In much of the developing world, entrenched market failures stifle agricultural productivity, leading to food insecurity and undernourishment for hundreds of millions of people. As populations continue to grow, we must address these challenges by encouraging public and private actors to transform markets and improve the livelihoods of farmers and other vulnerable populations.
Private sector agricultural research in developing countries accounts for only two percent of global spending on agricultural research and development. Publicly funded research and extension services cannot meet this gap in investment, and as a result, market failures often remain unsolved. However, there is an emerging consensus in favor of testing Pay-for-Results incentive approaches that use public financing to drive agricultural innovation and build inclusive markets for agricultural goods and services that benefit smallholder farmers.
At the June 2010 G20 meeting, G20 leaders submitted the Toronto Summit Declaration, which called for the development of "innovative, results-based mechanisms […] to harness the creativity and resources of the private sector in achieving breakthrough innovations in food security and agriculture development in poor countries." Later that year at the Seoul Development Consensus for Shared Growth, G20 leaders requested that international organizations "examine and recommend potential innovative results-based mechanisms […] for enhanced agricultural productivity."
The concept of “pull mechanisms” for agriculture received its first explicit reference in the November 2011 Report of the G20 Development Working Group when G20 representatives stated that "to encourage public and private sector investment in agricultural research in developing countries, we support the implementation of the ‘Agriculture Pull Mechanisms’ initiative, and welcome projects that embrace an innovative, results-based approach." In Innovation with Impact, a report commissioned by the G20, Bill Gates stated, “I believe this concept of pull mechanisms has real promise in the agricultural sector.”
In response to these calls, a group of countries including Australia, Canada, the United Kingdom, and the United States, in partnership with the Bill and Melinda Gates Foundation, created AgResults, a multilateral initiative incentivizing and rewarding high-impact agricultural innovations.
Two years later, at the G20 Summit in Los Cabos Mexico, the governments of Australia, Canada, the United Kingdom, and the United States, in partnership with the Bill & Melinda Gates Foundation pledged $118 million to establish AgResults through a Financial Intermediary Fund operated by the World Bank. In 2016, the Department of the Foreign Affairs and Trade (DFAT) in Australia, pledged an additional US $4 million, making the total AgResults Fund $122 million. Further funding by the Gates Foundation has increased that total to $145 million.
AgResults is overseen by a Steering Committee comprising representatives from each donor agency and the financial trustee. The Steering Committee is responsible for strategic oversight of the initiative, including making management decisions, approving design stages for each new project, and the monitoring of projects and the initiative as a whole. The Steering Committee includes representatives from:
Funds from donor countries are managed by the World Bank in its role as Trustee of the initiative.
A dedicated Secretariat supports project implementation, oversight and monitoring, project sourcing, peer review of new concepts, and outreach and communications.
A competitively selected Project Manager oversees each Challenge Project, working alongside competing private sector (and in a few cases NGO) organizations, and Verifiers. In some cases, additional technical support is required. The External Evaluator is responsible for measuring AgResults' impacts and comparing them to traditional “push mechanisms” or grant-based development approaches.
The AgResults structure is below:
The AgResults Steering Committee comprises representatives from our five donor countries and the World Bank Group, who acts as the trustee. The Steering Committee is a collaborative body that works together to decide the direction and priorities of AgResults.
AUSTRALIAN GOVERNMENT DEPARTMENT OF FOREIGN AFFAIRS AND TRADE (DFAT)
The World Bank Group acts as AgResults' Trustee and provides financial intermediary services that include, but are not limited to, receiving funds, holding funds, investing funds, and transferring them to recipients or other agencies for implementation as directed by the Secretariat on behalf of the Steering Committee. In addition to these basic financial management services, the World Bank provides additional financial analysis and financial guidance to the Steering Committee as requested, and is actively engaged in Steering Committee meetings as appropriate. The World Bank was also involved in the design and exploration of AgResults as an innovative finance initiative since its inception in 2010. The early involvement of the World Bank in this capacity reflects its comparative advantage in successfully bringing a number of innovative financial structures to the development community.
