December 3, 2018
By Tristan Armstrong
By 2050, the world’s population will grow by 2 billion people. At the same time, world hunger is on the rise: Over 820 million people are undernourished, a number that is only expected to grow as climate change, land degradation, urbanisation and conflict threaten world food systems. Only systematic, coordinated, and persistent efforts will enable the global development community to overcome such challenges.
Australia has long advocated for the use of strategic investments in food and agricultural systems to meet growing global demand. As part of this effort, in 2011, Australia joined other G20 Development Working Group colleagues to establish AgResults. The initiative is one of the most significant outcomes of the G20 Development Working Group and is now successfully tackling development challenges in some of the world’s poorest nations — contributing directly to seven of the UN Sustainable Development Goals.
AgResults has officially been working for over five years, and I have had the privilege of chairing the initiative since 2015. AgResults uses a novel approach to incentivize the adoption and scale-up of high-impact agricultural innovations, specifically among smallholder farmers who often bear the brunt of food insecurity. What’s so different about this approach? The way in which we engage the private sector.
AgResults motivates businesses to invest in target markets and achieve development outcomes that can strengthen food security, increase smallholder incomes, and even improve human and animal health. Each “Pay for Results Project” under AgResults has pre-defined objectives aimed at overcoming obstacles impeding the development of sustainable commercial markets. If private sector players achieve these results while adhering to certain parameters, then they are awarded a monetary prize.
The initiative is testing the effectiveness and efficiency of pull financing to promote the adoption of such agricultural technologies. This experimentation is also evident in our approach to project designs, each of which undergoes rigorous analysis and field validation to ensure that prize incentives are ‘right- sized’ to motivate private sector innovation, investment, and action to deliver measurable development benefits — all without distorting the market. An independent external evaluator provides yet another lens through which to gauge the effectiveness of the prize and measure impacts.
AgResults offers a range of advantages over traditional grant funding approaches: Pull financing allows donors to engage multiple innovators simultaneously whilst only paying on achievement of desired results. At the same time, the approach avoids crowding out the private sector by directly engaging with it. Perhaps most importantly, the initiative’s prize structure allows us to test out different ways to incentivize the private sector before significant donor funds are spent. To me, this is the most innovative and exciting dimension of the work, providing valuable lessons on the broader potential for catalyzing large-scale private-sector driven development impacts.
From encouraging the application of Aflasafe to reduce Aflatoxin in maize in Nigeria to testing technology packages that cut greenhouse gas emissions from rice farming in Vietnam to pushing for a stronger Brucellosis vaccine, AgResults’ portfolio ranges from adoption of existing technologies to cutting-edge research and development. And, five years along, the results are coming in: In Kenya, over 1.2 million hermetic storage devices have been sold to smallholders, enabling them for the first time to protect and store their harvested grain, improving farm incomes and food household food security. By the time the Nigeria Challenge Project wraps up in 2019, it is projected that more than 210,000 MT of aflatoxin reduced maize will be aggregated, safeguarding humans and livestock from the dangers of aflatoxin whilst enabling farmers to access higher value markets.
With five years of experience, it’s now time for the donors behind AgResults to do more. We must share the AgResults story with development practitioners and highlight the potential for pull financing to engage the private sector efficiently to deliver development impacts at scale. Now is the time to mainstream AgResults’ approach and extend its geographic reach to encompass Southeast Asia and the Pacific, a region severely underserved by the private and public sectors and facing major structural challenges. I’ve had the privilege of chairing the AgResults initiative for the last three years, and as I pass the baton to Aviva Kutnick, my colleague at USAID, I am proud of what we have accomplished so far and excited to see what the next five years will bring.
Tristan Armstrong is part of the Agriculture and Food Branch of the Australian Department of Foreign Affairs and Trade, and serves on AgResults' Steering Committee. Mr. Armstrong was the Steering Committee Chair from 2015 to 2018.