Sector-wide Evaluation: ADB’s Support for the Agriculture, Natural Resources, and Rural Development Sector
The Asia and the Pacific region is transitioning from largely agrarian and rural economies to increasingly nonagricultural and urban economies, and from subsistence to commercial agriculture. However, because Asia is home to most of the world’s hungry and most of the poor still live in rural areas and are engaged with agriculture and related activities for their livelihoods, agriculture and rural development remains a cornerstone as countries make this transition.
Moreover, the recognition of pressing challenges related to urbanization and changing food demands, environmental degradation, and climate change impacts on water resources have increased the prominence of the sector. This creates both challenges and enormous opportunities for continued support of Asian Development Bank (ADB) for agriculture, natural resources and rural development. Although ADB began moving away from the sector, culminating in Strategy 2020 downgrading it to a noncore sector, it has re-engaged following the 2008 food price crisis. ADB support for the agriculture, natural resources, and rural development sector amounted to $12.2 billion over the evaluation period between 2005 and 2017, and in recent years, its annual support has exceeded $2 billion.
This evaluation, which focused on the ADB defined agriculture, natural resources and rural development sector, is part of a new series of sector-wide evaluations undertaken by the Independent Evaluation Department. The sector is inherently complex, with close interactions and competition for resources with other sectors and the broader political economy. This complexity, coupled with gaps in institutional capacity and resource constraints, poses challenges for implementation and sustainability of investments, most notably in the irrigation subsector.
The evaluation finds that ADB’s overall support for sustainable agriculture and food security has been significant in terms of lending volume, but modest on results. This assessment is based on the weakness of ADB’s strategic guidance, limited development outcomes, and inadequate institutional arrangements for delivery. It is noteworthy that performance has been improving over the evaluation period. Given the availability of financial resources, re-engagement by ADB in the sector, and the improving portfolio performance, ADB has the potential to make a substantial contribution.
This evaluation report is timely as ADB has recently approved its new corporate strategy, Strategy 2030. The strategy identifies seven operational priority areas. The sector can make direct contributions to at least three of these including (i) rural development and food security, (ii) poverty and inequality, and (iii) climate change and environmental sustainability. Furthermore, ADB’s agricultural support will contribute to achieving the Sustainable Development Goals. We trust that the set of recommendations for improved strategic guidance, operational performance and institutional strengthening offered by the evaluation will help ADB deliver a significant contribution to the sector.