47 countries make reforms to help farmers grow business, 4 African countries among top improvers, World Bank
Four countries in Sub-Saharan Africa are among the top ten reformers worldwide promoting favorable regulations for farmers in the areas measured, a report issued by the World Bank finds.
According to Enabling the Business of Agriculture 2019, the business climate for agriculture worldwide is improving. 47 out of 101 countries measured implemented 67 regulatory reforms over two years making it easier for farmers to manage pest outbreaks, get quality seeds and access credit to invest in production. France, Croatia and the Czech Republic pair good regulations with efficient processes across all areas measured, although no country received a perfect score.
Agriculture is the economic backbone of many developing countries. It contributes about 25% of GDP in low-income countries, and 80 % of the extreme poor live in rural areas. The report underscores the need to accelerate reforms to tackle outdated legal provisions that do not meet farmers’ needs and remove bureaucratic obstacles that stifle business processes.
“We know that growth in agriculture is two to three times more effective at reducing poverty than growth in other sectors. More needs to be done to support farmers through regulatory reforms so that they can grow their businesses and thrive,” said Simeon Djankov, Senior Director, Development Economics, World Bank.
Global agricultural production is expected to increase by 20% during the next decade as farming techniques become more efficient. Although it is up to governments to decide which regulatory changes are the most feasible, countries that have efficient regulatory processes in agriculture tend to have higher productivity.
“Increasing agricultural productivity in a sustainable manner is a priority in the race to fix food systems, so that farmers can produce higher quality food, feed growing populations and improve their livelihoods while reducing the impact of agriculture on climate and natural resources,” said Martien Van Nieuwkoop, Global Director, Agriculture and Food, World Bank. “The efficient operation of players all along the food chain also facilitates farmer productivity and the sale of quality food, while avoiding food loss and waste.”
One way for policy makers to support farmers is to enact regulations that enable a more efficient provision of agricultural inputs --such as seeds, fertilizer, animal feed, veterinary medicinal products and water, promote access to finance, and facilitate market transactions.
The report assesses whether government regulations support farmers’ activities in these eight areas: supplying seed, registering fertilizer, securing water, registering machinery, sustaining livestock, protecting plant health, trading food and accessing finance.
Based on data collected between July 2016 and June 2018, more than half of reforms affecting farmers were enacted in the areas of protecting plant health, supplying seed and accessing finance, says the report. Reforms in protecting plant health focused on pest management, with one-third of reforming countries establishing a requirement for citizens to report pest outbreaks.
Across regions, farmers in Sub-Saharan Africa face the toughest regulatory challenges. But many countries are striving to improve the business climate, including through regional agreements facilitated by their membership to regional political and economic unions such as the Economic Community of West African States (ECOWAS). Sierra Leone, Burundi, Mozambique and Malawi are among the ten countries that improved the most globally, although they have a long way to go.
High income countries have a supportive business environment for farmers, especially in the areas of registering fertilizer, registering machinery, and protecting plant health. France, Croatia, and Czech Republic received the highest scores globally, showcasing good regulatory practices as well as efficient administrative processes across a number of indicators.
East Asia and Pacific
Thailand was among countries making reforms in the area of protecting plant health, while Lao PDR enacted reforms affecting securing water. Myanmar is among countries with best regulatory performance in the time to register a new maize or cereal variety, while China is among the best regulatory performers in terms of the cost of registering machinery. Vietnam is among the best regulatory performers in terms of quality of manufactured feed for livestock.
Developing Europe and Central Asia
Romania and Serbia performed well. Armenia and Georgia were among the top ten countries that improved the most over 2016-2018. Armenia, Bosnia and Herzegovina and Romania have put in place comprehensive regulations governing water, while Ukraine published comprehensive information on pests and diseases online. Kyrgyz Republic made tractor registration more affordable.
Latin America and the Caribbean
Colombia achieved a high score combining strong plant health and accessing finance rules with effective water management regulations. Official seed catalogues are now available in Haiti, and farmers are benefitting from improved labeling requirements for feed in Chile. Dominican Republic has introduced electronic applications for the submission of phytosanitary certificates while Peru has introduced a digital system that includes applications for phytosanitary certificates as well as information about their issuance and exchanges with trading partners.
Middle East and North Africa
Morocco is a top performer in this region, enacting efficient machinery registration processes and comprehensive water management laws that require information on water resources to be publicly available. Morocco is also among the top performers in the protecting plant health indicator.
South Asia registered the highest average improvement. Pakistan was among top improvers globally thanks to the establishment of a comprehensive warehouse receipt system. India was among countries who have established top regulatory systems for accessing finance. Bangladesh considerably improved its seed certification capacity. Nepal was among the top performers in the category of cost to register a new variety of maize.
Many African countries are striving to improve the business climate for farmers, but farmers on the continent continue to face the toughest legal and regulatory challenges globally. Sierra Leone, Malawi, Mozambique, Burundi, Kenya, and Nigeria have improved on aggregate. Benin, Mali, Niger, Sierra Leone and Togo have developed national regulations adopting the ECOWAS fertilizer guidelines, a step toward improving fertilizer quality.