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Page 1 of 4 Kevin Cleaver, Ph.D.
Director of Agriculture and Rural Development, World Bank, Washington DC
The World Bank calls its latest rural development strategy ‘holistic’: it seeks to reverse the decline in rural development funding by emphasising demand-driven projects across a far broader spectrum than before. Besides farming, it aims to improve healthcare and education, give a stronger voice to the rural poor, build roads and promote non-food enterprises and micro-finance. The strategy’s chief driver is Kevin Cleaver, Ph.D., a U.S. economist, who became Director for Agriculture and Rural Development in March, 2002. He oversees 300 professional staff and a total portfolio of outstanding loans and credits of about $15 billion to rural development and agriculture throughout the developing world. Mr. Cleaver spoke with Timothy Nater about the changes needed in donor and partner-country behaviour.
Our first objective is to reverse the decline in assistance
Nater: For you, what are the main trends in agriculture and rural development?
Cleaver: In the industrialised countries, there’s a dramatic change going on in the supply chain. Agricultural production is being increasingly dictated by what the consumers want in terms of quality, safety and high production standards. With that, you see the supermarkets, food processors, importers and exporters going back directly to the farms for contract-farming deals. This means an industrialisation of farming, the growth of larger and larger properties, even in emerging economies, like Brazil. Along with this, innovation is continuing apace. The Green Revolution is not over — in fact, it’s accelerating, with the biggest push coming out of the USA, Canada, Europe and Japan. With biotech, we’re just seeing the tip of the iceberg, greater production per hectare, qualitative change and new products.
On the consumer front, I detect increasing reluctance among taxpayers to go on paying for large subsidies for their farmers. Last year, $90 billion in subsidies went to US farmers alone. My prediction is that, in the near future, we’ll see an end to heavy subsidization, and that agriculture will compete more and more on the basis of productivity, efficiency, technology and the ability to please the consumer, and less on the extent of government largesse.
Of course, these trends are least visible in poor countries. Small farmers there are being left behind by the supply-chain developments and the technology revolution.
So, what can we do for small farmers in poor countries?
We’ve been presiding over a decline in foreign assistance to agriculture and rural development. From a high of $3.5 billion in 1995, World Bank lending in this sector had fallen to $800 million by 2002. Looking at other donors, we in the World Bank discovered that they, too, had reduced assistance to agriculture and rural development. So our first objective is to reverse the decline in assistance, simply out of recognition that most of the world’s poor live in rural areas and are directly or indirectly dependent on agriculture.
“One reason for the decline in assistance was that many of the projects for agriculture and rural development were unsuccessful… Our own operations evaluation department were saying that only 60% of our projects were any good.”
We also decided we had to improve the quality of what we were doing. One reason for the decline in assistance was that many of the projects for agriculture and rural development were unsuccessful. The sector that I’m director of in the World Bank had become the poster-child for poor-quality projects. We also saw that other donors who also published self-evaluations had the same sort of failure rate. The rational consequence for donor agencies was to ask themselves, “Why should we send good money after bad?”. Their answer was to redirect aid elsewhere, and simply get out of the rural development business.
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