2.a.1: The agriculture orientation index for government expenditures

Definition
The Agriculture Orientation Index (AOI) for Government Expenditures is defined as the Agriculture share of Government Expenditure, divided by the Agriculture value added share of GDP, where Agriculture refers to the agriculture, forestry, fishing and hunting sector.

The measure is a currency-free index, calculated as the ratio of these two shares. National governments are requested to compile Government Expenditures according to the Government Finance Statistics (GFS) and the Classification of the Functions of Government (COFOG), and Agriculture value added share of GDP according to the System of National Accounts (SNA).

An Agriculture Orientation Index (AOI) greater than 1 reflects a higher orientation towards the agriculture sector, which receives a higher share of government spending relative to its contribution to economic value-added. An AOI less than 1 reflects a lower orientation to agriculture, while an AOI equal to 1 reflects neutrality in a government’s orientation to the agriculture sector.

Rice Impacts
As rice consumption increases along with the global population, governments have to grapple with worsening food insecurity in the near future. While projections point to a 25% increase in global rice consumption over the next 25 years, yields in key rice producing countries may fall by up to 20% due to climate change impacts such as rising sea levels, salinity, temperature rise, droughts and floods. Government intervention is vital in making the push towards sustainable production within farmers and sustainable consumption within the general population.

Overlaps with the SRP Instruments
SRP Child projects include farmers in 19 countries that often receive a large portion of these budgets for their crops, allowing for robust sampling of data, where government contributions to the SRP projects are well documented and auditable.