This is the third installment of the Feed the Future Enabling Environment for Food Security project’s analytical tools series. Check out the introductory post and the AgBEE tool profile and stay tuned for new installments all week!

In markets, rules matter. Having a good governance architecture alone is not enough. Simply relying on relationships with a handful of the largest private sector actors to determine regulatory priorities is not enough; barriers to entrepreneurial micro, small, and medium enterprises must be understood clearly to encourage healthy competition and positive disruption within market systems.

Good, substantive rules can dramatically reduce business risk, attract domestic and foreign investment and promote the good competition necessary for sustainable improvements to market systems. Building on significant academic research linking good rules and market performance, USAID developed the Commercial, Legal and Institutional Reform (CLIR) methodology to offer systems-based analysis that has been applied in more than 50 countries over the last 20 years. These studies have helped to encourage governments to enter regional free trade agreements, forge new agricultural strategies and shape reform priorities across sub-Saharan Africa, Southeast Asia, Central America and Eastern Europe.

In 2008, USAID designed the AgCLIR tool, offering a systems-based approach to identify root causes for agricultural market system failures.

This post will provide a closer look at AgCLIR, USAID’s premier agricultural enabling environment diagnostic activity. It has been USAID’s foundation in many countries for conducting analysis of the formal and informal rules affecting firms and farms in a country as well as the public and private institutions that drive the agricultural market system.

AgCLIR Nuts and Bolts

Global indicator sets, like the World Bank’s Doing Business Index or the Enabling the Business of Agriculture Index provide data that can identify symptoms of an unhealthy enabling environment for businesses in agriculture. The AgCLIR assessment was designed to dig deeper, offering a structured approach to diagnose root cause problems and offer an agenda for reform. Much like the Agricultural Business Enabling Environment (AgBEE) Snapshot profiled yesterday, AgCLIR examines different topics across the natural enterprise life cycle, from firm and farm formation and licensing, access to inputs, markets and trade, and hiring employees through to insolvency and efficient processes for winding down. AgCLIR goes much deeper than the Snapshot, offering analysis and findings that derive from multiple weeks of in-country interviews. Assessment teams will typically meet with more than 200 government officials and mid-level staff, the private sector, civil society and other stakeholders in urban and rural locales guided by questionnaires that a multidisciplinary team of experts implement across agriculture, business, law and economics. Through various methods of local stakeholder engagement, including stakeholder roundtables, regional listening posts, briefings and other means, the assessment results can lead to an agenda for practical action driven by local priorities.

To see examples of past AgCLIR assessments, check out AgCLIR Liberia, AgCLIR Papua New Guinea, AgCLIR Myanmar and AgCLIR Zambia (funded by USAID) as well as AgCLIR Benin (funded by the Millennium Challenge Corporation).

AgCLIR Adapting and Evolving

In 2017, the USAID Bureau for Food Security, in partnership with the Feed the Future Enabling Environment for Food Security project, updated the methodology to reflect new developments in enabling environment metrics and to remain relevant for the Global Food Security Strategy. The tool is comprised of modular topics, allowing missions to pick and choose topics while providing comprehensive treatment tailored to the objectives and resources driving it. To see an example of new topics introduced into the AgCLIR methodology last year, check out the Ghana AgCLIR Summary and Recommendations and AgCLIR Ghana Full Report.

Translating AgCLIR Findings to Action

Past investments by USAID in AgCLIR assessment activities have been used by Missions and partners in a range of ways. For instance, USAID/Zambia used findings to support strengthening draft legislation to reduce the negative impacts of the government’s maize marketing activities. USAID/Tanzania utilized the analysis to guide its agricultural enabling environment portfolio, and this analysis fed into advocacy work that ultimately helped address agricultural export bans. USAID/Nigeria used the AgCLIR as a direct source of information to program a $7 million USAID activity dedicated to strengthening the business environment for agriculture. USAID/Uganda used AgCLIR as a resource for negotiation and discussion with the government and other stakeholders as well as to design past Feed the Future programs. USAID/Kosovo utilized the AgCLIR to help refine its agricultural strategy and develop a reform agenda that Kosovo's government implemented.

To learn more about AgCLIR, please contact the Feed the Future Enabling Environment for Food Security project.