Investments in agriculture can have broad economic and social impacts. To help developing countries analyze those effects and promote more evidence-based decision-making, IFPRI, the International Fund for Agricultural Development (IFAD) and the IFPRI-led CGIAR Research Program on Policies, Institutions, and Markets (PIM) created the Agricultural Investment Data Analyzer (AIDA) tool.
AIDA is the first online, user-friendly tool that uses an economy-wide model to assess the impact of agricultural investments on economic growth, job creation, and household welfare, and perform complex investment analysis.
IFPRI and IFAD introduced the AIDA tool at a February 24 event during the IFAD INNovation Talks. The virtual launch event highlighted the underlying need for the AIDA tool in developing countries. It is now available in four (in both English and Arabic): Egypt, Tunisia, Jordan, and Yemen.
“I am very excited that we are kicking this [IFAD INNovation Talks] off by a real innovation. An analytical tool developed by IFAD, IFPRI and CGIAR-PIM,” said Meike van Ginneken, Associate Vice-President of IFAD’s Strategy and Knowledge Department. She emphasized the importance of applying innovations at scale to contribute to ending poverty and hunger. “These kinds of analytical tools have the potential in help to achieve the SDGs and provide experts with policy guidelines that can help to design and assess national strategies and projects.”
Adopting data-driven approaches to deliver services can help address persistent poverty in the Middle East and North Africa region, said Dina Saleh, Regional Director of IFAD’s Near East, North Africa, Europe and Central Asia Division. “[This] transform[s] the way projects will serve smallholders, and the AIDA tool really brings us one step closer to this end ... AIDA elaborates data to provide options for policies and investments that can increase livelihoods and resilience in the rural areas,” she said.
World Bank Global Director for Agriculture and Food Martien Van Nieuwkoop noted that tools such as AIDA can lead to better environmental impacts and increased public support for agriculture around the world.
IFPRI Senior Research Fellow James Thurlow demonstrated the AIDA tool, which he said makes it easy to “model without a model.” Government officials, analysts, researchers, and investors design a package of investments and AIDA reports how the choices affect a country’s economy and population. “What makes these decisions so difficult is that they require trade-offs,” Thurlow said.
These trade-offs intensify as the governments’ ambitions exceed their resources. AIDA helps in deciding which trade-offs to take by assessing their combined benefits. AIDA is also useful to donors and other partners in making agricultural investment decisions and strengthening policy dialogues, he said.
Egypt’s Ministry of Agriculture and Land Reclamation used AIDA to update the Sustainable Agricultural Strategy 2030 (SADS 2030). “Agricultural priorities in [SADS 2030] were re-arranged according to the outputs from the AIDA tool,” which “highly contribute to prioritization process[es],” said Assistant to the Minister Mohamed El-Kersh.
AIDA is also useful in dealing with the COVID-19 pandemic, facilitating impact assessments and provide crucial evidence bases for policies. Officials in Tunisia used the tool’s Social Accounting Matrix (SAM) database to estimate impacts on the economy, food system and households. then employed those in simulations of the Tunisian economy’s resilience during the lockdown period, according to Zouhair El Kadhi, a macro fiscal adviser with Pragma Corp. and former Director of the Tunisian Institute of Competitiveness and Quantitative Studies (ITCEQ).
The AIDA tool is valuable in combining complex analysis, from SAM construction to impact evaluations, to determine potential investment areas and impacts, and is accessible by modelers and non-modelers equally, said IFAD Economist Athur Mabiso.
Channing Arndt, Director of IFPRI’s Environment and Production Technology Division, emphasized the importance of international collaboration in building such efficient and simple tools that can provide on-the-spot output for policy makers.
The AIDA can help to meet the strong demand for such prioritization tools in many countries, according to Christian Derlagen, Project Manager & Senior Economist at the U.N. Food and Agriculture Organization (FAO)—particularly where ambitious agricultural investment plans face financial restrictions. Clemens Breisinger, MENA Program Leader & Senior Research Fellow at IFPRI, also stressed the effectiveness of AIDA as a policy analysis tool, and thanked local and international partners in making AIDA, as well as IFAD and PIM for providing the funding.
Donal Brown, Associate Vice President for the IFAD Programme Management Department, stressed the importance of innovation—not only in the form of technology but in clearly identifying opportunities and challenges in times such as the present, when rural development, food security and local transformation—at least for the poor—are going backward in light of COVID-19 and climate change.
Dalia ElSabbagh is a Senior Research Assistant in IFPRI's Egypt Strategy Support Program (ESSP), based in Cairo. This post first appeared on the IFPRI Blog.