Institutions and rural services - Ifad

Institutions and rural services Lessons from IFAD-supported projects in Asia

9 OCCASIONAL PAPERS Knowledge for development effectiveness

Enabling poor rural people to overcome poverty

OCCASIONAL PAPERS Knowledge for development effectiveness

Institutions and rural services Lessons from IFAD-supported projects in Asia

by

9

Ashok Seth Agriculture and Rural Development Specialist Senior Agricultural Economist and leader, Rice Policy and Impact Research Programme, International Rice Research Institute, Philippines Humnath Bhandari Postdoctoral Fellow, International Rice Research Institute, Philippines

The ninth in a series of discussion papers produced by the Asia and the Pacific Division, IFAD

Enabling poor rural people to overcome poverty

© 2009 by the International Fund for Agricultural Development (IFAD) The opinions expressed in this publication are those of the authors and do not necessarily represent those of the International Fund for Agricultural Development (IFAD). The designations employed and the presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of IFAD concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The designations ‘developed’ and ‘developing’ countries are intended for statistical convenience and do not necessarily express a judgement about the stage reached by a particular country or area in the development process. All rights reserved ISBN 978-92-9072-087-4 Printed, August 2009

Table of contents

I.

Acknowledgements

4

Acronyms

5

Foreword

7

Summary

9

Introduction

16

The study

18 18 18

Objectives and scope Structure of the report

II.

Contemporary challenges in institutional reforms and emerging trends Decentralization Rural producer organizations Agricultural research Agricultural extension Seed quality and variety Private-sector participation Marketing and market information

III.

Review of institutional interventions and performance Institutional change and the welfare of poor rural people Performance review Bangladesh Cambodia Viet Nam

IV.

Regional cooperation on institutional and policy development East Asia Barriers to regional growth and integration in agriculture South Asia

41 41 41 41 46 49 53 53 53 54

Food pricing

55 55 56

VI.

Key conclusions and recommendations for the future

58

VII.

Next steps

69

V.

Emerging challenges of climate change and food pricing

20 20 22 23 27 31 33 34

Climate Change

References

70

Tables Table 1 Share of poor households with agriculture as main livelihood

17

Table 2 Evolving typology of institutional roles and responsibilities and direction of support

58

3

Acknowledgements

The Asia and the Pacific Division of IFAD supported the study summarized in this paper. The work was coordinated by Ganesh Thapa, Regional Economist, who also provided valuable comments on the initial draft of the report. The study benefited from suggestions made by IFAD’s project staff, in particular the country programme managers for Bangladesh, Cambodia and Viet Nam, who were also instrumental in organizing a field visit to the latter two countries. We would like to acknowledge the valuable suggestions and hospitality of all the research scientists, extension workers, officials and farmers interviewed during the field visit. The study has been further enriched by the suggestions of Thomas Elhaut, Director of the Asia and the Pacific Division.

4

Acronyms

ADIP

Agricultural Diversification and Intensification Project (Bangladesh)

ADSPS

Agricultural Development Support Project to Seila (Cambodia)

APIP

Agriculture Productivity Improvement Project (Cambodia)

AQIP

Agriculture Quality Improvement Project (Cambodia)

ARI

agricultural research institute

AsDB

Asian Development Bank

ASEAN

Association of Southeast Asian Nations

BARI

Bangladesh Agricultural Research Institute

BRAC

Bangladesh Rural Advancement Committee

CAAEP

Cambodia-Australia Agricultural Extension Project

CARDI

Cambodia Agricultural Research and Development Institute

CDD

community-driven development

CGIAR

Consultative Group on International Agricultural Research

CIMMYT

International Maize and Wheat Improvement Center

DAE

Department of Agricultural Extension (Bangladesh)

DLS

Department of Livestock Services (Bangladesh)

DOF

Department of Fisheries (Bangladesh)

FAO

Food and Agriculture Organization of the United Nations

FFS

farmer field school

GMS

Greater Mekong Subregion

HGDPEM

Ha Giang Development Project for Ethnic Minorities (Viet Nam)

HVAC

higher-value agricultural commodity

ICARD

the Information Center for Agriculture and Rural Development (Viet Nam)

ICRAF

World Agroforestry Centre

ICT

information and communications technology

IPM

integrated pest management

IRRI

International Rice Research Institute

MIDP

Market Infrastructure Development Project in Charland Regions (Bangladesh)

MoARD

Ministry of Agriculture and Rural Development (Viet Nam)

NAEC

National Agricultural Extension Centre (Viet Nam)

NAEP

New Agricultural Extension Policy (Bangladesh)

NARS

national agricultural research systems

NGO

non-governmental organization

NIAPWMP

Netrakona Integrated Agricultural Production and Water Management Project (Bangladesh)

5

Institutions and rural services

6

PRA

participatory rural appraisal

QBARCDP

Agricultural Resources Conservation and Development Project in Quang Binh Province (Viet Nam)

RPO

rural producer organization

RPRP

Rural Poverty Reduction Project in Prey Veng and Svay Rieng (Cambodia)

SAARC

South Asian Association for Regional Cooperation

SAIP

Smallholder Agricultural Improvement Project (Bangladesh)

SCRMP

Sunamganj Community-Based Resource Management Project (Bangladesh)

SLDP

Smallholder Livestock Development Project (Bangladesh)

SME

small and medium enterprise

TCARD

Technical Committee on Agriculture and Rural Development

TQPRMP

Participatory Resource Management Project – Tuyen Quang Province (Viet Nam)

VHAW

village animal health worker

USAID

United States Agency for International Development

Foreword

In order to increase productivity and incomes, poor farmers must be able to access production inputs such as fertilizer, irrigation water and high-yielding, locally adapted varieties of seed. They must also have access to research and extension services that enable them to use those technologies in the most efficient way to respond to evolving demand and product standards. Lastly, they need access to remunerative markets and the ability to negotiate with market intermediaries, so they can engage in markets on less unequal and more profitable terms. This paper summarizes the findings of a study supported by the Asia and the Pacific Division of IFAD. The study reviewed the changing roles and responsibilities of the diverse players in the provision of rural services for sustainable agricultural growth, and offered recommendations for IFAD’s future institutional development support to countries in the region. It included desk reviews of completed and ongoing agricultural/rural development projects in Bangladesh, Cambodia and Viet Nam, which were supplemented by a field visit to Cambodia and Viet Nam. The study assessed the successes and shortcomings of IFAD-supported projects in providing rural services to smallholders in these countries and recommended measures for future interventions. An important conclusion of the study was that the building of lasting grass-roots institutions would require enhanced support to strengthen the managerial, organizational and financial skills of the informal groups formed under various projects. Only in this way will it be possible to develop democratic and independent, demand-led rural producer organizations. The study calls for a continuing and important role for donor-funded projects in supporting reform of the institutions involved in development and dissemination of agricultural technologies. In this context, such projects should also support collaboration among key stakeholders, including community organizations, public institutions, NGOs, agribusiness and information and communications technology enterprises. In the area of seed production, the study highlighted the need for a relaxation of policies on the pricing of varietal seed, to enhance supply from private sources and community-based seed production initiatives. For marketing, it recommended further support to strengthening producer groups, providing information services, and developing equitable contract arrangements and guidelines for enforcement. The study also identified the need to support analysis of the social and sustainability dimensions of contract farming, for example the implications of land-use changes, local employment, food security, poverty reduction and the environment, which so far have not received much attention.

7


Although the study was based on a review of selected IFAD-supported projects in three Asian countries, we believe that its findings and recommendations will be of interest to a wider audience of policymakers, development practitioners, donors, academics and civil society in developing countries.

8

Ganesh Thapa

Thomas Elhaut

Regional Economist

Director

Asia and the Pacific Division

Asia and the Pacific Division

Summary

Over the last four decades, the rural economies of Asia have gone through a major transformation, with a significant reduction in poverty levels and in the absolute number of poor people. Agricultural productivity has improved, driven by public investment in technological innovations, other knowledge-based services and rural infrastructure. At the same time, supportive government policies, including market reforms and privatization of state-owned enterprises, have enabled greater investment by the private sector in rural economies. In addition, the decentralization of administrative, fiscal and political powers to local government agencies has increased adoption of participatory, community-based approaches to rural development. These changes in government policies and the structure of the rural economy have led to the entry of new rural service providers, including private agroenterprises, NGOs and local communities. This is in sharp contrast to the past situation, when public institutions were the key providers of services. This paper summarizes the findings of a study supported by the Asia and the Pacific Division with the aim of enhancing understanding of those ongoing institutional changes relevant to the development impact of IFAD-supported operations. The main objectives of the study were to: (i) review the changing roles and responsibilities of the diverse players in the provision of rural services for sustainable agricultural growth; and (ii) assess the status and propose future directions for IFAD’s institutional development support. The work included a desk review of selected completed and ongoing agricultural/rural development projects in Bangladesh, Cambodia and Viet Nam. A field visit to Cambodia and Viet Nam, as well as knowledge gained from previous visits to Bangladesh, contributed to an understanding of the institutional changes taking place. The process also benefited from interactions with key regional staff responsible for the division’s work in these countries. The study considered institutional reforms involving decentralization of services, the evolving role of rural producer organizations (RPOs), and of institutions providing agricultural research, extension, input supply (seed) and output marketing. These services are being provided by discrete entities that are at the centre of evolving institutional change, and their effectiveness is critical in sustaining future agricultural growth. In reviewing documents and during the field visit, the study team examined changes in the policy and institutional roles and responsibilities of public- and private-sector organizations, including NGOs and farming communities.1 Key findings were shared with IFAD staff to learn from the experiences of other divisions, and comments received are reflected in the present paper. Although the study provided a broad picture of the evolving scenario, it was constrained in its depth of analysis by limitations in data, time and budget.

1 The definition of the rural private sector adopted in this report is that described in IFAD’s private-sector development and partnership strategy (IFAD 2005). The definition includes smallholder farmers, along with farm workers, associations of farmers, agroenterprises (small and large transporters, agroprocessing, input supply retailers and manufacturers, brokers, traders), supermarkets and credit institutions.

9


Decentralization In general, experience with decentralization shows that subnational agencies are better placed than central government to deliver services more responsive to local communities and at lower cost. Decentralization also provides an effective platform for mainstreaming community-driven development (CDD) programmes and reform of public services. Countries in the region are moving at varying paces in decentralizing authority (administrative, fiscal and political) from the central government to local government units. IFAD-funded projects have supported decentralized participatory approaches using community groups as implementing agencies, particularly those formed by women. However, realization of the economic benefits of decentralized services has been constrained by capacity concerns and inadequate coordination among the various tiers of government, as well as by weak accountability mechanisms. Limited efforts have been made to link multisectoral CDD initiatives with sector- and activity-specific informal groups formed under various decentralized development programmes. Future IFAD-supported operations should emphasize targeted strengthening of grass-roots institutions, including greater representation by women, in order to facilitate

effective

administrative,

fiscal

and

political

decentralization

of

responsibilities. Linkages of activity-based informal groups and their organizations with decentralized local government institutions should be promoted. In this way, a common platform can be developed for integrated development planning and to access greater resources for the delivery of rural services. New projects should help mainstream participatory processes for service delivery by public institutions and should allocate sufficient resources for capacity-building of stakeholders at diverse levels. Despite good progress, continued support is needed to increase the representation of women in village institutions and community decision-making processes, as well as their access to and control of productive assets.

Rural producer organizations The importance of collective action by smallholders through their own RPOs is widely recognized. These organizations can help to: improve production through knowledgesharing, facilitate procurement of inputs at competitive prices, and maximize the selling prices of farm produce. Collective action by RPOs on behalf of their members can encourage public research and extension services to be more responsive to their needs and can facilitate the participation of RPO members in the planning, implementation and monitoring of the services’ work programmes. In general, IFAD-supported projects have been more successful in promoting informal groups, particularly those formed by women, than in building strong RPOs able to respond to the commodity-specific or broader economic and social needs of their members. Thus the sustainability of project-specific, community-based groups remains an ongoing concern. The building of lasting grass-roots institutions in the future would require enhanced support to strengthen the managerial, organizational and financial skills of informal groups for developing democratic and independent, demand-led RPOs, where members remain in control and set their own criteria for membership, admission procedures and priorities. However, the building of strong RPOs is a slow process, requiring the sustained expert support of independent

10

organizations, for example NGOs or established RPOs, in particular to ensure that weaker members are not disadvantaged or exploited. This would require the building of appropriate partnerships to ensure continued support during post-project periods. In this context, RPOs would need to be empowered to work with both public and private organizations along the supply chains to improve production systems and engage in collective marketing of commodities in response to market demand.

Agricultural research and extension With the increasing scarcity of land and water, raising the productivity and profitability of agriculture in existing areas through intensification and diversification is critical to accelerating rural growth. This would require a steady stream of appropriate production and post-harvest technologies suited to the socio-economic and biophysical needs of the resource-poor smallholders of the region. The three countries included in the study have made significant investments in strengthening national agricultural research and extension systems. In the past, public institutions have been the dominant players in providing production technologies and training to farmers. However, the increasing strength of the private sector and NGOs has led to a more pluralistic institutional structure, including input suppliers and purchasers of agricultural products, information/media companies, NGOs and producer groups/organizations. The exact role of these organizations in the provision of technical services can vary depending on the national situation, but they have helped make the agenda more responsive to the needs of farming communities, including the inclusion of output marketing issues. Thus the emerging institutional approach to research and extension emphasizes the empowerment of rural communities and adopts a demand-led approach, using information from various sources, including the private sector. In addition, the operational modality is moving from a centralized to a decentralized approach, which involves stakeholders, including farmers, in the governance and delivery of services in order to improve accountability and the incentives for participants. Increasing use of information and communications technologies (ICTs), particularly radio, television, mobile phones and the Internet, is providing farmers with greater access to agricultural information. Given this situation, the role of extension workers is also changing – from sole provider of technical recommendations, mainly from public institutions, to that of a facilitator involved in building the capacity of farmers to absorb information from diverse sources and arrive at solutions appropriate to their needs. In general, IFAD-supported projects have included only limited support for agricultural research, which is mainly provided through the grants programme managed by the region or centrally by the IFAD Technical Advisory Division. The research support included in projects has been targeted at downstream adaptive research and training to adapt and validate pro-poor technologies using participatory approaches. In contrast, the projects have included significant support to strengthen extension services, emphasizing beneficiary participation through decentralized group-based planning and implementation approaches. These have involved multiple service providers and supported a broad extension agenda, including consideration of marketing issues in more recent projects. The participation of NGOs has been emphasized in order to mobilize groups, address gender issues and improve the delivery of extension support, either directly or by linking groups to the public

11


extension services. Many projects have contributed to the increased agricultural productivity and income of poor households, but the impact is unevenly distributed. Extension themes have given greater attention to crop agriculture, providing limited support to the raising of livestock and fish, which is an increasingly important source of income for poor farmers and landless people. As they are not potential clients, this group also receives little attention from the private sector. There is a continuing and important role for IFAD-supported projects in supporting reform of the institutions involved in development and dissemination of agricultural technologies. In this process, IFAD’s grants window provides a unique opportunity to underpin the work of investment projects by developing and testing innovative approaches not only to develop and disseminate technologies, but also to develop inclusive governance, improved client accountability, greater decentralization, and the skills and capacity of national institutions to enhance poverty impact (IFAD 2003b). IFAD-supported projects should also aid collaboration among key stakeholders, including community organizations, public institutions, NGOs and agribusiness, as well as ICT enterprises. The leadership provided by IFAD-supported projects has helped empower women and supported policies for their social and economic advancement. In the future, however, projects should aim for better representation of women in decision-making bodies and their employment in advisory services to increase effectiveness in meeting the needs of women farmers. Mainstreaming of the gains already made and continuing reform of institutions providing technology support services at the country level would require strategic partnerships of IFAD-supported projects with other development partners, particularly the World Bank and the Asian Development Bank (AsDB).

Seed quality and variety Seed is particularly important to resource-poor farmers. Its quality not only determines crop yields, but also influences the use of other inputs, for example plant protection products, fertilizer and cultural practices. A variety of organizations are involved in the production and marketing of seed, including research institutes, other public agencies, NGOs and the private sector. As the industry matures and government policies are further reformed, private-sector seed companies increasingly become the main source, particularly where intellectual property rights can be protected. In this scenario, the focus of public-sector research and development would be on improving germ plasm and releasing new varieties of self-pollinated crops, for example rice and wheat, and of improved parental material for the production of hybrids by the private sector. Despite past progress, in many countries of the region the availability of good quality seed of improved varieties and hybrids is a major constraint on higher productivity. Farmers continue to save seed from their own harvests of self-pollinated crops, for example rice and wheat, for use in subsequent seasons, without proper cleaning, storage and replacement rates, which affects seed health and reduces crop yields. Regulatory authorities lack the capacity to control quality, and the current policy framework inhibits fuller participation by the private sector in increasing seed supply. To improve the efficiency and effectiveness of the seed delivery system, IFAD-supported projects should advocate relaxation of policies, including pricing of varietal seed, to enhance supply from private sources and community-based seed production initiatives. At the same time, the modernizing of seed infrastructure for quality control

12

and breeder seed production and, where appropriate, support for community-based seed production systems would improve the availability of quality seed.

Marketing An important challenge to market-driven growth of the region’s agriculture sector is the need to reform market institutions and integrate small and marginal farmers into modern value chains that serve domestic and export markets. A number of constraints prevent smallholders from benefiting from rapidly expanding markets, particularly for higher-value agricultural products, for example fruits, vegetables, milk, eggs and meat. These include small-scale farming operations with limited surplus production for sale, poor production methods and post-harvest handling, limited access to agroprocessing and to information on market demand, and lack of capital. Since markets are the main driver of this change, led by the private sector, innovative institutional mechanisms must be sought for collaboration between small producers and private agroenterprises. In some situations with clear and equitable contractual arrangements, promotion of contract farming can provide assured access to markets for small producers, who can group together to achieve economies of scale, gain assured access to inputs, credit, new crops/varieties, and appropriate production technology and skills.2 In more recent years, IFAD has provided greater support to strengthening market facilities (market information and farm-to-market roads), enhancing the capacity for market management of producers, market traders (including women) and small business operators, and improving access to credit. IFAD-supported projects can play a larger role in promoting a growing move towards commercial agriculture, including situations involving contract farming. The focus of this support should be on strengthening producer groups and their organizations, assisting with information services, and developing equitable contract arrangements and guidelines for enforcement. Analysis of the social and sustainability dimensions of contract farming should be supported, as well, for example the implications of land-use changes, local employment, food security, poverty reduction and the environment, which have not received much attention.

Regional cooperation on institutional and policy development The study includes a preliminary look at the status of cooperation on coordinated institutional and policy development. East Asia has achieved a high degree of regional integration in a number of fields, accelerated by growing market-driven trade. In contrast, South Asia remains highly protected and is the least integrated region, a situation further exacerbated by its political conflicts. A good example of regional cooperation in East Asia is the multisector Greater Mekong Subregion (GMS) programme of economic cooperation (GMS Program), involving Cambodia, China, the LAO People’s Democratic Republic, Myanmar, Thailand and Viet Nam. This programme began in 1992 with the help of AsDB and other partners, with agriculture as a key economic sector for increased regional cooperation. The extent to which poor producers would benefit from expanding markets for agricultural commodities would

2 It is important to ensure that the contracting relationship does not exploit farmers. Farmers and their groups may fail to foresee the pitfalls and exploitative clauses in a contract and may later find themselves in situations that are distinctly unfavourable. Mechanisms must be found to build farmers’ capacity to recognize such contract clauses/obligations.

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depend on the existence of complementary measures to address both in-country and regional policy and institutional reforms to help make smallholders more competitive, strengthen infrastructure, broaden the availability of timely information and improve the quality of public services, particularly in science and technology. The GMS Program is helping address these issues. IFAD’s support for regional initiatives has largely been channelled through its grants programme, which has supported development work on issues related to policy, technology, information-sharing and training activities. The study highlights the need for further analysis of coordinated efforts under grant and investment projects to promote the development of cross-border value chains, particularly those involving isolated poor ethnic minorities in border areas, who have derived limited benefits from recent economic growth. This requires strengthening of institutions, harmonization of policies and regulations for improved common product standards, and the control of sanitary and phytosanitary inspection services to prevent the spread of pests and diseases. Policy-reform analysis, exchange of information/expertise in science and technology, and human resource development would need support as well.

Emerging challenges of climate change and food pricing Climate change The croplands, pastures and forests that are sources of livelihoods, food and fibre for the vast majority of the populations in IFAD’s client countries face new biophysical and socio-economic challenges from climate change, particularly from rising temperatures, including increased frequency of drought and flood events. These changes are making production systems less stable and may contribute to a decline in agricultural productivity. Moreover, they have the potential to reduce the national agricultural gross domestic product of vulnerable countries. Implementation of global agreements to mitigate emissions of greenhouse gases and to cope with the impacts of climate change will require considerable effort on the part of participating countries. The success of this development strategy will depend on the ability of countries to address not only the direct impacts of climate change, but also the underlying factors that cause vulnerability to these changes. In this developing scenario, IFAD-supported projects have an opportunity to play a more proactive role in helping countries map the potential impacts of climate change on smallholder agriculture. They can help prepare adaptive strategies involving the adjustment of farming practices (cropping patterns, choice of varieties, planting methods and crop management practices), policies, institutions and attitudes of service providers in order to deliver responsive technological, infrastructural and management innovations. In addition, greater investments will be necessary in risk-sharing (safety-net and weather insurance) and in the strengthening of knowledge systems and mechanisms to mitigate the impacts of climate change, for example rewarding poor and vulnerable communities in hill and mountainous regions for their environmental services. Concurrently, projects would need to support the related and dependent issues of unemployment and poverty, which underlie vulnerability and food insecurity. Food pricing The surge in food prices between 2005 and early 2008, resulting from both supply and demand imbalances, and the speculative activities of traders have led to a

14

re-examination

of

the

food

policies

of

both

developing

and

donor

institutions/countries, with a view to increasing food supplies at affordable prices. Although the spike in food prices has now declined somewhat, the global financial crisis has once again demonstrated the vulnerablity of poor people to disruptions in access to food in the face of increasing demand and declining supplies. It has also confirmed that IFAD-financed projects must increase their focus on raising the productivity of small and marginal farmers – particularly in poor and vulnerable communities in coastal, mountainous and rainfed areas – through investment in agricultural services and policy and instutional changes that improve the availability of innovative technologies, input supplies and access to markets on better terms.

Next-steps Further regional/subregional or country-specific work to build on the findings of this study could include: support for the development of institutional and policy options to enhance the competitiveness of smallholder agriculture and smallholders’ ability to access innovative technologies and markets, as well as to manage risk and vulnerability to existing and emerging challenges. This work would also examine the role of RPOs and contract farming in linking farmers to markets. In the case of this increasingly popular option of contract farming, it would be important to assess its social and sustainability dimensions, including development of equitable contractual arrangements, the implications of land-use changes, local employment, food security, poverty reduction and environmental impact. Another area that merits further examination is the need for a strategy, including analysis of institutional and policy options, to link poor smallholders with expanding markets for higher-value agricultural products. Since this area has received some attention under investment projects supported by IFAD and other multilateral development agencies, this work would build on their experience to propose a strategy for involving poor people in higher-risk production and marketing systems. The experience of the GMS Program has highlighted the importance of cross-border trade in enhancing regional cooperation in agriculture. Further work by IFAD could improve understanding of the institutional and policy options needed so that the region’s isolated poor ethnic minorities, including those in mountainous areas, can benefit from the growing trade in cross-border value chains of higher-value commodities.

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Introduction

Under the IFAD Action Plan, the organization’s approach is becoming more country-programme oriented, with country ownership at the centre. Within this process, the Asia and the Pacific Division is seeking to improve the development impact of its operations – recognizing the changing circumstances in member countries and the new architecture for development assistance. It is an approach that emphasizes innovation and learning from field experiences, as well as the strengthening of incountry policies, institutions, partnerships, systems and processes (IFAD 2007). Over the last four decades, the rural economies of Asia have gone through a major transformation. A main contributing factor was the dramatic improvement in agricultural productivity, particularly of the staple cereals rice and wheat, made possible by the success of green revolution technologies (improved varieties, irrigation and chemical fertilizers). Other contributing factors included supportive government policies, public investment in infrastructure, and knowledge-based services such as the delivery of technologies and inputs. As a result, poverty levels and the absolute number of poor people in rural areas had shown major reductions. In recent years, however, productivity gains under green revolution technologies have either stagnated or declined in some areas due to ‘second generation’ problems. These involve the degradation of natural resources as a result of the intensified use of inputs, particularly under the rice and wheat cropping systems, leading to salinization, overexploitation of ground water, and physical and chemical deterioration of the soil. Nevertheless, the introduction of conservation technologies in these areas is providing options for sustainable intensification and diversification. Another major development has been the significant increase in demand for higher-value agricultural commodities (HVACs) such as animal products and horticultural crops in response to rising incomes, urbanization and globalization. For example, in South and East Asia, demand for vegetables has been steadily rising, and production has shown mean annual increases of 5.3 and 4.4 per cent respectively over the past twenty years (Ali 2001). Other important changes have included market reform and privatization of state-owned enterprises in many countries, including transitional economies. There is a growing trend to devolve administrative, fiscal and political powers to local

governments

through

decentralization

and

to

adopt

participatory,

community-based approaches to the implementation of rural development programmes. Market liberalization, privatization and decentralization have led to the participation of a multiplicity of actors in rural development. As a result, many countries have seen the emergence of the private sector, NGOs and local communities as providers of rural services. This has changed the institutional make-up of agricultural services: government institutions are no longer the sole provider.

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However, despite rapid progress and recent institutional changes in the sector, millions of rural people, in particular ethnic minorities and those in less-favoured areas, continue to depend directly or indirectly on agriculture, and a significant proportion live in poverty. For example, in selected middle- and low-income countries in East Asia, the share of poor households with agriculture as the main livelihood ranges from 68 to 96 per cent (Table 1). Table 1 Share of poor householdsa with agriculture as main livelihood Country

%

Cambodia

96.2

Indonesia

77.1

Philippines

73.3

Thailand

68.2

Viet Nam

93.3

Living on less than a dollar a day. Source: World Bank, Poverty projections toolkit (2002 estimate). Washington, DC: www.worldbank.org/poverty/ psia/tools.htm, click on ‘Data and Tools’, then ‘Tools’.

a

The factors determining rural poverty include lack of assets, lack of access to services, technologies and markets, and lack of skills and organization; as well as conflict and crises such as HIV/AIDS and climate change. New factors such as the emergence of global value chains, which in some areas is contributing to an increase in areas under cash crops at the expense of food crops, biotechnology-driven agricultural research and new markets for biofuels are changing global agriculture, which may not always be beneficial for poor women and men living in the rural areas of developing countries without a commensurate increase in productivity of remaining areas under food crops. – IFAD (2007) To accelerate agricultural growth and have greater certainty of providing sustainable benefits to poor women and men, IFAD-funded operations would need to: invest in areas where significant improvements in productivity are possible; promote higher-value agricultural products and processes; improve market linkages; and facilitate development of the non-farm economy. Project designs would need to consider the changing institutional make-up of rural service providers (agricultural research and extension, supply of inputs, marketing of outputs, etc.) to ensure that demand of poor people is met effectively, while facilitating increased participation of private service providers. At the same time, it would be necessary to ensure that inclusive and effective basic public functions, including appropriate legal and regulatory systems, are in place to support the sector.

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I.

The study

Objectives and scope The main objectives of the study were to: (i) assess emerging trends in changing roles and responsibilities of the various players in the provision of rural services; (ii) identify key institutional issues that impact the performance of IFAD-financed operations; (iii) examine opportunities for coordinated institutional and policy development in the region; (iv) assess implications for the future direction of interventions in institutional reform under IFAD-supported projects; and (v) recommend further operational or analytical work, taking into consideration the country context. The work included a desk review of selected completed and ongoing agricultural/rural development projects financed by IFAD and a field visit to Cambodia and Viet Nam. Knowledge gained and lessons learned in visits to Bangladesh during preparation of the National Agricultural Technology Project3 were also taken into account. The documents reviewed included project design and formulation reports and, where available, mid-term reviews, project completion reports, individual project evaluation reports and country programme evaluation reports. The study also benefited from other related documents and interactions with key regional staff responsible for IFAD’s work in the countries selected. However, due to the paucity of documents on implementation progress and evaluation of projects, as well as time constraints, only a limited number of projects and countries were included, which is a limitation. The study covered institutional reforms involving decentralization of services, the evolving role of rural producer organizations (RPOs), and of institutions providing agricultural research, extension, input supply (seed) and output marketing services. These services are being provided by discrete entities that are at the centre of evolving institutional change, and their effectiveness is critical in sustaining future agricultural growth. The definition of institutions broadly followed was the one outlined by Ostrom (2005): “… prescriptions that humans use to organize all forms of repetitive and structured interactions including those within families, neighbourhoods, markets, firms, sports leagues, churches, private associations, and governments at all scales.” Accordingly, in reviewing documents and during the field visit, the study team examined evolving changes in the policy and institutional roles and the responsibilities of public- and private-sector organizations in the delivery of services.

Structure of the report The findings and recommendations of the study are presented in chapters II, III, IV, V, VI and VII. Chapter II summarizes contemporary challenges and the current situation in the countries selected for the study. Chapter III presents findings from the review of institutional interventions and performance under selected IFAD-supported projects. Chapter IV takes a preliminary look at opportunities for regional cooperation on

3 An IFAD/World Bank financed project, which became effective in 2007.

18

institutional and policy development for the agriculture sector. Chapter V considers challenges related to climate change and food pricing. Chapter VI includes key conclusions and recommendations, and Chapter VII considers next steps and possible future directions.

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II. Contemporary challenges in institutional reforms and emerging trends

Decentralization4 Decentralization of services can deliver efficiency gains, with service benefits accruing mainly to the local population, for example in infrastructure (water and sanitation), health, education and agricultural extension. Experience shows that subnational agencies are better placed than central government to deliver services that respond to the needs of local populations (allocative efficiency) and at lower cost (productive efficiency). However, realization of the economic benefits of decentralized services is contingent on devolution of timely funding, improved coordination among the various tiers of government involved, and the effectiveness of accountability mechanisms for the results achieved (World Bank 2004). The main concerns in promoting decentralization as the key strategy for reducing poverty include the additional costs of decentralized planning, the capacity of target groups and local authorities to manage development programmes, and the willingness of government officials to hand over real power to lower levels. Other concerns have included disparities among regions of a country, due to the ability of better-off regions to allocate more resources and achieve more-effective targeting of poor people compared with poorer areas. A concern from the community viewpoint is a change in priorities or the removal of the community’s planned activities. To avoid this problem, it is important to have clear guidelines and predetermined budgets from which communities can do their decentralized planning. At the same time, increased representation of women in political bodies would allow more inclusive planning. Decentralization and community-driven development (CDD) give planning, decision-making and resource management responsibilities to community groups, using participatory methods. It is a way of organizing communities for poverty reduction that increases their capacity – in partnership with a range of institutional actors. CDD approaches can help improve the effectiveness and targeting of public service delivery; they can have a positive impact on the living standards of poor people and help build social capital and sustainability. Decentralization provides an effective platform for mainstreaming CDD programmes and for the reform of public services, with two-way accountability between local government and communities. In this respect, international experience shows that: • Linking communities and local governments in effective partnerships, though difficult, is important for scaling up, maintaining financial and institutional sustainability, and improving local governance. • Scaling up of CDD is best complemented by policy dialogue to strengthen the decentralization framework, intergovernmental fiscal systems and local government.

4 ‘Decentralization’ involves devolving political authority to elected local governments at subnational and municipal/village levels, establishing an initial set of responsibilities for local development and administration, and the transfer of resources from the national level, through community-managed funds, to support the implementation of these responsibilities. ‘Deconcentration’ transfers administrative powers and functions from national to provincial and district levels as well as from line ministries to their provincial departments.

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• Delegation of administrative and fiscal responsibilities and an integrated approach to local development empower communities to manage their own development needs (World Bank 2004, 2005a). Country experience Decentralization and deconcentration of authority (administrative, fiscal and political responsibilities) from central government units to local governments and administrations have been key elements in Cambodia’s and Viet Nam’s public-sector reforms throughout the 1990s. Bangladesh has made limited progress in this regard. In Cambodia, renewed efforts towards decentralization began in the late 1990s under the United Nations-sponsored Seila Program,5 which combines development and poverty reduction with local governance reforms and local development. The programme has been successful in facilitating broad-based participation among local and subnational authorities through decentralized and participatory funding of rural roads, schools, water supply schemes and irrigation. Economic benefits have been brought to rural communities and spread across socio-economic groups. Reforms adopted under this programme have been able to sensitize the civil administration to bottom-up planning processes and the need for good governance. However, the slow progress of these reforms, for example the limited powers of elected municipal councils and limited resource allocation, hinder political, administrative and fiscal decentralization, and this reduces the intended benefits to poor rural people. In addition, vertically managed sectoral programmes are able to bypass subnational entities or overrule efforts at horizontal coordination (Anderson 2004). In Viet Nam, fiscal decentralization has progressed faster than administrative reform, at least to the provincial level. The focus of many decentralized initiatives has been on developing municipal or village social and economic infrastructure. In practice, however, many programmes have prioritized larger works, including roads and other activities, around easily accessible settlement areas. At the same time, there has been bureaucratic resistance to transferring decision-making authority and resources to lower levels, as well as weak coordination between fiscal, administrative and political decentralization. The main concerns in promoting decentralization and CDD as the key instruments for reducing poverty include weak targeting mechanisms, inadequate attention to smaller livelihood-related infrastructure schemes, additional administrative costs, the capacity of target groups and local authorities to manage development programmes, and the reluctance of central and provincial government officials to hand over real power to lower levels. Other concerns have included increased disparities among regions due to the ability of better-off regions to provide more funds for decentralized programmes compared with poorer regions, and insufficient representation of women in local political bodies. A number of donor-supported projects have included direct financing of municipal or village development budgets, but there are still uncertainties regarding these direct financing mechanisms. In all the countries selected for the study, no serious attempt has been made to develop mechanisms to link multisectoral CDD programmes and sector- and activity-specific informal groups formed under various development programmes with decentralized local government institutions. As a result, there is no

5 Seila means ‘foundation stone’ in Khmer Sanskrit.

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common platform for integrating local-level development planning and coordination to provide improved access to development resources and rural services for poor people. To get a fuller picture of service delivery performance in poor communities throughout the region, better monitoring and evaluation and more data are needed.

Rural producer organizations The increasing diversification and commercialization of agriculture requires smallholders and poor farmers to organize and coordinate their activities in order to enhance production and marketing, and thus income. Collective action is needed to improve the ability of farmers to share knowledge, increase timely availability of inputs at competitive prices and maximize selling prices for their farm produce. RPOs can also be an effective tool for making research and extension services more responsive to the needs of producers. This can be achieved through representation on governing bodies and participation in decision-making processes, including planning, implementation and monitoring of the research and extension programmes. In general, RPOs start as informal groups, for example common interest groups, and, as they build capacity for self-reliance, can be federated at local, subregional, regional and national levels into effective member organizations. With sustained support to build institutional, financial, technical and marketing capacity, an RPO has the potential to provide a range of services and to be an advocacy group that influences public policy on behalf of its members. International experience shows that there is no universal approach to strengthening RPOs. The approach needs to be tailored to suit local conditions and the specific needs of producers, incorporating the principle of empowerment. A review of national and international experiences highlighted the need for a favourable policy environment – through government support and a needs-based agenda that involves RPO leaders and members (Rondot and Collion 2001). It also emphasized the need for initial external financial support, which allows time to develop capacity to mobilize internal financial resources through savings or income-generating activities. Other principles for success included the need to: • strengthen technical capabilities and provide back-up support for maintaining and updating skills/knowledge, if possible through resources controlled by producers, with an emphasis on ‘learning by doing’; • develop human (members and leaders) and financial resources; emphasize development of effective leadership for the growth and survival of the RPO, and thus needs-specific training; • establish linkages that provide access to and create capacity to use strategic information; • provide sustained support, particularly in knowledge management and skills development, so that RPOs can grow and mature. Country experience Bangladesh. In general, small producers remain unorganized and lack a voice to influence the functioning of public institutions. Large NGOs, such as Grameen Krishi Foundation (supported by Grameen Bank), Pali Karma Sahayak Foundation (PKSF) and the Bangladesh Rural Advancement Committee (BRAC), have played a pivotal role in promoting informal groups of poor rural people, mostly women, in a range of

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services – for example, rural financial intermediation through microcredit or more broad-based support for on-/non-farm income-generating activities. However, these efforts have not led to formation of strong grass-roots organizations representing the needs and aspirations of poor rural people. When more commodity-specific formal organizations have been promoted, for example the Bangladesh Poultry Association or the Shrimp Hatchery Association, larger producers and business interests have joined together to become the dominant players. The groups have functioned more as advocacy organizations, successfully influencing government policies, which, however, largely benefited the bigger producers and traders. Cambodia. Compared with Bangladesh and Viet Nam, Cambodia has made less progress in developing RPOs. As a result, public institutions often do not work for the benefit of all producers, particularly poor people. The focus has been on promotion of informal groups of various kinds, mainly through externally assisted projects, with little effort to develop these into effective RPOs. This would require greater resources and the sustained commitment of key stakeholders, where appropriate, drawing on international experience. Historically, Viet Nam has strongly promoted collective action, but has concentrated on organized cooperatives and mass organizations with government involvement. There are over 15,000 legally registered agricultural cooperatives with the ability to enter into a variety of contracts. A law introduced in 1997 provided more-flexible methods of organization and operation for cooperatives and expanded their involvement in a number of agricultural activities, including land preparation, seed production and marketing, input supply, irrigation services, crop protection and product marketing. However, the most common activity undertaken by the cooperatives is the provision of irrigation services; whether old or new, they are much less involved in marketing. Moreover, after operating for a period, many run into difficulties related to their scale of operation, management and financial skills, and lack of clear operational mechanisms and vision. Mass organizations take the form of unions, representing the interests of specialized groups, for example women. In addition, there are many informal groups, including clubs, community groups and associations. It is estimated that there are over 100,000 producer groups in rural areas. The vast majority are informal with limited resources. About 25 per cent are more formal, larger, and governed by representative boards with their own regulations. The Government is reluctant to increase the scope of the alternative organizations needed to accommodate the diversity of local situations, market characteristics and farmers’ needs. Despite this reluctance, however, market forces and the need to make agriculture more competitive are forcing consideration of alternative institutional arrangements that allow producers effective participation in markets and greater control over decision-making processes.

Agricultural research Access to improved technologies (for germ plasm, crop/livestock/fishery management practices, information) is critical to any strategy to increase agricultural productivity and thus help alleviate poverty and hunger. The strengthening of national agricultural research systems (NARS), including partnerships with international agricultural research institutions and sustained government support, can provide high payoffs on investment in research. In the 1960s and 1970s, such

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investments resulted in breakthrough technologies (i.e. the green revolution), able to provide major increases in productivity/production of staple cereals (rice, wheat and, later, maize). Other successes of research investment have included vaccines for tropical diseases of animals, conservation tillage, and integrated pest, disease and nutrient management in a variety of crops. However, germ plasm improvement and management research on crops and natural resources – particularly in meeting the needs of resource-poor farmers in marginal coastal, upland and mountainous areas – has led to only limited improvements in productivity. New concerns about the efficiency of input use, declining land and water quality, and the sustainability of productivity gains made in the past in irrigated environments are adding to future challenges for agricultural research. The complexity and diversity of the challenges to improvements in agricultural productivity are increasing, but the ability of many NARS to effectively respond to these issues has declined. Many have failed to keep pace with the changing needs of farmers, due to lack of institutional innovation in organization and management and to inadequate public funding of research. In contrast to the publicly funded national research institutions, the private sector, particularly the large multinational corporations dealing with life sciences (biotechnology and agricultural inputs), have made major strides and are investing heavily in research and development and technology transfer. Many countries in the region, including China, India, Indonesia, Malaysia, Thailand and Viet Nam, have benefited from investment by these companies in downstream technology development programmes. In some countries, for example Bangladesh and India, large NGOs are also investing in agricultural research, but have limited involvement in seed development or adaptive research. Thus entry of the private sector and NGOs into agricultural research has changed the institutional makeup of NARS in many countries. The challenge now is to strengthen the emerging pluralistic institutional structure with mechanisms that encourage participation and sustainable funding of agricultural research by both the public and private sectors. At the same time, there is a need to focus the attention of government-funded programmes on ‘public good’ research. A review of research projects financed by the World Bank to strengthen NARS (Byerlee and Alex 1998) and the findings of a workshop on the reforms, relevance and sustainability of research systems (Rajalathi, Woelcke and Pehu 2005) identified the following emerging trends: • increasing recognition that future knowledge systems will have multiple sources, partners and users. To benefit from such diverse systems, development of a pluralistic institutional structure is important,6 with universities, the private sector, farmer representatives and NGOs as partners. This would harness additional scientific skills and have greater capacity to match research with the needs of both farming communities and consumers, thus increasing the overall efficiency of NARS;

6 Farmers experiment on different aspects of agriculture and have a remarkable knowledge base in this regard. They also have a good knowledge and resource base of crop varieties and their suitability to local microhabitat conditions. This knowledge includes tolerance performance of varieties to different limiting conditions (drought, pests, excess rainfall, poor soil conditions, weed competition, etc.). It is empirically gathered – farmers do not have the luxury of failures as researchers do, and hence they select only those approaches that work. When talking of agricultural research, it is important to draw on this knowledge – it makes economic sense to build on farmers’ experiences, because this approach could then reduce the risk of failure, while allowing farmers’ knowledge to be ‘mainstreamed’. This concept needs to be emphasized and strategically brought into agricultural research approaches.

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• institutionalized separation of research funding from research execution to allow development of a more-effective policy for setting priorities for research and allocation of resources, and for supporting research execution by alternative suppliers with a view to greater efficiency; • a strong case for public-sector funding of basic, strategic research (long-term research with uncertain payoffs and high ‘spillovers’7) on problems of small-farm agriculture (transaction costs are too high for farmers to organize their own research), and on natural resource management (with positive environmental benefits); • increasing recognition of complementarities in public- and private-sector roles in research and market-driven agricultural development, with the agricultural value chains providing appropriate entry points for the formation of public/private partnerships. However, such partnerships can be management intensive and may raise complex national and international legal issues regarding intellectual property rights. These must obviously be addressed to enable mutually beneficial relationships; • increased flexibility and institutional autonomy in public research institutions, combined with increased accountability. This would promote results-oriented institutions, characterized by improved management of human, financial and physical resources; • decentralization of NARS and promotion of participatory approaches involving stakeholders, in particular the clients of the research systems. This would increase responsiveness of institutions to clients’ needs. The institutional models include full or partial funding of research by farmers and other clients, involvement of farmers and farmer organizations in the governance of research organizations and the conduct of research, and various types of contractual relationships with clients in executing research; • promotion of regional and international research alliances and technology spill-ins7 through flexible collaborative models, including research agendas with global

implications

(environment,

climate

change,

biodiversity

and

agriculture/health linkages); • new models for technology transfer that move beyond the traditional research/extension chain to involve farmers, NGOs and the private sector in a variety of formal and informal partnerships, information dissemination and feedback mechanisms. As the research systems in the region increasingly look to rainfed areas for higher productivity in order to reduce poverty, food insecurity and environmental degradation, it will be necessary to integrate the indigenous knowledge of farmers as a strategic choice in conducting agricultural research. The inherent knowledge of farmers, as well as their collection of crop varieties and animal breeds suited to harsher environments (drought, disease, pests, adverse soil conditions, etc.) accumulated over generations, would not only enhance chances of success, but would help accelerate the transfer of successful technologies to other farmers.

7 ‘Spillovers’ are benefits accrued by those not investing in the research. ‘Spill-ins’ are benefits derived from investments of others by those that do invest in research.

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Country experience Bangladesh. The Bangladesh NARS comprise ten agricultural research institutes (ARIs) and the Bangladesh Agricultural Research Council, the coordinating body. During the 1970s and 1980s, with external assistance from the World Bank, the U.S. Agency for International Development (USAID), Australia and Japan, ARIs expanded rapidly. By 1984, the current network of ARIs linked to the Ministries of Agriculture (6), Fisheries and Livestock (2), Environment and Forests (1) and Commerce (1) was in place. Further expansion/improvement of facilities at some of the crop institutes was supported under the World Bank-funded Agricultural Research Management Project (ARMP) during the late 1990s. Over the last 25 years, the public, crop-based research institutes, particularly the Bangladesh Rice Research Institute (BRRI) and Bangladesh Agricultural Research Institute (BARI), aided by the International Rice Research Institute (IRRI) and the International Maize and Wheat Improvement Center (CIMMYT), have made significant contributions towards increasing cereal yields and total food production. Yields of rice, which received the largest share of funds invested in agricultural research, increased dramatically through the use of green revolution technologies (improved varieties, irrigation and chemical fertilizers), and the increased cultivation of irrigated boro rice (dry season – December through April). However, the system is now finding it increasingly difficult to generate new and profitable technologies suited to the changing needs of farmers. The main barriers to better research include inadequate and unstable funding, with over 90 per cent of the revenue budget going to finance salaries and related costs, weak management of the research systems, including inefficient allocation and use of available resources, declining quality and relevance of research, limited access to new sciences, and ineffective institutional arrangements for the coordination of research, including weak governance, poor scientific incentives and an eroding human resource base. Cambodia. NARS are being strengthened slowly under the Australian-assisted Cambodia-IRRI-Australia Project (CIAP), which has been instrumental in establishing the Cambodia Agricultural Research and Development Institute (CARDI). CARDI became operational in 2000 and now has over 40 employees to deliver on its mandate according to national priorities. However, Cambodia still lacks a sufficient number of qualified scientific staff for effective national research coverage. The country is dependent on external assistance to fund the system. The research programmes, which are still dominated by rice research, are planned and implemented with limited participation by farming communities or the extension service. CARDI is adopting a partnership approach with other organizations with research capacity to enhance its ability to provide a broader research-and-development service in the future. Viet Nam. Since the 1960s, the Government has attempted to strengthen its NARS, which have now grown to include institutions in six different ministries. The Ministry of Agriculture and Rural Development (MoARD) is the largest player (25 research institutes with 113 subinstitutes, as well as research centres and six universities), with a concentration of research establishments in the Red River and Mekong River deltas. Within Asian Development Bank (AsDB)-assisted projects, MoARD is rationalizing research institutes/centres to eliminate duplication and improve the coverage of central coastal and northern highland agroecological regions. Under the current structure, research efforts are fragmented and not well coordinated. However, programmes are

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being reviewed so as to focus on important agricultural problems requiring adaptive, onfarm participatory research and to improve linkages with extension staff and farmers. MoARD has introduced a system of competitive grants to the institutes and is planning to give them greater autonomy in financial, administrative and human-resource-development matters. Even though progress has been made in a number of areas, the research systems continue to face weaknesses. The key constraints include: insufficient funding of many institutes and poor coordination among the research programmes of various related institutions – resulting in duplication or gaps in research; inflexible and slow response to the changing needs of a market-oriented agriculture; weak linkages with extension; a shortage of qualified researchers; poorly maintained research infrastructure and equipment; and insufficient involvement of stakeholders in the planning and implementation of research programmes. A comparison of constraints faced by the three NARS shows some common themes related to the institutional and policy framework, funding and overall management, including responsiveness to the needs of farming communities. While other research service providers, for example agribusiness enterprises and NGOs, may play a greater role in the future, a strong and productive network of publicly funded research would be critical to meeting the technology needs of small and marginal farmers, who constitute the majority of poor rural people, as well as to safeguard the nation’s natural resource base and the environment. Public research systems that are responsive to market signals can also help enhance the competitiveness of agriculture in the changing environment of regional and global trade.

Agricultural extension Public extension services have traditionally focused on the dissemination of production technologies and the provision of associated training to farmers. Declining or stagnant funding and the inadequate technical skills of staff in many countries are curtailing the scope and coverage of these services. As a result, they are finding it difficult to keep pace with the changing needs of farmers, and past attempts to reform the extension service in many countries have met with limited success. At the same time, the increasing strength of the private sector and NGOs in some countries has encouraged a move towards a pluralistic institutional structure. Agribusiness enterprises, including input suppliers and purchasers of agricultural products, information/media companies, NGOs and producer groups/organizations are entering the sector as service providers. The roles of these groups in the provision of extension service can vary according to the national situation, but often lead to broadening of the extension agenda, including empowerment and promotion of community-based organizations, and the inclusion of marketing issues. A review of different approaches to revitalizing extension services that were tried in different parts of the world concluded that there is no universally applicable approach to extension reform. Imposition of an externally developed standardized extension approach to a new situation does not guarantee success, even when the new model is considered ‘best practice’. Solutions that are more appropriate emerge from an analysis of the success and failures of existing extension programmes in the context of prevailing conditions and the priorities of the country concerned (World Bank 2002; Birner et al. 2006). In addition, the development of an extension programme should be seen as an integral part of a wider agricultural knowledge and innovation system, combining

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inputs from agricultural research, extension and education. As many factors affect performance of the agriculture sector – including interdependent constituents of the knowledge and innovation systems – attribution of the contribution made by extension raises a number of problems. However, it is generally accepted that a well-performing extension service can make significant contributions to improved agricultural growth and the welfare of poor people (Anderson and Feder 2004). Findings by the Neuchatel Group, the World Bank and USAID to develop a common framework on institutional approaches to the reform of agricultural extension (Neuchatel Group 1999; Alex et al. 2004) highlighted the following principles: • A sound agricultural policy is essential in providing an enabling environment. An extension programme is more likely to succeed if the necessary conditions for growth in agriculture and the related industries are in place. • Focus of extension should be on facilitation and knowledge-sharing and not only on technology transfer. Extension is often narrowly defined as a vehicle for technology transfer. Instead, it should be seen as a means of promoting a two-way flow of information between scientists/extension workers and farmers, collected using participatory approaches, and taking advantage of the increasing use of information and communications technology (ICT). A good extension service facilitates the flow of complementary information from different sources and builds the capacity of farmers to absorb this information and arrive at solutions appropriate to their needs. To play this role, an extension service requires high-calibre human resources with good grounding in technical information, understanding of market opportunities and an ability to marry expertise with people skills. • Producers are not simply beneficiaries of agricultural extension, but are the key stakeholders and sponsors. Extension activities are more effective when farmers are directly involved in the identification, implementation and monitoring of the extension agenda. When farmers fund or purchase training service, the impact is significantly better than when they are recipients of a programme entirely designed and funded by someone else. Farmers’ exercise of their rights as stakeholders and sponsors requires the empowerment and promotion of strong producer organizations capable of sharing responsibilities at all stages in the extension delivery cycle. • Increasing involvement of farmers in the market economy requires a new relationship between farmers and the private sector. The move from subsistence farming to commercial farming is consumer-driven rather than producer–driven. Because input suppliers and produce buyers have a better feel for emerging consumer demand, closer linkages between farmers and the private sector are essential. Extension services can play an important role in facilitating a balanced relationship between producers and the private sector and can provide unbiased market and technical information to enable producers to benefit by responding to market demands. • New perspectives are needed in supporting private extension service providers with public funds. Public funding of extension is essential, but that does not mean that only public institutions should provide extension services. Government may contract out some or all of the implementation to NGOs, farmer organizations or specialized consultants. However, in order to contract

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out services, government institutions must develop the capacity to monitor and evaluate the activities they finance, matching these with the country’s financial resources. • Pluralistic and decentralized institutions of extension service providers require effective coordination. Extension systems should be able to respond to local situations and changing needs. Decentralizing decision-making and service provision can strengthen the pluralistic institutional structure of extension service providers and improve producers’ choices in terms of methods, quality and cost. However, the multiplicity of actors makes national coordination and consultation an essential task for the lead public agencies – although coordination should not be allowed to become central control by another name. Country experience Bangladesh. Public extension is the dominant service provider. The key players providing national coverage within the Ministry of Agriculture are the Department of Agricultural Extension (DAE) with over 24,000 staff, including over 10,500 field workers; the Department of Fisheries (DOF) with about 5,000 staff, including some 3,000 technical and subtechnical field staff; and the Department of Livestock Services (DLS) with over 8,400 staff, including 1,500 technical and 3,500 subtechnical staff. DAE, which concentrates on providing crop advice, has extension staff based at four levels: headquarters, district, upazilla (subdistrict) and union (cluster of villages/habitats). In contrast, DOF and DLS do not have staff at the union level. As a result, the focal point of their extension activities is the upzillas. Adoption of the New Agricultural Extension Policy (NAEP) by DAE in the 1990s represented a major shift in the public extension service, as it required the department to change from a centralized extension service to a decentralized, pluralistic one, and from a top-down operational mode to a participatory, demand-led one. Similarly, adoption of the National Fisheries Policy required a fundamental change in DOF, from operating a ‘regulation and control’ regime to a ‘participation and cooperation’ approach in the provision of services, including extension support, by involving local communities, the private sector and NGOs. In recent years, a number of other service providers have entered the field, including large NGOs and the private sector, creating a more pluralistic institutional structure of service providers. Some private players undertake this service as part of a contract farming arrangement for the production of seed, oil crops, fruits and vegetables for both the domestic and export markets. Although quite small in the area covered, this represents an important development for the future, which would further increase pluralism and transfer some costs of extension services to the private sector, NGOs and farming communities. While the new policies represent a significant advance over past practices, many of the changes required under the new policies are still to be fully implemented and internalized. At the same time, there is a lack of clarity regarding public and private roles in the provision of extension services. As a result, DAE, as it has a large field force, wants to continue to manage projects and function as the main service provider. Not enough attention is being paid to the need for inter-institutional coordination and support for greater involvement of other service providers to encourage further strengthening of the emerging pluralistic institutional structure. Lessons learned since the adoption of NAEP

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have also highlighted the need to address the funding, management and institutional issues that continue to constrain efficiency and effectiveness of the public extension service (World Bank 2005). Cambodia. The agriculture extension service in Cambodia is being developed under the Cambodia-Australia Agricultural Extension Project (CAAEP phases I and II) within the Department of Agricultural Extension. The focus has been on enhancing capacity at national, provincial and district levels. This now involves 17 provinces, 94 districts and over 550 staff. All participating provinces have received support for human resource development, use of an agroecosystem analysis methodology for municipal-level extension planning, and regular monthly monitoring of all activities at district, provincial and national levels. The programme monitors extension effectiveness by surveying the adoption of innovative technologies. The activities pursued by the department conform to the Government’s socio-economic development plan, which favours profitable enterprise development as the approach to poverty reduction. Extension planning encourages linkages with the decentralization and deconcentration processes of the Government and with local planning processes at the municipal level. While good progress has been made in developing a professional extension service, a number of areas require greater attention and support: development of community-level human resources for effective planning and transfer of demand-based extension support and for strengthening an emerging pluralistic institutional structure of service providers at the municipal level; improvement in the cost-effectiveness of extension support to enhance the long-term financial sustainability of the service once external support is withdrawn; and deepening of integration with the Government’s decentralization and deconcentration programmes. Viet Nam. The public extension system is the dominant service provider in the country. The service is organized at four levels: central, provincial, district and municipal. In July 2003 the Government established the National Agricultural Extension Centre (NAEC) under MoARD to coordinate national extension activities, working with other partners in the system. At the provincial level, this responsibility is vested in the Department of Agriculture and Rural Development (DARD), but at the district and municipal levels, it is combined with other administrative units. Government funding for extension comes mainly from MoARD, with some from provincial budgets. The central-, provincial- and district-level extension services employ about 3,200 professionals under the technical guidance and coordination of NAEC. In addition, the services include 7,500 mostly part-time municipal extension workers and more than 100,000 village assistants. On average, there is one specialized extension worker for every 3,700 farm households (information collected during the visit to NAEC). Although still dominated by government agencies, other organizations also participate in extension and training support. These include mass organizations such as women’s unions, youth unions and commodity-specific producer associations, for example for coffee, tea or cotton. In addition, NGOs, universities, consultants and private firms are also beginning to emerge as extension service providers, although still very small compared with the government service and far below the needs of the rural population. It is generally accepted that the extension service contributed to increased national food production, particularly rice, during the 1980s and 1990s. However, poor communities and remote and upland areas were inadequately served, and productivity there has remained low. The public service is now in transition. MoARD has initiated

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changes to make it more participatory and pro-poor. The institutional changes have included the establishment of advisory councils for extension at the provincial level to involve key stakeholders, including farmers, mass organizations, NGOs, the private sector and researchers. Attempts are also underway to decentralize extension support and mainstream participatory approaches. Despite these efforts, however, the service is finding it difficult to adjust to new circumstances, particularly those led by an increasingly deregulated and market-oriented economy. The key constraints include: inadequate coverage due to the shortage of human and financial resources; inadequate understanding and knowledge of new technologies, particularly of market-oriented non-crop agriculture, to support the diversified needs of farmers; weak technical and managerial capacity of provincial extension services and grass-roots extension agents; poor linkages with the research service; a persistent top-down approach to planning and delivery of extension, which often fails to understand farmers’ concerns, in particular those of poor farmers and ethnic minorities in upland and remote areas; weak systems for data collection, analysis and dissemination to address rural people’s need for knowledge and information; and weak monitoring and evaluation to assess the quality of the services being provided to local people (AsDB 2002, 2006).

Seed quality and variety Seed is particularly important to resource-poor farmers. Significant increases in productivity can be achieved solely from the seed used, estimated to be about 10 per cent in the case of rice (Hossain et al. 2002). Thus the choice of seed and its genetic potential not only determine crop yields, but also influence the use of other agricultural inputs, for example plant protection products, fertilizer and cultural practices. While there are many contributing factors to low yields of important crops, including rice and maize, poor quality of the seed used, particularly by resource-poor farmers, is an important contributing factor. In addition, in many countries there are severe shortages of good quality seed of improved varieties and hybrids, which further compounds the problem. In countries where the private sector is still weak, improved varieties are mainly released to farmers by public institutions. However, as the seed industry matures, with supportive government policies, private-sector companies increasingly become the main seed source for new varieties and hybrids. The nature of private seed companies ranges from international corporations to small, local suppliers. In several countries, cooperatives and associations formed by progressive farmers become involved in seed production, often in contractual agreements with private seed companies. In these markets, the role of government is to create a supportive legislative framework and minimize its market interventions. In such cases, public institutions usually undertake basic breeding and release of genetic material/parental lines, with private-sector companies taking responsibility for producing finished seed for sale to farmers. Seed production offers ‘win-win’ opportunities for public/private partnerships, where the relationship can grow to form strong research-and-development consortia for the production of new varieties and hybrids. One notable example of such an arrangement between a public institution and private seed companies is the ICRISAT8 /Private-Sector

8 International Crops Research Institute for the Semi-Arid Tropics.

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Hybrid Parent Research Consortia for sorghum and pearl millet in India, which started in 2000 and, based on initial success, was expanded in 2004 to include pigeon pea. The public/private partnership consortia for research and development is a good example of institution-building that benefits from the comparative advantages of public and private organizations in research, development and marketing. Country experience Bangladesh. The poor quality of the seed used, particularly by resource-poor farmers, is considered an important contributing factor to low yields of several important crops in Bangladesh, including rice and maize. Availability of good quality seed is limited. The major area of shortfall is in rice, where replacement rates range from 5 to 10 per cent. This level of replacement is insufficient to maintain yield and to exploit the full genetic potential of released varieties, owing to admixture and genetic deterioration. The major producer of seed for common crops is the publicly owned Bangladesh Agricultural Development Corporation (BADC). In addition, a number of private seed companies and large NGOs are engaged in seed production and marketing. Seed certification, quality control and regulatory roles undertaken by public institutions are weak and need strengthening. Cambodia. Seed production in the country at present centres on rice seed. After the introduction of improved varieties, most of the seed is saved by farmers from their own crops for use in subsequent seasons. Replacement rates are quite low. More recently, under the Agriculture Quality Improvement Project (AQIP), which is being assisted by Australia, four seed companies have been promoted. The project has invested in infrastructure and training and provides its own extension and market information services. Under the project, companies are building marketing capabilities and designing a market-based distribution network. A Cambodian NGO, the Human Resource and Rural Economic Development Organisation (HURREDO), is testing vegetable seed varieties at a seed production facility in the Siem Reap area. Viet Nam. Improved seed is produced here by a variety of organizations, including universities, research institutes, public seed agencies and private companies. Because of limited funding for breeding and research operations, research institutes supplement their budgets by selling seed directly to both seed companies and farmers. However, this practice is being phased out; in the future, institutes would focus only on the production of pure breeding lines for sale to producers of foundation and certified seed. Rice and maize are the most important seed produced in the country. Their production is increasingly being shifted to hybrids produced privately, although restrictions on trade in seed between provinces limit the growth of the private companies. Hybrid seed is increasingly popular and is widely planted by farmers. In addition, there is a need to review the government policy of subsidizing hybrid seeds with a view to encouraging development of a competitive seed market. Despite wide adoption of improved varieties and hybrids, productivity remains low. In the Mekong delta, for example, rice yields have stagnated over the past five years. Maize yields are also low (2.5 tons/hectare). The poor quality of the seed used (genetic base, purity and storage conditions) is considered an important contributory factor. There is a need to strengthen the seed certification, quality control and regulatory roles of public institutions, which are weak.

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Private-sector participation The rural private sector includes a whole continuum of economic agents, ranging from subsistence or smallholder farmers, rural wage-earners, livestock herders, small-scale traders and microentrepreneurs; to medium-sized, local private operators such as input suppliers, microfinance institutions, transporters, agroprocessors, commodity brokers and traders; to other, bigger market players that may or may not reside in rural areas, including local or international commodity buyers and sellers, multinational seed or fertilizer companies, commercial banks, agribusiness firms and supermarkets. Associations – of farmers, herders, water users or traders – also constitute an important part of the private sector. – IFAD (2005) This is the definition of the private sector used in this study. With more deregulated and open economies, most governments in Asia have encouraged greater participation by the private business community in economic development. While these changes have facilitated rapid growth of private enterprises in many sectors of the economy, the rural sector is still perceived by many as too costly and risky an option for investment. Additional barriers to greater private participation include limited access to finance, limited skills and knowledge, and, in some cases, lack of a ‘level playing field’ for firms competing with state-owned enterprises. At the same time, the limited size of rural markets, with their high transaction costs and inadequate infrastructure, limits the profitability of private enterprises. There is a need for continuing policy, institutional and financial reform to facilitate greater private-sector investment in the rural economy so as to accelerate a growth that also benefits poor people. There is an opportunity to promote public/private partnerships, for example in rural infrastructure development, that offers a way to bring additional resources and expertise from the private sector to expand coverage and improve quality. In this context, it is recognized that the limited capacity of governments and the private sector to develop and implement such partnerships can be an important constraint in many countries. One profitable area for private business participation is the growing interest in ‘higher-value agriculture’ in many countries of Asia. Horticultural crop production by smallholders provides higher income and increases the demand for labour, which provides additional employment opportunities for landless people and other farm labourers. These developments have also attracted private investment in the value added processing of agricultural commodities, for both domestic and export markets. Public institutions have a complementary role in setting appropriate food safety and quality standards consistent with the international sanitary and phytosanitary requirements of export and domestic markets. There is considerable potential for further growth, but a number of technological, infrastructure and regulatory constraints must be addressed by both public and private organizations in order to exploit the full potential of the growing higher-value subsector. Country experience Bangladesh. As in other countries in the study, the rural private sector presents a mix of informal, small, medium and large local, regional and international enterprises involved in a range of activities in the production, marketing and processing of agricultural commodities. Although the agriculture sector in Bangladesh has performed well in the recent past, agricultural production alone will not be able to reduce rural

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poverty by half by 2015 owing to a shrinking cultivable area. The rural non-farm sector, including agroenterprises, would also need to play an important role in increasing income and generating employment opportunities in rural areas in order to make a significant dent in widespread poverty. However, growth of the private, business-led, rural non-farm sector faces a number of important constraints. These include: high vulnerability to flooding and natural disasters, which severely limits operations of more than a third of rural enterprises; lack of access to electricity; poorly maintained and managed rural infrastructure; inadequate access to investment finance and working capital, particularly for small and medium enterprises (SMEs); and lack of an effective, decentralized local government structure capable of facilitating delivery of services to rural entrepreneurs (World Bank 2004a). Cambodia. The private sector consists mainly of individual entrepreneurs managing SMEs, as well as regional and international companies. Formidable challenges faced by the private enterprises in Cambodia, as highlighted by a recent study, include a weak business environment and governance, lack of enforcement of existing regulations, poorly developed supply chains, inadequate and uncompetitive infrastructure services and low productivity of individual enterprises (World Bank 2003). In the context of the rural areas where the majority of poor Cambodians live, the private sector, including farmers and their organizations, can be the ‘engine of growth’ for poverty reduction through both on- and non-farm activities. This would require development of an improved legal framework and institutional environment, enhancement of agricultural productivity through technological innovations, intensification and diversification of production systems, and investment in private, business-led agricultural product processing, marketing and agribusiness development. Viet Nam. Over the last decade, Viet Nam has seen rapid growth in private business activities, particularly following enactment of the Enterprise Law. However, the majority of new enterprises have been in the service sector in and around a few industrial provinces. In the agriculture sector, private business participation is still limited. In general, rural business enterprises are small in scale and mostly involved in input supply, primary processing and trading. They suffer from insufficient capital investment, dated technology, lack of quality controls and standards and high transaction costs. Private business growth is also inhibited by the Government’s favourable treatment of state-owned enterprises, particularly in the provision of credit and land, as well as in import and export activities. One area where public/private partnerships are finding acceptance is in rural infrastructure development, although the current successful cofinancing arrangements between the private sector and local government/community are largely confined to small activities in externally financed projects. A closer study of these pilot activities could provide lessons in developing a supportive legal and institutional framework for expansion of public/private partnerships.

Marketing and market information Due to the increasing commercialization of agriculture, farmers in many countries have marketable surpluses of a range of agricultural commodities, but rely on agricultural market systems that are highly fragmented and poorly developed. Thus an important challenge in increasing the profitability of farming operations and rural growth is to integrate smallholders into agricultural value chains serving domestic and export markets, in which, at least in some countries, supermarkets are beginning to play an

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important role. Agricultural value chains include both traditional commodity crops (e.g. rice, maize) and HVACs (horticultural crops, fish, livestock, non-timber forest products). The latter usually provide a higher gross margin per unit of available resources (land, labour, capital, skill/technology) than other commodities within a given location and context. However, it is important to recognize that farmers can also improve returns on common commodity crops by selling higher-value differentiated niche products, for example aromatic rice, organic rice and wheat, and high-protein maize for the poultry industry. Rural producer organizations and marketing. In countries included in the study, the marketing arrangements are somewhat disorganized and dominated by small-scale operations. Conventional market chains for many commodities, including those serving poor consumers, involve numerous small-scale producers, brokers, wholesalers and retailers. In such a situation, the experience of many countries has shown that collective action by producers through RPOs can play a central role in strengthening the position of farmers so they can market their products at improved prices. As discussed in an earlier section, an important element in enabling RPOs to play this role is the empowerment of rural producers and their organizations (through skills and organizational capacity). In the early stages, third-party facilitation is often required as the first stage in the development of RPOs, beginning with informal common-interest groups, as well as the creation of effective, efficient coordination along the value chain, in particular linkages with buyers/markets and agroenterprises. Supermarkets and other distribution chains. Even though supermarkets have become an important part of the agricultural commodity trade in some countries of the region, other distribution chains – including small shops, markets and roadside stalls – remain the dominant suppliers, particularly of fresh fruits and vegetables. Supermarkets usually buy larger quantities than other distributors and purchase commodities according to agreed criteria (variety (consistency), quality and timeliness of delivery). The main suppliers of HVACs to supermarkets are wholesalers or those RPOs able to make the investment necessary to meet the agreed criteria for quality and logistics. Poor farmers have no direct access to supermarkets due to high food safety/quality or quantity requirements. RPOs can help these small farmers by providing the training and other support needed to meet the standards set by supermarkets. Experience has shown that RPOs and other distribution chains enjoying a relationship of trust with supermarkets are able to provide stable prices and increased income to farmers. There is concern, however, that policies advancing the rapid growth of supermarkets could have a negative impact on small, resource-poor farmers, unless they are supported in improving the efficiency of their farming operations by organizations having good working relationships with the supermarkets. It is also important to support and develop other distribution chains that are able to compete with supermarkets and provide profitable outlets to small and marginal farmers (Moustier et al. 2006). Contract farming. Contract farming is an operational arrangement that allows buyers (companies, traders, wholesale buyers) to exert control over the production process without owning or operating farms, which continue to be owned or leased and cultivated by farmers. Contracts vary greatly in detail and complexity. In exchange for a marketing agreement, a contract can be a simple purchasing commitment or may include provision of a variety of services. These could include access to research and extension support, credit, quality inputs (seed, fertilizer and crop-protection products),

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and skills in maintaining product quality and safety. This arrangement can be a socially acceptable means of product supply to agroenterprises in many countries of the region, where shortage of land or the land tenure rules or political realities are not conducive to large-scale farming, particularly by multinational corporations. Thus contract farming can not only provide assured markets at agreed prices to small and marginal farmers for their products, but can also be a means of addressing some of the constraints faced by them in integrating into agricultural value chains. Despite these benefits, however, international experience with contract farming has been mixed. There have been problems in fulfilling contracts, due to weak governance by purchasers or failure of producers to honour contracts. Lessons learned from successful contract farming experiences show that: • Terms and conditions must be clearly laid out in the contractual agreement, particularly with regard to the obligations and benefits that accrue to each party to the contract and taking local conditions into account. • Farmers participating in contracts should be well organized, with strong relationships. • The contract system generally works better if the product is specialized and differentiated, for example specific fruits and vegetables. Conversely, contracts for undifferentiated products, for example regular varieties of rice, have a limited chance of success. Market information. Access to credible market information and intelligence is important if farmers are to know what to produce and where, as well as how to sell their products at attractive prices. As presently organized in most countries, small producers have little accurate information about market demand, prices and the best periods for selling their products. They also lack information on their rights and the regulatory framework for market operations. Most past effort has focused on supporting public institutions, usually government departments of marketing, in disseminating market information to farmers and improving marketing arrangements at regulated markets. However, these efforts have seldom produced an effective system of practical value to small and marginal farmers. There appears to be considerable room for improvement in market information arrangements for these farmers. Country experience Bangladesh. As in many other countries of the region, there is limited strategic linkage between agricultural production and the market. The fragmented market chain involves many players, including local brokers, traders, bapari and farias (middlemen at different levels), commission agents, wholesalers and retailers. Farmers have little bargaining power against wholesalers and their agents, who play the dominant role in setting market prices. Weak arrangements for the dissemination of market information, lack of infrastructural facilities, including storage, and inefficient management of marketplaces and ‘growth centres’ limit market accessibility and farmers’ ability to negotiate optimal prices. The management of marketplaces/growth centres is controlled by traders, and existing market regulations are inadequately enforced. As a result, farmers sell surplus production, in particular the perishable higher-value commodities, directly to brokers/traders at the farmgate prices offered immediately after harvest. This creates a seasonal glut in the market, which further depresses prices. While early and late

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production within the season receive better prices than peak season harvests, most poor farmers are not in a position to exploit this window of opportunity, due to a lack of appropriate technologies/knowledge and the other constraints highlighted above. In Bangladesh, private sector/NGO-driven contract farming is a small, but growing activity, incorporating technical, credit and marketing support for higher-value agriculture. This can be an important mechanism for improving market access for small and marginal farmers at attractive and stable prices, particularly as there is a large pool of such farmers willing to diversify production systems to augment family income. However, to realize the full potential of contract farming, and to avoid problems experienced in other countries, it would be necessary to ensure that: government rules and regulations do not constrain agribusiness and contract farming development; the necessary infrastructure is in place; and farmers are protected from an exploitative relationship with agroenterprises. The public research and extension services can play an important role in meeting the technology needs of producers and in empowering farming communities by promoting the development of informal groups into strong producer organizations. Greater efforts would also be needed to develop trusting public/private relationships that protect the interests of small and marginal farmers. Due to increasing demand in Bangladesh, the production of fruits, vegetables, meat and fish has increased in recent years. Research has shown that entry of smallholders into horticultural crop production provides higher income and increases demand for labour, thus creating employment opportunities for landless labourers (Ali and Hau 2001). These developments are now attracting private investment in value added agroprocessing of agricultural commodities for both the domestic and export markets. To accelerate the private-sector-led growth of higher-value agriculture, backward and forward linkages must be strengthened to help small rural entrepreneurs increase investment in agroprocessing and in developing food quality and safety assurance systems consistent with international requirements. Greater investment is also needed in research, extension, suitable post-harvest technologies for value addition, and capacity-building of all stakeholders in order to support higher-value agriculture. While some innovative work has been done by NGOs in the use of mobile phones by poor people to exchange market information, an effective system is still lacking for collection and distribution of such information to help farmers market their produce at better prices. Cambodia. As in many other countries in the region, the fragmented marketing chain in Cambodia involves many players, including producers, brokers, wholesalers and retailers. Rice (domestic and export) is the most widely traded agricultural commodity in Cambodia and is of direct interest to poor farmers. Other commodities of local/regional importance include maize, vegetables and other food crops (soybean, cassava and sweet potato). With the exception of major cities, market infrastructure, rules and regulations are poorly developed. The marketing chain suffers from weak farmer/processor and farmer/trader/consumer linkages, poorly organized and managed markets, the absence of grading and standards, and weak market information and intelligence. The Agriculture Marketing Project, assisted by the Canadian International Development Agency, began operations in 2004. The project has helped the Agriculture Marketing Office of the Ministry of Agriculture, Forestry and Fisheries establish a consistent and reputable market information system. Armed with the latest market information, farmers in the project area have been able to generate higher incomes by sorting and grading their produce and by more-effective bargaining with traders. The

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Department of Agriculture Extension and some NGOs have helped the Agriculture Marketing Office disseminate market information (Agriteam Canada n.d.). However, the majority of farmers rely on traditional methods (threshing, drying, storing and handling) and processors use outdated technologies, which reduces the quality of both the raw materials and the finished products marketed. In addition, all players along the value chains lack knowledge of quality assurance systems and are supported by ineffective quality-control arrangements. To improve poor people’s access to markets, Cambodia needs to strengthen linkages along the value chain, organize the supply chains better, and improve quality-control systems. Viet Nam. The agricultural market systems remain poorly developed, with inadequate supporting infrastructure and heavy dominance by state-owned enterprises. Despite the quick growth in exports over the last ten years, the domestic market is still the main outlet, absorbing nearly 90 per cent of Viet Nam’s food production. Conventional market chains for many commodities, including those serving poor consumers, involve numerous small-scale producers, brokers, wholesalers and retailers. They use a range of outlets, including mobile street vending, informal street stalls, informal and formal markets, and supermarkets. Markets are dominated by small-scale operations, with 70 per cent having less than 200 traders, and only 10 per cent more than 500. Except in major cities, market conditions are generally poor, in many cases with weak management and poor transport systems from farms to local markets. Over the last five years, central government policies reflecting traffic considerations, improved regulation of food safety and quality, food distribution centralization and urban modernization have favoured rapid development of supermarkets, involving both domestic and foreign investors. This is particularly the case in big cities such as Hanoi and Ho Chi Min City. The main suppliers of HVACs to supermarkets are farmer associations, cooperatives or large producers in the form of semi-public companies. Poor farmers have no direct access to supermarkets, due to high food safety/quality or quantity requirements. Successful and well-managed associations, with support from government institutions and NGOs, are able to provide training (e.g. in safe vegetable production), inputs, collective marketing, quality control and credit supply. Associations in stable and mutually trusting relationships with supermarkets have been able to provide attractive prices and increased income to farmers (Moustier et al. 2006). Distribution of agricultural prices and other market information is undertaken by the Information Center for Agriculture and Rural Development (ICARD), established in 1997. ICARD reviews and analyses commodity and market information for distribution to public and private individuals and organizations, through printed and electronic media, to facilitate production and marketing decisions. However, the information disseminated has often been late and has not reached poor farmers in many parts of the country. To address these weaknesses, and with support from the Swedish International Development Cooperation Agency, ICARD has pilot-tested new procedures for disseminating information to extension workers, market retailers and wholesalers at various levels, and directly to farmers at the municipal level. This includes locality-based market information for farmers through which bulletin board material could be relayed to districts and transferred to municipalities. Eventually, it is hoped that this would be developed into a nationwide system.

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Experience with contract farming in Bangladesh, Cambodia and Viet Nam In all three countries, contract farming is a relatively new phenomenon. However, in Viet Nam, due to support from the Government, it has progressed at a faster rate than in the other two countries. However, as summarized below based on some examples, the results have been mixed. Bangladesh BRAC, a large, well-established NGO, introduced export quality french bean cultivation and entered into production contracts with small and marginal farmers (95 per cent men; 5 per cent women) in Chandina District. Starting in 1998 with 61 farmers who produced 32 metric tons, by 2002 the programme expanded to 965 farmers with a production of 272 metric tons. A formal contract between BRAC and individual producers specified price, quality and quantity to be purchased. All required inputs (seed, fertilizer, pesticides, credit), training and extension support were provided by BRAC. The produce delivered to the BRAC collection centres by farmers was graded into three qualities and purchased at different prices (very fine bean at 20 Bangladeshi taka (Tk)/kg;a fine bean at Tk 15/kg and the lower quality at Tk 3/kg). The average yield was 8,750 kg/hectare, with an average cost of production of Tk 7.92/kg and average net return to farmers of about Tk 6.93/kg. Further expansion of exports was limited, however, due to inadequate infrastructure, limited availability of suitable inputs (seed of a suitable variety and fertilizer) and lack of the regulatory regime required by more sophisticated markets. In order to attract poor farmers to high-risk, higher-value crop production through contract farming, the following are needed: (i) a trusted partner and considerable technical support, along with an assured market, fair prices and credit for inputs; (ii) assured access to suitable inputs (seed of improved varieties, fertilizer); (iii) a government-supported regulatory regime for food quality and safety standards acceptable to importing countries; (iv) considerable public and private investment in infrastructure development, including cool chain and air freight capacity; and (v) improvements in labour skills and productivity to compete in international markets without subsidies. a 1 Tk = 0.01477 US$. Source: International Finance Corporation-South Asia Enterprise Development Facility (IFC-SEDF), World Bank Group (October 2004) Bangladesh. Growth and Export Competitiveness. Poverty Reduction and Economic Management Sector Unit, South Asia Region, www.ifc.org/ifcext/southasia.nsf/Content/Bangladesh_overview.

Cambodia Rice is Cambodia’s most important crop. It occupies about 84 per cent of cultivated area with high biodiversity and represents an over-50-per-cent share of total farm income. The Cambodian Center for Study and Development in Agriculture (CEDAC), an NGO supported by donors, encouraged the Angkor Kasekam RoungReoung (AKR) model of contract farming of organic rice for export. It began in 2001 with 1,200 farmers and expanded to 80,000 farmers by 2004. Farmers were required to join an association in their commune and sign a semi-formal contract with a private company. The contract provided no legal protection, but included oversight from the commune association. The private company bought rice through the association for milling and export at an agreed minimum price. Farmers were trained and provided with seed and technical support by the company. Although the experience with contract farming is still confined to a small area, early indications are that poor farmers with small farms were unable to participate. Those benefiting were mostly larger farmers with sufficient landholdings to be able to shift some of the area used for household food production to cultivation of the specialized rice variety (Neang Malis) and to adopt organic cultivation practices. While contract farming has provided a stable market and higher prices, the contract arrangements seem to favour the company, as farmers have neither legal protection nor bargaining power if the price of rice increases more than the minimum set at the start. This model seems to need improvements in the contractual arrangements and strengthening of grass-roots organizations. Further work is needed to verify benefits and constraints and to develop supporting policies. Source: Cai J, L. Ung, S. Setboonsarng and P.S. Leong (June 2008) Rice Contract Farming in Cambodia: Empowering farmers to move beyond the contract towards independence. ADBI Discussion Paper 109. Asian Development Bank Institute, Tokyo, Japan.

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Experience with contract farming in Bangladesh, Cambodia and Viet Nam Viet Nam Contract farming, although new, is growing fast and has now been tried in a number of situations involving vegetables, fruits, rice, baby corn, fish and pig production. Two types of contract systems can be observed. In the first, the processing company or buyer contracts an organization representing small farmers, for example a cooperative, and the organization contracts small producers individually. In the other case, the processing company or buyer contracts farmers directly. Key lessons have demonstrated the need for: (i) an open and trusting relationship between producers and buyers; (ii) well-trained and organized producers; (iii) clearly defined and well-understood terms and conditions of contracts in appropriate forms; (iv) impartial advice based on analysis of different options, as contract farming is not suitable for all products and situations – for example common commodity production contracts were less successful than those for specialty products. Source: Central Institute for Economic Management (March 2005) Market and Development Bulletin. A bimonthly bulletin published by Hanoi with support from AsDB and the IFC-Mekong Private Sector Development Facility (IFC-MPDF).

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III. Review of institutional interventions and performance

Institutional change and the welfare of poor rural people The framework for assessing institutions and their governance is built on the long-argued and widely accepted concept that well-performing institutions play an important role in sustaining investment and economic growth. Good governance of public institutions is particularly important for poverty reduction, because the efficient delivery of rural services is critical to enhancing the livelihood options and improving the incomes of poor people. The focus of the review was on those institutional reforms that are most likely to improve the welfare of poor people. They included transparency and accountability, information-sharing, and access to services such as inputs (credit, seed, fertilizer, irrigation) and marketing.

Performance review Bangladesh The following projects were selected for review: • Smallholder Livestock Development Project (SLDP; loan number: I-280-BA) – closed • Netrakona Integrated Agricultural Production and Water Management Project (NIAPWMP; loan number: I-343-BD) – closed • Agricultural Diversification and Intensification Project (ADIP; loan number: I-443-BD) – closed • Smallholder Agricultural Improvement Project (SAIP; loan number: I-505-BD) – closed • Sunamganj Community-Based Resource Management Project (SCRMP; loan number: I-567-BD) – ongoing • Market Infrastructure Development Project in Charland Regions (MIDP; loan number: I-681-BDP) – ongoing Decentralization and social mobilization for participatory planning and implementation Despite limited decentralization, Bangladesh has made much progress in developing social capital through the creation of self-managed, empowered groups of various kinds, mostly composed of women. IFAD-financed projects have had a significant impact in this regard. All project designs specified the formation of groups involving poor people, for example savings and credit, water users, pond farmers, small and marginal farmers and landless people. Large NGOs, contracted by projects, helped form the groups and provided training on diverse topics, including group management, social issues and skills needed for income-generating activities. The purpose of the formation and empowerment of the groups was to reduce transaction costs in providing services to poor people, improve access to and involve them in the decision-making process for the planning and delivery of services, particularly extension and credit. As an example, under the Agricultural Diversification

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and Intensification Project (ADIP) (IFAD 1997), group members were free to use loans for any purpose, but training and support in agricultural and livestock activities meant that two thirds of the loans were used for this purpose. In general, the group approach worked well and projects such as ADIP and the Smallholder Agricultural Improvement Project (SAIP) (IFAD 1999a) were successful in building social capital and in improving livelihoods. However, they did not attempt to further strengthen rural people’s organizations and institutions by federating common interest groups into active RPOs. One of the major successes of the Bangladesh programme has been its impact on gender equity and on the social and economic well-being of women. Tangible contributions to this success were also made by agricultural and rural development projects delivered with the help of NGOs, including Grameen Bank and BRAC. The programme has generated self-employment for women, which has not only enhanced women’s self-image, but has brought them recognition as economic contributors to family well-being and to the community at large. For example, under the Netrakona Integrated Agricultural Production and Water Management Project (NIAPWMP) (IFAD 1993a), ADIP and SAIP, women’s groups were extended credit and training for agricultural (e.g. homestead vegetable production) and non-agricultural enterprises, which contributed improved nutrition and income. Interventions in agricultural marketing arrangements also helped broaden the role of women in the rural marketing process, including the setting up of women’s marketing groups under ADIP. An ADIP survey showed that women’s involvement in economic activities under the project contributed to an increase in their ownership of sewing machines, cattle and cropland. While good progress has been made, a number of challenges remain. IFAD (2005b) highlights the following areas of convergence for continued support: • ensuring women’s access to economic resources; • improving microfinance to guarantee inclusion of extremely poor people; • eliminating violence against women; • reducing vulnerability and enhancing skills through training; and • improving women’s participation in local markets. Participatory approaches to adaptive research and extension As highlighted in an earlier section, agricultural technology innovations and their application in Bangladesh are constrained by institutional weaknesses of the agricultural research and extension services. While IFAD-supported projects have not attempted significant institutional reforms, other problems have been addressed, particularly those concerning skills gaps and business processes. The projects reviewed included a greater focus on agricultural extension than on research. Research support was confined to participatory adaptive trials for specific topics in NAIPWMP, ADIP and SAIP. The overall conclusion from these interventions appears to be that some good field trials were carried out, but their impact was limited. This was due to the inherent institutional weakness of participating research institutes, including poor linkages between research and extension, and lack of full commitment and orientation to participatory approaches. These constraints were not addressed and mainstreamed in the national system. In the case of the Smallholder Livestock Development Project (SLDP) (IFAD 1991), funds were provided to the Bangladesh Livestock Research Institute and BARI for specific trials in nutrition and animal husbandry for poultry, goats and sheep, and for improving research/extension linkages.

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The cross-cutting Box 8 benefits of empowering poor rural people and strengthening Institutional their organizations analysis: What to look at Overall approach. The focus of IFAD-supported projects has been on building individual and collective capabilities, mainly through groups using decentralized participatory approaches, for social empowerment, improvement of economic opportunities and assistance with infrastructure. Developing human assests. All the projects studied have included interventions to build human assets through better health, training and technical knowledge. For example, under the Agriculture Diversification and Intensification Project in Bangladesh, farmer groups developed skills and increased incomes through vegetable production and the higher productivity of rice. Forty per cent of the participating group members improved their access to drinking water and many acquired their own tubewells. Building social capital and addressing unequal gender relations. The strengthening of trust and social bonds has been achieved through groups supported under the projects, which gave members the confidence to invest in collective activities for improved outcomes. For example, the Participatory Resource Management Project – Tuyen Quang Province in Viet Nam introduced decentralized, participatory bottom-up planning, which identified an investment in a microirrigation scheme to supply water for higher-value agriculture. A construction company designed and supervised the work, but the villagers, who were organized into water user associations, dug and lined the channels themselves. The gender approach has combined group-based economic empowerment, strengthening of decision-making roles and measures to improve women’s well-being. For example, the Smallholder Agricultural Improvement Project in Bangladesh had a significant gender impact through the creation of social capital. The microfinance activities enhanced women’s self-image, their relationships with others and their recognition as economic actors by the community. Agricultural production. Training and technical support provided under the projects have helped farmer groups increase cropping intensity, yields and incomes through improved marketing arrangements. For example, under the Agricultural Diversification and Intensification Project, farmers in the project area increased overall cropping intensity by 6 per cent, the area under vegetables by 63 per cent and average sales of vegetables per household by 67 per cent. These increases were greater for agriculturally focused small farmer groups. In Cambodia, the Agriculture Productivity Improvement Project was successful in establishing a village-based, privately operated and self-funded veterinary service, which enabled poor farmers to increase production and income from livestock through more-effective disease control and improved management and feeding. Natural resource management. Involvement of user groups and governance arrangements based on self-management have spread the high cost of protecting natural resources and enhancing the sustainability of investments. However, in the case of organizations formed for natural resource management, there may be a trade-off between ensuring environmental protection and managing resources to contribute to immediate poverty-reduction needs. For example, under the Agricultural Resources Conservation and Development Project in Quang Binh Province in Viet Nam, the involvement of local farmer groups and self-management boards were successful in promoting afforestation and conservation, but sustainability of the improvements was a concern, given the lack of protection from fuelwood collectors, particularly during the post-project period. Infrastructure. The sustainability of infrastructure investment, in the short-term at least, was achieved in a number of projects, for example in Bangladesh and Viet Nam, by setting up effective user groups and self-management boards.

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However, the outcome of this work was not included in the reports reviewed. Except for SLDP, all projects had a significant extension component, which was implemented by DAE in the Ministry of Agriculture. The nature of the support involved group formation, training for farmers and department staff, on-farm demonstrations and communications support. In general, the approach to extension support emphasized

beneficiary

participation

through

group-based

planning

and

dissemination systems for production activities, which in some cases included consideration of marketing issues. NGOs were engaged to mobilize groups and link them with DAE staff. While there were variations among projects, the involvement of NGOs helped mobilize communities for group formation and contributed to more frequent contact and effective involvement of DAE staff in the dissemination of information on crop technologies. As a result of the training provided to DAE staff, institutional procedures were influenced to adopt participatory approaches, at least at the group level, but there was no significant impact on institution-building at higher levels (district/national). In addition, coordination between DAE staff at headquarters and NGOs was a problem. In some situations, due to weaknesses in training programmes for farmers, the impact of this input was reduced. Efforts to integrate livestock support into the DAE extension programmes met with limited success, and coordination between DAE and DLS remained a problem. In terms of the reaction of farmer groups to services provided under the project, access to credit was ranked as the most important support, followed by demonstrations, particularly when they included free provision of inputs such as seed. NGO participation NGOs have participated broadly in IFAD-financed projects. Key intervention areas have included community mobilization for group formation and delivery of services to poor people, mainly in microfinance. Some large NGOs have also been involved in extension delivery and adaptive research. In general, the performance of large NGOs has been good. Most showed enthusiasm for agricultural development and some have recruited technical staff at their own expense. This is promising from the point of view of developing effective, alternative extension service providers. In some projects (e.g. ADIP), the engagement of a large number of NGOs created coordination and monitoring problems, and the quality of work undertaken by smaller NGOs with limited resources was patchy. The country programme evaluation (IFAD 2005e) found that the process used to select NGOs was inadequate, resulting in some cases in the selection of small, local NGOs, which hindered project implementation. Projects also reported high attrition rates of NGO staff, which further affected the quality of the work. Seed The major area of shortfall for quality seed in Bangladesh appears to be for rice, where the range of replacement rates is 5-10 per cent. This range is insufficient to maintain high yields and to exploit the full genetic potential of improved varieties, due to admixture and genetic deterioration. SAIP included support for an informal seed multiplication and distribution scheme, which helped farmers multiply improved seed for their use, exchange or sale. However, this informal arrangement failed, as many participating farmers either consumed a significant proportion of the certified seed provided under the project or sold it for food. In view of this failure in the first half of

44

the project, the focus was changed to encourage interested and trained farmers to enter into contract with public or private seed companies to become contract seed growers. This approach worked better and appeared to be more sustainable. Marketing Despite the increasing importance of marketing issues for poor and marginal farmers, earlier IFAD-supported projects made only limited attempts to address these issues. The sole support included under the community infrastructure component of SAIP was the development of 25 designated growth centres to improve market access, as well as pilot testing of support for the building of marketing capacity at the producer level. More recently designed projects are attempting a more holistic approach to linking farmers to markets. An example is the Market Infrastructure Development Project in Charland Regions (MIDP) (IFAD 2006c). This project intends to identify potential producer groups in charland areas,9 develop market facilities (market information and farm-to-market roads), enhance the capacity for market management of producers, market traders (including women) and small business operators, and improve access to credit. Private-sector participation In IFAD-supported projects, the main private-sector players have been farmers and a variety of groups formed by poor people, who have accessed microfinance and agricultural technologies to improve the profitability of their farming enterprises (crops, livestock and fisheries). Another private group involved in the implementation of projects is NGOs. They have been involved in a number of activities, including training, credit, input supply, adaptive research and extension – with some of the large ones investing their own resources to provide expanded service. The combined impact of the commercialization of agriculture by farmers with credit financing through NGOs has been to accelerate agricultural growth, enable value addition activities and improve the incomes of small and marginal farmers. In this expanded market, other private-sector players not directly involved in implementing project activities have been involved as suppliers of agricultural inputs (seed, fertilizer, pesticides, farm machinery, irrigation equipment) or services (repair, transport) or as buyers of products produced by farmers (traders, processors). Greater participation by these players in project areas was greatly facilitated by changes in government policies on trade liberalization (reduction of tariffs on the importation of diesel engines for shallow tubewell irrigation) and deregulation of the input market (e.g. distribution and marketing of seed and fertilizer). The need for public as well as private investment in infrastructure development and the provision of some rural services has highlighted the option of public/private partnerships. These offer a way to bring additional resources and expertise from the private sector to expand coverage and improve quality. IFAD microfinance projects have supported cofinancing arrangements between the public sector and local communities for small-scale infrastructure development. This experience offers an opportunity for further expansion of such arrangements to include other players in the private sector.

9 ‘Charland’ is land located in an active river basin that is subject to erosion and accretion. Charland regions are also prone to severe annual flooding. They are home to some of the poorest people in Bangladesh, with seasonal incomes only.

45


Cambodia The following projects were selected for review: • Agriculture Productivity Improvement Project (APIP; loan number I-423-KH) – closed • Agricultural Development Support Project to Seila (ADSPS; loan number: I-513-KH) – closed • Rural Poverty Reduction Project in Prey Veng and Svay Rieng (RPRP; loan number: I-623-KH) – ongoing Decentralization and social mobilization The Seila Program, which began in 1996, is Cambodia’s aid mobilization and coordination mechanism. It manages Cambodia’s poverty reduction, decentralization, deconcentration and local governance reforms, as well as development support. IFAD’s Agricultural Development Support Project to Seila (ADSPS) (IFAD 1999) was designed to increase food and income security by financing agricultural development and rural microfinance services. In the first phase of the Seila Program, considerable emphasis was placed on village-level development and the election of village development committees, which included both women and men. The second phase is continuing this support and is coordinating municipal-level local development funds, managed by elected members, and provincial investment funds, managed by appointed government committees at national, provincial and district levels. In general, Seila has been successful in facilitating broad-based participation among local and subnational authorities. Local development funds have largely financed rural roads, schools, water supply schemes and irrigation. These investments have brought economic benefits to rural communities and have spread across socio-economic groups. Civil administration now engages in bottom-up planning processes and good governance. Seila has also been successful in introducing bottom-up planning processes in the Government’s development programmes. However, governance/regulatory issues persist that may hinder political, administrative and fiscal decentralization, which may in turn reduce the intended benefits to poor rural people. Vertically managed sectoral programmes are able to bypass subnational entities or overrule efforts for horizontal coordination (Anderson 2004). ADSPS was implemented as a sector programme within the Seila framework, which was largely managed by central government staff at national, provincial and district levels, supported by technical advisors. This meant that activities financed by the project were not part of local development plans, and linkage with local government bodies, for example village development committees, was limited. The project mobilized groups across different socio-economic levels using participatory processes with the help of NGOs, who were also involved in implementing the microfinance component and training. However, the project completion report noted that coordination of the microfinance component with the Provincial Department of Agriculture was quite poor and contributed to credit not being effectively targeted in support of the agricultural component and its activities (production start-up programme and agriculture improvement programme). This highlights the importance of designing close institutional alignment into implementation arrangements between agricultural services and microfinance activities. Groups were encouraged to select technically

46

feasible and financially attractive activities that addressed their priority concerns and to participate in field demonstrations, extension and other activities (IFAD 2006b). The Rural Poverty Reduction Project in Prey Veng and Svay Rieng (RPRP) (IFAD 2003) is financing both agricultural and local development. Project groups participate in the municipal planning process, as well as in monitoring and impact assessment processes. The local development component supports decentralization and gender mainstreaming at the municipal and provincial level and decentralization and deconcentration at the national level, using the Government’s system for decentralized development planning. In general, the processes to empower community-based informal groups to manage their productive resources under IFAD-supported projects have worked satisfactorily. However, no attempt was being made to formalize these groups into their own organizations for greater sustainability. RPRP is innovative in seeking to align project activities with the Government’s decentralization programme. It is introducing a common planning process for activities financed by the agricultural investment and local development components, including the cofinancing of infrastructure facilities with municipal councils through a common infrastructure development fund. Households headed by women in ADSPS and RPRP represent 12-23 per cent of all households, and women account for over 50 per cent of the adult labour force, providing 30-40 per cent of farm labour. The project area does not have the rigid division of labour and sources of income by gender found elsewhere in the region. Women, along with men, are mobilized and empowered as members of diverse groups, including those involved in savings and credit activities. By improving the livelihoods of all participating households (farm incomes and a more diversified pattern of crop and livestock production), the project is able to benefit those headed by women as well. RPRP includes explicit support for gender mainstreaming at the provincial level and gender analysis training, regular gender analysis of project activities and province-wide gender training in good governance. Adaptive research, extension, and natural resource and environmental management IFAD-supported projects in Cambodia have included limited support for adaptive research. In the case of ADSPS, this included participatory on-farm trials to support upland agriculture. Work was undertaken by project staff, with design and implementation support from the World Agroforestry Centre (ICRAF), which is an institute of the Consultative Group on International Agricultural Research (CGIAR). However, the initial work failed to contribute significantly to upland farming systems. Later work, which included input from CARDI, was more successful. Agricultural extension activities have covered both the livestock and crop subsectors. In the case of livestock, under the Agriculture Productivity Improvement Project (APIP) (IFAD 1996b), the focus was on developing a privatized animal health service delivered by village animal health workers (VAHWs). This work was underpinned by promotion of a privately operated supply chain for veterinary vaccines and medicines. Continued support for this approach is being provided under RPRP, which is addressing weaknesses in the number of workers and their technical skills through training, and through the supply of vaccines and medicines. To enhance the sustainability of the private

VAHW

approach,

RPRP

supports

establishment

of

district-level

VAHW associations to provide oversight on technical standards, offer ongoing

47


Box 8 Institutional innovations in agricultural extension – lessons learned Institutional analysis: What to look at Focus on participatory approaches and bottom-up planning to target poor people, including women. Governments have adopted policies to decentralize decision-making and encourage participation in investment decisions by local communities and their organizations. Within the framework of these policies, the projects reviewed have adopted participatory and bottom-up approaches to facilitate demand-based planning and to improve access to services for poor people, including agricultural extension. At the same time, projects have been located in the poorer parts of countries to improve targeting of poor households. In general, this approach has led to better linkages between farming communities and public extension services, which remain the dominant provider. However, there has been limited improvement in the quality of service, and coverage of poor people, particularly women, was compromised owing to unequal social and economic relations in local communities. Support for the emerging pluralistic institutional base for service delivery. Projects have promoted local producer groups in all three countries to express demand and to influence the extension agenda. In Bangladesh, responsibility for promotion of community-based organizations and delivery of extension support, for example under the Agricultural Diversification and Intensification Project, was contracted out to large national NGOs having the capacity for such work. In practice, this approach worked during the life of the project, but was unsuccessful in promoting stable community-based organizations, as the NGOs involved largely moved on to different tasks when the projects ended. In Viet Nam, both formal (e.g. cooperative) and informal groups (e.g. farmer extension clubs, women’s associations, farmer field schools) were involved, but they largely followed publicly determined priorities for production. In Cambodia, the Agriculture Productivity Improvement Project successfully established a village-based veterinary service provided by self-employed village animal health workers. However, in most projects, sustainability of these initiatives during the post-project period remained a concern. In general, linkages of small producers and their organizations with the private agribusiness sector and markets remained weak, with limited integration into emerging private-sector-driven value chains. Notable exceptions have included the commercial livestock producers, for example poultry in Bangladesh and coastal and riverine aquaculture and pig production in Viet Nam, where the role of the private sector is strong in linking input supply companies and buyers with producers. However, these have not always targeted poor people and women or involved IFAD-supported projects. Need for institutional innovations in funding mechanisms of extension services. Most IFAD-supported projects have channelled funds to public extension services through the government budget. There have been some limited attempts to experiment with channeling funds through competitive or contractual mechanisms, such as community development funds, contract farming and user cofinancing (with a small proportion coming through user fees or cost sharing). However, ensuring that new financing mechanisms serve poor people and that service providers are accountable to them would be a major challenge. Capacity-building of key stakeholders. All projects have included resources to support capacity-building activities, particularly to promote group-based participatory approaches to enable communities to articulate their needs. However, post-project sustainability of these approaches remains a concern, particularly as prolonged support is needed to build capacity in poor and more-marginal rural communities. In addition, the focus on methodological approaches has in some cases limited support for technical training and strengthening of the outreach of service providers. For example, the interim evaluation of the Agricultural Resources Conservation and Development Project in Quang Binh Province in Viet Nam highlighted the need for capacity-building and for greater outreach of the extension service for agriculture and aquaculture. The OE evaluation of the Bangladesh portfolio highlighted the need for greater attention to documenting and disseminating knowledge to partners to strengthen outreach.

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education, rationalize fee rates and facilitate the purchase of veterinary medicines and supplies. ADSPS crop extension activities received technical support from CAAEP, in particular for its approach to agroecosystem analysis. This somewhat resource-intensive approach was developed for selected provinces as an input to municipal development planning, which allows greater stakeholder participation. RPRP is also adopting this approach for municipal-level investment planning. To assist with institutional development of the extension service, ADSPS supported recruitment of district and village extension workers. However, as they were paid from project funds, post-project sustainability was an issue, particularly as RPRP is continuing with a somewhat similar approach in different districts from those covered under ADSPS. The community-based natural resource management programmes of both ADSPS and RPRP involved the planting of forests in a number of municipalities. RPRP also includes funding for rice-field fisheries and other natural resource and environmental management initiatives. Seed Seed production here is dominated by rice seed production. After the introduction of improved varieties, most of the seed is saved by farmers from their own crops to use in subsequent seasons. IFAD-supported projects have not supported seed production in Cambodia. Marketing In the past, IFAD-supported projects emphasized production activities, and marketing issues did not receive much attention. However, this situation is changing. RPRP, through linkages with AQIP, assisted by Australia, is helping improve market opportunities for fruit and vegetable producers. Private-sector participation In IFAD-supported projects, the main private-sector players have been farmers and a variety of groups formed by poor people, who have accessed microfinance and agricultural technologies to improve the profitability of their farming enterprises (crops, livestock and fisheries). Another private group involved in the implementation of projects is NGOs. Other private-sector players not directly involved in implementing project activities have been involved as suppliers of agricultural inputs (seed, fertilizer, pesticides, farm machinery, irrigation equipment) or services (repair, transport) or as buyers of products produced by farmers (traders, processors).

Viet Nam The following projects were selected to assess the evolving nature of institutional interventions: • Participatory Resource Management Project – Tuyen Quang Province (TQPRMP; loan number: I 328-VN) – closed • Agricultural Resources Conservation and Development Project in Quang Binh Province (QBARCDP; loan number: I-434-VN) – closed • Ha Giang Development Project for Ethnic Minorities (HGDPEM; loan number: I-460-VN) – closed

49


• Rural Income Diversification Project in Tuyen Quang Province (loan number: I-578-VN) – ongoing Decentralization and social mobilization for participatory planning and implementation IFAD-supported projects have facilitated decentralized operations through support to institutional frameworks that enable poor rural people to organize into groups or associations and, using participatory processes, to develop the capacity to negotiate with the power structure. This approach to social mobilization has enabled poor rural people to engage in planning and implementation and to identify their priority needs in order to obtain more-effective responses (IFAD 2001c). The Participatory Resource Management Project – Tuyen Quang Province (TQPRMP) (IFAD 1993) and the Agricultural Resources Conservation and Development Project in Quang Binh Province (QBARCDP) (IFAD 1996, 1996a) were among the first projects to use decentralization and the participatory development approach in Viet Nam. These projects successfully established community groups based on common activities, for example water user groups. After a slow start, the projects succeeded in building management capacity at the community level and in familiarizing government departments that provide rural services with participatory, demand-driven approaches. However, for deeper understanding and adoption of these processes and for improved communication among the various institutions involved in the projects, there appeared to be a need for continued support and training. Participatory rural appraisals (PRAs) conducted by the projects were limited to activity-specific planning and implementation by each line department of its own component. This approach did not allow scope for development of a common platform for integrated, local-level development planning and implementation. PRAs could have devoted more attention to participation by the poorest people and to an analysis of the local causes of poverty. While line department staff exhibited good technical understanding and experience in their respective sectors and assimilated the training in PRA methodologies, they appeared not to have time or resources to facilitate participatory approaches on a continuing basis. In such situations, provision of dedicated facilitators was found to be beneficial for participatory development, social mobilization processes and development of strong linkages between departments/service providers and target groups/communities. Early projects had complicated designs and relied on project-specific institutions at the grass-roots level – for example project coordination units, self-managed boards, new committees – with memberships and functions overlapping with existing ones. In many cases, it would have been better to use existing institutions for these functions and to strengthen them in terms of capacity, transparency, information-sharing and active engagement in participatory processes. Community development funds (CDFs) were introduced to encourage bottom-up development and to provide communities with a flexible institutional mechanism to finance their evolving needs during implementation. While this was a successful intervention, no suitable mechanism was identified to mobilize other resources during the post-project period. As a result, sustainability was considered doubtful. IFAD-supported projects contributed to the social and economic empowerment of women by involving them in groups, particularly savings and credit groups, and in skills

50

development for agricultural, livestock, forest management and marketing activities. Women were actively involved in PRAs, including some women-only PRA groups (in Quang Binh) in order to identify their specific needs. The main areas for continued support and policy dialogue include distribution of power within households (in terms of decision-making power, workload, nutrition); representation in development institutions; and access to productive assets (land, credit, education). Adaptive research, extension, natural resource management and environmental protection The adaptive research component of projects, for example of TQPRMP, was designed to address constraints faced by poor farmers operating in various farming systems. This required work to be undertaken on-farm in microecological situations similar to those faced by farmers. However, the inability of the research systems to manage on-farm research meant that most of the work was carried out at research centres. Owing to weak research/extension/farmer linkages, priority concerns expressed by farmers during PRA exercises were not fully understood and addressed by researchers. Moreover, the main research centres (e.g. the Agriculture and Forestry Applied Research Centre) appeared to be weakly linked to the national research institutes. In contrast to adaptive research, extension support under IFAD-funded projects has been more successful. The projects used findings of PRAs to identify the technology support needs of farmers and to build a demand-based extension system. Under the agricultural development component of QBARCDP, a decentralized district- and municipal-level extension system was established and extension workers were trained in participatory extension methodologies. In TQPRMP, the extension system was successful in addressing some of the technical constraints and disseminating extension messages through participatory, on-farm technology validation trials, demonstrations, farm visits and use of mass media. IFAD-supported projects also promoted need-based livestock services to farmers. In Quang Binh province, the extension service helped bring about advances in fish rearing, establishment of fish and shrimp hatcheries and the treatment and prevention of disease. Under the Ha Giang Development Project for Ethnic Minorities (HGDPEM) (IFAD 2005a), the extension system – through farmer field schools (FFSs) and integrated pest management (IPM) clubs – helped demonstrate technologies that increased yields and production of major cereals, forage crops and agroforestry tree species and that had the potential for wider uptake. However, the approach ignored the value of indigenous practices, constraints on poorer mountainous areas and the inability of households to cope with high-cost technologies. Evidence collected during the post-project period seemed to suggest that few FFSs or groups have survived, farmers are not convinced of the institutional approach adopted, and the facilities provided and impetus achieved have not been maintained. Other weaknesses were the emphasis on high-input production technologies in extension messages and the neglect of postharvest management and marketing issues. The issuance of forest protection contracts to local farmers and their communities in Ha Giang was found to be an effective, efficient mechanism for the care and management of forests (IFAD 2001c). This success provides a useful model for further institutional innovations in community-based forest management practices. However, in the absence of alternative sources of fuel and the use of shifting cultivation, protection

51


of forests in mountainous regions remains a formidable task. In Quang Binh, a programme was piloted to develop tree planting to counter the gradual intrusion of sand dunes in 12 southern municipalities. The participatory arrangements used in the programme, which allowed cultivation and the settlement of people under self-management boards, gave promising results in promoting the sustainable utilization, management and conservation of forests. In general, though, despite promising pilot work, projects have had limited impact in community-based natural resource management or in the wider application of soil conservation measures and agroforestry. Input (seed)/output marketing and private-sector participation Past projects have given little attention to the development of market linkages between smallholders and private markets for inputs, despite their strategic importance. The only exception is the recently approved Programme for Improving Market Participation of the Poor in Ha Tinh and Tra Vinh Provinces (IFAD 2006). This programme aims to increase incomes by facilitating access to and participation in markets. It will create an institutional and environmental framework and invest in activities that allow poor people to exploit the development potential of the private sector. The programme’s investment components include five interlinked interventions: • municipal market opportunity support to enhance the livelihoods of poor people through more-effective interaction with markets; • job/market facilitation and market development to facilitate increased access by poor rural people to jobs and to add value to their production; • enterprise financing for household/microenterprises and SMEs to benefit poor people; • programme coordination to ensure effective management and create the basis for replication of successful approaches and interventions elsewhere in the country; • a performance incentive budget to promote efficiency in managing programme resources by expanding the budget of any activity having a substantial impact in enabling poor people to participate in markets.

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IV. Regional cooperation on institutional and policy development

East Asia This region has achieved a high degree of regional integration in a number of fields, particularly in market-driven trade. It has invested heavily in cross-border infrastructure, transport, regional trade agreements and in developing economic corridors – thus increasing intraregional trade faster than any other regional market (Krumm and Kharas 2006). The emerging challenges to continuing expansion of trade call for policy reforms and rationalization of the roles and responsibilities of public and private institutions in order to promote bilateral and regional trade arrangements. The regional vision is to establish an economic community of member countries of the Association of Southeast Asian Nations (ASEAN) by 2020. China’s commitment to a regime of low protection in agriculture and the China-ASEAN trade agreement with its ‘early harvest’ provision would further reduce trade barriers. Greater Mekong Subregion (GMS). A good example of regional cooperation is the multisector GMS Program, which began in 1992 with the help of AsDB and other partners. It involves Cambodia, China, the LAO People’s Democratic Republic, Myanmar, Thailand and Viet Nam. Large investments in infrastructure, human resource development and the creation of a favourable business environment to attract private-sector resources have contributed to rapid growth and expanding markets. Agriculture is a key economic sector in GMS, and the sector of non-traditional, highervalue products for export is of growing importance (AsDB 2007). Although GMS agriculture has made significant contributions to growth, it faces a number of challenges, including the need for policy and institutional reforms, if it is to manage future growth with equity and deepen regional integration. Critical areas relate to: institutional reforms for improved delivery of public services; management of health/social issues in preventing the spread of disease; mitigation of unfair labour/migration practices; investment in science and technology to bridge skills gaps; and prevention of environmental degradation, which is largely due to the unsustainable management of natural resources (Butiong 2006). The core agriculture support programme is addressing some of these concerns by promoting public/private partnerships, enhancing the capacity of agricultural science and technology, establishing emergency response mechanisms for agricultural and national resource crises, and strengthening institutional linkages and mechanisms for cooperation (AsDB 2007).

Barriers to regional growth and integration in agriculture Existing regional agreements limit trade in sensitive sectors such as agriculture. Despite this, however, cross-border formal and informal trade is substantial in many agricultural commodities, for example rice, maize, cassava, fruits and vegetables. As shown by Elhaut (2006), there is serious potential for growth if greater attention is paid to: • improved logistics, processing capacity, supply chain competitiveness and market integration, particularly involving poor rural producers;

53


• continued support to strengthen technology, communications, extension and credit services for small producers; • harmonization of common product standards and inspection services; • improved capacity for the monitoring and control of sanitary and phytosanitary standards.

South Asia A number of initiatives have been promoted under the South Asian Association for Regional Cooperation (SAARC), including the recent agreements on the South Asia Preferential Trade Area (SAPTA) and South Asia Free Trade Area (SAFTA). Despite these, however, a recent study (World Bank 2007) concluded that South Asia remains highly protected and is the least integrated region: intraregional trade accounts for only 5 per cent of the countries’ total import/export trade. The study highlighted a number of constraints on increased competitiveness and regional trade, including weak infrastructure, finance and economic governance; insufficient and unreliable power supply; and inflexible labour and land markets. The study also pointed to continued conflict between India and Pakistan, inappropriate policies and weak institutions as additional barriers to enlarged regional trade and cooperation. In the agriculture sector, the approach of SAARC member countries to cooperation is based on recommendations of the Technical Committee on Agriculture and Rural Development (TCARD), which at present is quite limited. There appears to be a desire among member countries that TCARD play a role in bridging knowledge gaps by identifying

specific

areas

for

regional

cooperation

through

dedicated

programmes/projects. It should also promote institutional cooperation in various disciplines of agriculture, for example agricultural research and extension, collective actions to combat pests and diseases, and joint ventures in developing value chains, including agroprocessing. An initiative to share agriculture-sector information includes establishment of the Agricultural Information Centre (SAIC) in Dhaka, Bangladesh. SAIC is still developing its mandate, and will need more resources if it is to achieve visible impact.

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V. Emerging challenges of climate change and food pricing

Climate change The croplands, pastures and forests that occupy 60 percent of the Earth’s surface, are progressively exposed to threats from increased climatic variability and, in the longer run, to climate change. Abnormal changes in air temperature and rainfall and resulting increases in frequency and intensity of drought and flood events have long-term implications for the viability of these ecosystems. – FAO 2007 The Intergovernmental Panel on Climate Change (IPCC) has concluded that human activities that emit greenhouse gases into the atmosphere are responsible for most of the warming of at least the past 50 years, which could in turn be responsible for an increase in earth temperature of 0.5 to 1.0 degree Celsius. The Food and Agriculture Organization of the United Nations (FAO) concludes that climate changes are contributing to a decline in the productivity of agriculture, particularly in more vulnerable parts of the world (FAO 2007). While overall global food production may be sustained, those least able to adapt or access food at affordable prices would bear the main burden. In the long term, it is likely that some countries would see a reduction in their national agricultural gross domestic product (World Resources Institute 2005). Considerable global efforts are needed to mitigate emissions of greenhouse gases and to develop adaptive mechanisms to help cope with the impacts of climate change. The success of this development strategy would depend not only on the ability of both rich and poor countries to address the direct impacts of climate change, but also on the underlying factors that cause vulnerability to these changes. In the face of drier, hotter and more unpredictable weather patterns, the immediate challenge for farmers is to adapt farming practices to the changing circumstances. In practice, climatic changes are additional challenges to those already faced by farmers, particularly those farming in marginal rainfed areas, which are home to the majority of poor and food-insecure people. Thus adaptations to climate change, although becoming increasingly urgent, would need to be addressed simultaneously with other challenges that impede productivity growth and diversification in agriculture and efforts to reduce rural poverty. Among other factors, these include inadequate investment in research and development and in water security in order to develop scientific and technological solutions, rural infrastructure and market access for small farmers. Depending on the situation, technology-based adaptive mechanisms may involve changes in cultural practices, including sowing date and varieties (or crop), adaptation of irrigation systems and adjustments in the use of other inputs. However, to enable farmers to make informed choices, the public services, particularly agricultural research and extension, would need to provide better information, including better forecasts, to prepare farmers for change and provide options for adaptation suited to their socio-economic and biophysical circumstances. Some work by the national systems has already started, in conjunction with the international research institutes of CGIAR. For

55


example, with the help of IRRI and CIMMYT, Bangladesh is working on heat- and drought-resistant varieties of staple crops such as rice, wheat and maize. IRRI is also helping Cambodia and Viet Nam in similar work. In addition, in the Indo-Gangetic plains, which include Bangladesh, work is underway to change the way rice and wheat are grown. This involves the use of zero-tillage farming methods, which help conserve water and nutrients and, as an added benefit, reduce the amount of carbon dioxide released from the soil into the atmosphere, where it contributes to climate change. ICRAF has found that planting trees between crops and in the boundaries around crops can help adapt to climate change by sequestering carbon, preventing soil erosion, restoring soil fertility and providing shade for other crops. In this developing scenario, IFAD’s projects have the opportunity to play a more proactive role in helping member countries map the potential impacts of climate change on smallholder agriculture. It would then be possible to prepare adaptive strategies involving adjustment of farming practices – cropping patterns, choice of varieties, planting methods and crop management practices – as well as of policies, institutions and attitudes of service providers in order to deliver responsive technological, infrastructural and management services. Although not specifically intended to address adaptation to climate change, technical grants to IRRI to develop technologies for improving rural livelihoods in rainfed systems in South Asia (grants 148, 262 and 634) have made a number of recommendations for raising the productivity of rice, maize and legumes under the variable environmental conditions faced by millions of farmers in Bangladesh, India and Nepal (Islam et al. 2007). There is also a need for greater investment in risk-sharing (safety-net and weather insurance) and in strengthening of knowledge systems and mechanisms to mitigate the impacts of climate change. Work supported by IFAD (grant 534-ICRAF to the World Agroforestry Centre) has demonstrated the possibility of rewarding poor and vulnerable communities in hill and mountainous regions for environmental services they may provide to benefit the wider community (Leimona et al. 2008). In the future, both grant and loan projects would need to focus on mainstreaming actions that help reduce the vulnerability of poor and marginal farming communities to climate change.

Food pricing The surge in food prices between 2005 and early 2008, resulting from supply and demand imbalances and speculative activities of traders, has led to re-examination of the food policies of developing countries and of donor institutions/countries. The objective of these examinations has been to increase food supplies at affordable prices to those most in need. Although the spike in food prices has now declined somewhat, the global financial crisis has once again highlighted the vulnerablity of poor people to disruption of reliable food supplies in the face of increasing demand and declining supply. A policy brief prepared by the International Food Policy Research Institute (IFPRI) (Braun et al. 2008) described the complex causes of the current food and agriculture crisis and highlighted the need for a comprehensive response. To ensure that help flows to those in immediate need of assistance, the policy brief emphasized the need for expansion of humanitarian assistance to food-insecure people, elimination of export bans and restrictions, and implementation of fast-impact food production programmes in key areas. In the medium to long term, the brief recommended adoption of market-oriented regulations to calm speculation and strengthen food-

56

import financing and reliable food aid. It highlighted the need for increased investment in social protection, the scaling up of sustained agricultural growth and liberalization of world trade. Because countries differ in their needs and situations, the policy brief stressed that the design of programmes needs to be country-driven. The food crisis has demonstrated that IFAD needs to increase project support to raising the productivity of smallholder agriculture, particularly in affected countries, through policy and institutional changes. The organization also needs to invest more in agricultural services that improve the availability of innovative technologies, input supplies and access to markets on better terms.

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VI. Key conclusions and recommendations for the future

The overall conclusion of the study is that the organizations involved in delivering rural services are progressively adopting practices that enhance the welfare impact of their work. However, there are large variations both among countries and within services included in the study. International experience shows that improvements achieved in institutional effectiveness are strongly influenced by the following reforms: • decentralization and development of social capital through the empowerment of poor rural communities to work together for a common purpose; • participation of target communities in the governance of and decisions on the allocation of public funds and the choice of goods and services to be provided; • institutional pluralism in the delivery of services to encourage competition and increase choice; and • rationalization of the roles and responsibilities of public- and private-sector institutions in the provision of services related to public and private goods. Table 2 summarizes the evolving typology of roles and responsibilities of public and private institutions, as well as the direction of support under IFAD-funded operations for continued improvements in the services provided to poor rural people. Table 2 Evolving typology of institutional roles and responsibilities and direction of support Key issue

Public

Private

Increasing administrative, fiscal and political responsibility to local government agencies for rural services

Inclusion of private stakeholders in governance (participating communities, NGOs, agroenterprises)

Reliance on public funding, but with involvement of both public and private organizations in delivery of services

Effective involvement in decision-making process, including funding and monitoring and evaluation of services

IFAD

Decentralization Governance and institutional capacity

Support for capacity and skills development Operational modalities

Shift from top-down to participatory approaches Participatory planning and implementation for greater transparency and accountability

Increased participation and shared responsibility for execution and outcomes Reduced dependence on public funding through cost recovery or cost sharing

Support for emerging pluralistic institutional structure of service providers and facilitation of effective representation of poor people, including women, in governance Empowerment of rural communities and strengthening of their organizations Support for common platform for community-level, participatory, multisector planning and prioritization of development plans Promotion of community-managed funding mechanisms, including public/private partnerships, for greater transparency and sustainability More-effective targeting of poor people in local plans

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Key issue

Public

Private

IFAD

Rural producer organizations Governance and organizational development

Supportive policy for development of member-led democratic and independent RPOs

Support to development of strong RPOs, particularly through sharing of experience and skills development

Development of services (social, technical, financial, marketing) based on member demand

Support to empowerment of participating communities and provision of managerial, organizational and financial support for development of independent RPOs Promotion of innovations for financial sustainability

Focus on development of human and financial resources Establishment of linkages with relevant public and private organizations to access knowledge and services, including credit Research Governance and institutional development

Development of pluralistic institutional structure Establishment of appropriate intellectual-property-rights legislation for mutually beneficial public/private partnerships

Inclusion of all stakeholders (participating communities, NGOs, agroenterprises) in governance and in decision-making processes, comprising funding and monitoring and evaluation

Focus of public-sector funding on ‘public good’ research and long-term capacity development

Increased private investment and public/private partnerships in market-driven technology development

Strategic placement of grants and loans, in collaboration with other development partners where appropriate, to support: (i) national/regional initiatives for policy and institutional reform; (ii) national, regional and international initiatives to generate demand-based pro-poor technologies

Promotion of regional and international alliances, particularly to address global issues and develop national capacity Operational modalities

Decentralization of national system and promotion of participatory approaches involving key stakeholders Demand-based planning and monitoring to improve responsiveness to farmers and market Competitive allocation of funds

Execution of publicly funded research through: (i) public/private partnerships; and (ii) participation in competitive grant programmes

Support for mainstreaming of participatory approaches involving stakeholders, in particular poor people and women Support for innovative models involving stakeholders in a variety of formal and informal partnerships for pro-poor research and development

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Key issue

Public

Private

Support for pluralistic and decentralized institutional structure (including NGOs, agribusiness, farmer organizations) and options for private provision of extension, where necessary with public funding

Inclusion of all stakeholders in governance and decision-making at all stages in the decentralized extension system

IFAD

Extension Governance and institutional development

Capacity-building of stakeholders

Increased private investment in market-driven technology transfer, including ICT tools and techniques

Facilitation of equitable relationship between producers and agroenterprises Operational modalities

Adoption of participatory approaches with stakeholder involvement Competitive allocation of funds to promote accountability and responsiveness Focus on empowerment of farming communities to enable independent choices based on knowledge from various sources

Execution of publicly funded contracts through public/private partnerships or fee-based provision (paid by farmer) of demand-based extension support along the value chain Extension (and input) support as part of contract farming model, working through producer organizations

Facilitation of institutional innovations for enhancing technology outreach – including networks of service providers and technically qualified rural youth – to achieve more-effective technology transfer and exchange of knowledge and information, with a focus on marginalized areas

Support for innovative models of technology transfer involving farmers, NGOs and agroenterprises in a variety of formal and informal partnerships with public institutions, including models where funds are controlled by users

Input supply (seed) Governance and institutional development

Level playing field (policy and legislative) for private-sector participation in seed industry Capacity development of regulatory service Public/private partnerships for seed production and distribution, including involvement of RPOs

Increased investment in seed production and marketing, including strengthening of distribution network Strengthening of RPOs to facilitate bulk purchasing of inputs for distribution to members

Support for policy and institutional reforms to encourage private-sector-led seed production and distribution systems

Market Access to technology and skills

Funding of market-oriented research and extension Promotion of institutional pluralism

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Provision of technologies for production, post-harvest management, extension support and inputs

Support to reform of technology services, including rationalization of public and private roles and funding of pro-poor programmes

Key issue

Public

Private

Supportive policy environment for private-sector participation

Increased investment in rural agroenterprises, including processing, inputs and credit markets

IFAD

Market Market linkages

Strengthening of producer organizations Support for market communication and infrastructure Capacity development of stakeholders, including issues related to contract farming

Collaboration with producers and their organizations through contract farming or other services, including mechanisms for equitable enforcement of contracts

Strengthening of producer organizations Support for policy and institutional reforms for greater private participation and public/private partnerships, including those for infrastructure development Promotion of contract farming and institutional capacity for contract design and dispute resolution Study of social and sustainability dimensions of contract farming

Sanitary and phytosanitary standards

Establishment of common grades and standards

Supply of safe inputs and IPM practices

Strengthening of capacity for monitoring and control of sanitary and phytosanitary standards

Training of dealers, distributors and farmers, as well as their organizations, in good agricultural practices, including food safety

Development of stakeholder capacity to implement good agricultural practices Risk and vulnerability

Policy support for creation of insurance market

Promotion of equitable contracts

Capacity development in managing financial and market instruments

Facilitation of access to insurance services, where available

Sharing of regional and international experience for improvements in sanitary and phytosanitary standards Support for infrastructure and capacity development

Support for policy and institutional innovation in risk management, including safety-net programmes and insurance market

The following section offers study conclusions and recommendations that take account of the lessons learned: Provide sustained support to decentralized institutions and engage empowered communities through participatory approaches There are large variations in the pace and depth of decentralization and its related reforms in the various countries of the region. Despite this, however, overall experience suggests that decentralization of administrative, fiscal and political powers, empowerment of communities through their own organizations, and their involvement in the decision-making process using participatory approaches are important pro-poor initiatives in rural development. These approaches lead to improved quality and efficiency of services as compared with the top-down approach adopted by public institutions in the past. The evolving typology of service delivery under decentralized systems requires a transfer of responsibility to local government agencies, engagement of all stakeholders in the governance of social and economic development activities, and support for institutional pluralism in the provision of services at the local level.

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As demonstrated earlier, IFAD-supported projects have emphasized participatory approaches to targeting poor people and determining their priority needs. They have also been proactive in supporting social mobilization to promote a variety of groups, for example savings-and-credit self-help and common interest groups (water users, commodity-specific groups). This has enabled poor people, particularly women, to participate in the decision-making process and in the efficient management of resources. IFAD has been a pioneer in promoting women’s interests and in supporting institutions for both women-specific and mainstreamed activities. As a result, significant progress has been made, but there is still a long way to go in reaching equality in the gender distribution of power in terms of decision-making authority, workload, access to education, nutritional status and representation in public institutions. Other concerns related to decentralization include a need for accountability mechanisms and the capacity-building of nascent grass-roots institutions. Accordingly, the design of future IFAD-supported operations should: • emphasize strengthening of local government and community-based grass-roots institutions – including greater representation of women in decision-making bodies – to facilitate effective administrative, fiscal and political decentralization of responsibilities. Facilitate formal recognition and support of such bodies by the government during the post-project period as a project design feature; • link diverse activity-based informal groups and their organizations with decentralized local government institutions to promote a common platform for integrated village development planning and for accessing resources in support of rural services for poor people; • mainstream participatory processes as the preferred operational modality for provision of public services, and allocate sufficient resources for the capacity-building of all stakeholders (which has generally been underestimated in past projects); and • ensure effective representation of women in village institutions and community decision-making processes and in bodies with control of assets and resources. Strengthen rural producer organizations for collective action Collective action by producers, through their own organizations, can improve their ability to share knowledge, increase timely availability of inputs at competitive prices and help in marketing farm produce at improved prices. Strong RPOs have also been able to make agricultural services such as research and extension more responsive to the needs of their members through participation in the planning, implementation and monitoring of work programmes. Experience shows that the development of democratic and well-managed, sustainable RPOs is a slow process requiring sustained support and intensive capacity-building. A past approach of governments and development agencies in the region was to promote cooperatives, which suffered from poor management (including weak financial systems) and government interference. As a result, the region has few strong, independent RPOs. In general, they have been unable to secure effective participation for poor people in the growing markets for agricultural commodities and to improve other services for members. Even though IFAD’s projects have a long history of supporting the formation of informal groups, consistent and sustained attempts have not been made to federate these groups into independent and democratically managed

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RPOs. A notable exception seems to be the project self-help groups formed by women in India, which were federated to scale up their social and economic empowerment and to involve them in basic production or income-generating activities. Given the importance of collective action in improving the livelihoods of smallholders, it is recommended that IFAD-supported projects be proactive in supporting the development of strong RPOs. More specifically, it recommends the following focus: • strengthen managerial, organizational and financial skills of informal groups to develop democratic, independent, demand-led RPOs that serve all – where members remain in control and set their own criteria for membership and admission procedures to avoid takeover by elite and powerful lobbies;10 • empower RPOs to improve coordination along supply chains on behalf of small producers, including access to improved services such as research and extension. Linkages with private business enterprises could be undertaken for the collective marketing of commodities, in order to benefit from economies of scale at reduced transaction costs and to improve the quality and consistency of outputs delivered to markets; and • develop the capacity of RPOs to facilitate access to institutional credit and to test innovative, user-controlled, demand-driven financial instruments (similar to CDFs) to provide producers and their organizations the financial leverage to procure services (e.g. training, production/post-harvest technologies, market information) from suppliers of their choice. Support participatory research and extension to improve availability of pro-poor technologies Increased agricultural productivity through sustainable intensification and diversification of production systems is needed (crops, livestock, fisheries and forestry) in order to accelerate agricultural growth and increase the incomes of small and marginal farmers. Effective institutions of service providers are essential to successful achievement of higher productivity. A more pluralistic institutional structure of such providers – resulting from the entry of private organizations, including NGOs, agroenterprises, community-based organizations and qualified rural youth – has changed the roles of public and private institutions. The emerging typology requires that public institutions adapt to these changes and support pluralism in the funding and execution of research and extension and in the flow of information to farmers from multiple sources. The focus of publicly funded research would increasingly be on basic, strategic, long-term themes of a ‘public good’ nature, with uncertain payoffs, including natural resource management and the problems of small farm agriculture, particularly those in rainfed marginal environments. To address these complex problems, public institutions would need to strengthen the national system and forge regional and international alliances on issues with global implications, such as climate change, biodiversity and agriculture/human health linkages. The agricultural value chains for high-value commodities provide an entry point for greater collaboration between public and

10 The key word here is democratic. As pointed out in the text, elite and powerful lobbies often take over and serve the agendas of the rich and powerful. Maintaining an equitable balance in decision-making and structure is a key concern, and institutional mechanisms are needed to ensure that the concerns of the RPO are truly democratic and serve the interests of all members.

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private institutions, as well as a greater opportunity for increased private investment in research and development. Technology transfer would need innovative models involving traditional (research and extension) and non-traditional partners (farmers, NGOs and other private-sector players) in a variety of formal and informal partnerships and information-sharing and feedback mechanisms. Producer groups and their organizations would need strengthening to be able to share responsibility at all stages in the technology development and delivery cycle. Adoption of participatory approaches would be the norm, for greater transparency and accountability. In several countries of the region, NARS reform is being supported by the World Bank (Bangladesh, India, Indonesia), AsDB (Viet Nam) and some bilateral donors (e.g. the Australian Agency for International Development (AusAID) and the Australian Centre for International Agricultural Research (ACIAR) in Cambodia). IFAD’s loan projects, on the other hand, have provided support to targeted downstream research and training to adapt and validate pro-poor technologies using participatory approaches. A broader research agenda and a larger proportion of IFAD’s research funds are channelled through regional or country-specific grants, mainly to institutes under the CGIAR. Research financed by IFAD through this mechanism has led to some notable successes, for example cassava biological pest control and rice and maize variety development. Despite this, however, the productivity and poverty impact of many research grants has been uncertain (e.g. due to institutional constraints and weak linkages with loan projects) or is difficult to quantify (IFAD 2003b). IFAD-financed projects have been successful in applying decentralized participatory approaches to support extension programmes, mainly through public institutions, but in most cases also involving NGOs. These projects have contributed to increases in agricultural productivity and the incomes of poor people, but the impact is unevenly distributed and there are concerns about sustainability. For example, in spite of efforts to address the needs of upland farming communities – mostly ethnic minorities – the impact on their welfare has been limited due to institutional weaknesses, poor understanding of their social structure and priority concerns, inadequate infrastructure and a focus on approaches more suited to the needs of communities in the lowlands.11 Extension themes have largely focused on crop agriculture. Livestock and fisheries have received limited support, even though these subsectors are important sources of income for poor farmers and landless people. These groups have also been neglected by the private sector. In general, despite some promising pilot work, projects have had limited success in the wider application of community-based natural resource management or of soil conservation measures. Improved institutional mechanisms are needed to ensure that field problems, particularly of poor people in remote and marginal areas, receive higher priority in the research and extension planning process, and that research outcomes are linked with extension programmes. It is recommended that: • IFAD should help support the institutional reforms of public agricultural service providers, particularly in areas of governance, planning (resource allocation, prioritization), monitoring and evaluation, decentralization, mainstreaming of participatory approaches, and human resource development. Wherever possible,

11 This is also due to the lack of a research focus on appropriate technology options for the uplands. Agricultural research, even today, concentrates its energies on approaches suitable to plains cultures.

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this support should be channelled through strategic partnerships with other development partners, particularly the World Bank and AsDB. • Since these basic reforms are often not sufficient to ensure accountability and responsiveness to clients (farmer communities, NGOs and the private sector), alternative

funding

mechanisms

should

be

explored

to:

(i)

finance

demand-driven research and extension through competitive grants to strengthen the emerging pluralistic institutional structure of service providers; and (ii) promote service funds controlled by users in order to support public/private partnerships. • The outcomes of projects financing innovative pilot activities should be reviewed to identify successful initiatives and suitable areas for wider application through community-based natural resource management programmes. Promote policy and institutional reforms to encourage private-sector-led seed production and distribution systems While many factors contribute to low yields of important crops in the region, use of poor quality seed, particularly by resource-poor farmers, is considered an important contributing factor. For example, the saving of seed from a farmer’s own rice harvest for use in subsequent seasons, without proper cleaning, affects seed health and reduces crop yields. Unlike in the past, when public institutions were responsible for all stages in the seed system, a variety of organizations are now involved in production and marketing, including research institutes, the private sector, public seed agencies, NGOs and, in some cases, producer groups. As the seed industry matures, with well-regulated markets, private-sector seed companies increasingly become the main producers and marketers of seed, with the public sector concentrating on basic breeding and the release of new genetic material (varieties or parental lines for production of hybrids). In many countries, both public- and private-sector producers of foundation and certified seed depend on the public research institutes for breeder’s seed. However, these institutes are unable to satisfy this demand due to lack of funding, infrastructure (processing and storage facilities), incentives and support staff. Even in the case of certified seed, the demand exceeds available supply. To improve the efficiency and effectiveness of the delivery system, it is recommended that: • IFAD should advocate policy reform to provide adequate incentives for greater participation by the private sector. • It should help modernize processing and storage infrastructure for breeder seed production to meet increasing demand, strengthen capacity for quality control and, where appropriate, support community-based seed production systems. This would develop entrepreneurship in the seed business among organizations of small and marginal farmers, as well as expand the market for good quality certified seed. Encourage improved marketing arrangements for small and marginal producers and their integration into market-driven value chains An important challenge in rural poverty reduction is the integration of small and marginal farmers into evolving domestic and export value chains of agricultural commodities, which increasingly depend on the private sector and, in many cases, involve supermarkets as the driver of change. Small producers have not been able to benefit from these developments due to poor production methods, lack of access to

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post-harvest management technologies, information on customer requirements, and capital, as well as financial management skills. To help growers address these problems, public institutions must increase investment in rural infrastructure (roads, markets, power) and build the capacity of administrative, technological and regulatory bodies to support market-driven agriculture. Producer organizations need to be strengthened to act collectively for input procurement and output marketing on behalf of small and marginal producers. Contract farming agreements between producer groups and private-sector organizations are becoming increasingly common as a means of gaining assured access to markets and, in many cases, of delivering commodity-focused extension support and key inputs. Despite these advantages, however, contract farming is not free of production and market risks, and experience with this approach in the region seem to have given mixed results, at least in the early years. The downside of contract farming has included contract enforcement issues, unreliable purchasers attempting to exploit monopoly situations, inefficient management or changes in contract terms and corrupt officials in the sponsoring organization. Although older IFAD-supported projects in the region gave limited attention to marketing issues, more recent projects in Bangladesh and Viet Nam are specifically addressing marketing constraints, including infrastructure and access to credit (IFAD 2006, 2006a, 2006c). Accordingly, future operations should: • vertically integrate small and marginal producers in value chains in a manner that protects their interests, taking into account the structural changes in markets, for example the growth of supermarkets; • develop strong organizations of rural producers and support them in providing a range of services to their members, including facilitation of marketing operations and participation in contract farming; • pilot-test innovative safety-net approaches, including insurance schemes, to safeguard small and marginal producers against risk and vulnerability; and • facilitate more equitable participation by smallholders in contract farming arrangements, market information services for producers, development of equitable contract arrangements and guidelines for enforcement. Finance analysis of the social and sustainability dimensions of contract farming, for example implications of land-use changes, local employment, food security, poverty reduction and the environment. Support increased private-sector participation and public/private partnership Public/private partnership options are finding increasing acceptance as a way to improve the quality and coverage of infrastructure services, increase public and private participation in infrastructure development, provide rural services and mobilize additional resources and expertise. Earlier recommendations dealing with agricultural research and extension, seed quality/variety and marketing have already highlighted the potential for increased private-sector participation. IFAD-supported microfinance projects have furthered the development of SMEs and have encouraged cofinancing arrangements between the public sector and local communities for small-scale infrastructure development (IFAD 2006). These experiences offer an opportunity for expansion of such arrangements to include the private sector. At the same time, it is recognized that a clear,

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enabling legal framework is needed for such participation. IFAD-supported projects should strengthen the partnering capacities of both government and the private sector. Promote innovation, knowledge management and information-sharing Each area of institutional reform discussed above has highlighted the need for building capacity, for improving access to information on international and national best practices, for innovations in achieving institutional reforms, and for effectively disseminating information on specific objectives of the project/components. In some cases, these may be thematic institutional reform issues of concern to all or several projects in the region. In general, all projects have included a strong training component, but have been less effective in ensuring documentation and dissemination of information on innovations or best practices. Moreover, IFAD loan projects have not made the best use of knowledge generated by IFAD grants, both in the region and internationally, or made full use of a grant linked to a loan project for testing innovative new ideas that may be ‘risky’ or may not have the support of the partner government in the loan project itself. Examples could include a user-controlled fund for competitive grant programmes for rural services, particularly extension, and institutional innovations in developing and linking grass-roots organizations of poor rural producers with local government for broad-based rural development initiatives. Projects should also endeavour to have effective mechanisms for the dissemination of information on project costs, expenditures, procurement, and details of specific benefits for each targeted group, for example ethnic minorities, so as to enhance transparency and accountability. It is recommended that: • Each operation should include a strong component on innovation, knowledge management and information-sharing, with clearly identified objectives and priorities for generation, documentation and dissemination of information – including ICT – in relation to the development objectives of the project. • The design stage of new operation(s) should examine the utility of existing knowledge generated by relevant grants and the possible role of a new grant in generating new knowledge to enhance implementation effectiveness or to mainstream innovations. Promote regional cooperation on institutional and policy development In Asia, particularly East Asia, there is a desire and wide support for increasing regional cooperation and trade, including in agricultural commodities, which are already a major contributor to regional economic growth. The GMS Program is identifying measures that would help bolster regional trade. However, the extent to which poor producers would benefit from such initiatives would depend on complementary measures to address in-country and regional policy and institutional reforms. Such reforms would help develop competitive markets, improve infrastructure, expand the availability of timely information and improve the quality of public services. IFAD can assist regional initiatives by supporting better understanding of the organizational structure of value chains of interest to poor people in order to design measures that foster equitable collaboration between rich and poor, as well as large and small countries in the region. More specifically, IFAD’s grant and investment projects could:

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•

support institutional innovations to promote cross-border value chains of agricultural commodities, particularly those involving isolated poor ethnic minorities in border areas, where the incidence of poverty is higher than the regional average;

• strengthen institutional and policy measures to enhance regional cooperation in the harmonization of product standards and control of sanitary and phytosanitary services; • promote institutional and policy reforms to improve public services, particularly agricultural research and extension, and the exchange of information/expertise in human resource development; and • strengthen in-house capacity to develop innovative regional initiatives.

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VII. Next steps

Beyond the steps implicit in the five sets of recommendations in chapter VI, further subregional or country-specific work to build on the findings of this study could include support for: • in-depth study of the current organizational and operational approaches of public service providers, different groups of NGOs and the private agribusiness sector in agricultural extension, with a view to exploring ways of redefining the roles and responsibilities of the public agency to make it market-friendly and to make use of its human and tangible resources in more efficient ways; • development of institutional and policy options to enhance the competitiveness of smallholder agriculture and smallholders’ ability to access markets and manage risk and vulnerability. This work would also examine the role of RPOs and contract farming in linking farmers to markets. In the case of this increasingly popular option of contract farming, it would be important to assess its social and sustainability dimensions, including the implications of land-use changes, local employment, food security, poverty reduction and environmental impact. Since this area has received some attention under investment projects supported by IFAD, this work would build on their experience to propose a strategy for involving poor people in higher-risk, market-driven agriculture; • improved understanding of the institutional and policy options needed so that the region’s isolated poor ethnic minorities, including those in mountainous areas, can benefit from the growing trade in cross-border value chains of higher-value, low-volume commodities, for example medicinal plants. The experience of the GMS Program has highlighted the importance of such crossborder trade in enhancing regional cooperation in agriculture.

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IFAD (1991) Bangladesh: Smallholder Livestock Development Project (SLDP; loan number: I-280-BA). Appraisal report. Rome. IFAD (1993) Viet Nam: Participatory Resource Management Project – Tuyen Quang Province (TQPRMP; loan number: I-328-VN). Appraisal report. Rome. IFAD (1993a) Bangladesh: Netrakona Integrated Agricultural Production and Water Management Project (NIAPWMP; loan number: I-343-BD). Appraisal report. Rome. IFAD (1996) Viet Nam: Agricultural Resources Conservation and Development Project in Quang Binh Province (QBARCDP; loan number: I-434-VN). Appraisal report. Rome. IFAD (1996a) Viet Nam: Agricultural Resources Conservation and Development Project in Quang Binh Province (QBARCDP; loan number: I-434-VN). Interim mid-term review report. Rome. IFAD (1996b) Cambodia: Agriculture Productivity Improvement Project (APIP; loan number I-423-KH), cofinanced with IDA. Appraisal report. Rome. IFAD (1997) Bangladesh: Agricultural Diversification and Intensification Project (ADIP; loan number: I-443-BD). Appraisal report. Rome. IFAD (1999) Cambodia: Agricultural Development Support Project to Seila (ADSPS; loan number: I-513-KH). Appraisal report. Rome. IFAD (1999a) Bangladesh: Smallholder Agricultural Improvement Project (SAIP; loan number: I-505-BD). Appraisal report. Rome. IFAD (2000) Bangladesh: Smallholder Livestock Development Project (SLDP; loan number: I-280-BA). Project completion report. Rome. IFAD (2001a) Bangladesh: Sunamganj Community-Based Resource Management Project (SCRMP; loan number: I-567-BD). Appraisal report. Rome. IFAD (2001b) Bangladesh: Netrakona Integrated Agricultural Production and Water Management Project (NIAPWMP; loan number: I-343-BD). Project completion report. Rome. IFAD (2001c) Viet Nam: OE country programme review and evaluation report. Rome. IFAD (2002) Viet Nam: Rural Income Diversification Project in Tuyen Quang Province (loan number: I-578-VN). Appraisal report. Rome. IFAD (2003) Cambodia. Rural Poverty Reduction Project in Prey Veng and Svay Rieng (RPRP; loan number: I-623-KH). Appraisal report. Rome. IFAD (2003a) Bangladesh: Smallholder Agricultural Improvement Project (SAIP; loan number: I-505-BD) Mid-term review report. Rome. IFAD (2003b) Evaluation of IFAD’s Technical Assistance Grants Programme for Agricultural Research. Corporate-level evaluation report. Rome. IFAD (2004) Viet Nam: Agricultural Resources Conservation and Development Project in Quang Binh Province (GBARCDP; loan number: I-434-VN). Interim evaluation report. Rome. IFAD (2005) IFAD’s private-sector development and partnership strategy. EB 2005/84/R.4/Rev. Rome. IFAD (2005a) Viet Nam: Ha Giang Development Project for Ethnic Minorities (HGDPEM; loan number: I-460-VN). Appraisal report. Rome. IFAD (2005b) Bangladesh: Country strategic opportunities paper. Rome. IFAD (2005c) Bangladesh: Market Infrastructure Development Project in Charland Regions (MIDP; loan number: I-681-BDP). Appraisal report. Rome. IFAD (2005d) Bangladesh: Agricultural Diversification and Intensification Project (ADIP; loan number: I-443-BD). Project completion report. Rome. IFAD (2005e) Bangladesh: OE country programme evaluation report. Rome. IFAD (2006) Viet Nam: Programme for Improving Market Participation of the Poor in Ha Tinh and Tra Vinh Provinces. Appraisal report. Rome. IFAD (2006a) Viet Nam: Rural Income Diversification Project in Tuyen Quang Province (loan number: I-578-VN). Mid-term review report. Rome.

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IFAD (2006b) Cambodia: Agriculture Productivity Improvement Project (APIP; loan number I-423-KH), cofinanced with IDA. Project completion report. Rome. IFAD (2006c) Bangladesh: Market Infrastructure Development Project in Charland Regions (MIDP; loan number: I-681-BDP). Appraisal report. Rome. IFAD (2007) IFAD Strategic Framework 2007-2010. Rome. Islam, Z., M. Hossain, T. Paris, B. Hardy and J. Gorsuch, eds. (2007) Technologies for improving rural livelihoods in rainfed systems in South Asia. Los Baños, Philippines: International Rice Research Institute (IRRI). Krumm, K., and H. Kharas, eds. (2006) East Asia integrates: A trade policy agenda for shared growth. Washington, DC: World Bank. Leimona, B., G. Villamor, M. van Noordwijk, A. Fauzi and R. Utaira (2008) Developing mechanisms to reward the upland poor in Asia for environmental services that they provide (RUPES). IFAD Grant 534-ICRAF completion report. Bogor, Indonesia: Southeast Asia Regional Office, World Agroforestry Centre (ICRAF). Moustier, P., Dao The Anh, Hoang Bang An, Vu Trong Binh, M. Figuié, Nguyen Thi Tan Loc and Phan Thi Giac Tam, eds. (2006) Supermarkets and the poor in Vietnam. Hanoi: Markets and Agriculture Linkages for Cities in Asia (MALICA) and Making Markets Work Better for the Poor (M4P). Neuchatel Group (1999) Common framework on agricultural extension. Paris. Ostrom, E. (2005) Understanding institutional diversity. Princeton, NJ: Princeton University Press. Rajalathi, R., J. Woelcke and E. Pehu (2005) Developing research systems to support the changing agricultural sector. Washington, DC: Agriculture and Rural Development, World Bank. Rondot, P. and M.-H. Collion, eds. (2001) Agricultural producer organizations: Their contribution to rural capacity building and poverty reduction. Report of a workshop, 28-30 June 1999. Washington, DC: Agriculture and Rural Development, World Bank. World Bank (2002) New approaches to extension: A workshop for practitioners. Proceedings and case studies on the workshop convened by the World Bank, U.S. Agency for International Development and the Neuchatel Group, Washington, D.C., 11-15 November 2002. Washington, DC. World Bank (2003) Towards a private-sector-led growth strategy for Cambodia. Washington, DC: Private Sector Development Unit, East Asia and Pacific Region. World Bank (2004) Proceedings of the workshop on community-driven development, Hanoi, Viet Nam, 13-14 April 2004, jointly organized by the World Bank and The Partnership to Assist the Poorest Communes, Ministry of Planning and Investment. Hanoi. World Bank (2004a) Promoting the rural non-farm sector in Bangladesh. Washington, DC: Agriculture and Rural Development Unit, South Asia Region. World Bank (2005) Revitalizing the agricultural technology system in Bangladesh. Washington, DC: Agriculture and Rural Development Unit, South Asia Region. World Bank (2005a) East Asia decentralizes: Making local government work. Washington, DC: Poverty Reduction and Economic Management (PREM), East Asia and Pacific Region. World Bank (2007) Trade policies in South Asia: An overview (in three volumes). Vol. I. Operational summary. Washington, DC: Poverty Reduction and Economic Management (PREM), South Asia Region. World Resources Institute (2005) World resources 2005: The wealth of the poor – managing ecosystems to fight poverty. Washington, DC: published in collaboration with the United Nations Development Programme, United Nations Environment Programme and the World Bank.

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IFAD The International Fund for Agricultural Development (IFAD) is an international financial institution and a specialized agency of the United Nations dedicated to eradicating poverty and hunger in rural areas of developing countries. Through low-interest loans and grants, it develops and finances programmes and projects that enable poor rural people to overcome poverty themselves.

Contacts: Ganesh Thapa Asia and the Pacific Division IFAD Via Paolo di Dono, 44 00142 Rome, Italy Tel: +39 06 54592098 E-mail: [email protected] Valentina Camaleonte Asia and the Pacific Division IFAD Via Paolo di Dono, 44 00142 Rome, Italy Tel: +39 06 54592670 E-mail: [email protected] www.ifad.org

International Fund for Agricultural Development Via Paolo di Dono, 44 00142 Rome, Italy Telephone: +39 06 54591 Facsimile: +39 06 5043463 E-mail: [email protected] www.ifad.org www.ruralpovertyportal.org

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