• EBA Home
  • About EBA
  • Rankings/DTF scores
  • Methodology
  • Stakeholders
  • Reports
  • News

Contact

1818 H Street, NW
Washington, DC 20433 USA (202) 473-1000
E-mail


Methodology

Enabling the Business of Agriculture methodology aims at identifying, measuring and examining key regulatory factors that have an impact on agribusiness activity. 
Early on, the project identified a range of topic areas that affect agribusiness sector enabling environment. For each topic, key policy and regulatory issues were identified for measurement and monitoring. A consultative process involving technical experts, policymakers, representatives from donor agencies, civil society organizations, the private sector and partner institutions helped to identify and prioritize key issues. Data points selected on the basis of relevance, measurability, variability and statistical robustness were used to shape standardized questionnaires for each topic. 

  •  Data Collection

    The data are collected in a standardized way to ensure comparability across countries and over time. The team designs questionnaires for each topic area and administers them to experts in each country. The questionnaires use a hypothetical, standardized case scenario to ensure comparability across countries. The standard business case with assumptions about the legal form of the business, its size, its location and the nature of its operations for each topic applied for all countries. Assumptions guiding respondents through their completion of the survey questionnaires vary by topic and are presented in more detail in Appendix B (PDF), Data Notes section that follows. In addition, in the interest of comparability, the values in the assumptions are not fixed values but proportional to the country’s gross national income (GNI) per capita.

    The questionnaires are administered to public sector representatives, private sector respondents, farmer organizations, specialists from academic or research institutions, and other informed contributors. The team holds several rounds of interaction with these experts, involving conference calls, written correspondence and country visits. To fill any data gaps, questionnaires were supplemented by desktop research that drew on studies, research papers and official sources (laws, regulations, policies and official statistics). The data are current as of June 30, 2016.

    Eight of the topics were chosen for scoring in the current report and they are presented below. Additional indicators are being piloted and refined for potential scoring in the future. For more details on additional indicators, click here.

  •  Scoring

    EBA indicators are divided into legal and efficiency indicators. For legal indicators, individual questions in those indicators are assigned numerical scores ranging from 0 to 1 (see Appendix B for details.). For efficiency indicators, the time, cost and documents required to conduct a specific administrative procedure (such as the registration of a new fertilizer product) are combined to build a single indicator. Individual component indicators are normalized to a topic distance to frontier score which captures the gap between a country’s performance and a measure of best practice across the entire sample (see Methodology for details of calculation).

Select:

EBA seed indicators aim to identify obstacles affecting the timely release and production of high-quality seed by the formal seed supply system, by examining the regulatory environment for plant breeding, registration of new varieties and seed quality control.

The variety:

  • Is a maize variety developed by the private sector.
  • Is being registered for the first time in the entire country.
  • Has not been registered in any other country.

Note: In exceptional cases when maize varieties are not being developed by the private sector in the country, we consider imported maize variety, which may have been previously registered elsewhere.

Procedures

A procedure is defined as any interaction of the seed company’s owner, manager or employees with external parties, including any relevant government agencies, lawyers, committees, public and private inspectors and technical experts. All procedures are counted that are legally or in practice required for the seed company to release a new variety of seed. Procedures are consecutive but can be simultaneous.

Time

Time is recorded in calendar days and captures the median duration of each procedure. The time span for each procedure starts with the first filing of the application or demand, and ends once the last procedure required to release a new seed variety on the market has been fulfilled, such as the listing in the national catalog or gazette. Any tests performed by the seed company prior to filling an application are not counted. The minimum time for each procedure is one day. The calendar days for distinctiveness, uniformity and stability (DUS) and value for cultivation and use (VCU) tests are determined based on the number of testing seasons required by the authority and the number of cropping seasons existing in the country, as follows:

Countries with two cropping seasons per year: 

  • If one season is required by law to perform the tests, 135 days are counted for the testing procedure.
  • If two seasons are required by law to perform the tests, 275 days are counted for the testing procedure. This accounts for the two seasons of 135 days each and 5 days to account for the time needed to plow and prepare the land before the next cropping season (135+5+135 = 275 days). 

Countries with one cropping season per year:

  • If one season is required by law to perform the tests, 182 days are counted for the testing procedure.
  • If two seasons are required by law to perform the tests, 547 days are counted for the testing procedure. This accounts for the full calendar year including one season (365 days) and an additional testing season (182 days). 

Cost

Only official costs are recorded, including fees and taxes. In the absence of fee schedules, a government officer’s estimate is taken as an official source. In the absence of government officer’s estimate, estimates by seed companies are used. If several seed companies provide different estimates, the median reported value is applied. Professional fees (for example, notary fees) are only included if the company is required to use such services. All costs are recorded as a percentage of the country’s income per capita.

View Methodology

EBA fertilizer indicators measure regulatory bottlenecks limiting access to fertilizer. The indicators also focus on operational and economic constraints, as well as the implementation of legislation affecting the fertilizer industry.

Assumptions about the fertilizer company

The fertilizer company:

  • Is a private entity (company, a nongovernmental organization (NGO) and/or a farmer organization or cooperative);
  • Is registered in the country;
  • Imports fertilizer to sell in the country;
  • Has registered at least one new fertilizer product in the country.

Assumptions about the registered fertilizer

The fertilizer:

  • Is a new chemical fertilizer product—a fertilizer product is any product containing nitrogen, phosphorus, potassium or any recognized plant nutrient element or compound that is used for its plant nutrient content.
  • Is produced in a foreign country.
  • Is being registered for marketing purposes. 

Procedures

A procedure is defined as any interaction of the company’s owners, managers or employees with external parties, for example, government agencies, lawyers, auditors, notaries and customs or border authorities. It includes all procedures that are officially required for the business to legally perform its described activities, such as registering and importing fertilizer. Interactions among owners, managers and employees are not counted as procedures.

Time

Time is recorded in calendar days and captures the median duration of each procedure. The time span for each procedure starts with the first filing of the application or demand, and ends once the company has received the final document, such as the fertilizer registration certificate. It is assumed that the company’s owners, managers or employees have had no prior contact with any of the officials.

Cost

The cost captures official fees and taxes associated with the relevant licenses, permits and certificates, along with their required documents. All costs are recorded as a percentage of the country’s income per capita.

View Methodology

EBA machinery indicators measure regulatory barriers and associated practices limiting access and use of agricultural tractors by farmers. In particular, the indicators capture the requirements for tractor import, registration and inspection, tractor testing, the prevailing approval process, as well as tractor performance and operator safety standards.

Assumptions about the importing business

The business:

  • Is a private sector company (manufacturer, dealer or distributor of agricultural machinery).
  • Is registered as a business in the country.
  • Does not operate in an export processing zone or in an industrial estate with special import or export privileges.
  • Uses the most-used seaport for importation of tractors in the country. If the country is land-locked, it is assumed that the most-used border posts are used.

Assumptions about the machinery product:

The machinery product:

  • Is a two-axle or four-wheel drive agricultural tractor.
  • Has more than 20 engine horsepower.
  • Is designed to furnish the power to pull, carry, propel or drive implements. 
  • All self-propelled implements are excluded.

A tractor is used as a proxy to assess the enabling regulatory framework and the practices impacting access and use of agricultural tractors for farm mechanization.

Procedures

Procedures capture any required company interaction with external parties, such as ministries, government agencies, testing centers, accredited labs and so on to obtain a tractor type approval/homologation. Internal interactions among owners, managers and employees within the company do not count as procedures. 

Time 

Time is recorded in calendar days and captures the average duration of the company interaction with relevant agencies to obtain the tractor type approval or to obtain required licenses, permits and certificates.

Cost

Cost captures official fees and taxes associated with the tractor type approval/homologation or the licenses, permits and certificates, along with their required documents. All costs are recorded as a percentage of the country’s income per capita.

View Methodology

EBA finance indicators measure laws and regulations that promote access to a range of financial services, with a focus on areas that are particularly relevant for potential customers in rural areas. These customers are partially or fully excluded from traditional financial services due to factors such as their geographical location or available type of collateral.

Assumptions about the financial institutions

  • Microfinance institutions (MFIs): MFIs are financial institutions that specialize in the provision of small-volume financial services (such as credit, deposits and loans) to low-income clients. MFIs can take deposits, lend, and provide other financial services to the public and are licensed to operate and are supervised by a public authority.
  • Financial cooperatives: Financial cooperatives are member-owned, not-for-profit, cooperatives that provide savings, credit, and other financial services to their members. There are typically two types of financial cooperatives, namely: i) small financial cooperatives that provide services only to their members; are typically supervised by either the central bank, the department of cooperatives, or the ministry of finance; and are referred to as savings and credit cooperatives (SACCOs) in some countries; and, ii) cooperative banks that take deposits from and lend to the public, and are regulated under the main financial institution laws and supervised by the central bank. The financial cooperative indicator do not measure cooperative banks but only  small financial cooperatives to be consistent with the topic’s emphasis on small-scale lending and financial inclusion.  

Note: Finance indicators are designed to measure laws and regulations that promote access to financial services for potential customers that are partially or fully excluded from traditional financial services. In particular, the MFI and agent banking indicators focus on supporting the provision and proliferation of financial services to those who are excluded from traditional banking system. These indicators are not applicable to countries with a high level of financial inclusion where agribusinesses and smallholder farmers have few obstacles accessing the formal financial sector. Therefore, those countries are not measured under these indicators and the corresponding data for those countries are shown as “N/A” (not applicable).

The threshold used to establish what countries fall under those with a high level of financial inclusion has been determined as the average of the normalized values (0–1) of two variables, namely: “account at a financial institution (% of rural adult population),” and “account at a financial institution (% of adult population) based on the World Bank Findex database. Following this approach, those countries with a number higher than 0.8 on the average of normalized values of the above-mentioned two variables will be identified as countries with high level of financial inclusion. Countries under this classification are Denmark, Greece, Italy, Korea, the Netherlands and Spain.

View Methodology

EBA markets indicators monitor and analyze laws and regulations that can impact smallholder producers and agribusinesses when accessing domestic and foreign agricultural markets for their products.

Agricultural trade

To make the data on agricultural trade more comparable across countries, several assumptions about the business, the agricultural products, trading partner and shipment are used. Furthermore, only certain requirements are captured by EBA data, and specific rules are used to calculate time and cost.

Assumptions about the business

The business: 

  • Performs general agricultural trading activities.
  • Does not directly engage in agricultural production, processing or retail activities.
  • Does not operate in a special export processing zone.

Assumptions about the traded product and trading partner

A theoretical product and trading partner are selected for each country based on official export statistics in accordance with the following rules:

  • The traded products are defined and grouped as cash crops, cereals, fruits and vegetables according to the Harmonized Commodity Description and Coding System 1996 version (HS 96).
  • All data are sourced from the UN Comtrade Database, using the export data from 2009–13.
  • For each country, the combination of the product and the partner country selected represents the highest five-year average export value (in US dollars). For example, cereal exports to Zimbabwe is selected for Zambia. In addition, the HS 4-digit product within the category that is exported the most to the partner country is used for studying the specific legal and regulatory requirements. For example, coffee exports (the top product within the cash crop category) to the United States is selected for Colombia.

Assumptions about the shipment

The shipment:

  • Is transported via a 20-foot full container-load.
  • Weighs 10 metric tons or costs US $10,000, whichever is most appropriate.
  • All packing material that requires fumigation (such as wood pallets) is assumed to be treated and marked with an approved international mark certifying that treatment.

Requirements to trade

A “requirement” for purposes of the study is any legally required qualification or document that must be obtained by the business to buy or sell the selected product in the domestic market or export the product to the trading partner. These requirements may apply to the trader (for example, a selling/buying license, periodic export registration, mandatory memberships, and so on) or to the export consignment on a per shipment basis (for example, phytosanitary certificate, quality certificate, and so on). These requirements involve interactions with external parties, including government agencies, inspectors and other relevant institutions. Buyer-driven requirements such as private laboratory tests are not considered for purposes of the study.

The following principles apply to the requirements recorded:

  • Only requirements specific to the product group (or the top exported sub-product within that group) and agricultural products more generally are captured. Customs, commercial and shipping documents that are not specific in this way are not measured (for example, certificate of origin, export declaration, bill of lading, letter of credit, and so on).
  • Mandatory membership of a public or private entity is included if it is required to obtain and exercise the right to export the selected product or agricultural products more generally.
  • Trader-level licenses include any document or action that is required to obtain and exercise the right to buy or sell the product in the domestic market or export overseas, including registration or accreditation requirements and traditional licenses.
  • Documents are collected on a per shipment basis, and one document includes both application and completion of the process (for example, obtain a phytosanitary certificate or obtain a quality certificate).

> Where multiple documents are obtained simultaneously, they are recorded as separate documents but time is adjusted to reflect their simultaneity.
> The mandatory documents required by both the country studied and the selected trading partner
are included.
> Both public and private fumigation certificates are excluded if they are not required by the laws of either the country studied or the selected trading partner. Only fumigation that is required for the product itself is captured, and separate fumigation for packaging prior to its purchase/use is not included.

Time

Time is recorded in calendar days and captures the median duration to obtain each mandatory document to export on a per shipment basis. Time to complete membership requirements or to obtain trader-level licenses is not captured. The time span for each document starts with the first filing of the application or demand, and ends once the company has received the final document, such as the phytosanitary certificate. If time is obtained only in working days, the data are converted to calendar days based on the assumption that there are five working days per week and the procedure starts on a Monday. It is assumed that the company’s owners, managers or employees have had no prior contact with any of the officials and that the company completes each procedure to obtain the document without delay on its side. 

The following principles apply to how time to obtain documents is measured:

  • It is assumed that the minimum time required for each document is one day, except for documents that can be fully obtained online, for which the time required is recorded as half a day. 
  • Although multiple documents may be obtained (and related processes completed) simultaneously, the process to obtain each document cannot start on the same day (that is, simultaneous processes start on consecutive days). 
  • If the process to obtain a document can be accelerated for an additional cost and is available to all types of companies, the fastest legal process is chosen and the related costs are recorded. Fast-track options applying only to firms located in an export processing zone or to certain accredited firms under authorized economic operator programs are not taken into account.

Cost

The cost includes all official fees and fees for legal or professional services if such services are required by law to complete the qualification requirement or obtain a document. Service fees (for example, those charged by fumigation companies) are only included if the company is required by law to use such services. Traditional (scheduled) border taxes/tariffs are not captured. Other special charges or taxes that apply to the export product or sub-product, or the export of agricultural products generally, are included only where they result in the issuance of a stand-alone mandatory document to export or are conditional to obtain another mandatory document to export. 

Where possible, laws, regulations and fee schedules are used as sources for calculating costs. In the absence of fee schedules, estimates by the public/private sector respondents are used. If several respondents provide different estimates, the median reported value is applied. In all cases the cost excludes bribes. All costs are recorded as a percentage of the country’s income per capita.

Producer organizations 

To render data on producer organizations comparable across countries, the following case study is used to select the most appropriate legal form in each country:

Several agricultural producers wish to pool their production within a producer organization to sell it on the spot market or through long-term sales contracts with buyers (“the transaction”). The principal function of the organization is to pool and sell the members’ production, and the organization takes ownership of the produce in question.

The following principles also apply:

  • Voluntary and open membership;
  • Democratic member control (“one member, one vote”);
  • Joint-ownership by members; and
  • Created to support and promote the economic interests of its members through joint economic activity.

If different forms of producer organizations exist in a country’s laws, the one which obtains the highest aggregated score under the producer organizations indicator is selected for inclusion in the dataset.

View Methodology

EBA transport indicators measure regulatory and administrative constraints affecting the provision of reliable and sustainable commercial road transport services.

Assumptions about the business

The business:

  • Is a private entity or natural person whose core business is transporting goods by road for commercial purposes;
  • Has met all formal requirements to start a business and perform general industrial or commercial activities;
  • Is located in the country’s largest business city;
  • Has a maximum of five trucks; each truck has two axles and a maximum loading capacity of 15 MT (metric tons);
  • Transports agricultural products within the country, including perishable products, and it does not transport fertilizers, pesticides, hazardous products or passengers;
  • The trucks were first registered in the largest business city less than six months ago; the “trucks” comprise a tractor unit and a trailer;
  • All employed drivers have the domestically required driver’s license to drive a 15 MT vehicle; and,
  • Carries out cross-border transport services with its largest agricultural border-adjacent trading partner.

Assumptions about the “reference” product

The “relevant” product selection was based on UN Comtrade’s 2009–13, five-year average export value of major plant product groups, and mirror data in cases where data were not sufficient. For example, cereals constitute the reference-product for Bolivia and tomatoes are the ones for Morocco. A list of each country’s reference product is available in the Country Data tables. 

Assumptions about the cross border trading partner

This partner selection was based on UN Comtrade’s 2009–13, five-year average trade value of major plant product groups (and mirror data when needed), as well as on a border-adjacent criterion. The partner selection methodology was used as a proxy for defining the largest trading partner by truck, in the absence of transport data disaggregated by mode of transport (sea, air, rail or road). It is also assumed the agricultural products being shipped to and from the largest trading partner were produced locally, not imported. For instance, the largest trading partner of Burundi is Tanzania. A list of each country’s largest trading partner is available in Country Data tables. 

Time

Time was recorded in calendar days and captures the median duration of obtaining the required company or truck license, excluding preparation time. The timespan starts once all required documents have been submitted to the relevant authority and ends once the company has received the final document. It is assumed that the company’s owners, managers or employees have had no prior contact with any of the officials.

Cost

Costs capture only official costs required by law, including fees and taxes. Fee schedules in transport laws and regulations have been used as legal basis when available, and an estimation from qualified contributors in the alternative scenario. It is assumed that all documents have been submitted in the timely and correct form. All costs are recorded as a percentage of the country’s income per capita.

Validity

Validity is measured for domestic and cross-border truck licenses. Validity is expressed in years.

View Methodology

EBA water indicators measure laws and regulations that promote sustainable, inclusive and efficient governance of water resources, with a particular focus on the use of water for irrigation.

Assumptions about the water user

The water user:

  • Is a farm that grows crops.
  • Is a medium-sized farm for the country, with land area that falls between 2 and 10 hectares.
  • Uses mechanical means to individually abstract water for irrigation.
  • Is not located in a broader irrigation scheme.

If medium-sized farms in the country, as prescribed in any official farm-size classification system, deviate significantly from this given range, it is assumed that the case study farm does not qualify for any exemption from permit requirements that may otherwise apply to small farms (such as exemptions for smallholders or subsistence farmers).

Assumptions about the water source

The water source:

  • Is a river located 300 meters away from the farm;
  • or Is a groundwater well located on the farm. 

The choice between surface water and groundwater as a source for irrigation water is made based on the predominant irrigation water source for the country, determined using Food and Agriculture Organization (FAO) 2016 AQUASTAT data. The majority of EBA countries predominantly use surface water for irrigation; those with predominant groundwater use for irrigation are: Bangladesh, Denmark, India, Jordan, Nicaragua and the Netherlands.

View Methodology

EBA information and communication technology (ICT) indicator measures laws, regulations and policies that promote an enabling environment for the provision and use of ICT services, with a particular focus on rural areas. The ICT indicator focuses on the regulations and policies to improve access to ICT services.

View Methodology