Canada Funds Key Ag Issues

The Canadian government has announced a program to direct $40 million of its programming budget for foreign assistance to key agricultural issues like grain storage, livestock vaccines, and fertilizer innovation. Interestingly the plan is to work with the private sector to leverage the relatively modest sum into greater funding.

Canadian support in the amount of $40 million over five years for AgResults – an innovative Canada-led initiative aims to improve food security in developing countries in close cooperation with the private sector. The announcement was made at the G-20 Summit in Los Cabos, Mexico, as part of a broader donor commitment of up to US$100 million in support of this initiative.

The governments of Australia, Canada, Italy, the United Kingdom, the United States, as well as the Bill & Melinda Gates Foundation, are supporting this effort.

AgResults involves donors allocating relatively small amounts of public sector money to leverage private sector research and development on food security challenges that would otherwise go unaddressed due to market uncertainties. Public funds are only paid out to partners that demonstrate measurable results in targeted areas such as improving harvest management and nutritional fortification of staple foods.

Commonly known as an advanced market commitment, this type of approach emphasizes accountability and innovation.

In the coming years, the initiative will launch a series of pilot projects that address some of the biggest problems in global food security and agricultural development. The AgResults’ portfolio of pilot projects will represent a diverse mix of agriculture and food security issues, testing different types of pay-on-results approaches in different regions around the world. The initial set, expected to start later this year, will focus on maize production in Sub-Saharan Africa, including:

• Incentivizing the adoption of on-farm storage technology for smallholder farmers;
• Encouraging innovative distribution of a breakthrough technology to reduce aflatoxin contamination; and
• Building a market for new vitamin A-enhanced varieties of maize.

Additional projects will be explored in the coming years, including livestock vaccines and fertilizer innovation, as well as new ideas related to increasing crop yields, decreasing post-harvest losses, increasing livestock productivity and improving nutrition.

The model has already shown success in pulling private sector knowledge and resources towards the development of an affordable vaccine against pneumococcal disease – a disease that kills millions of children each year in developing countries. With the first vaccines delivered in late 2010, this initiative is expected to save an estimated 7 million lives by 2030. Canada made a significant contribution of $200 million in Budget 2007 to this initiative.

AgResults builds on Canada’s leadership in financing innovative development initiatives internationally. Canada has previously supported the Small and Medium-Sized Enterprise Finance Challenge, launched at the Toronto G-20 Summit in June 2010, and the private sector component of the Global Agriculture and Food Security Program, launched in April 2010. Canada, with other G-20 Leaders, committed to exploring the potential of innovative initiatives at the Toronto G-20 Summit, and is pleased to be following through on this commitment.

Canada’s contribution of $40 million for AgResults is being provided through existing Government of Canada resources for international assistance. Funds from donor countries will be managed by the World Bank.