Development Assistance to Agriculture: Can the decline

Caide au developpement agricole : le declin est-il rever

A number of recent meetings and reports have highlighted the need for an increased flow of aid resources from donor countries to developing countries - and an increased priority for agriculture - if the UN Millennium Development Goal target of halving extreme poverty and hunger are to be met by the target date of 2015. This article uses OECD data on aid flows (m. oecd . org/dac/idsonline) to answer questions such as: how have aid volumes to agriculture changed over time? Which countries are the main donors and recipients? Is aid to agriculture targeted at countries most in need?

The global volume of assistance to agriculture (2002 prices) increased steadily from $2.5 billion in 1974 to peak at $6.4 billion in 1984 (Figure 1).

However, the volume of aid halved between 1988 and 1994 and has continued to fall. For both bilateral and multilateral donors, total Official Development Assistance (ODA) to agriculture fell from 22 per cent of sectoral aid in 1982 to just 7 per cent in 2002. As the share of sectoral aid in total aid flows has itself fallen over time, the decline in the relative share of agricultural programmes in total aid flows has been even more dramatic.

Figure 2 ranks individual donor countries from left to right in order of the importance of agricultural aid in their total ODA in the 1980s. To the left are traditionally strong donor countries but with evidence of sharp dedine. In the centre group the share has been somewhat better maintained, and to the right

is a group that only started to give assistance to agriculture since the 1990s.

The relative stability in the geographical focus of agricultural assistance is shown in Figure 3. However, there has been a noticeable shift in assistance from South and Central Asia to Far East Asia, reflecting a sharp drop in agricultural aid to India and a steady increase in aid to China, mainly low-interest loans from Japan. Japan and the US between them account for 49 per cent of bilateral aid to agriculture, followed by France who accounts for a further 11 per cent.

Figure 4 shows changes in the distribution of agricultural ODA by country income group. While the

Figure 1: Aid to agriculture, 1973-2003 (3-year moving average, 2002 prices) Figure 2: Shares of bilateral assistance to agriculture

Source: OECD Creditor Reporting System

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Source. OECD Creditor Reporting System