Focus on climate change must be at the heart of UK’s aid to agriculture

28 Jun 2023

• Aid watchdog finds many positive examples of UK aid to agriculture through its delivery programmes, research and investments but warns of a lack of coherence in the UK’s approach.
• Nearly two years on from COP26 in Glasgow, it says the UK’s approach to climate change and nature in agriculture must be more ambitious.
• Until recently, British International Investment (BII) had few incentives to address climate change, nutrition or gender in its investments in agriculture.
• Report recognises the importance of agricultural research, but finds that the research funded by BEIS often lacked relevance to development.
• Reviewers say budget cuts have undermined UK’s international influence on agriculture.

The UK must ensure an integral focus on tackling climate change when providing aid to agriculture in developing countries, a new report from the aid watchdog finds today (Wednesday 28 June).

The Independent Commission for Aid Impact (ICAI) notes that while UK aid to agriculture has been mainly relevant – with many examples of effective interventions – budget reductions have reduced effectiveness and further reduced coherence, putting the UK’s international standing at risk.

During its presidency of COP26 in 2021, the UK led a call for action to transform global food and agriculture systems. It urged a focus on sustainable agriculture that would provide nutritious, affordable food for all while restoring ecosystems, building resilience and reducing emissions.

This reflected a growing awareness that progress towards the Sustainable Development Goal of Zero Hunger is faltering, that climate change is accelerating and that the two are inextricably linked.

ICAI Chief Commissioner Dr Tamsyn Barton, who led the review, said:

“Developing countries are on the front line of the climate crisis so it’s vital that our aid programmes acknowledge this. Support for agriculture can empower local communities, generate wealth locally, improve global food security and ensure that people are getting the nutrition they need.

“While our review found many examples of good practice, there is more to be done to improve coherence of the overall aid package and ensure climate change and nature are at the heart of the UK’s support to the agriculture sector.”

ICAI’s review, which draws on case studies from Malawi, Nigeria and Rwanda, notes that the UK spent an estimated £2.6 billion in bilateral aid to agriculture between 2016 and 2021. This included direct development interventions, agricultural research programmes and investments in agricultural businesses.

The agriculture sector is highly vulnerable to climate change and is estimated to be the third-largest source of climate emissions in the global economy. It was therefore surprising that few agriculture programmes in the early phase of the review period contained interventions directly addressing climate change, the reviewers said. However, this improved over time.

The report looks at aid spending from several government departments, including the Foreign Commonwealth and Development Office (FCDO) and its predecessors (FCO and DFID), the former Department for Business, Energy and Industrial Strategy (BEIS), as well as the UK’s development finance institution, British International Investment (BII).

It finds that FCDO’s spending on delivery programmes fell from £260 million in 2019 to £53 million in 2021, while FCDO and BEIS spending on research fell from £147 million to £85 million over the same period. However, BII’s average annual investments in agriculture increased between 2016 and 2021.

FCDO delivery programmes focusing on engaging small farmers in commercial agriculture were found to be highly relevant to poverty reduction. Between 2016 and 2021, the number of programmes including climate objectives and drawing on International Climate Finance (ICF) increased significantly, although in a few cases the incorporation of climate objectives into ongoing programmes was somewhat superficial.

Investing in the growth of larger agribusiness narrowed BII’s opportunities for direct poverty reduction other than through job creation. Until recently BII had few incentives to address priorities such as nutrition, gender or climate in its investment decisions.

The UK’s increased focus on commercial agriculture meant that few of the programmes and investments ICAI saw would benefit the nutrition of poor food consumers, because there were limited opportunities in Africa for making a profit by producing cheap, nutritious food.

The report notes that prioritising the interests of UK universities rather than those of developing countries compromised the developmental relevance of BEIS-funded agricultural research. FCDO-funded research, however, was found to be highly relevant and was delivered by organisations specialised in research for development impact.

ICAI’s report also found that the UK’s international influence and the agriculture portfolio’s coherence have been undermined by disruptions to staff capacity, from Brexit, the COVID-19 pandemic, the creation of FCDO and reductions in the aid budget.

Reviewers spoke to many officials who recognised the importance of advancing an ambitious agenda around climate-resilient food systems, but said they found little confidence among them that the UK government would currently be able to deliver this.

Awarding a green-amber rating for the UK’s aid to agriculture, ICAI makes the following recommendations:

1. The government should ensure that all agriculture programmes and investments have an integral focus on climate change and nature.
2. All commercial agriculture programmes and investments should be monitored for nutritional outcomes.
3. The government should act to secure the UK’s influence and thought leadership on agriculture.
4. FCDO, BII and AgDevCo should look for operational synergies and complementarities between programmes and investments to maximise effectiveness, building on their comparative advantages.
5. The Department for Science, Innovation and Technology and UKRI should integrate learning about development effectiveness, including from previous ICAI reviews, into future ODA-funded agricultural research.

The government will respond to ICAI’s review in due course.