Can USAID Forward support sustainable supply chains?

To help farmers in the developing world feed their communities, local initiatives are needed that can survive without subsidies. That includes the establishment of farmer-led seedling nurseries. Photo by: Fintrac

One of the best ways to sustainably increase incomes and quality of life for the world’s most vulnerable populations is to integrate smallholders into synergistic agricultural value chains. And we know that a combination of good practices, basic technologies, inputs, infrastructure and credit can make that happen.

However, sustainability within the USAID Forward reform initiative launched four years ago has been largely defined and tracked by the ability of civil society organizations and other local nongovernmental organizations to receive large amounts of direct USAID funding, and there are numerous projects being implemented with a focus on readying them for that purpose. In terms of health, education and other public good services, this probably makes sense. But agriculture is a more complicated business.

Certainly, community-based organizations and other NGOs can be important players in this sector, and providing the best of them with manageable funding increments to provide technical, analytical, certification and advocacy services is very useful. But to achieve lasting food security, productive enterprises such as farmer groups, seed and input suppliers, processors and marketing agents must be strengthened. Yet providing them with cash can be distortive and counterproductive to sustainable economic growth.

Importantly, this is not a disingenuous argument to roll back the U.S. Agency for International Development’s local funding goals — rather, it is a recommendation that USAID Forward resources be used to build capacity through more diverse local partners in different ways than direct operational funding. If USAID Forward more consistently integrated an “incentivize not subsidize” approach into its programming, it would be far more likely to spur private investment and local ownership than is currently the case, and it would be far more compatible with the market systems philosophy that permeates other USAID and international donor efforts.

It would be ideal, for example, if local engineering firms could compete for USAID dollars to improve feeder roads, refurbish irrigation canals and design the port handling facilities so desperately needed by the private sector; and if local accounting and consulting firms were trained to monitor this type of construction progress against budget expenditures, recommending adjustments in case of completion delays or quality issues.

USAID is already achieving solid impact in several Feed the Future focus countries by providing credit guarantees through commercial banks and by providing “pull” financing for local technologies like soil testing and drip irrigation. What if USAID Forward did more of this and supported additional research and development through local universities and research institutes in seeds, pests, diseases or fortified food products? How about directly jumpstarting farmers, farmer groups and other local entrepreneurs to establish tractor leasing companies and seedling nurseries?

These are precisely the types of local initiatives that can survive without subsidies because they don’t rely on the provision of huge grants and contracts to select institutions and organizations, which can both overwhelm recipients and create unsustainable donor dependency.

USAID Forward is being used in some instances to improve and outfit local NGOs for extension service provision, which is a smart investment — though again, the ability of grant recipients in these cases to manage USAID funds is receiving the majority of emphasis when in reality, it is only one part of a successful equation. The other critical piece is the technical competency and performance of these organizations in delivering quality extension, which can only be meaningfully and objectively evaluated against direct increases in client farmer productivity, sales and income — metrics unfortunately missing within the USAID Forward context.

Rethinking the trajectory of USAID Forward in agriculture might have been considered too provocative a concept a while back, but this is no longer the case as officials at USAID’s Washington headquarters and individual country missions grapple with resource rationalization and optimization, and development practitioners realize it is here to stay.

USAID Forward principles remain consistent with U.S. President John F. Kennedy’s vision in 1961, when USAID was created as “aid to end aid” by “helping people to help themselves.” Our challenge now is to make sure that institutional capacity isn’t confused with agricultural sustainability, and that donor funding doesn’t eclipse commercial viability.

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Feeding Development is an online conversation hosted by Devex in partnership with ACDI/VOCA, Chemonics, Fintrac, GAIN, Nestlé and Tetra Tech to reimagine solutions for a food-secure future from seed and soil to a healthy meal.

The views in this opinion piece do not necessarily reflect Devex's editorial views.

About the author

  • Claire Starkey

    Claire has been collaborating on agricultural initiatives with local and international partners to improve food security for farmers and farm families in developing countries for three decades. A creative strategist, she provides leadership to Fintrac's organizational development, advises staff and clients on best practices to achieve sustainable impact, and advocates for increasing women's participation in the agribusiness sector worldwide.