German Institute for Development Evaluation

Cooperation with the private sector in agriculture

Since the mid-1990s, the private sector has become increasingly important as an active partner for development cooperation (DC), both in Germany and internationally. In this context, the private sector is involved both in financing as well as in designing and implementing DC measures. DC and the private sector cooperate through various programmes (e.g. develoPPP) and measures (e.g. Business Support Services by the DEG) and as part of bilateral projects (integrated development partnerships).

In the agricultural sector too, cooperation with the private sector is playing an increasingly important role, for example in providing extension services or financing, in knowledge and technology transfer and in setting up reliable business partnerships. The idea is that the goals of the private sector and DC should complement each other. While the private sector aims to secure a supply of raw materials (e.g. through contract farming) and/or consolidate or expand its markets, DC strives to promote the economy in rural areas, enhance production and productivity in agriculture and create additional jobs outside the agricultural sector, thus supporting structural changes in rural areas with a view to meeting environmental and social objectives.

Critics of this involvement by private enterprises to promote agricultural development are concerned that the interests of the private sector may overshadow development goals such as poverty reduction and food security and that the poorer population groups in particular may not be reached. They are also worried that these partnerships may neglect compliance with human rights standards and principles.

Despite the ever increasing importance of cooperation with the private sector, particularly in the field of agriculture, there has been no systematic analysis of the relevant strategies and support programmes and the underlying results logic in German DC to date. The extent to which the different forms of cooperation are geared towards helping to achieve development goals has not been systematically addressed either. Moreover, against the backdrop of criticism of the approach, an analysis is required to establish which measures are integrated into the programmes to take account of human rights standards and principles and of environmental and social standards. This analysis will also need to examine the extent to which monitoring mechanisms are established to ensure compliance with these standards and principles and are used by the German Federal Ministry for Economic Cooperation and Development (BMZ) and the implementing organisations.

Objectives of the evaluation and methods

By putting the portfolio of cooperation with the private sector in agriculture on a systematic footing and examining the extent to which the instrument is geared towards achieving development goals, the evaluation supports BMZ and the implementing organisations (GIZ, DEG, sequa) in harnessing cooperation with companies more effectively as a DC instrument.

The evaluation identifies the different interests of the various actors (BMZ and implementing organisations, private sector, civil society organisations). In doing so, an analysis of the private sector's point of view in particular as to how much their activities in developing countries benefit from cooperation with DC will also help BMZ and the implementing organisations to design cooperation in a more targeted way.

By examining compliance with and monitoring of human rights aspects and of environmental and social standards in cooperation with the private sector in agriculture, the evaluation helps record the current status and identify any potential for improvement.

To reconstruct and examine the plausibility of the results logic of cooperation with the private sector, the evaluation primarily analyses documents from BMZ and the implementing organisations, focusing on strategic documents on cooperation with the private sector, on the relevant sectors (agriculture, rural development, food security, private sector development) and on the cross-cutting issues of human rights/environmental and social standards and gender equality. In addition, documents are analysed from programmes in which cooperation with the private sector in agriculture is being implemented.

Qualitative interviews with representatives of BMZ, implementing organisations, the private sector, civil society and academia are another key element of the evaluation.

As at: November 2018