AAP Agricultu re Action Plan (World Bank, 2009a)

AFF agricult ure, forestr y and fishing

AFTAR Agricultu re and Rural Development Departm ent, Africa Region (World Bank)

APL Adaptable Program Loan

ARDD Agricultu re and Rural Development Depart m ent

ARD agricult ure and rur al development

ARD& FS agricult ure, ru ral development and food security

ASIP Agricultu re Sector Investm ent Program

CAADP Com prehensive Africa Agricultu re Development Progr amm e

CAS Countr y Assistance Strat egy

CD Countr y Direct or

CDD Com m unity-Dr iven Development

CRS Creditor Reporti ng System

DAC Developm ent Assistance Comm itt ee (OECD)

DDO deferred drawdown option

DPL Developm ent Policy Loan

ED Executive Direct or

ERL Emer gency Recovery Loan

ESW econom ic sector work

FY fiscal year

GAFSP Global Agricul tur e and Food Securit y Progr am

GDP gross domestic product

GEF Global Environm ent Facility

GFRP Global Food Crisis Response Progr am

IATI Inter national Aid Transpar ency Initiat ive

IBRD International Bank for Reconstru ction and Development

ICSID International Centr e for Settl ement of Investm ent Disputes

IDA International Development Association

IEG Independent Evaluat ion Gr oup


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IFC International Finance Corpor ation

LIL Learning and Innovation Loan

M& E m onitoring and evaluation

MDG Mill ennium Development Goal

MDTF m ultidonor trust fund

MIGA Mult i lateral Investm ent Guarantee Agency

NEPAD Development

NGO non-governm ental organisation

ODA Official Developm ent Assistance

OECD Or ganisation for Economic Co-oper ation and Developm ent

OOF Other Official Flows

OPCS Operat ions Policy and Countr y Services (Worl d Bank )

P4R Program-for-Results

PRS Pover ty Reduction Str ategy

PRSC Pover ty Reduction Support Credit

RDS Rural Developm ent Str ategy (Worl d Bank , 2003)

SAL Structu ral Adjustment Loan

SASKI Sustainable Agricultu re Systems, Knowledge and Institutions (Thematic Group)

SIL Specific Investm ent Loan

SIM Sector Investm ent and Maintenance Loan

SWAp sector- wide approach

T&V tr aining and visit extension m odel

TAL Technical Assistance Loan

TF trust fund

TG Themat ic Grou p

TTL Task Team Leader

USAID United States Agency for Inter national Developm ent

V2A From Vision to Action (Worl d Bank, 1997)

VP vice-president

WB World Bank

WBG Worl d Bank Gr oup

WDR Worl d Developm ent Report


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Executive summary

A num ber of donor case studies, of which t he Worl d Bank w as one, were carr ied out as part of a lar ger

exam ination of aid to agricultur e, rur al development and food security (ARD&FS) which aims to

contribut e to strengthening the basis for m utual accountabil ity in the sector by impr oving the

understanding and handling of inform ation on aid flows to the sector. The broad context of the study is

to assess the extent to w hich aid data reflect t he policy prior ities of donors and r ecipients. Also,

whether ther e are accepted good practices for m easuring, tracking and accounting for aid flows th at

serve to str engthen coherence between policy, planning and resource all ocation and ther eby enhance

development effectiveness.

The World Bank Group operates t hrough t he International Bank for Reconstruct ion and Developm ent

(IBRD), the Int ern ational Developm ent Association (IDA), the Int ern at ional Finance Corpor ation (IFC),the Mul ti later al Investm ent Guarantee Agency (MIGA) and the Inter national Centr e for t he Settl ement

of Investm ent Disputes (ICSID). The World Bank Group deliver s aid (according to the Organ isation for

Econom ic Co- oper at io definit ion of

official development assistance (ODA), which is concessional loans with a grant element of at l east

25%) to the agr icult ur e and rur al developmen t (ARD) and ARD and food securit y (ARD& FS) sector

thr ough IDA.

, which result in policies

and str ategies for different sectors, are perceived to be objective and have become t he r eference point

for m any other agencies. In t he Bank, sector str ategies, which have a l ife span of five to seven years inone or m ore phases, go through a r igorous process of lesson learn ing, analysis, consultation, review

and evaluation.

or ARD were: Rural Developm ent: From

Vision t o Action 1 (V2A) laun ched in 1997; Reaching the Rur al Poor A Renewed Str ategy for Rur al

Development 2 (RDS) (2002 07); and the Agricult ur e Action Plan3 (AAP) (2010 12), which is the curr ent

str ategy. The main co

have rem ained largely unchanged. Having moved from tr aditional agricult ur e program m es to broader

.

Over the period fr om 1995, two main changes have occur red in t he type of financing instru m entsavailable to the Bank. The first change was away fr om a simple, single sector or subsector pr oject

approach to more compl ex, m ult isectoral progr amm es. The second change is the replacem ent of

Str uctu ral Adjust m ent Loans (SALs) by Developm ent Policy Loans (DPL). The low point of B ank

lendin g to ARD was in fiscal year (FY) 2000 at US$1.8 bill ion, and th e peak was in FY 2009 at US$5.3

bil l ion. The lending projection for t he AAP of US$6.2 8.3 bil l ion per year is to be delivered by IBRD, IDA

and IFC.

1 World Bank (1997).


3 World Bank (2009a).


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The World Bank h as its own coding system st ored in its Pr oject Database. Each operation is coded

according t o sector and them e. The two m ain aid flow data sources are the DAC Creditor Reporting

System (CRS) and AidData. The Worl d Bank st art ed repor ting t o CRS in 2009, but has r econciled data

fr om 2000. The AidData database is based on CRS and elaborat ed by assigning a sect or code t o each

project. CRS is m ore detailed and disaggregated than the Worl d Bank coding system, with around 30

purpose codes that can be assigned to ARD&FS. However, sectoral codes and th ematic codes are

mixed.

The power of the countr y director s in the process of sectoral r esource allocation has m eant that

corporate- sector policy and priorit ies could not easily be translated into incr eased lending. The Bank

is also dr iven by its ann ual Wor ld Developm ent Repor ts (WDRs). WDR 2008, Agricul tur e for

Development (form ulated in 2007)4 proved to be extr emely infl

to the agricultur e sector. The demand for r esults is also increasingly import ant in determ ining how

resources are all ocated.

The m ain policy im plications of the study are as follows:

There is an im precise l ink betw een corporate str ategies on ARD& FS and Worl d Bank l ending tothe sector.

The volum e of actual aid to ARD&FS revealed by aid-fl ow data is less impor tant t han the patter nsthat t he data reveal.

The growing im portance of corporate policy and strategies underlin es the import ance ofstr engthening national systems.

Actual allocation of r esources to ARD is at l east as much tr iggered by global cr ises as by deepanalysis of the need.

Expansion of aid to ARD without expansion of staff number s or operating budgets t hreat ensinvestm ent quality.

In general, the ARD&FS sector is less able to dem onstrat e results and value for m oney than thesocial sector s.

Governm ents need to be str ategic in accessing different sour ces of external fun ding. CRS is an impr ecise tool in report ing aid flows to agricultur e. The cru cial role of t he private sector and private investm ent in generating gr owth in ARD is not

captured by aid-f low data.

The main conclusions are:

Reporting aid flows to CRS is not a pr iority. CRS under - ppor t for ARD. The Bank has successful ly channell ed increased aid to ARD. Tracking aid flows m ust be consistent and the World B ank offers a good exam ple. Reporting aid flows externall y must refl ect the differ ent objectives an aid agency is seeking to

achieve. The Worl d Bank com m unicates to the outside world a coherent story about its

development assistance.

The Bank r eports its aid fl ows responsibly.



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Introduction

The donor case studies are part of a lar ger examination of aid to agricul tur e, rur al development and

food securit y (ARD&FS) which aims to contr ibute to str engthening the basis for m utual accountabil ity

in the sector by impr oving the understanding and handling of inform ation on aid flows to the sector.

The broad context of t he study is to assess the extent to w hich aid data reflect t he policy prior ities of

donors and recipients. Also, whether there ar e accepted good practices for m easuring, tr acking and

accounting for aid flows that ser ve to str engthen coherence between policy, planning and r esource

allocation and t hereby enhance development effectiveness.

The aim of the five donor st udies is to analyse how well aid report ing refl ects donor policies and

progr amm es in the sector and t o identify good practice in measuring and accounting for aid. The case

study on the Worl d Bank (WB), along with one on the Intern ational Fund for Agricult ural Development ,

complem ents thr ee studies on bilateral donors. It aims t o provide insights into the way m ulti l ateral

financing institutions operate with respect to r eporting aid data and the coherence between their

policies and aid flows.

The case study was conducted thr ough:

A week-l ong series of interviews at WB headquart ers in Washington DC with senior m anagers andstaff in the Agricultur e and Rural Development Departm ent; regional departm ents, especially

Afr ica (AFTAR); t he Operations Policy and Countr y Ser vices (OPCS); Developm ent Data Group; and

the International Finance Corporation (IFC).

Review of ARD&FS report s, especially the m ain statemen ts of WB policies and str ategies withrespect to ARD&FS, annual Reviews of t he Agricultu re and Rural Development Portfol io and

evaluation report s.

Analysis of figures for WB lending to ARD&FS for t he period since 1995 obtained from the CreditorReportin g System (CRS) developed by the Or ganisation for Economic Co- operat ion and

Development Assistance Comm ittee (DAC) and fr om AidData. Accessing report s, press r eleases and other documents on ARD& FS on th e extensive WB website.The case study focuses on th e aid operations in ARD&FS of the concessional par t of t he WB, that is t he

International Development Association (IDA). Lending by the non -concessional par t of the Bank , the

International Bank for Reconstru ction and Development (IBRD), is covered in l ess detail. IBRD data

are r eported to CRS separately fr om IDA data

agricult ure and r ur al development (ARD) does not separate IDA grants and credits fr om IBRD loans.

IFC does not report to CRS and its operations with respect to ARD&FS are dealt w ith only br iefly. The

operations of t he Mul ti later al Investment Guarantee Agency (MIGA) are not covered.

The main sour ces of data on aid fl ows ar e the OECD-DAC CRS, the AidData database and the WBProject Database. CRS r eport s on official developm ent assist ance (ODA) flow s which , in the case of

WB, relat es to IDA. AidData is based on CRS but is elabor ated thr ough exam ining pr oject data. The WB


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Project Database reports on both IDA and IBRD (non- concessional) aid. Much of the analysis in t his

donor study is drawn fr om t he WB

lending instrum ents.

The WB is t he leading development agency in conducting and learning f rom evaluations and

operational research in ARD&FS at global, regional and countr y level. This produces a great m ass of

data and reports, only a small fraction of which could be r eviewed. Alth ough the WB is adept at

presenting a coherent view of it s policies and strategies in ARD&FS, it is not m onolithic. Within the

short tim e available it was only possible to capture a sm all par t of t he diversity that exists, especially

at the r egional level.

describes the struct ure and institut ions of the Worl d Bank Group, focusing

on IDA but also touching on the non- concessional arm , the IBRD, and the IFC. It also l ooks at the

to ARD& FS and the different aid instr um ents that it deploys.

exam ines actual aid flows and tr ends over t he last 15 years.

explores the way in which the Bank codes and report s its operations. -- vis

s on ARD&FS with t he

actual scale and tr ends in its lending. sum m arises the policy im plications of the

analysis


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Wor ld Bank in perspective

The World Bank Group (WBG) operates t hr ough an arr ay of instit utions and instr um ents. The Group

compr ises IBRD, IDA, IFC, MIGA and the International Centr e for the Settlem ent of Investment

Disputes (ICSID).

WBG delivers aid (accordin g to th e OECD-DAC definition of ODA, that is concessional l oans wit h a

grant element of at least 25%) to the ARD& FS sector t hr ough IDA. IDA provides grants and highly

IBRD, which offers loans and risk m anagem ent

products to i ts mem ber governments at close to market r ates, deals with m iddle-income and credit-

wort hy poor countries. Some countr ies qualify for a blend of IDA and IBRD credits. IBRD is a DAC

m ember and report s its lending to the CRS, where it is recorded as Other Official Flows (OOF).5 IFC

focuses on providing support t o the private sector thr ough a mixtur e of equity and loan guarantees, as

well as providing advisory services. IFC does not r eport to CRS.

IBRD and IDA, which compr ise what is comm only called t he WB, operate as one entity. The division

between the provision of grants or l oans, or indeed a m ixture of the tw o, is determ ined by the income

level and cr edit-w orth iness of the country concerned. There are 79 countr ies that are eligible for IDA

funding, most of which ar e in Africa (39). It pr ovides around 20% of its aid in grant s and the r emainder

as long-term (35 40 years) interest-free credits, with a 10-year grace period.

WB/IB RD is govern ed a board of 25 Executive Direct ors (EDs). Five EDs are appoint ed, repr esentin g

the five countr ies holding the largest num ber of shares, whilst 20 EDs are elected by the other

m em ber count r ies. The sam e EDs are also on the boar ds of IDA and IFC. MIGA has a separat e board.

WB operates thr ough a complex m atrix m anagem ent system which m eans that each sector (such as

agricult ure and r ur al development) and region (such as Africa) is represented by a distinct unit.

Overl aying the sector and regional structur e are Netw orks, the most im portant of which are the

Sustainable Development N etwork , to which ARD belongs, the Hum an Development Networ k and the

Poverty Reduction and Economic Management Networ k. In addition, there are over 90 Thematic

Gr oups (TGs) that ser ve to link know ledge activities bot h in sector s and regions. For exam ple, in ARD-

relat ed areas ther e are TGs in Sustainable Agricult ur e System s, Knowledge and Institut ions (SASKI),

Rural Policies, Comm unity- Driven Development (CDD), Gender and Rural Development , Rural

Infrastr uctur e, Mark ets and Finance, and Natural Resource Management.

There are six regions: Africa (sub-Sahara), South Asia, East Asia/Pacific, Latin America/Caribbean,

Middle East/Nor th Africa, and Europe/Central Asia. The WB has aggressively decentralised over the

5 OOF are transactions by the official sector w ith countr ies on the List of Aid Recipients which do not m eet the

conditions for el igibilit y as ODA or Official Aid, either because they are not pr im aril y aim ed at developm ent or

because they have a grant elem ent of less than 25%.


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last 15 years. It now has offices in over 120 countr ies. The staffing of th e countr y offices reflects the

natur e of the portf olio of the Bank in each location. The heads of country offices are Countr y Director s

(CDs), most of whom are r esident in countr y although some ar e based in Washington. In some cases,

one CD may be responsible for WB offices in a number of neighbouring count ries.

Each sector is overseen by a Sector B oard, comprising t he m anagers for the sector in each r egion.

The Sector B oards ult im ately manage the processing and implem entation of operations. They also

m anage and own corporate policies and strategies for their r espective sectors and oversee analytical

and advisor y activities (AAA) and econom ic sector wor k (ESW). WB operations ar e incr easingly

m ult isectoral. At the initiation of an operation, the sector w hich has the predominant all ocation of

resources expected by component agricultu re, roads, social protection, for exam ple determ ines

which of t he different Sector Boards (such as education, health etc.) takes on this r esponsibil i ty. For

this r eason, the operations for w hich the Agricult ure and Rural Development Sector Board is

responsible in effect defines the scope of the sector as far as t he Bank is concerned. The Sector Board

serves as a vital l ink in tu rning policy into operations and in monitor ing the quality of the operations,

including disbursements.

Within agricult ure and ru ral development, there is a central unit the Agricult ure and Rural

Development Depart m ent (ARDD), which provides policy and t echnical backstopping to t he operational

units dealing with agricult ure and ru ral development in t he different r egions. It is also responsible for

the form ulation of corporate policy and strategy for the sector t hr ough the ARD Sector Boar d and for

pr oducing an Annual Por tf olio Review of ARD.

The lending operations of the Bank ar e m anaged by regional sector units, for exampl e, Afr ica

Agricultur e (AFTAR). The operational units in t he agricultur e sector ar e responsible for m anaging the

process of identifying and form ulating pr ojects and program m es in ARD&FS, presenting them to the

WB Board and then supervising im plem entation thr ough to com pletion. Each unit comprises a

m anager and regular fu ll- tim e staff, m ost of whom w ill have a background in agricultur e. They are

supplement ed by short - and long- term consultants in the specific technical areas that are r equired at

the t ime.

The operational units in the Bank also m anage over 2000 tr ust fu nds (TFs) on behalf of other

development agencies and foundations, many of wh ich are in th e ARD sector. Alt hough some TFs

include WB resources, ther e are increasing num bers of mul tidonor tr ust funds (MDTFs) which are

financed by several donors, where t he Bank pr ovides management services but does not necessaril y

contribute funding.

senior m anagem ent is increasingly com m itted to enhancing collaboration between the different

m ember s of the Group. Although IBRD and IDA operat e as a single entity, the l inks w ith IFC have never

been strong. Effort s are being made to strength en the l inks between the tw o, for exam ple, by

comm itting both Bank and IFC to delivering on com m on policies and str ategies, and by greater

sharing of information.


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IBRD raises funds for its lending operations by issuing bonds on inter national capital mar kets. It can

raise funds on very favourable t erm s because of its AAA-r ated status. For exampl e, in 2010 it raised

the equivalent of US$34 bil l ion in 28 curr encies on medium to long m atur ities. Although br oad

guidelines exist regarding all ocation by sector, it is essentially driven by demand fr om governm ents.

Although not classified as ODA, WBG resources available fr om IBRD and IFC contribute enor m ously to

the overall external financing of the agricult ure sector. WB data on IBRD as well as AidData docum ent

the extent of non- ODA funds targeting the sector.

IDA -l oan facil ity. Its resour ces are replenished every thr ee years. Over the

last five replenishment s, IDA has seen a m assive expansion, especially since IDA-13 which star ted infiscal year (FY) 2003 (see Table 1). At the beginn ing of th e centur y this expansion was dr iven mainl y by

the comm itm ent of the donor com m unity to povert y reduction and the achievement of the Mil lennium

Developm ent Goals (MDGs). The contin ued expansion under IDA-15 was dr iven by the gl obal food, fuel

and financial cr ises. The surge in IDA resources after the global food price crisis of 2007 08 has

especially benefited sub-Saharan Africa and South Asia. There are also indications t hat incr eased

contribut ions to IDA by cert ain donors, for example the United Kingdom , reflect t heir individual

comm itm ent to r eaching the aid target of 0.7% of gr oss dom estic product (GDP) and the wil l ingness to

channel much of the extr a resources through mu lti l ateral agencies including WB.

The latest IDA r eplenishm ent (IDA-16) was com plet ed in Decem ber 2010 (for FY 2012 to FY 2014) forUS$49.3 b il l i on . Th is i s 12% h igher than IDA-15 6 b il l i on . IDA-13 was less than hal f the s ize o f

IDA- 16. The case for the IDA-16 replenishm ent was part icularl y strong because of the fact t hat ther e

are only four years r emaining to 2015, the tar get year for achieving the M DGs.

m ainly fr om donor governm ents (60%) but also from nts from

IFC and IDA repayments fr om t he 27 countr ies that have graduated fr om IDA.

IDA is the l argest single sour ce of concessional financing to developing countries wh ere people earn

less than US$2 per day. It provides finance for around 20% of all developm ent progr amm es in IDA

countr ies. It provides resources for agricul tur e thr ough long- term developm ent programm es and

thr ough em ergen cy r esponses, such as the Global Food Cri sis Response Progr am (GFRP). Its long-

term investments in agricul ture particularly target smal lholder far mer s and support a w ide range of

actions which are cur rentl y defined to include: increasing productivity; l inking farm ers to m arket s;

building rur al roads; strength ening producer or ganizations; reducing risk and vulner abil ity, including

provision of safety nets; enhancing non-farm income; and, overcom ing barrier s to entr y in carbon

tor are

also priorities.


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Table 1. Worl d Bank IBRD and IDA lending to ARD& FS by theme and sector , FY 2005 10 (US$

mill ion).

IDA-13 IDA-14 IDA-15

: Rural

Development

2,802.2 2,215.8 3,175.7 2,276.8 4,298.6 5,003.7

:

Agricul ture,

fishing, forestr y

1,933.6 1,751.9 1,717.4 1,360.6 3,400.0 2,618.3

:

Themes andSectors

22,307.0 23,641.2 24,695.8 24,702.3 46,906.0 58,747.1

Of wh ich:

IBRD 13,610.8 14,135.0 12,828.8 13,467.6 32,910.8 44,197.4

IDA 8,696.2 9,506.2 11,866.9 11,234.8 13,995.2 14,549.7

Source: Worl d Bank Annual Report 2010.

The allocation of IDA resources between eligible countr ies follows a perfor m ance-based allocation

system . This includes country perfor m ance ratings of IDA countr ies which are assessed annually

using country policy and institutional assessm ent r atings. This compr ises 16 crit eria grouped into four

equally weighted clusters covering policy and institut ional factors: (i) economic m anagem ent; (i i)

str uctur al policies; (i i i) policies for social inclusion and equity; and (iv) public sector m anagem ent and

institut ions. The overall aims of IDA are to help t he poorest countr ies meet th e MDGs, respond to

clim ate change, promote socially and environm entally sustainable developm ent and to better m anage

risk . One of the five key prior ity areas of support is for Creating opportunities for gr owth thr ough

promoting agricul ture and food securi ty .6

At global level, WB does not set sectoral all ocations for the use of IDA funds. However, actual

allocations are expected to be broadly in l ine with the Bank s long-t erm str ategy, Meeting the

Challenges of Global Developm ent, which w as defined in 2007.7 Once a countr y IDA allocation has

been determ ined, using the perfor m ance-based system described above, the core IDA sectoral

allocations are largely set thr ough a process of consultation between th e Bank, governm ent and

national stakeholders. This takes place thr ough the pr ocess of dr awing up a Country Assistance

Str ategy (CAS). CASs are intended t o enable countr ies to align exter nal assistance to th eir nat ional

development prior ities. All CASs are r esults- based and identify specific result s for each area of

support.

The CAS, which usually has a three-year horizon, is developed through broad, stakeholder

consultation. It is ultim ately a refl ection of governm ent- perceived priorities for the econom y as a

whole and th e role envisaged for financing from WB. As a result the CAS has becom e the gateway for

6 World Bank (2011a).7 World Bank (2007a).


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operations at the countr y level. For IBRD countr ies, the equivalent m echanism is the Countr y

Partner ship Str ategy.

. The Bank also manages a large num ber of TFs, the most im portant in t he sector being

the Global Agricul tur e and Food Secur ity Progr am (GAFSP). Other s inclu de carbon off sets, the Global

Environment Facility (GEF) and recipient-executed activities.

. IFC has a growing progr amm e in the agro- industr ies sector. It operat es in over 100 countr ies. In

FY 20 s (US$536 m il l ion). It expl icit ly

engages in food security by support ing agribusiness value chains fr om farm er t o consumer . In FY 2010

it invested US$2 bil l ion in lending across the agricul tur al supply chain. It also provides advisory

services, about 30% of which are aimed at investm ent climate work . Although part

operations are in the form of equity and long- term loans, the fastest growing part of its portfol io is inloan guar antees, which m ake up 31% of its pr oducts in FY 2010.8 The m ain part of its contribution to

achieving the goals of the Agricultur e Action Plan (AAP)9 is in this form . IFC in effect r educes the r isk

of private-sector investm ent in agr icultur e, especiall y agro- processing, by providing loan guarant ees.

In this way, it is able to leverage large am ounts of private-sector investm ent that woul d not otherw ise

be made in the sector. This is not only in l ine with t he overall rhet oric that pr ivate investm ent is cr ucial

to the development of agricul tur e, but it also offers t he opport unity to ensure a m ore balanced

financing of the sector by using dom estic and external (aid) public funds t o leverage private domest ic

and foreign investm ent.

As a m ult i lateral or ganisation, the Bank is under l ess pressure to respond to the political im peratives

of its mem bers than bilateral agencies although som e m ember s of the board m ay seek to exert

influence on contr oversial decisions. Bilateral aid organisations necessaril y reflect the political

agenda of the governm ent in power. For this reason, countr y, regional and sector analyses

and evaluation processes which r esult in policies and str ategies for various sector s are per ceived to

be objective and have become t he r eference point for m any other agencies.

Along with m any m ajor donors and international financing institutions, WB puts considerable staff

tim e and resour ces into form ulating corporat e strategies and policies to guide its work in different

sectors. In the Bank , such str ategies, which have a l ife span of five to seven years in one or m ore

phases, go thr ough a r igorous pr ocess of lesson learning, analysis, consultation, r eview and

evaluation. It invests a lot of effort on system atic program m e supervision, m id- ter m reviews and

impl ementat ion completion report s which are geared towards learning l essons that can be applied as

good practice to its oper ations. There is also the Independent Evaluation Group (IEG) which repor ts to

ible for pr oviding an objective assessm ent of the r esults

of WBG wor k in or der to identify and dissem inate lessons learned from experiences.

8 IFC (2011).9 World Bank (2009a).


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Although

offensive and are str ongly oriented to its partner s, clients and the developm ent comm unity, they are

ult imatel y judged by the extent to which they can be tr anslated into program m es that achieve

corporate goals and objectives in the sector concerned. One indicator of success is the volum e and

quality of lending operations t hat occur in t he sector. In addition to periodic sector st rategies, the

different sector s and even TGs such as SASKI carr y out annual portfol io reviews which are used to

fine-t une curr ent and pipeline operations. However, given the l ong tim e lag between conception of a

lending operation and its effective start ing date which can often be two years or mor e the im pact of

a specific str ategy upon aggregate lending in the sector is not im m ediately evident.

ARD have been guided by thr ee different cor porate

str ategies as well as by global crises, evaluations of the portfol io and by str ongly articulated pr iorities

expressed by senior m anagement.

Rural Developm ent: From Vision to Action10 (V2A) was l aunched in 1997 after several year s of

consultation across the globe. Reaching the Rural Poor A Renewed Strategy for Rural Development 11

(RDS) cam e into operati on in 2002 and contin ued thr ough 2007. The Agr icul tur e Action Plan12 is the

curr ent str ategy (by a different n ame); it has a shorter , three-year l ife span (2010 12).

the cour se of the last 15 years have rem ained largely unchanged, it has nuanced the th eme in several

ways (see Table 2). Before V2A, the Bank was r ather narr owly focused on agricultur e in the t raditional

definit ion of the ter m , often fundin g comm odity- specific pr ojects. For a decade, V2A and RDS (1997

2007) broadened the scope of the strategy to be m ore rur al, coining the phrase rur al space to avoid

call ing r ural development a sector. After 2000, in response to t he MDGs and Povert y Reduction

Strategy (PRS) processes, the focus was to m ake the str ategy more oriented towar ds poverty

reduction. More recently, tr iggered by the global financial crisis and especially by the global h ike in

rice

crisis was at least in par t the consequence of decades of underinvestment in agricult ure , and that

cereal yields wer e stuck, especially in Afr ica, led to the form ulation of the AAP which has brought

agricult ural productivity to the fore as a target for Bank operations in ARD. The shift in think ing is also

refl ected in the titl es of the documents, where rur al (in V2A and RDS) has been replaced by

agricul ture, and in the priori ty themes addressed.

10 World Bank (1997).11 World Bank (2003).12 World Bank (2009a).


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Table 2. Worl d Bank st r ategies in ARD.

Rural str ategy and policy

formulation

Enabling environm ent for

broad-based and sustainable

rura l growth

Raising agricul tur al productivity

Agricul tur al systems

intensification

Enhancing agricultu ral

productivity and

competitiveness

Linking farm ers to mark ets and

str engthening value addition

Management of natur al

resources and forestry

Non- farm econom ic growt h Reducing risk and vulnerabil ity

Water allocation and

management

Social well -being, m anaging

risk , reducing vulner abil ity

Facil itate agricultur al entry and

exit and rural non-farm income

Local and comm unity

development and rur al

infrastructure

Sustainable m anagem ent of

natural r esources

Environm ental ser vices and

sustainabil ity

As can be seen in the table, enhancing agricultur al productivity has been central t o all t hree

str ategies. The m anagem ent of natur al r esources has also been a consistent t heme, although in AAP

this takes on a new guise in the form of agricultur e as a provider of environmen tal services (following

the appr oach set out in WDR 2008).13 Supporting non- farm growt h and incom e is comm on to RDS and

AAP, as is attention to r isk and vulner abil ity. However, novel featur es of AAP are t he focus on linking

farm ers to m arket s, strengthening value chains and value addition. The idea that exit strategies are

needed for some r ur al people, incorpor ated into AAP, m arks a m ajor shift of thinking fr om earlier

str ategies, which were based on the prem ise that r ural development is a way of keeping people in

rur al areas and reducing migration to towns.

It is clear that AAP shifts the focus of Bank strategy back towards agricultu re. This is reflected not

only in the titl e of the document, but al so in the emphasis of the content, focusing on enhancing

agricu lt ur al pr oductivity (receiving 74% of lending in FY 2010) and value chains (17%). However,

softer components continue to find a place in the strategy thr ough addressing risk and vulnerabil ity(6%), ru ral non-far m income generation (9%) and environm ental ser vices (14%). AAP has a short er

tim e horizon than earlier strategies just thr ee years which is designed to coincide with the thr ee-

year CAS cycle. The shift in em phasis is also reflected in t he change in institutional ar chitecture f rom

the tim e when agricultur e did not featur e in the name of any unit and the sector was m anaged by a

RuralSector B oard to the pr esent ARDD and the Agricultur e and Rural Development Sector B oard.

AAP was form ulated thr ough close collaboration with t he regions. It is now being translated into

Action Plans for each r egion. The Action Plan for the Africa r egion was l aunched in early Mar ch 2011,

but other regions have not yet for m ulated Action Plans. The scope and content of each regional Action

Plan is str ongly influenced by the thr ee rur al worl ds depicted in WDR 2008 agricult ure- based,



21/65



tr ansform ing and urbanized. The Action Plan for Afr ica is a potentially powerful m echanism for

ensuring that cor porate policy is tr anslated into lending because it is compl etely congruent with t he

four pil lars of the Comprehensive Afr ica Agricult ure Pr ogram m e (CAADP) developed by the New

, the continentally-accepted fram ework for th e

development of the sector. This is perhaps the first t ime t hat the Bank has so thoroughly aligned itself

legitim ising CAADP in the donor comm unity and the active support it provides thr ough its own l ending

progr amm e and in m anaging MDTFs that provide support to CAADP processes.

The Africa Agricultur e Action Plan ,14 launched in

Mar ch 2011 as a 10-

both of which agricult ure has a place: Com petitiveness and Employment , thr ough agricult ural

productivity and diver sification, with indicator s being the r ate of growt h of agricul tur e value added and

cereal crop yields; and Vulner abil ity and Resil ience , including improved resil ience to clim ate change.

T for ARD have always included the operat ions of IDA, IBRD and IFC. However , the

emphasis on IDA-eligible countries was always clear. It was not unti l t he form ulation of the curr ent

AAP that lending projections for all t hree wer e form ally presented together. The lending projection for

AAP of US$6.2 8.3 bil l ion per year (in term s of com m itm ents) is to be delivered by all th ree

institut ions. IBRD and IDA are not form ally separat ed in AAP and for the fir st tim e the IFC contribut ion

to the sector US$1.7 1.9 bil l ion is included. At one level the presentation of WB and IFC jointly in

AAP is intended to demonstr ate that different par ts of WBG are wor king together bett er. However,

ther e is also a clear comm itm ent to str engthening the way IBRD/IDA and IFC activities complem enteach other , especiall y now that t here is a clear focus on private- sector- driven growth, which is IFC s

standard modality.

Since 1995, two m ain changes have occurr ed in the t ype of financing instr um ents available to t he Bank

and the way they have been used. The first change reflects the shift fr om t he simpl e, single-sector or

subsector project approach to more com plex, m ult isectoral progr amm es. The second change is the

replacem ent of Str uctur al Adjustment Loans (SALs) by Developm ent Policy Loans (DPL). This m ark ed

the shift away from non-sector lending built ar ound conditionalities controversially associated with

the stru ctur al adjustm ent era towards jointl y agreed countr y policy refor m un derwr itten by DPLs. Am ore detailed discussion of the different lending instr um ents is contained in Annex 1.

Although the Bank has em ployed 13 different lending instr um ents during this period, the m ost

impor tant distinction is between investm ent loans, of which there are six m ain types Specific

Investm ent Loans (SILs), Lear ning and Innovation Loans (LILs), Adaptable Pr ogram Loans (APLs),

Emer gency Recovery Loans (ERLs), Sector Investm ent and Main tenance Loans (SIMs) and Technical

Assistance Loans (TALs) and developm ent policy inst ru m ents SALs (until FY 2005) and DPLs (from

FY 2005 to pr esent). Investm ent loans ar e used to finance specific project investm ents, such as

extension, m arkets or r oads. Development policy loans are in effect budget support tied to specific

policy actions that m ay be sector -specific but often cover refor m s in several sectors. The data for this

14 World Bank (2011b).


22/65



analysis have come from the WB Project Database of Agricul tur e + 3 .15 Over th e period, th e ARD

Sector Board has been responsible on average for ar ound 84% of all l ending to the sector. Its share

was sm all est in FY 2009, when it f ell t o 69%.

The m ain instrum ent for projects is SIL, which is defined as being to support the creation,

rehabil itation and m aintenance of economic, social and institut ional infrastr uctur e. Over the 15-year

period studied, SILs have made up around 70% of all lending (Figur e 1). The shift away from sim ple

ARD-sector projects to m ult isectoral projects has meant t hat financing is invariably shared with other

sectors. Although these supporting investment s are designed to contr ibute directly to t he sector

development goals, they m ight not be captur ed in the report ing system for ARD.

Figur e 1. Total and Specific Investmen t L ending (SIL) to ARD& FS, FY 1995 2010 (constant year 2000

US$).

Source: World Bank data for Agriculture +3 plus other sectors.

APLs provide phased support for l ong-t erm development progr amm es. They involve a series of loans,

each usually of three to five years duration, that buil d on the lessons learned fr om the pr evious loan in

the ser ies. Successive phases of an APL are usuall y trigger ed by the achievemen t of specific

m ilest ones that are t aken as indicator s of success. Since FY 1995, APLs have compr ised 5.9% of all

lending comm itments.

15 e. = agricultural extension and r esearch; anim al pr oduction; crops; l ivestock; forestr y; irr igation and

forestry; agricultur al mar keting and trade; and agro-industry.

0

500

1000

1500

2000

2500

3000

3500

4000

4500

FY95

FY96

FY97

FY98

FY99

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

US

$million

SIL

TOTAL


23/65



The Bank also adopted a series of new lending instr um ents which wer e intended to m itigate its earlier

tendency to finance only large and bankable projects with short dur ation the classic US$50 mill ion

or m ore project with a five-year im plem entation period. LIL was created as a way of financing projects

of US$5 m ill ion or l ess, and in areas that could be considered experim ental, risky and/or t ime -

sensitive. Since FY 1995 LILs m ake up onl y 0.2% of all lending comm itm ents.

ERLs support econom ic and social r ecovery imm ediately after an extraordinary event, such as war ,

civil distur bance or natur al disaster. In the Bank, as with al m ost all pr oviders of ODA, there has been a

m ark ed increase in th e volum e of emer gency funds over the last 15 years (Figure 2). Since FY 1995

ERLs have averaged 4.7% of all com m itm ents. However, dur ing the l ast five years t hey have averaged

6.1%, com pared w ith jus t 2.8% for th e five years f r om FY 1995 to 1999.

Figur e 2. World Bank l ending for emer gencies, FY 1995 2010 (constant year 2000 US$).

Source: World Bank data for Agriculture +3 plus other sectors.

SIMs focus on public expenditur e program m es in specific sectors. A SIM was used to finance the fir st

of the Agricult ur e Sector Investm ent Progr am (ASIPs) in Zambia in the m id- 1990s which were, in

effect, the precur sors of sector -w ide approaches (SWAps) in agricultur e. A TAL is used to build

institut ional capacity in the borr ower countr y. It m ay focus on organizational arr angem ents, staffing

m ethods and technical, physical or financial r esources in key agencies.

DPLs star ted in FY 2005. In many ways, they repl aced the SALs that wer e used dur ing th e 1980s and1990s and en ded in FY 2005 (Figure 3). Taken toget her , since FY 1995 SALs and DPLs have account ed

for over US$4.4 bil l ion of lending to ARD or alm ost 10% of all comm itm ents to the sector. Since they

0

100

200

300

400

500

600

700

FY95

FY96

FY97

FY98

FY99

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

US$million

ERL


24/65



were intr oduced, DPLs have com e to play an increasingly impor tant r ole in total lending. Over the last

five years they have aver aged 15.9%, peaking at 27.7% in FY 2009 follow ing t he wor ld f ood and

financial crises.

Figure 3. World Bank l ending thr ough Structur al Adjustment Loans (SALs) and Development Policy

Loans (DPLs), FY 1995 2010 (constant year 2000 US$).

Source: Worl d Bank Pr oject Database.

A DPL is generall y provided thr ough a program m atic series of successive development policy

operations. Some development policy operations in IDA-eligible countr ies support t he impl ement ation

of a countr y's PRS and are call ed Povert y Reduction Support Credits (PRSCs) or gr ants.

0

200

400

600

800

1000

1200

1400

FY95

FY96

FY97

FY98

FY99

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

US$million

DPL

SAL


25/65



Aid flows to ARD&FS

The WB has differ ent definit ions of ARD depending upon the audience that is being addressed. In part ,

this refl ects the way the

separated sets of codes for the sector s and for them es. Each data set sum s t o 100% and each activity

has a set of sector and them atic codes. In WB Annual Reports a m ixtur e of data on sectors and them es

is presented, but r eporting on thematic areas is clearly more inter esting for a public comm unication

document.

The curr ent categorisation of comm itm ents in ARD is presented in AAP as Agricultu ral pr oduction

and markets , representing the sum of agricul ture, f ishing and forestry together with agricul ture

m arkets, tr ade and agro- industr y. In WB Annual Repor ts, agricul tur e, fishing and forestr y are called

Agricultur e . AAP includes Special Financing and various other investm ents and newly em erging

areas that fall un der the ARD Sector B oard, such as land adm inistration, agricultu ral agency reform ,

agricult ural and rur al finance, and mark et roads.

IFC operates a completel y separate system of codes from WB. In the area of ARD&FS it includes:

Agribusiness production and pr ocessing Agri-related trade finance Ferti l isers Agri- logistics and infrastructur e Food retail

Trust funds are not report ed as part of WB aid flows but ar e com paratively sm all, amounting to

US$132 mill ion in 2006 08. The largest TF is GEF, which accounts for 70% of the total.

The following figures (and associated data tables in Annex 2) present th e aid flows fr om WB to ARDover t he period since FY 1995, using figures fr om the WB Pr oject Database. Som e compar isons are

m ade between the different aid flow sources WB Project Database, CRS and AidData and the

different definitions of ARD and ARD&FS16 (see Methodological Note in the m ain report ). In the data

report ed to CRS ther e is alm ost no difference between the narr ow definition of agricultu re, forestr y

and fishing (AFF) and the br oader one (AFF+) (see footn ote 16) because the Bank h as not r eport ed

16 The narr ow definition of agricul tur e, forestr y and fishing (AFF) uses CRS purpose codes 311, 312 and 313. The

broader definition (AFF+) includes r ur al developm ent (code 43040) + developm ent food aid (52010) + em ergency

food aid (71010). The sti ll -br oader definition adopted by the Overseas Development Institut e (ODI) (ARD& FS) alsoincludes social m itigation of HIV/AIDS (16064), 10% of bank ing and financial services (240), 10% of busin ess

suppor t ser vices (25010), 20% of tr ade policy (33110) and tr ade facilitation (33120), 10% of general budget suppor t

(51010) and 10% of support to non -govern m ental or ganisations (920).


26/65



against r ural development (since 1998), development food aid or em ergency food aid. It is only when

exam ining the ARD&FS definition that differences can be seen.

Project Database provides its own inter pretation of the aid flows, w hich includes lending by IDA

and IBRD (Figur e 4). The definit ion by WB, which f oll ows th e definition of t he sector by th e ARD Sector

Board, includes agricult ure, forestr y and fishery as well as ARD-r elated lending within other sector s

such as health, industry (agro- industr y), trade and public administr ation. This shows that t he low point

of Bank lendin g was in FY 2000 at US$1.8 billion , and the peak w as in FY 2009 at US$5.3 billion . In real

ter m s, the peak in FY 2009 was no higher than t he peak 12 years bef ore, in FY 1997. The inter vening

years saw a precipit ous declin e to FY 2000 and slow r ecovery in lending since th en.

Figur e 4. World Bank lendi ng to ARD, FY 1995 2010 (constant year 2000 US$).

Source: Worl d Bank Pr oject Database.

Using CRS data for IDA, it is possible to com pare AFF with th e broader defin ition (ARD&FS. Figur e 5

shows that th e two definitions run closely in paral lel, with AFF totall ing around 27% more than

ARD& FS over the per iod 1995 2009. The gap in 1997 and 1998 is because, after 1999, the Bank n o

longer report ed to CRS under rur al developm ent (43040), budget support (51010) and m aterial r elief

assistance (72010).

0

500

1000

1500

2000

2500

3000

3500

4000

4500

95 96 97 98 99 0 1 2 3 4 5 6 7 8 9 10

US$million

IBRD & IDA


27/65



Figure 5. IDA lending to agr icultur e, forestr y and fishing using narr ow definition (AFF) and br oader

defin iti on (ARD&FS) (constan t 2000 US$).

Sour ce: CRS.

Using AidData and the AFF+ definition, a different picture is presented (Figur e 6). In particul ar, the

dr am atic incr ease in lending over th e period FY 2005 to FY 2009 is not evident. It is not cl ear if the

explanation for this discrepancy l ies in the fact that only a part of IBRD operations possibly only the

near- concessional item s are captured by AidData.

Figur e 6. IBRD and IDA lendin g to ARD& FS, 1995 2009 (constant year 2000 US$).

Source: AidData.

0

200

400

600

800

1000

1200

1400

1600

1800

2000

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

US$million

ARD&FS

AFF

0

1000

2000

3000

4000

5000

6000

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

US$million

IBRD

IDA

Total


28/65



The data presented in this section are pr imar ily drawn fr om AidData and the WB Project Database.

The primar y source for the AidData database is CRS and the foll owing graph com pares the t wo and

shows them to be relatively simil ar and of the same scale with r espect to IDA flows. A comparison of

the WB Pr oject Database and the AidData database (for IDA and IBRD combined) is shown in Fig ur e 6.

The figur es for IDA alone show no part icular tr end in lending over th e last 15 years (Figure 7).

Figur e 7. IDA lending t o ARD&FS, 1995 2009 (constant year 2000 US$).

Source: AidData.

Figure 8 compares figur es for IDA lending to agricultur e based on the nar row definition (AFF) and

broad definition (ARD&FS) derived from CRS with the figur es from AidData. Although t here are som e

distinct differences between the data sets, in general they are quite sim ilar in patter n.

0

200

400

600

800

1000

1200

1400

1600

199

5

199

6

199

7

199

8

199

9

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

US$million

IDA


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Figur e 8. AidData and CRS (AFF and ARD&FS) calcul ations of IDA lending to agr icult ur e, 1995 2009

(constant year 2000 US$).

Regionally, the two data sets (AidData and WB Project Database) show a r elatively simil ar breakdown.

However, ther e are differ ences, not l east due to the two incom patible definitions of regions. The data

in both AidData and the WB Project Database show a similar tr ansition from a dominance of lending in

East Asia during t he 1990s to increasing volumes in South Asia and Africa and m ost r ecently Latin

Amer ica and Caribbean (See Figures 9 and 10). The strong gr owth of investm ent in t he sector in recent

years is captur ed only in the WB Pr oject Database and is shown to be l argely driven by lending in

Afr ica region and Lat in Amer ica (see Annex 3(a) with AidData figur es and Annex 3(b) with t he WB

Project Database figures).

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

US$million

AidData

AFF

ARD&FS


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Figur e 9. World Bank r egional l ending to ARD&FS according to data fr om AidData (constant year

2000 US$).

Figur e 10. Worl d Bank r egional l ending to ARD&FS accor ding to data from the Worl d Bank Project

Database (constant year 2000 US$).

0500

1000

1500

2000

2500

3000

3500

4000

4500

5000

US$million

South of Sahara

South America

South & Central Asia

Oceania

North of Sahara

North & Central America

Middle East

Far East Asia

Europe

Africa

0

500

1000

1500

2000

2500

3000

3500

US$million

SAR

MNA

LCR

ECA

EAP

AFR


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Repor ting Wor ld Bank aid flows

WB has its own coding system st ored in t he Project Database. WB start ed report ing to CRS in 2009,

and has also r econciled data fr om 2000. The AidData database is based on CRS and elaborat ed by

assigning a sector code to each pr oject, foll owing an exam ination of all aid pr ojects.

CRS is the standard inter national vehicle for r eporting aid flows. In agricultur e, the narr ow definition

(AFF), which is alm ost always used when r eporting aid to agricult ur e, uses three m ain sector codes

for agricu lt ur e (311), forest r y (312) and fishing (313). DAC also uses a br oader definit ion (AFF+) which

adds ru ral developm ent (43040), food securit y progr am m es (52010) and emer gency food aid (72040). Itis possible to constru ct a furt her expanded definition of the sector ARD&FS by selecting the

appropr iate CRS five- digit pur pose codes (see Annex 4). The expanded definition adopted by this st udy

includes:

Agricultu ral production, processing and m arket ing (three sector codes + 19 purpose codes) Rural socio-economic development (four purpose codes) Emer gency relief and welf are (thr ee purpose codes)

The system of r ecording codes at t he Bank is m anaged by the OPCS departm ent, which is an

independent ar biter of the way each operat ion is coded. There is a Sector and Them e Governance

Group w hich m eets annually to discuss changing codes. The system is r esistant to changing the codes

so as to avoid any undue inf luen ce of lending f ashions. OPCS also m eets r egular ly with DAC to discuss

coding and is curr ently pr oposing changes to t he way Bank codes are m apped to CRS.

OPCS is r esponsibl e for r eport ing to OECD (and the Inter national Aid Transpar ency Initiat ive IATI).

OPCS scrutinises the docum ents for each operat ion in order to verify the coding that has been

assigned by th e Task Team Leader (TTL). It dialogues with t he TTLs and sector m anagers concer ned

imm ediately prior t o Board approval if adjustment s to the coding are thought to be needed.

In the WB coding system , each operation can onl y be coded with up to five sector codes and five

them atic codes. The r esponsibil i ty for assigning codes to each operation at the beginning of its cycle

(the Activity Initiating Sum m ary) rests with the TTLs in the operational uni ts. TTLs appear to give l itt le

thought t o the task of coding and generall y use the codes with which t hey are fam iliar. There are

pr oposals by OPCS to add codes or layer s of codes that w ould be r ecorded by TTLs. For exam ple, in

response to the em phasis on climate change and environm ent, there is a pr oposal to ask TTLs to

record (at t he beginning of the cycle) the percentage of an operation t hat addresses adaptation and the

percentage on m itigation measures.

Sector codes have rem ained more or less constant over the years, whilst t hematic codes appear and

disappear according to corporate priorit ies or fashions. For the sector, agricultu re uses Agricultu re

+3 codes which com prise six core AFF codes, ublic adm inistr ation m inus agricult ure, fishing andforestry plus two codes classif ied under industry and trade Agricul tur al marketing and tr ade and

Agro-industr y (see Table 3). However, within any single operation t here could be codes related t o any


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of the other sectors including finance, health, energy and m ining, transport ation, water, sanitation and

flood pr otection . DPLs, which can account f or fr om 25% (IDA) to 45% (IBRD) of the port folio, are coded

in a rather ad hoc m anner since they tend to support economy- wide policy refor m s as well as sector-

specif ic programm es.

only to comm itments, which are recorded at the mom ent that the

operation is approved by the Board. This result s in a very lum py or spiky patter n of aid flows since a

single large comm itm ent in one year m ay produce a spike when compared with the neighbouring

years when smaller or fewer com mitm ents might be made.

A persistent issue is th at whil st t he sector codes allocated to an activity right ly add up to 100%, the

them atic codes are also defined to sum to 100%, leading to the underr eport ing of com m itm ents in

some sectors in the WB Annual Report s. Although this does not appear t o be a ser ious problem for

agricult ure when com pared with health, for exampl e, it is one which has been raised on manyoccasions. In the APR for FY 2005, attention w as drawn to a m ajor discrepancy between the figur es

report ed under t he r ural them e (US$2.8 bil l ion) and ARD review (US$8.7 bil l ion) and that lending to

agricult ure could be underreport ed because all lending for agency refor m is al located to the law and

ju st ice sector .

CRS is clearly m ore detailed and disaggregated than the WB coding system, having around 30 pur pose

codes that can be assigned to ARD&FS. However, th is advantage is confounded by having both

sectoral codes and them atic codes mixed, which could result in some double counting or at least

difficult choices to be m ade when m apping Bank codes to CRS. CRS includes codes which are sectoral

(such as agricultu re), them atic (such as rur al development) and for financing instrum ents (such as

budget support) which cut acr oss the two separate sets of Bank codes.

The WB coding system is mor e internally consistent than CRS because it has separate and clearly-

defined sector and them atic coding. However, the r estriction of a m aximum of five sector codes and

five them atic codes for each operation is a l im itation since nowadays m ost operations are

m ult isectoral. This can pose a dilemm a for TTLs when coding an operation at the beginning of its

process.

All WB gr ants and IDA credits ar e classified as ODA. All IBRD lending r eport ed to CRS is classified asOOF. Until 2009 WB did not provide repor ts t o DAC in a standar d for m at but i nstead DAC staff

downl oaded data fr om availabl e Project Database and assigned codes according to

m apping that had been discussed. Dissatisfaction with the way the data wer e tr ansform ed to CRS

codes led OPCS to begin it s own m apping exercise. Fr om 2009, OPCS has been r eport ing to OECD with

CRS codes already selected. The records t aken from the Pr oject Database were also reform atted to

meet DAC reporting requirements.

CRS mapping tak es account of only

recorded in

m arker s used by DAC to aggregate general t hemes such as gender or environm ent. This meant t hatreport s of other donors.


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The Bank has r etr ofitt ed its data t o the agreed CRS codes for t he period 2000 to 2008. It covers

comm itm ents (net of cancellations), gross disbursem ents and net disbursement s. However, since

disbursem ents are not recorded by sector or t heme, the figures are m erely allocated according to the

share recorded at comm itm ent stage. Data on comm itments and al l pr oject information come from

the publicly available projects database. Data on disbursem ents, repaym ents etc. come fr om t he

Business Warehouse. All l ending instrum ents are tr eated in the same way with no distinction between

DPLs and investm ent l oans.

An OECD working party on statistics17 report ed that t here has been a m atch between the CRS and DAC

data since WB star ted r eporting its concessional and non-concessional fl ows at th e detailed activity

level in 2009 in full compliance with the r equested CRS++ report ing form at. This allows users t o easily

go from the aggregate-l evel statistics t o analyses of aid at the detailed activity-l evel, which m arks a

significant impr ovement in report ing.

The CRS uses a five-digit code to describe sector and purpose. At the thr ee-digit level, the codes are

sim ilar to those of WB five- digit l evel , CRS is cer tainly m ore detailed than

is intended to

foster. In contrast, WB ector codes indicate only the part of the economy supported. Development

goals are captur ed by themat ic codes. This divergence can lead to incorr ect m apping. However, CRS

allows only five sector codes

and five thematic codes assigned. For proper m apping, Bank projects have to be subdivided and

unique CRS codes assigned to each part , which is a l engthy manual process.

r exam ple, the Bank assigns

part of the comm itm ent in each sector- specific project to governm ent administr ation, which is not in

line with the CRS rationale for using pur pose codes. In th e Bank codes, this tends to be a catch- all

code. In ARD this code is BL Public Administr ation agricult ure, fishing and forestr y . In some

sectors, for exam ple in health and tr ade but not agricult ure,

detailed. Bank codes labelled General such as AZ General agricult ure, fishing and forestr y are

m apped to CRS codes 10 which are intended for br oad policy and adm inistrat ive management.

Table 3. Worl d Bank Agricul tur e + 3 codes mapped to CRS.

AB Agricultural

extension and

research

ALL ALL 31166 Agricultu ral extension

AJ Animal production ALL ALL 31163 Livestock

17 OECD-DAC (2010).


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AH Crops ALL ALL 31161 Food cr op pr oduction

AT Forest r y ALL ALL 31210 Forest r y policy and

administrativemanagement

AI Irr igation and

drainage

ALL ALL 31140 Agricultu ral water

resources

AZ General agricultu re,

fishing and forestr y

ALL

except

68 and

41

All except Nutr ition

and food security and

Small and medium

enterprise support

31110 Agricultu ral policy and

administrative

management

BL Public

administration

agriculture, fishing

and forestry

ALL ALL 31110 Agricultu ral policy and

administrative

management

YA Agricultural

m arketing and trade

ALL

except

45, 50,

49, 47

All except Export

development and

competitiveness, Other

tr ade and integration,

Trade facil itation and

market access,

Regional int egration

31191 Agricultu ral services

YB Agro-industr y ALL All 32161 Agro-industr ies

Alth ough OPCS does not have a direct vested inter est in th e way operat ions are coded, there appears

to be impl ici t pressure in the system t o report up sectors or them es that are high in the senior

There is also impl icit competition for t he share of codes between sectors,

especially when, as current ly, the agricultur e sector has a tar get for l ending each year.

Within the Bank, there is l i tt le interest at sector /r egion level in disbursement f igures, unless a specific

operation encounter s serious delays in disbursement and falls into the category of problem project.

The system for r ecording disbur sements is completely separate fr om th e coding of comm itm ents.

Disbursement figures ar e submit ted to DAC in a very crude way, by allocating actual expenditur es pro

rata according to the share of codes used for the original com m itm ent. Consequentl y, the

disbursem ent figures r eported provide only a reasonable picture of the different tim e profi les between

comm itm ents and disbur sement s at aggregate level. The profi le is distorted, however, by the fact that

DPLs, which make u p 25% of IDA aid and often even m ore of IBRD aid, are r eported as disbursing

100% at th e m oment they are approved.

Few staff know about or ar e concerned with r eporting to CRS. Bank staff tr eat its own internal coding

system seriously since it is used in reporting to senior m anagem ent and impacts the way perform ance

of different sectors and un its is assessed. It is also perceived as being im portant because it conveys

impor tant comm unication messages through the way it is translated into statements of perform ance

report ed in the Annual Report. In contrast, the way data are report ed to DAC for CRS report ing out

is largely unknown by staff and is the dom ain of a sm all num

PKP2__ Understanding aid to ARD and food security: World Bank

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