AFGHANISTAN AGRICULTURE MOVING FORWARD: PART I

UNCLAS SECTION 01 OF 05 KABUL 000394

SIPDIS

DEPARTMENT FOR SA/FO AMB QUINN
NSC FOR DEPUTY NATIONAL SECURITY ADVISOR: AHARRIMAN/KAMEND
DOD FOR DEPUTY ASSISTANT SECRETARY COUNTERNARCOTICS: MLONG
USDA FOR DEPUTY SECRETARY: CCONNERS
ONDCP FOR POLICY ADVISOR: RAGRESTI
USAID FOR AA/ANE:JKUNDER, DAA/ANE: MWARD, ANE/SAA KAY FREEMAN,
SKEYVANSHAD, NMADHAV

E.O. 12958: N/A
TAGS: EAID AMGT AF
SUBJECT: AFGHANISTAN AGRICULTURE MOVING FORWARD: PART I

This is the first cable in a three-part series that describes
the present state of agriculture in Afghanistan and what the
donor community, led by USAID and USDA, are doing to revitalize
this sector. The respective components are described below:
?Part I covers the importance of the agriculture sector to
the reconstruction of Afghanistan, the Ministry of
Agricultures new Master Plan, the reorganization of the
Ministry of Agriculture, and donor coordination.
?Part II covers agricultural research and extension,
progress in privatizing animal health and veterinary
services, management of natural resources, and programs to
integrate Afghanistans nomadic population into the
reconstruction process.
?Part III covers USAID-funded programs designed to promote
growth of a market-led, value chain agricultural sector,
capacity building initiatives involving U.S. land-grant
universities, USDA programs, communications and agro
development, and a vision of the way forward.


1. Summary: Developing the agriculture sector in Afghanistan is
critical for economic growth and for tackling opium poppy
oppy
cultivation. The Minister of Agriculture, Animal Husbandry and
Food (MAAHF),Mr. Obaidullah Ramin, has begun to provide
leadership to rebuild the agriculture sector in recent months.
Agriculture development is now in a better position to fuel
expansion of the economy.

2.The Minister of Agriculture, Animal Husbandry and Food, Mr.
Obaidullah Ramin, is providing direction to rebuild the
agriculture sector. Minister Ramin initiated an institutional
restructuring of the Ministry and the preparation of an
Agricultural Master Plan. The latter consists of a
comprehensive agricultural development strategy and investment
framework to guide reconstruction efforts. There is now strong
and dynamic leadership in the Ministry of Agriculture. Donor
coordination receives active engagement directly from the
Minister. The Ministry of Agriculture is now in a better
position to support agricultural development and broad-based
economic growth.

3.Key areas of progress in the agriculture sector include:
:
capacity building, promoting market-led agriculture development,
animal health and privatizing veterinary services, and
strengthening natural resource management. Despite progress,
considerable challenges remain. Building an effective research
and extension system, extending rural financial services, and
eliminating opium poppy cultivation are priorities. As
Afghanistan moves from post-conflict and crisis management, more
long-term sustainable development planning is needed.
Addressing the challenges of Afghanistans agricultural
reconstruction will require sustained capacity building of the
Government of Afghanistan and long-term donor assistance with
clear performance benchmarks. Institutional and programmatic
challenges to rebuild agriculture are consistent with the
recommendations of donors and USG efforts through USAID and
USDA. End summary.

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IMPORTANCE OF THE AGRICULTURE SECTOR IN RECONSTRUCTION
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4.The Government of Afghanistan recognizes that economic
growth is a key factor for poverty reduction and that
agriculture plays an important role in this process. The
agriculture sector, which has been severely affected by years of
war and neglect, provides much of the livelihood of 80 percent
of the countrys population and accounts for more than half of
gross domestic product (GDP). Given the countrys dependence on
agriculture, the rate of recovery in the sector will largely
determine the nations overall rate of economic recovery and
poverty reduction. Improved agricultural productivity and
growth are central to reconstruction. At the same time,
attention to rural non-farm economic activities are also
important.

5.To achieve the Governments development goals, economic
growth must be accelerated to sustain an increase of an
estimated six percent per year growth in the agriculture sector.
ctor.
Higher growth rates in agricultural productivity will directly
promote broad-based economic growth, reduce rural poverty, and
conserve natural resources. Growth in productivity must be
based on new applications of science, technology, and
information, and large-scale investments in agriculture
development.

6.Afghanistan reconstruction requires a national strategy
that raises the profile of agriculture development, effectively
extends donor assistance to Afghan farmers and supports and
attracts private sector investment. An effective agriculture
strategy fosters broad-based economic growth in rural areas
comprehensively, forges alliances between stakeholders, and
takes advantage of emerging market opportunities. A national
agriculture program in Afghanistan requires multidisciplinary
and pluralistic approaches to local economic development,
poverty reduction, social and gender equity, natural resource
management, and good governance. Reconstruction efforts need to
move away from short-term, sector-by-sector approaches for the
sustained reduction of rural poverty and improved economic
growth. Fortunately, Afghanistan now has a comprehensive
national agricultural development strategy and program in place
to guide reconstruction efforts and promote long-term
investments.

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AGRICULTURE MASTER PLAN FINALIZED
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7.The Agriculture Master Plan was just endorsed by the
Economic Subcommittee of the Cabinet of the Government of
Afghanistan (GOA) as a comprehensive development blueprint for
the sector that identifies priorities for investment. The Chief
Economic Advisor to President Karzai, Dr. Ishaq Naderi, is a
strong champion of the Master Plan and an ardent advocate of the
pro-growth approach adopted by the Plan. For Dr. Naderi,
agriculture growth is central to his vision for the economic
transformation of Afghanistan and he supports large investments
in agriculture including the rehabilitation of rural roads and
irrigation systems. Moreover, agriculture figures prominently
in the Afghanistan National Development Strategy (NDS) interim
paper to be presented in the London Conference.

8.Supported by USAID, the UKs Department for International
Development (DFID),the European Union (EU),the World Bank and
Asian Development Bank, the Master Plan was generated through a
participatory process that included input from both the
provincial and central levels. Committees of Afghans and
expatriate advisors worked together to prepare the Plan,
completed in November 2005.

9.The Master Plan is comprehensive. It emphasizes
commercial, market oriented agriculture. It also includes
actions for improving food security through support to wheat
farming systems and a range of direct action targeted to poor
people to ensure adequate nutritional status. Virtually all
farmers and parts of the country are expected to benefit. The
he
Master Plan gives broad treatment to poverty reduction including
direct action programs to reach the poor. It emphasizes
environmental protection, the needs of the large nomadic
pastoralist (kuchi) population, and improving natural resource
management and reforestation.

10.The Master Plan identifies a number of key priorities and
cross-cutting themes for immediate action and for sequencing
activities for longer-term development. With a projected
investment of US$1.3 billion over the next five-year period, the
Plan is oriented to economic growth and engagement with the
private sector. It is designed to provide six percent overall
growth rate in the agriculture sector and a doubling of farm
incomes in 12 years, which should contribute greatly to reducing
poverty, eliminating opium poppy cultivation, and creating a
prosperous rural economy. As such, the Master Plan provides a
strategic roadmap for accelerating agricultural growth and the
consequent transformation of Afghanistans rural economy.

11.Accelerating agriculture growth in Afghanistan requires
resources to be focused on a few key priorities. The Master
Plan identifies the following as key priorities: (a)
horticulture, (b) livestock, and (c) cereals for food security.
The Master Plan is clear that income generation in the high
value perennial horticulture sector is essential to the solution
to macro-economic problems as well as rural prosperity and
poverty reduction. Perennial horticulture will account for
nearly one-third of all agricultural growth in the Master Plan
strategy. The Master Plan elaborates a feasible program by
identifying seven, perennial horticulture crops that could,
conservatively, add nearly US$1 billion to annual exports in a
ten-year period, and a very conservatively estimated cumulative
US$264 million to government tax revenues in that period.
Agriculture growth and its multipliers to the rural non-farm
m
economy will account for nearly three quarters of employment
growth and poverty reduction with roughly one-third of that
total effect coming from the export oriented, commercialized
priority horticulture commodities.

12.A balanced rural development strategy requires attention to
a number of cross-cutting issues. In the Master Plan, the
interventions associated with the integration of these issues
are clearly visible in the strategies to address the commodity
sub-sector priorities. These cross-cutting themes include: (a)
management of natural resources, (b) research and extension, (c)
farmer associations and community participation, (d) rural
finance, and (e) gender.

13.The priorities in the Master Plan are a guide for the
private sector. Rapid commercialization requires large
investment in irrigation, rural roads, rural electrification
and, for example, in the Shomali Plains in Parwan Province, the
need for de-mining. Those physical investments must be linked
ed
with the agricultural commercialization priorities. That in
turn requires coordination at the highest levels of government
with the Ministry of Agriculture.

14.The Ministry of Agriculture is responsible for implementing
the Plan. With limited technical staff resources, the Ministry
will require substantial training as well as technical
assistance to fill the gap until trained Afghans can take over.
The Master Plan allocates resources for training the next
generation of Afghan agriculturists; providing technical
assistance for policy formulation and planning; for building
regulatory mechanisms; and for improving the enabling
environment for private sector growth and investment. Donors and
multilateral institutions agree that the Master Plan is both
ambitious in its goals and realistic in its approach.

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STRENGTHENED LEADERSHIP IN THE MINISTRY OF AGRICULTURE
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15.The Minister of Agriculture has assumed a strong leadership
role. He has grown in the job rapidly and has taken charge
after a short time in office, extending his leadership
throughout the Ministry. He is supportive of private sector
and market-led approaches to rebuilding the agriculture sector
and is engaged with donors. The Minister is committed to making
the Ministry of Agriculture effective and well respected.
Minister Ramin has a comprehensive view of the direction the
Ministry should go; has set clear objectives; works hard to
achieve them; and motivates staff in the process.

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RESTRUCTURING OF THE MINISTRY OF AGRICULTURE
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16.The Ministry of Agriculture is restructuring itself to make
it more efficient and responsive to the current needs of Afghan
farmers and to be better able to utilize international donor
assistance. It is the only Ministry to complete Phase II of
f
the priority reform and restructuring (PRR) process, that
entails restructuring and re-grading Ministry staff. As part
of this process, an agreement was reached with the Civil Service
Administration that the Ministry would only keep six general
departments in the headquarters and transform its field offices
to efficient institutions that respond effectively to farmers
and agro-business clients and provide technical advice to ensure
the quality of agricultural inputs and outputs. Based on the
new approved structure, the Ministry in Kabul now consists of
six general departments: (a) Extension Economic and Applied
Research; (b) Policy Economic Analysis and Planning, (c) Natural
Resource Management, (d) Food, Agro-Industry and Market
Development, (e) Quality Control, and (f) Finance and
Administration.

17.Still, the capabilities of staff varies greatly, with
management skills being quite limited. The Ministers office is
well staffed and running efficiently. The Planning Department
t
also has a solid core of competent staff, but needs to expand.
However, Many of the other departments are weakly staffed.
Staff evaluations are underway to identify staff training needs
in order to upgrade staff quality and competence. Donor
assistance is necessary in the foreseeable future to continue to
build capacity of Ministry staff.

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IRRIGATION DEPARTMENT TO MERGE WITH AGRICULTURE MINISTRY
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18.The GOA recently decided to merge the Department of
Irrigation, currently with the Ministry of Water and Power, with
the Ministry of Agricultures Natural Resource Department, a
move long anticipated. Merging the Irrigation Department into
the Ministry of Agriculture will provide for greater synergy and
integration of agriculture productivity activities with
irrigation rehabilitation efforts.

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DONOR COORDINATION GREATLY IMPROVED
D
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19.Partly as a result of the Master Plan process and the
restructuring of the Ministry of Agriculture, as well as the
growing leadership role played by the Minister of Agriculture,
there is good collaboration among donors and harmonization of
development strategies in support of the GOAs development
objectives. Donor coordination in the agriculture sector is
vastly improved compared to a year ago. The Minister now chairs
a bi-weekly donor coordination meeting that brings together the
major donors in the agriculture sector to discuss important
policy and agriculture reconstruction issues, share information
on existing projects and new initiatives, and to facilitate
dialogue among all interested stakeholders. This is welcome
progress and represents a significant break from the past.
Greater synergy and complimentary endeavors by the donors in
future agriculture reconstruction efforts are now possible.

20.Coordination among the different GOA ministries and
nd
agencies concerned with agriculture and rural development and
economic growth (i.e., Agriculture, Water and Power, Rural
Rehabilitation and Development, National Environmental
Protection Agency, Commerce, Higher Education) remains a serious
challenge. These issues cut across sectors and government
agencies. Mechanisms to establish effective inter-agency
coordination and address them will demand new institutional
capacities and incentives. The Ministry of Agriculture also now
has to start paying more attention to the expectations and
requests of members of Parliament.

NORLAND