USAID’S Legacy in Agricultural Development: 50 Years of Progress

Over its first half century, USAID has been at the forefront of agricultural development, the starting point of the process of economic transformation and growth. Recounting USAID's legacy in this area is an effort to review, document and preserve USAID's achievements in agricultural development; highlight best practices and challenges; and share lessons learned with USAID and its partners.

Agriculture was the key to this endeavor, with USAID pushing the frontiers of innovation to develop and advance best practices in agriculture and rural development. After helping champion the Green Revolution that more than doubled staple crop yields, USAID continued at the forefront of advances in agriculture, harnessing new technologies and strategies to boost productivity and better the lives of rural people, transform government’s role, and partner with the private sector to magnify impact. USAID has been—and remains—a frontrunner in agricultural development since its founding in 1961. USAID’s Legacy in Agricultural Development takes stock of USAID’s achievements, highlights best practices, and shares lessons learned to accelerate progress in nine key areas.


Reforming a country’s land tenure and property rights systems produces enormous benefits for agriculture. Working with local systems, USAID’s efforts to demarcate land holdings, reform land registries, and define property rights have helped transform agriculture around the world by prompting more efficient resource use. Secure land tenure and property rights motivate farm households to invest in productivity-increasing technologies and physical upgrades to capture the full returns and use land rights as collateral for loan finance, driving economic growth. Land rights also strengthen incentives for better natural resource management, such as conserving soil moisture, terracing slopes, and planting ground cover. USAID support for indigenous groups at a disadvantage in formal legal settings has increased land tenure security within informal or customary settings, increasing local incentives for safeguarding resources. The Agency’s conflict-mitigation techniques have expanded natural resource rights and access, protecting biodiversity in the process.


From the outset, USAID recognized that science and technology could catalyze game changing break throughs in agriculture. USAID funding helped scale up the Green Revolution, producing history’s most dramatic increase in food production through the development of high yielding cereal varieties. USAID has partnered with U.S. university scientists and host-country researchers to conduct research to boost crop and animal productivity, regenerate soils, manage pests, enhance nutrition, support science based biotechnology, pioneer remote-sensing applications, and understand farming systems. Bringing together international and national agricultural research systems with different capacities and complementary expertise has resulted in fruitful collaboration. In 1971, USAID and other organizations formed the Consultative Group on International Agricultural Research (CGIAR), a partnership of international research centers. Over the years, USAID has provided more than $1.4 billion to fund the CGIAR’s work, estimated to have lifted food production in developing countries by 7 to 8 percent. USAID’s success in transferring the benefits of science and technology demonstrated that agricultural research partnerships generate high returns.


Agriculture is a dynamic sector, requiring education, research, and extension systems that continually adjust to ensure relevance and increase productivity and profitability. USAID has been a major investor in the agricultural institutions of dozens of countries, and trained thousands of graduate-level students in the United States. These local institutions have provided education and training to scientists, extension officers, and farmers. USAID is turning to technology-based learning solutions to keep pace with the educational needs of today’s globalized, knowledge intensive agricultural systems. Expanding information and communication technology is creating new partnerships to improve agricultural institutional capacity. USAID’s Legacy underscores how USAID draws upon an increasingly diverse set of public and private sector partners, opening new possibilities for integrated education and training to help individual and institutional capacities grow.


USAID has been an effective advocate for enabling environments that open markets and promote competition. USAID-funded research and training has helped define the field of agriculture and food-system marketing in developing countries, leading to policy reforms that enable markets to perform better, expand the private sector’s role, and open market opportunities to improve livelihoods. Clearly delineating public and private sector roles improves market performance and enhances efficiency. USAID learned that market-led growth requires a vibrant, competitive private sector, along with a toolkit of approaches and methodologies and the active participation of small farmers and other entrepreneurs. USAID has also promoted the public sector’s role as a market referee to ensure fair and transparent regulations. With USAID’s support, many countries have successfully made the transition from static state-dominated systems to dynamic market-based economies that are responsive to consumer quality standards and enhanced food safety.


The prevailing financial paradigm in the 1960s assumed that the rural poor required subsidized interest rates to stimulate the adoption of new agricultural technologies. In the 1970s USAID concluded that subsidized lending was financially unsustainable and seldom worked as intended. USAID’s work with cooperatives helped advance a new approach to agricultural and rural finance based on competitive interest rates, secure deposits, stable institutions, and lower transaction costs. USAID’s enthusiastic embrace of small-scale lending helped lay the foundation for the modern microfinance system that now reaches more than 150 million people worldwide. More recently, USAID has turned to cell phones and other technologies, demonstrating their role in extending access to finance—savings, loans, and transfers—to dispersed rural populations at lower cost. USAID also piloted ways to defuse financial risk, including Development Credit Authority loan guarantees, weather-indexed insurance, and warehouse receipt systems, to build confidence in financial services and spur rural investment. USAID has learned that a country’s financial institutions and regulatory framework must also be strengthened and streamlined for rural financial markets to work well.


USAID-sponsored research in the 1970s uncovered the presence of a profitable, non-farm rural sector generating labor-intensive employment and making efficient use of scarce capital. Rural enterprises, eager to respond to new incentives, often need help linking to outside markets and value chains to accelerate their growth. Starting in the 1980s, USAID embraced agribusiness and value chain projects that add value to food staples as well as high-value non-traditional crops. Between 1998 and 2010, USAID supported 240 value chain projects, investing over $4.5 billion that produced $14 billion in additional farm income, and more than 1million new jobs. Women have been a significant focus, representing a substantial portion of the 19 million beneficiaries. The late 1990s marked a low point in USAID’s funding for agriculture, and the Agency launched the Global Development Alliance to leverage private matching funds along with new ideas, resources, and technologies to jointly tackle business challenges and development problems. Since 2001, USAID has forged over 1,000 alliances—many in agriculture—with more than 3,000 partners. New ventures, established with USAID seed capital, often attract private sector interest and lead to commercial deals with a lasting impact.


Recognizing that well-functioning economies require stable policies and fair regulations that facilitate competition and growth, USAID has worked with partners to get agricultural policies right. USAID-supported reforms have liberalized grain trading, streamlined business procedures, opened public enterprises to private investment, and made policy-making more transparent and predictable. Beneficial policies require sound research and analysis tailored to the local context; this requires a trained cadre of objective, critically thinking local analysts. USAID provided access to quality higher education to thousands of promising young scientists and analysts, bequeathing a critical mass of trained and experienced professionals in developing countries. The Agency has provided core support to national and international policy research institutions to help study and implement sound policy development. Over the years, USAID found that it needs its own agricultural policy expertise to articulate the impact and incidence of policy alternatives.


An active proponent of the benefits of liberalized trade, USAID has worked to broaden access to trade treaties for emerging economies and sharpen their trade-negotiating skills. USAID’s achievements include helping Central American and Caribbean countries reach trade agreements under the Central American Free Trade Agreement, improving competitiveness, attracting investment, and encouraging trade-led agricultural diversification. USAID achievements in trade facilitation, institutions, and policies have had a significant impact on expanding agricultural trade flows. Promotion of non-traditional agricultural exports, a key USAID strategy, has contributed to diversified livelihoods, increased incomes, and better diets, creating year-round jobs for thousands of underemployed rural people. To cement these gains, USAID has helped improve market information systems, equipping governments to gather, analyze, and act on trade-related data and market opportunities. A critical lesson is that taking full advantage of trade-led opportunities requires strategic decisions as well as sustained investments to increase productivity and reforms to address labor standards, gender equity, environmental impacts, and threats to food safety.


Over the past five decades, USAID has been a leader in integrating environmental considerations into agriculture, developing approaches that other countries, communities, and donors have adopted and modified. Drawing from U.S. experience, USAID has extended the use of drip irrigation, fertilizer micro-dosing, integrated pest management, agroforestry, and sustainable water use planning and management. USAID has also developed a comprehensive approach to incorporating environmental standards and practices into all facets of its work, promoting good agricultural practices, and certifying food commodities as sustainably produced. USAID has shown that leveraging millions of dollars with private investors and donors to develop agricultural subsectors—such as environmentally sound coffee value chains—can achieve sustainable results. Improving natural resource management practices of rural agricultural enterprises, upgrading natural resource extension services, and strengthening the capacity of grass-roots rural organizations are helping countries identify and institutionalize best practices.


USAID has played a major role in translating the breakthroughs of the Green Revolution and other agricultural innovations into better lives and a healthier planet—and new advances are rolling out every day. The Agency’s work has spread the benefits of scientific and technological progress to help millions of people achieve food security and look to a brighter future. USAID has learned that monitoring and evaluation are essential for measuring impact, cataloging knowledge and learning lessons. Continuing activities long enough is also critical to maximizing impact and sustainability. New efforts like the President’s Feed the Future initiative are part of a comprehensive approach that links higher agricultural productivity and incomes with improved health and nutrition, particularly for children and mothers. Recognizing that its resources are finite, USAID is increasingly using partnerships to extend its reach, efficiency, and impact while building durable global alliances to improve lives and meet the challenge of feeding the world’s billions.

Monday, November 4, 2013 - 5:15pm