UK focuses on agri-business and commercialization; funding remains higher than decade ago but has declined slightly in recent years

The United Kingdom’s (UK’s) Department for International Development (DFID) has been stepping up its focus on agriculture since the release of its ‘Conceptual Framework on Agriculture’ in 2015. The Framework focuses on the role agriculture and agro-industry can play in supporting economic growth and poverty reduction and prioritizes support for family and smallholder farmers to become commercially viable. The framework outlines three main approaches to guide and prioritize investments: 1) ‘stepping up’ (promoting agricultural commercialization and agro-industry development to generate more income for farmers and create jobs), 2) ‘stepping out’ (promoting job creation in manufacturing and services and mobility), and 3) ‘hanging in’ (supporting agriculture as a holding strategy for those smallholder farmers that are likely to remain in subsistence agriculture).

In addition, the framework outlines three cross-cutting priorities:

  1. Inclusion and women’s economic empowerment: The goal is to promote agricultural transformation to be inclusive and create equal opportunities for women, men, and marginalized groups.
  2. Production of nutritious and safe food: The aim is to develop policy and programs to promote agricultural transformation and analyze how agriculture can increase nutritional benefits and feed into nutrition policies.
  3. Environmental sustainability and climate-smart agriculture: Through this priority, DFID aims at promoting growth and reducing poverty, building resilience to climate-related challenges, and reducing the impact of agriculture on the environment.

For further details on methodology, see our Donor Tracker Codebook.

    For further details on methodology, see our Donor Tracker Codebook.

    However, this increased political focus has not led to consistent funding increases. According to data from the Organisation for Economic Co-operation and Development’s (OECD’s) Development Assistance Committee (DAC), the UK spent US$977 million in 2016 on official development assistance (ODA) for agriculture (including forestry and fisheries) and rural development, a 9% decrease from US$1.1 billion in 2015. This corresponded to 5% of the UK’s total ODA, below the 7% average among OECD DAC members. It is important to note that this figure includes significant funding amounts for infrastructure-related investments relating to rural development; the actual amount spent on agriculture is thus significantly lower. Despite decreases in funding since 2014, ODA to agriculture remains significantly above where it stood a decade ago, at US$333 million in 2017.

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    DFID’s bilateral agricultural programs follow the framework’s approaches and priorities. For example, in Zimbabwe, DFID works with small-scale farmers on how to benefit from rising food prices and focuses on market linkages and access to financing for farmers. In Afghanistan, DFID prioritizes large-scale agriculture, infrastructure and business development as part of broader economic-stability strategies.

    Based on OECD data, in 2016, 46% of UK’s ODA to agriculture and rural development was channeled in the form of core contributions to multilateral organizations. Key recipients were the World Bank’s International Development Association (IDA, 19%) and the European Union institutions (EU institutions, 18%), followed by the African Development Fund (AfDF, 4%), and the International Fund for Agricultural Development (IFAD; 2%). In addition, the UK has made smaller commitments to several multilateral partnerships working in agriculture. The UK is an important donor to the Global Agriculture and Food Security Program, committing £136 million (US$184 million) from fiscal years 2012 to 2018, and to the Consultative Group on International Agricultural Research, committing £185 million (US$250 million for FY2012 to FY2017, according to DFID’s Development Tracker website (DevTracker).

    DFID co-funds the Africa Enterprise Challenge Fund, which aims to stimulate US$200 million in private-sector investment in agriculture and financial markets across Africa. DFID also participates in the AgResults Initiative (£25 million from FY2012 to FY2024, or US$34 million), which aims to incentivize the private sector in developing countries to invest in the development and delivery of agricultural technologies. More details about DFID’s agriculture programs can be found on DevTracker.

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    In January 2017, DFID released its first Economic Development Strategy, in which agriculture features as a priority area. Prioritized approaches include:

    1. Increase agri-business: financing agriculture infrastructure and promoting commercial agriculture by transferring knowledge to smallholder farmers and linking them to markets.
    2. Support farmers and their families to access opportunities and jobs outside of their farms.
    3. Support subsistence farmers with other viable income to prevent malnutrition and extreme poverty.
    4. Encourage innovative commercial approaches that reduce the cost of nutritious diets.

    DFID drives strategies for the UK’s agricultural development agenda

    DFID drives the strategic direction for the UK’s agriculture development agenda and is responsible for administering agricultural ODA. Within DFID headquarters, the Economic Development Division (within the Growth and Resilience Department) manages the work related to DFID’s ‘Conceptual Framework on Agriculture’ and the link between the agricultural sector and economic growth. The Growth and Resilience Department also works closely with the agricultural research team within the Research and Evidence Division. Overall, design and implementation of agriculture programs is decentralized, as DFID’s country offices manage bilateral programs.