New and expanding agricultural indices, such as the Enabling the Business of Agriculture index developed by the World Bank, can help identify where agricultural markets are inefficient and where policy changes could lower the burden on businesses while maintaining important standards.
They are promising new tools not only for governments, but also for investors evaluating where to expand agribusiness. Donors can leverage these indices to prioritize their funding, to inform program development, and to evaluate program results.
Whether large or small, agribusinesses only grow if they make profits and attract capital investments. Farmers are more empowered to invest in their own productivity if their governments are making sound investments in the operating environment.
Conversely, government policies and bureaucracy can raise transaction costs and suppress income growth if unnecessarily burdensome. Sometimes the highest price is paid in the form of economic activity not taking place due to inefficient regulation.
By tracking performance over time, the use of indices can spur healthy policy competition, promote transparency, and undergird smart policy choices by engaging the private sector and bolstering leadership commitments to strategies that require longer than the political calendar to bear fruit.
Though these new agricultural indices have inherent limitations, what gets measured tends to get done. The data they produce should help provide the impetus for right-sizing regulation to promote the business of agriculture.
Read the full report by Andrea Durkin published by the Food Security Project of the Center for Strategic and International Studies (CSIS).