Translating Policies into Results for Agribusiness
This post was excerpted from Fintrac’s Food Analytics Briefing Series. Full paper available here.
Given the sensitive and highly political nature of the agricultural sector, government policies often create barriers to the growth of agribusinesses, which can weaken a country’s enabling environment. For instance, government control of the Ethiopian fertilizer market has resulted in farmers getting the wrong fertilizer at the wrong time, while ineffective trade procedures in Nepal mean that it takes more time to clear a seed shipment than it takes to grow the seed.  Without inclusive and informed policy development, the agricultural sector cannot operate at full potential.
Policy reform is a continuous system of change, with an ultimate goal of putting in place the structures and processes within countries that ensure a participatory, sustainable and evidence-based approach to reform. This can be achieved through high-quality, proven methodologies and a bottom-up participatory approach to reform. This post describes the five-step model of policy reform and serves as a roadmap to build legal, regulatory and institutional capacity for strengthening enabling environments.
1. Utilizing cross-country metrics to establish benchmarks for reform
The policy reform model starts with cross-country benchmarking to evaluate performance within and across countries over time. Providing clear and concise metrics on legal, regulatory and institutional performance can catalyze policy change by empowering the private sector and other stakeholders with an evidence base for reform, increase the urgency for change within governments and channel competition between countries to improve their performance in policy reform. 
To establish benchmarks for reform, two tools have been designed and tested by Fintrac for USAID. The first tool is the USAID Agribusiness Regulations and Institutions (AGRI) Index,  offering digestible metrics on the ease of doing business in the agricultural sector. The second tool is the Institutional Architecture for Food Security Policy Reform Diagnostic, which provides a framework for mapping the institutional landscape, analyzing systemic constraints and highlighting areas to improve institutional capacity and performance.
2. Undertaking deep dive analysis to identify reform priorities
Effective policy change depends on a credible analytical understanding of existing constraints and challenges. Once countries have identified priorities, the next step in the reform model involves a deep-dive constraint analysis and identification of actionable recommendations for change. The trademark of this approach is the application of consistent and structured analysis that builds on past experiences from multiple country contexts to understand the feasibility of interventions, time and resources needed, specific action steps and the impact of the reform for key development goals.
Agribusiness Commercial Legal and Institutional Reform (AgCLIR): The AgCLIR methodology was designed to examine what laws are in place in the agricultural sector, who is responsible for implementing them and what other organizations support such implementation, as well as to understand the cultural and social dynamics that may prevent these actors from fulfilling their duties. It provides an in-depth analysis of the key constraints to profitably starting and running an agribusiness and actions that can be implemented to remove these constraints.
3. Building systems for inclusive, evidence-based policy development
The third stage in the model centers on policy formulation and development. Evidence-based analysis alone is not sufficient to ensure strong policy development. There must also be the capability within line ministries to understand and utilize this evidence, as well as systems in place to include all key stakeholders in the process. As such, particular attention needs to be focused on the structures and processes that underpin policy development.
Support for policy analysis units: Within ministries of agriculture, the policy analysis unit has a vital yet often understated role in the policy development process for the agricultural sector. Their responsibilities include gathering available information, conducting analysis, coordinating with development partners, providing technical assistance and managing the consultation process with stakeholders. Yet these units generally lack the staffing and resources to carry out their duties. These policy analysis units require capacity building for their staff and technical support to bridge remaining gaps. This approach ensures policy development remains locally driven, thus ensuring buy-in from governments and other stakeholders.
Empowering private sector and civil society: Government policy should exist to serve its stakeholders, from individual farmers to large agribusinesses. Both private sector and civil society often face constraints that limit their ability to engage in constructive policy dialogue. A central feature of this approach needs to be leadership training, which aims to mobilize senior managers to better understand the policy development process and how best to organize for policy advocacy.
4. Strengthening institutional capacity for implementation
To varying degrees, a lack of capacity for policy implementation is an issue in every Feed the Future country. The technical departments within ministries of agriculture are the lead implementers of agriculture policy, yet these departments commonly suffer from insufficient staff numbers, low staff retention, inadequate training and a lack of resources. Simple interventions in effective project management and budgetary planning can substantially boost the implementation capacity of technical departments.
Identifying and supporting agents of change: Institutional support should be targeted at agents of change — key individuals within both the public and the private sector who are well-positioned and motivated to positively impact institutional reform. USAID field projects provide direct education support, training and skills development to these agents of change.
5. Using monitoring and evaluation (M&E) to ensure sustained change
M&E can provide unique and vital information about the performance of government policies and projects. It can help government identify what works, what doesn’t work and why. This feedback is critical to the success of a policy reform effort by ensuring effective oversight and management of implementation, results-based budgeting, and transparency and accountability. Common constraints include poor availability of data, limited data collection at district levels and no ability to track financial expenditures.
While many donor-funded projects incorporate M&E metrics to measure concrete activities, measuring policy reform efforts is much more difficult. Policy reform often involves multiple implementers, stakeholders and sectors, making attribution a major challenge. It is difficult and costly to isolate specific interventions within a policy reform process and measure their impact on national-level reforms.
While there is no singular approach or model for governmental M&E systems, the World Bank has identified three common features for success across countries: M&E systems require full government buy-in; must be led by a powerful central ministry; and must be closely tied to budgetary planning.  Utilizing these characteristics, a number of countries have excelled in putting M&E systems in place. With these systems in place, successful M&E feeds into step one of the model, thereby creating a positive, reinforcing cycle.
A one-size-fits-all-solution to policy reform does not exist. Development partner interventions must be focused on providing long-term sustainability even after the end of a project. The first three steps in the change model are about ensuring informed and inclusive policy development, ultimately strengthening the existing enabling environment. Step four is where the longer term, harder work of organizational change happens. Step five then uses M&E to create a reinforcing cycle for reform. The goal is to move from a static or reactive organization to a dynamic organization that can learn, retain knowledge and ultimately create a sustainable reform cycle.
 USAID, 2015, Agribusiness Regulations and Institutions (AGRI) Index, Final Report.
 USAID, 2015, Agribusiness Regulations and Institutions (AGRI) Index, Final Report.
 Inspired by the World Bank’s global Doing Business report.
 World Bank, 2007, How to Build M&E Systems to Support Better Government, Independent Evaluation Group.