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Public investment is deemed to be exogenously determined in the sense that political economy compulsions determine the level and composition of public investment. Therefore, increasing attention is being paid to improving budget and the policy making process. The political economy considerations influencing agricultural policy choices includes, among other things, ideas and ideology. These play an important role in explaining agricultural policy choices.

In many countries, the public sector is making concrete efforts to guide and improve investment in agriculture by developing country investment plans (CIPs), based on predefined development strategies and national priorities. It is important that the development strategy leads to the adoption of policies and programmes that will contribute to increasing farm household savings and investment.

This report proposes a three-pronged strategy for pro-poor agricultural growth that involves:

i. Promoting the growth of commercial agriculture and its value chains, using public policy to enable the private sector (farmers and agro-industrialists) to take the lead.

ii. Shaping the engagement of the public sector in ways that enable as many small farms as possible to link to markets and successfully commercialize by investing their own savings.

iii. Putting in place support programmes targeted to those small farms that cannot succeed as viable businesses (e.g. facilitating exit strategies for those who cannot succeed in agriculture and enacting measures to promote rural non-farm employment).