Sachs appeals for new agriculture aid fund

Influential US economist Jeffrey Sachs is on a tour to promote the need for extra funding and a new mechanism for agriculture. On Monday he was in the European parliament making further appeals to European official donors to do more in this area, and not just provide short-term food aid. The encouragement to increase investment in agriculture is worthwhile, but is the creation of another aid vehicle the best way to go about this?

Sachs is expert at catching political and public attention through the media and is very persuasive in parliaments. His reach is visible from the 80 Millennium Villages that he has established in Africa. We can expect to hear a lot more about his new proposals, and given the political interest in the food price crisis it is entirely possible that Sachs’ scheme could end up as a big ticket item at one or more of the aid summit meetings this year. This especially as the UN’s World Food Programme says that rising food prices have plunged an extra 100 million people into poverty this year.

The professor recommends helping small farmers obtain seeds and fertilisers to increase crop yields and beat the poverty trap. Malawi has done this, against donors’ advice, and achieved great success. He says that until now development agencies such as the World Bank have often pushed for the dismantling state support to agriculture, the opposite of what should be done. He says that “ African farmers lack financing to buy critical inputs such as fertilizers and high-yield seeds. The donor countries would do Africa and the world a load of good by focusing less on shipping expensive food aid from Europe and the United States and focusing much more on helping African farmers to gain access to the inputs they need for higher productivity”. Malawi has managed to double its grain output in the last three years through such investments

So far so good. But Sach’s suggestion that this should be done by creating a new Global Fund for African Agriculture is more controversial. Eurodad understands that Sachs is facing strong resistance to a new fund from representatives of many agencies present on a task force set up by UN Secretary General Ban Ki-moon, to whom Sachs is an adviser. Also that Sachs is talking of an amount of $8 billion a year that could be distributed by the fund.

While the World Bank, African Development Bank, European Commission and others on the Ki-moon task force clearly have an interest in blocking new institutions, they are right that governments should think very carefully about setting up new funds. It would be ironic if one of the political outcomes of this year of aid effectiveness reporting and negotiation was to result in the creation of yet another aid body. The UNDP estimates that there area already some 1,000 global financing mechanisms and the number of other donors has also increased rapidly in recent years. Managing these multiple relationships is very challenging for recipient governments, and many vertical funding initiatives cut across rather than strengthen country systems.

In the area of health – where vertical funding schemes have developed the fastest, a new paper by the NGO alliance Action for Global Health is frank about the difficulties this is causing. They complain about the lack of coordination between the different health initiatives and wonder if they add much to what multilaterals were already doing. They conclude that global health campaigns are so numerous that they “are contributing to fragmentation – to the detriment of aid effectiveness in the health sector” and their proliferation “can undermine efforts both for improved harmonisation and alignment as well as absorbing large resources, including for their administration.

On 22 May the European Parliament is due to adopt a resolution on rising food prices and another resolution and a further resolution will be debated that week on aid effectiveness. It is not yet clear whether Jeffrey Sach’s appeals there or elsewhere in Europe have fallen on fertile or stony ground. But Eurodad urges caution in running up a new mechanism rather than using existing ones better to support African farmers and agricultural systems.

See also: An interesting article from the Wilson Center on the progress and pitfalls of a Sachs Millennium Village in Kenya

This article first appeared in Eurodad’s Development Finance Watch

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