USAID cuts a “threat” to small farmers in developing world

The United States Agency for International Development (USAID) has long been a key player in supporting agricultural development worldwide through technical assistance programmes. These initiatives were designed to improve productivity, sustainability and market access for farmers in developing countries, including the fruit and vegetables sector. 

In determining what impact a termination or reduction of such programmes might have on global food security, farmer livelihoods and international trade, it is important to be realistic. USAID assistance to developing countries has been represented as “huge”, either to support claims that it was wasteful, or to brag about its support for farmers worldwide. The reality, however, is different. 

The total USAID budget stood at an average of US$43.5bn a year, which includes all programmes worldwide. Of this amount, only about US$2bn-US$2.5bn per year has been spent on economic growth and agricultural programmes, of which support for fruit and vegetables value chains was just a fraction. According to Market Data Forecast, the global fruit and vegetables market was calculated at over US$750bn in 2024. 

Alex Pavlovic, who served as director of several USAID-funded projects in Africa, Asia and Western Balkans, confirmed that in monetary terms, USAID assistance was “a drop in the bucket” in the context of the global value of the fruit and vegetables sector. 

“From this perspective, we cannot expect anything significant to change in fruit and vegetable production or supply chains,” he said. “This is especially true for companies and distributors that are global players in Europe, the US and other leading world markets.”

Those who might feel the consequences of the interruption of USAID agricultural and market access projects, he feared, would be small producers and farming groups in developing countries.

“The USAID technical assistance programmes opened new perspectives for many smallholders, from grassroots interventions to projects designed to make systemic changes in the beneficiary countries,” said Pavlovic. “I am afraid that many countries, particularly in Africa, Asia and South America, still don’t have sufficient capacity and mechanisms to support them after these projects are gone. The transition from traditional farmers to commercial producers may be jeopardised.”

Numerous USAID economic growth projects stimulated the integration of small producers with larger businesses and exporters, according to Pavlovic. “We promoted the adoption of new technologies, provided credit guarantees for small and medium-sized enterprises (SMEs) and cooperatives, and helped them to connect with new markets through trade missions and fairs like Fruit Logistica,” he said. “Access to finance is crucial, but agriculture is generally not a priority for traditional banking structures, and in the developing world it comes with extra risk attached. Financing small farmers is an issue everywhere. In many developing countries, USAID has helped introduce new models of financing for small farms, and there are various solutions.

“For example, US International Development Finance Corporation (DFC), in cooperation with central governments and local banks, has been implementing guarantee scheme initiatives to enhance access to finance for SMEs in the agricultural sector across the globe. Credit and savings systems were strengthened and expanded. Development of capital markets was supported with regulatory changes. And innovative mechanisms, like impact investing, digital finance solutions, tokenisation, have been tried and tested under USAID programmes as well.”

The long-term consequences are hard to predict, but such cuts are a threat to agricultural innovation, food supply chains and farmer livelihoods, according to Pavlovic, especially in Africa, serving to exacerbate both poverty and food insecurity.