In developing countries, agriculture accounts for a sizable portion of the labor force and is crucial to rural resilience, growth and food security. International trading in agricultural commodities is a significant source of income for many developing nations.
But besides the fact that in poor countries there needs to be a significant increase in productivity in agriculture, there is a need to shift to more sustainable methods, making adjustments for climate change.
However, there are two sides to the coin. On the one hand, agriculture leads to a significant volume of greenhouse gasses being emitted into the atmosphere (almost 17% of global GHG emissions) which contributes to the destruction of natural habitats as well as using a huge amount of water which means that minimizing its impact on the environment would necessitate significant financial investment.
The other side of the coin is that extreme weather patterns and climate change have a significant impact on agriculture and solving this issue comes at a significant cost. Thus, flows such as official development assistance (ODA) are important sources of funding for agricultural development in many low- and middle-income countries (LMICs).
ODA for agricultural adaptation
Climate change is already having a serious impact on the agricultural industry, namely in LMICs. Most of these countries do not possess the necessary resources and skills to handle the effects of climate change (droughts, storms, heat waves, etc.). Thus, the food security of their communities and their livelihoods are put at risk which leads to migration and other social processes with a negative impact.
In such difficult times, farmers are looking for ways to increase domestic production more sustainably.
With this in mind, ODA for agricultural adaptation is crucial to assist LMICs, helping them improve the management of the risks associated with climate change.
According to Donor Tracker, a SEEK Development’s website that assists in the advancement of international development by giving the advocacy community quick access to extensive quantitative information and qualitative strategic insights, ODA for agri-sectors is on the rise:
- In 2020, ODA for agricultural adaptation reached US$5.3 billion
- ODA for agricultural adaptation registered a 30% increase in the period between 2018 and 2020, yet it remains below the levels in 2017
- The list of the largest donors is topped by France, Germany, and the EU
- In 2020, Myanmar was the country that benefited from the most agricultural adaptation ODA, while the largest growth among the major beneficiaries was registered by Nigeria in Africa
- The subsector with the most donor funding was agricultural development.
In 2020, donors prioritized agricultural development, allocating 38% of their funds to projects with climate change adaptation as the primary goal.
The graph below illustrates the figures relating to bilateral ODA to agricultural adaptation by sub-sector in 2020.
Fig.1. Bilateral ODA to agricultural adaptation by sub-sector in 2020
Source: Donor Tracker
The public sector is where the majority of ODA for agricultural adaptation was routed. The graph below illustrates the bilateral ODA by funding channel between 2011 and 2020
Fig.2. Bilateral ODA by funding channel in the period between 2011 and 2020
DAC donors*, percentage of total agricultural adaptation ODA
Source: Donor Tracker
In 2020, the least developed nations and those from sub-Saharan Africa topped the list of beneficiaries of ODA for agricultural adaptation.
The graph below shows 2020 bilateral ODA to agricultural adaptation by beneficiary income group and region (US$ millions).
Source: Donor Tracker
Top 15 DAC donors of ODA for agricultural adaptation
France topped the list of the major Development Assistance Committee donors in 2020, with an emphasis on climate change adaptation of US$1.1 billion. It was followed by Germany and the EU institutions, with a little over US$1 billion each.
Source: Donor Tracker
Top 15 bilateral DAC donor beneficiaries of ODA to agricultural adaptation in 2020
Myanmar, Nigeria and Cambodia were the top beneficiaries of funding for agricultural adaptation. Of the top 15 bilateral ODA recipients, nine countries are in Africa and the Middle East, five are in Asia, and one is in Europe.
Source: Donor Tracker
Final word
The global agricultural sector is dealing with a growing number of environmental issues, such as shifting climate patterns, water scarcity, workforce shortage, and an increase in the frequency of natural calamities. All of these pose serious risks to food security around the globe, along with rising food demand brought about by the population increase and shifting consumption patterns.
The war in Ukraine, a major exporter of wheat, sunflower oil, and other food products, delivered yet another blow to the world food supply. These parallel crises highlight the significance of investing in agriculture and food security, both of which can benefit from ODA.
