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Table of Contents
Learning Notes Series
Introductory Note List of Abbreviations Issues related to Key Success Factor 1: Country relevance, commitment and partnerships
1.1 1.2 Project Rationale and Relevance Pro-Poor Policy Dialogue for Change (draft)
Issues related to Key Success Factor 2: Poverty, Social Development and Targeting
2.1 2.2 2.3 Gender Food Security, Health and Nutrition Project Targeting
Issues related to Key Success Factor 3: Alignment of design features with IFAD Strategic Objectives and lessons learnt; analysis and results framework
3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 Technology Change for Livelihood Development Agricultural Water Infrastructure and Management Livestock and Rangeland Development Rural Finance Micro and Small Enterprise (MSE) Development Financial and Economic Analysis for Investment Projects Land Tenure (draft) Marketing and the Rural Poor (draft)
Issues related to Key Success Factor 4: Implementation arrangements and institutional aspects
4.1 4.2 4.3 4.4 Pro-Poor Institutional Transformation for Community-Based Development Rural Technical Support Services Designing for Implementation Community Development Funds
Issues related to Key Success Factor 6: Innovation, Learning and Knowledge Management
6.1 Monitoring and Evaluation
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Introductory Note
Learning Notes Series
IFADs Strategic Framework for 2007-2010 reiterates the Funds basic mandate to increase incomes and enhance the food security of the rural poor. To achieve this IFAD is committed to six strategic objectives: improved access to, and use by, the poor of natural resources; improved technologies and production support services; development of a broad range of financial services; effective input and agricultural produce markets; development of off-farm enterprises and rural employment; and participation of the poor in development policy formulation and programming. Six principles of engagement are to guide pro-poor support: selectivity and focus of efforts; targeting; empowerment of rural people; maximising opportunities for innovation, learning and scaling up; use of effective partnerships; and sustainability of impacts. The Strategic Framework also commits IFAD to provide more practical guidance on quality enhancement (QE) to teams designing investment projects. A consensus has been reached on a set of key success factors (KSFs) that are considered critical in focusing team efforts on the above strategic. KSFs seek to optimise the relevance, coherence, implementability and impact of the IFAD portfolio, providing both a checklist for quality enhancement during design and a framework to assess the readiness of projects for implementation. Six general KSF Domains have been agreed: country relevance, national commitment and partnership; poverty, social capital and targeting; alignment with IFAD strategic objectives, rural development policy, lessons learnt and requirements for project analysis; implementation arrangements and institutional aspects; risks and sustainability; and innovative features, learning and knowledge management. The attached Learning Notes (LNs) aim to guide and support teams in applying KSFs to enhance lending quality and impact. LNs provide concise reminders of core issues and operational tasks facing designers or reviewers in dealing with important individual themes during the design, execution and evaluation of investment proposals. They crystallise knowledge and lessons learnt, drawing on IFAD, borrowers and outside partners experience. It is assumed that LN users have had some prior exposure to the design, implementation or supervision of investment projects; but for those less familiar, links are also provided to sources of more detailed information and examples of best practices. The LN themes are grouped under the KSF Domains to which they relate. This is an open-ended series. The topics covered by Learning Notes so far reflect recurrent QE challenges or needs under individual KSFs, IFAD strategic priorities, as well as the availability of drafting staff. Existing LNs will be updated and improved. More will be added as necessary. Comments and suggestions for improvements or new LN themes are welcome. Contact learningnotes@ifad.org.
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List of Abbreviations
Learning Notes Series
Abbreviations
Arab Center for the Studies of Arid Zones and Dry Lands Appraisal Report Association for Strengthening Agricultural Research in Eastern and Central Africa AW Agricultural Water BDS Business Development Services BSF Belgian Survival Fund CBA Cost Benefit Analysis CBNRM Community-Based Natural Resource Management CCI Cross-Cutting Issues CDF Community Development Funds CGAP Consultative Group to Assist the Poor CGIAR Consultative Group on International Agricultural Research CI Cooperating Institution CIHEAM International Centre for Advanced Mediterranean Agronomic Studies CRED Centre for Research on the Economics of Development CTA Technical Centre for Agricultural and Rural Cooperation DANIDA Danish International Development Agency DFID Department for International Development (UK) DGIS Directorate-General for International Cooperation (Netherlands) EA Environmental Assessment EB Executive Board ECDPM European Centre for Development Policy Management ENDA Environnement Dveloppement Action ESSN Environmental Screening and Scoping Note FAM Financial Assets and Markets FAO Food and Agriculture Organization of the United Nations FAO-AGA FAO Animal Production and Health FAO-WAICENT World Agricultural Information Centre of FAO FIVIMS Food Insecurity and Vulnerability Information and Mapping Systems GEF Global Environment Facility GM Global Mechanism HIV/AIDS Human Immunodeficiency Virus / Acquired ImmunoDeficiency Syndrome HSA Human and Social Assets HH Household ICARDA International Center for Agricultural Research in the Dry Areas ICRAF World Agroforestry Centre IDS Institute of Development Studies IDRC International Development Research Centre ACSAD AR ASARECA
Information, Education and Communication International Land Coalition International Labour Organization
Innovation Mainstreaming Initiative International Livestock Research Institute Programme for Improved Management of Agricultural Water in Eastern and Southern Africa
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Abbreviations (continued)
IMI IP IPTRID KSF LD LEAD LN M&E MIX MSE MSMEs NAP NAPA NBSAP NEAP NGO NRM O&M ODI OED OP PAT PA PB PDF PRSP PT PCU PMU R&D RBA RB-COSOP RF RFI RIMS RUPES SCN SEED SME SOF SWOT SWAp TA TOR UNCCD UNFCCC WB WHO WP WUA Innovation Mainstreaming Initiative Indigenous Peoples International Programme for Technology and Research in Irrigation and Drainage Key Success Factor Land Degradation Livestock, Environment and Development Learning Note Monitoring and Evaluation Microfinance Information Exchange Micro and Small Enterprises Micro-, Small- and Medium- Enterprises National Action Programme National Adaptation Programmes of Action National Biodiversity Strategies and Action Plan National Environment Action Programme Non-Governmental Organization Natural Resource Management Operation and Maintenance Overseas Development Institute (UK) Operations Evaluation Department (World Bank) Operational Programme Productive Assets and Technology (IFAD Strategic Objective 2) Western and Central Africa Division (Africa I) Presidents Bulletin Project Development Facility Poverty Reduction Strategy Paper IFAD Technical Advisory Division Project Coordination Unit Project Management Unit Research and Development Rural Business Adviser Results-based Country Strategic Opportunities Programme Rural Finance Rural Financial Institution Results and Impact Management System Rewarding the Upland Poor of Asia for the Environmental Services they Provide Standing Committee on Nutrition (UN) Small Enterprise and Employment Development Small and Medium Enterprise Special Operations Facility Strengths Weaknesses Opportunities Threats System-Wide Approach Technical Assistance Terms of Reference United Nations Convention to Combat Desertification United Nations Framework Convention on Climate Change World Bank World Health Organization Working Paper Water User Association
1.1
Core issues
Investments in pro-poor rural development may be financed on the basis of detailed initial designs or outline proposals to be developed later. But whether investment decisions are made earlier or later, the decision makers are under the same pressures to ensure that the investment is relevant, justified, implementable and generates sustainable livelihood gains for the target group. It is thus necessary to take account of the following issues: 1. The need for investment proposals to be convergent with government poverty reduction and agricultural sector development plans: Poverty Reduction Strategy Papers (PRSPs); System-Wide Approaches (SWAPs); evidence of whether the government is committed to the proposed IFAD investment; reasons why IFAD is the appropriate choice of financing agency, in terms of its development mandate and comparative advantage. The forces to which the poor are vulnerable; the consequences of these vulnerabilities and the processes and mechanisms that deepen poverty, or aid escape from it; the livelihood strategies and coping mechanisms that poor people adopt. Constraints, opportunities and priorities for improvement of rural livelihoods as perceived by poor people themselves and other informants in their communities (local schoolteachers, doctors, etc.). Precedents for, or examples of, poverty alleviation in circumstances similar to those of the proposed project; lessons learned and what has worked or not worked in the experience of IFAD and others; potentials for replication or innovation in design.
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Based on the above, it is necessary to adopt: 4. An approach to poverty alleviation and entry points for change that builds on the strengths of the poor and brings improvements to their livelihood strategies and abilities to cope. The expected impacts on poverty need to be evident and attainable at tolerable levels of risk despite agro-ecological, socio-economic, policy or other constraints. Various implementing partners able to execute plans effectively, based on evidence of their capacities or potentials. Institutional strengthening and external support may need to be provided to help them to carry out their allotted tasks. Measures built into the project design that will ensure flexibility in the face of changing circumstances, and the sustainability of project-funded activities and services after the end of loan disbursement.
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1.2
Core issues
Project design may call for a dialogue to address policy issues, legal or regulatory constraints that, if not resolved, would limit potential project benefits to the rural poor or jeopardise the replicability of investment approaches. Through a single, often localised, project IFAD can seldom lever major changes to national policies and change should be sought only when essential for project success. Where possible, financing should not be made conditional on policy change. However IFADs practical experience of pro-poor agricultural development can provide strong advocacy towards adjusting the application of policies and regulations, to the extent needed to ensure that project benefits successfully reach specific target groups. Dialogue may yield more substantial policy changes if IFADs advocacy is linked to similar pressures from other financing agencies or donors. Whether acting alone or in alliances, policy dialogue should first create government appreciation of constraints and acceptance of the need for policy change. Such awareness may have initially been expressed in dialogue over IFADs Results-based Country Strategic Opportunities Programme (RB-COSOP), then be reinforced during the design of a specific follow-up project. Once dialogue has advanced to agreement on specific policy changes, these need to be formally adopted by both sides. Proposals for policy dialogue should provide for analysis of the topics to be addressed, drawing as appropriate on consultations from community level upwards, rural diagnostic studies and socio-economic surveys, past IFAD experience, national background data, and the views of high-level administrators and other decision makers, legislators and government ministers. Operational measures and procedures for implementation of the agreed dialogue are likely to cover mechanisms to ensure that all voices, from those of the most disadvantaged to powerful stakeholders, are represented in consultations and surveys; that there are channels for upward, downward and lateral communication of views and the formation of consensus; that there are appropriate alliances with other financing agencies or donors pressing for similar policy changes; that expected change outcomes are specified and who will formalise agreement or sign off on them is unequivocal; that there is an agreed agenda, a timetable and milestones for drafting and finalising agreed policy changes, backed by monitoring indicators and responsibilities; and that arrangements and funding for facilitating interactions and recording of outcomes are agreed and budgeted.
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2.1
Gender
Learning Notes Series
This Note relates to KSF2: Poverty, social development and targeting
Core issues
Gender equality and womens empowerment have gained increasing importance, both as objectives and as instruments for poverty reduction. IFAD is guided by the principle that development initiatives should incorporate the priorities and needs of both women and men and give them equal opportunities to access benefits and services. As defined by the prerequisites for gender-sensitive design in IFADs Plan of Action 2003-2006 Mainstreaming a Gender Perspective in IFADs Operations, investments should follow a three-pronged strategy to achieve gender equity and mainstreaming: expansion of womens access to and control over assets; strengthened decision-making/political representation of women, and improved wellbeing: 1. Proposals should be based on a clear understanding of: (a) the division of gender roles and responsibilities; (b) gender differences in access to resources and benefits, participation in community affairs and decision-making; and (c) the needs of special vulnerable groups, e.g. the young and elderly. In line with the Prerequisites of Gender-Sensitive Design of IFADs Gender Plan of Action, operational measures should ensure gender-equitable participation in, and benefit from, planned activities and in particular they should: 2.1. include specific targets in terms of proportion of women participants in different project activities and components; 2.2. specify means to ensure womens participation in project-related decisionmaking bodies; 2.3. allocate resources for specific activities to support gender mainstreaming and womens empowerment (e.g. gender sensitisation and training; measures to enable women to participate in planned training, etc.); 2.4. incorporate Project Coordination Unit (PCU)/ Project Management Unit (PMU) Terms of Reference (TORs) that include responsibilities for gender mainstreaming, especially at the level of project director, M&E officer, extension officer, microfinance officer; 2.5. explicitly address the issue of present and likely availability of field staff to ensure outreach to women, linking recruitment and training activities accordingly; 2.6. specify that experience/willingness to work with women and marginalised groups is a criterion for NGO/partner selection. 3. All people-related indicators should be sex-disaggregated so that the project or programme monitors differential impact and participation by women and men see Learning Note 6.1 Monitoring and Evaluation. Designs should promote opportunities for policy dialogue on issues related to gender equality and the empowerment of women see Learning Note 1.2 Pro-Poor Policy Dialogue for Change.
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2.2
Core issues
1. Project design documentation should include an analysis of food insecurity, hunger/malnutrition, and the burden of disease which should be based on: 1.1. Basic evidence (from secondary sources) and analysis of the significance (serious concern / concern / not a concern) and causes (e.g. access to services, current policies) of:
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food insecurity, including duration of hungry season, sufficiency of household food stores; malnutrition, including the prevalence of chronic and acute malnutrition among children aged less than five years; burden of disease, including life expectancy, infant mortality and the relative importance of HIV/AIDS, tuberculosis, malaria, etc. 1.2. Examination of any red flag values (for example, chronic malnutrition higher than 30% or adult prevalence of HIV greater than 5%). 1.3. Discussion of any expressed priorities of community members concerning food security, health and nutrition, with documented methodology (such as amount of time spent in how many villages, number of focus groups with /) sufficiently robust to justify any conclusions reached.
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The scale and costing of project components should respond to the significant concerns drawn from the above evidence and the priorities expressed by communities. When any significant concerns are not addressed by the IFAD project, evidence should be given that the government, other agencies, NGOs, etc. are adequately addressing these concern(s). Potential threats to public health attributable to project activities (for example, increased risk of malaria and schistosomiasis associated with irrigation) should be acknowledged in the design, and appropriate mitigation efforts proposed and costed as necessary.
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2.3
Project Targeting
Learning Notes Series
This Note relates to KSF2: Poverty, social development and targeting
Core issues
For IFAD, targeting refers to all measures which, in a given context, can either promote or inhibit the flow of benefits to the identified target groups. The borrower and main implementing agency should be committed to poverty-targeted use of project funds, taking into consideration: 1. Project or programme design should be based on a solid poverty and livelihoods analysis, to identify which communities and people are poorer and why, taking gender differences into account. 2. The principle of social and geographic poverty targeting should be made explicit in the Aide Memoire of the project design team to the government, and the targeting strategy justified and clearly described in the project Appraisal Report and in IFADs Loan Agreement (geographic targeting selects areas while social targeting refers to targeting within communities). 3. Where possible, actions and procedures for targeting should connect with specific budget allocations - e.g. through criteria that steer IFAD loan funds towards propoor activities or components, or by earmarking some budget lines for specific sub-groups. 4. Operational measures should be planned and described to make targeting a reality. These should include: 4.1. Enabling measures to foster a favourable environment, and a pro-poor and gender-sensitive mindset among implementation partners. These include policy dialogue and the appropriate selection and sensitization of implementation partners, to be continually applied throughout the project/programme cycle; 4.2. Self -targeting: ensuring that goods and services on the project menu or actually provided respond to the priorities, financial and labour capacity and livelihood strategies of targeted groups; 4.3. Empowering measures: aiming to give the targeted groups equal or even superior capacities to access and qualify for goods and services, including: beneficiary capacity-building; strengthening or promotion of communitybased organizations; information and communication to promote awareness of project opportunities and participation amongst the target groups; 4.4. Procedural Measures such as application and approval procedures for accessing funds, locus and modalities of decision making on project activities and beneficiary contribution requirements designed in a way that prevents the exclusion of the poorest (components should be checked to make sure that identified target groups are not unwittingly excluded by and from these procedures); 4.5. Direct or eligibility criteria-based targeting: Eligibility criteria, such as income levels, preferably developed and applied with community participation. Quotas or earmarked funds based on eligibility criteria may also be necessary to ensure a minimum level of participation of specific target groups. 5. Implementation reporting by Project Co-ordinating Units and Co-operating Institutions should monitor effectiveness of targeting measures, and cover gender-differentiated participation by, and benefits to, the poorer people and special priority target groups in the project area.
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3.1
Core issues
1. Project Formulation should result in: i) a technical strategy for changes in crop/livestock production, farming systems, processing, post-harvest or storage technology that is fully consistent with the constraints and circumstances of the intended target group. This should take into account gender roles and social differences as well as ongoing trends in livelihoods and the role of agriculture in the local and national economy; ii) evidence that adopting this strategy would benefit the target group, and; iii) workable proposals to facilitate the adoption of agricultural and technological changes and ensure that benefits reach the target group. Depending on circumstances, technical changes may involve more efficient use of existing resources, intensification using new inputs, diversification into new products or markets, or adoption of advanced technologies such as biotechnology. The poor may benefit directly by upgrading their subsistence or commercial production systems, or through changes by the less poor that create jobs for the poorer. The Technical Strategy should be based on an analysis of the agro-ecological and socio-economic setting including technical potentials, precedents for change, trends, constraints and opportunities. The Technical Strategy should also take account of relevant issues concerning input supplies and markets; infrastructure; the environment and policies for resource management; and the evolving role and importance of farming and agriculture-based employment in the livelihood strategies of the target group. Benefits should be demonstrated using a few realistic, well-chosen, illustrative crop/farm models. Where the poor are to be reached indirectly through job creation, their share in benefits should be calculated. Organisation of technology change will usually involve contributions from the potential adopters themselves, facilitated and supported by the best available sources from the public, private or voluntary sectors or via commercial associations, depending on circumstances. These aspects are covered in Learning Note 4.3 Rural Technical Support Services.
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3.2
Core issues
IFAD investments in agricultural water (AW) infrastructure and management should complement or strengthen the livelihood and coping systems of the rural poor. Building upon local culture, knowledge and institutions, and promoting group participation among target groups, investments should deepen socio-cultural understanding and expand IFADs expertise of AW development. Investments need to address the following core issues: 1. AW development in rural development projects must be compatible with the physical resource base and complemented by, or complementary to, up- and downstream activities. It should take account of competing demands especially for domestic and livestock drinking water. Development plans should address issues raised by present efficiency of (rain-fed) water use or irrigation practices. AW proposals for a given area should match mid- and long-term, up- and downstream, agricultural and non-agricultural developments. The target group should participate pro-actively from the earliest possible stages of the life of AW developments, from design, through O&M to rehabilitation and reconstruction. Participation should also extend to decisions to change AW use due to externalities such as droughts, floods or urbanization. Lessons learned from any successful user adaptations to officially-operated schemes should be built upon. Poor rural men and women should be assured of equitable, reliable and sustained access to, use and control of land and water, also of equitable distribution of the benefits of water use. Local and customary laws and regulations for resource allocation, costing/cost recovery, as well as local institutions and organizations governing AW decision-making, should be duly taken into account. Capacity-building for sustained AW use should be promoted through support for local institutional frameworks (traditional frameworks, Community Committees, Water User Associations (WUAs), Municipal Water Boards, Watershed Development Entities, etc.,) as appropriate to the scale of IFAD investments. The policy and institutional framework for water governance applied to AW must provide for and emphasise appropriate gender balance; participation of the poor in formulation, implementation, management and turnover of irrigation and other AW infrastructure; AW decentralization; equity-oriented usufruct and use rights linked to accessible and respected means for enforcement and conflict resolution; consistently applied claim and appeal structures; public (municipal/decentralized) information, communication and early warning systems; and transparent and participative public investments guided by Social Poverty Indexes or the like.
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Thematic Study on Water User Associations in IFAD Projects (2001) Knowledge management: A thematic review of IFAD support for water management and irrigation in E. and S. Africa (2000) Bangladesh - Oxbow Lakes Small-Scale Fisherman Project (1988), Land and Water Governance Case Study: Improving benefits for poor, landless farmers, August 2004 Gambia - Lowlands Agricultural Development Programme (1995), Case Study: Rice Land for Labour Agreements Benefiting Women Niger - Special Country Programme (1995), Rainwater Harvesting (indigenous soil & water conservation): Tassa
Tanzania - Participatory Irrigation Development Programme (1999), strong participatory approach and strengthening capacity of WUAs Sudan - Gash Sustainable Livelihoods Regeneration Project (2003), Case Study: Local Governance to Secure Access to Land and Water in the Lower Gash Watershed Sources of expertise outside IFAD Rural Poverty Portal: Water to combat rural poverty
Programmes, Research & Basin Organizations: WWAP of UNESCO; EUWI; CPWF, IWLEARN, IWMI; ICARDA; ABN; INBORIOB, CGIAR Development organizations & banks: UNDP(water); FAO (technical, legislative); UNESCO; WB; ADB; AfDB; IADB, UNESCO NGO and Networks: www.irrigation.org; ICID; IUCN; WWC; OIEau; GWP; earthtrends.wri.org
3.3
This Note relates to KSF3: Alignment of design features with IFAD Strategic Objectives and lessons learnt; analysis and results framework
Core issues
Settings and target groups for livestock and rangeland projects are particularly diverse. The range of issues that needs to be taken into account in planning investments reflects this diversity. 1. Livestock and rangeland development strategies. As livestock is the major user of primary production in arid and semi-arid regions, degradation has always been attributed to this sector. However, degradation of land and vegetative cover resulting from unsustainable grazing pressure is often a consequence of complex interactions between climate change, inappropriate resource management practices, policies and regulations, lack of enforcement and political dominance of groups or individuals. A change to sustainable alternatives may ideally involve giving more control to local people or to those with traditional rights. 2. The role of livestock in livelihood strategies. The rural poor may rely on livestock to improve diets and food security, earn cash for basic requirements or investments, or accumulate animals as savings for emergencies or as a symbol of wealth. Livestock rearing may be a sole activity or part of a diversified farming system. Complex regimes may govern caring for livestock and sharing of outputs. Different stock or livestock products may be the responsibility of different family members. Investment support needs to be formulated to respond to the particular strategy of the target group and matched both to the prevailing agro-ecological potential and local custom. 3. Technical strategies for livestock development. Depending on the type of livestock and production system, technical approaches to livestock development vary greatly. Different priorities (e.g.: upgrading feed supply, improving genetic quality, tackling diseases and parasites) may raise difficult choices. As well as technical potentials, decisions will be influenced by whether supplies of medicines, feeds or other inputs and improved breeding stock can be assured, and whether producers would have access to markets for expanded output. 4. Cross-cutting livestock and rangeland related issues: 4.1 Livestock and gender: small livestock such as poultry or rabbits and household dairy products are usually managed by women and thus they can provide a potential entry point for pro-poor womens development or opportunities for youth especially in many rural or peri-urban settings. 4.2 Livestock and value chain: value chain analysis is fundamental to understand local market dynamics, internal relationships and main factors hampering/promoting livestock production. 4.3 Livestock and land tenure: security investments in livestock infrastructures/assets can be encouraged by ensuring land tenure. 4.5 Livestock and Pastoralism: main users of range resources are pure pastoralists (nomads), semi-nomadic pastoralists and semi-sedentary pastoralists or agro-pastoralists. Participatory development approaches involving all users have relevant effects on the reduction of conflicts among pastoralists and sedentary communities as well as on land improvement activities (investments in livestock and water infrastructures). 4.6 Livestock and water: access to reliable sources of water is a key-factor for livestock development as long journey to the water points can be shortened and overgrazing and soil erosion animals around the limited water points can be reduced. 4.7 Livestock in post-crisis situations: vulnerability of livestock owners to emergency situations varies depending on whether their lifestyle is pastoral or if it incorporates crop production into a mixed-farming system. These activities include: (i) Destocking initiatives providing for the intentional removal of animals from a region before they die and (ii) Restocking initiatives necessary to supply livestock owners with breeding animals in order to increase herd size over time (lost or decimated).
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Access to Veterinary Services should be fostered as in many developing countries small-scale livestock producers have minimal access to animal health services. Training in animal health and establishment of veterinary clinics should be designed in order to improve livestock productivity.
5. Access to Financial Services should be enhanced in order to enable community organizations and individuals to purchase farm machinery, food processing equipment and livestock and also to invest in livestock related infrastructures. 6. Access to Market Services for livestock and livestock products will often need to be assessed, as will also supply chains for livestock feed and inputs, germplasm upgrading (including artificial insemination) and veterinary medicines. 7. Access to Training Services and training activities can be developed through Farmers Livestock Field Schools (FLFSs) including aspects of animal protection (vaccination), animal breeding, animal husbandry, first-aid skills, veterinary regulations and communicable diseases, meat inspection and livestock marketing systems.
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3.4
Rural Finance
Learning Notes Series
This Note relates to KSF3: Alignment of design features with IFAD Strategic Objectives and lessons learnt; analysis and results framework
Core issues
IFAD interventions in rural finance (RF) should promote increased access to diversified financial services for the rural poor on a sustainable basis. Services may include credit, savings, remittances and in some cases micro-insurance and leasing finance. The following key issues may need to be addressed during design and/or implementation: 1. Conditions for feasibility of investment in rural finance. Minimum conditions include sufficient human population, absence of high inflation and financial repression policies, minimum levels of security and political stability, some basic economic and trading activities, as well as marketplaces and monetisation of the local economy - see IFAD RF Decision Tools, Part 1, Section 5 for more details. 2. The rationale for RF intervention. Rural finance should be an essential contributor to meeting major development objectives and a useful intervention in the project context, not an automatic component. Stand-alone RF projects are a positive trend that should be encouraged. When RF is one component among others it must have a critical mass, sufficient budget and a clear rationale. 3. Support for formulation and implementation. Unfamiliarity of some borrowers with the IFAD RF approach may call for a high level of technical support, formation of new partnerships with strong/close international or national partners, intensive stakeholder consultations and close attention to demand, equity and interest rate concerns. 4. RF strategy envisioned. Project support should create rural financial institutions (RFIs) that are sustainable and show credible poverty outreach and social performance. 5. Selection of RF partners. Potentially credible RF partners need to be found and supported as necessary. For a new RFI, strong technical assistance may be needed to support project implementation and the use of non-specialised NGOs should be avoided. For an existing RFI, the RF partner selected should have a credible strategy for growth, outreach and sustainability, and a viable governance structure although at the planning stage the study and discussion of governance options are more important that finalisation. 6. Monitoring of partners work. A simple system for performance-based monitoring is essential. Reporting on Microfinance Information Exchange (MIX) should be actively promoted - see IFAD RF Decision Tools Part II, Section 10. 7. Budget composition. IFADs priority in RF development is not to supply loan capital, but to build the capacity of rural financial services. Budgets should provide support for technical assistance for institution building, especially at start-up and during early growth phases. 8. Savings mobilization. If the intention is to encourage savings mobilization the legal implications and implied responsibilities need to be clear, especially when seeking voluntary deposits from the public - see IFAD RF Decision Tools Part I, Section 4.
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3.5
This Note relates to KSF3: Alignment of design features with IFAD Strategic Objectives and lessons learnt; analysis and results framework
Core issues
Micro and small enterprises (MSEs) allow the rural poor including some of the most marginalized and vulnerable strata such as rural women, youth, and the landless to diversify their incomes, create new sources of economic growth and generate additional employment (including self-employment) in rural areas. The same strata may also be reached through MSE support to small-scale local entrepreneurs, whose business expansion can create new jobs for the rural poor. Core issues that shape the justification for and design of investments in MSE development concern: 1. The policy and institutional environment. A countrys legal framework, current business practices, government policies such as tax breaks or seed grants for MSEs, bureaucratic and administrative procedures, etc. may all act either to encourage or impede MSE development. The availability and strength of local financial services. Commercial banks, micro-finance institutions, micro-leasing companies, etc., also non-financial service providers such as business counselling, must be adequate to support MSE growth. The business opportunities and evolving demand in the project area. Agriculture-related (agro-processing, input selling, food trade) and nonagricultural MSE opportunities (carpentry, metal-working, transport, shops, handicraft, other amenities) should be present, together with government commitment to an identified target clientele. There should be general indications that financial returns from typical MSEs are attractive to this clientele. The institutional mechanisms for MSE promotion. Support needs of potential MSE entrepreneurs require identification. Business development services such as entrepreneurship training, management and planning advice, and improved market information and access, are likely to be needed. Assistance in making loan applications and advice on dealing with financing agencies will also be required. Micro and Small Enterprise Units (MSEs) may need setting up if institutional mechanisms are inadequate. Such units may also incorporate teams of rural business advisers (RBAs) to strengthen links between MSEs, producers or producer organisations, other market intermediaries such as traders, processors or transporters, and rural or urban businesses. Related infrastructural needs and constraints. Means may have to be found to address non-commercial constraints to MSE growth such as the poor quality of the rural roads needed to link MSEs to markets, inadequate water and electricity supplies and ineffective communication networks.
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Financial and Economic Analysis for Investment Projects Learning Notes Series
This Note relates to KSF3: Alignment of design features with IFAD Strategic Objectives and lessons learnt; analysis and results framework
3.6
Core issues
The design of rural development investments should include tests of financial viability and sustainability, as well as a demonstration of the value of the project to the economy in general. Financial and Economic Analyses provide the relevant ex-ante evidence within the frameworks of Discounted Cash Flows and Cost Benefit Analysis (CBA). The principles that guide these frameworks are long established and well documented. However, the value of the analysis as a decision tool hinges on the quality of the assumptions that underpin it, as well as its ability to capture a variety of costs and benefits and accurately predict the project outcomes. Related to the above, some core issues to consider in the context of Quality Enhancement are: 1. Accurate estimation of financial costs. Inaccuracy of early cost estimates can be partly attributed to incomplete information and inherent difficulties in predicting a distant future. However, there is a marked bias towards underestimation, which frequently results from inadequate assessments of: local capacity for diligent and expedient implementation; availability of inputs locally/internationally; efficiency of procurement; and timely availability of counterpart funds. 2. Accurate estimation of financial benefits. A critical variable for the estimation of incremental benefits is the adoption/adaptation rates of new technologies and enterprises. The case for change is usually made on the basis of technical and financial viability, but adoption rates also depend on: the risk perceptions and risk mitigation strategies of the target group, the labour and cash flow constraints of households, reliability and complexity of technology, and other social factors that can determine individual preferences and motives. Moreover, the commercialisation of outputs hinges on the assumption of existing demand and of a functioning market. These assumptions should be appropriately examined in order to arrive at realistic estimates of producer prices and sales volumes. 3. Demonstration of financial viability and sustainability. The routine test of financial viability for IFADs projects is the financial analysis for the indicative private enterprises. The analysis should also encompass the viability of the institutions that are either participating or being formed under the project, in order to ensure that service provision can be sustained past the financing period. Cost recovery is key to financial sustainability and when services are provided on that basis the formulation should include an analysis of demand for them. However, the willingness and ability of the rural poor to pay for project supported services and outputs, and the capacity of institutions and service providers to charge for them, remains an issue that should be critically examined. 4. Assessment of social costs and benefits. Economic analysis is traditionally used to correct financial prices for distortions and transfer payments. Extended CBA can also account for externalities and other social costs and benefits. This may require complex shadow pricing methods and value judgements, but key pecuniary externalities common to agricultural development (e.g. upstream/downstream links in watersheds) should be accounted for in the analysis, when they are linked to a significant portion of the projects costs and benefits. 5. Uncertainties in attribution of costs and benefits: Flexible financing instruments such as Community Development Funds will generate unpredictable cost and benefit streams. An analysis that is based on some indicative activities to be undertaken is feasible in some cases by assuming a menu of options for the target group. Uncertainty can weigh on more structured project designs as well, especially for research and extension activities. This is due to the large time lags for the accrual of benefits from research and extension services and the inherent serendipity of research outcomes. Lastly, the problem of attribution of costs and benefits applies especially to IFAD projects that engage in wider donor programme initiatives, such as a SWAp, in which case an ex-ante CBA on IFADs contribution may not be the appropriate decision tool.
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3.7
Land Tenure
Learning Notes Series
This Note relates to KSF3: Alignment of design features with IFAD Strategic Objectives and lessons learnt; analysis and results framework DRAFT
Core issues
Ensuring secure access to land and other natural resources is often central to improving rural livelihoods and reducing poverty. Both the rules of land tenure and the system of access rights can be critical. 1. Land rights and rules of access determine who benefits, and how benefits are shared, from land-based developments such as changes to more sustainable farming systems, improved irrigation or community-based natural resource management (CBNRM). 2. Landlessness or precarious land access are often at the root of chronic poverty, social exclusion and food insecurity. 3. Women can be doubly disadvantaged because land inheritance practices as well as norms and procedures for formalizing land rights often discriminate against them. 4. Weak and unprotected land rights can undermine incentives for longer term investments by land users in sustainable land and natural resource management. 5. Unclear or conflicting systems (e.g. customary versus statutory land rights) often culminate in the loss of land rights for the poorest and most vulnerable. 6. Because land ownership and political power are often closely connected, those with limited land rights may be less able to influence community decisions on land allocation and use e.g. to spend community funds to introduce pro-poor CBNRM. 7. Where land rights are insecure, project interventions that raise the value of land can deprive IFADs target groups of their land rights through encouraging land grabbing by the more powerful. Rules and norms governing land tenure can be administered by statutory (formal) and customary (informal) organisations. Neither is per se superior; the social context is what matters. Any pro-poor tenure system must be: Inclusive: no member of the community should be excluded from land access if this is necessary to sustain her or his livelihood. Secure: tenure is protected against violation from more powerful actors and land can be occupied for long enough to allow the rural poor to reap the benefits of their land-based investments. Systems for rights of access to land are complex and context specific. Some rights of access are strong e.g. the right to exclude others from the land. Others are weaker and often confined to certain uses or periods of time e.g. access to stubble grazing, or pastoralists access to watering points during the dry season. Access rights are not always visible and may overlap: some may be vested in the community, some in an individual and yet others in the state. In handling core issues of land tenure and access project designers should: Take into account the complexity and context-specificity of land rights. Reflect the political nature of land rights in implementation arrangements. Consider gender differences in access to land and security of rights. Establish and/or strengthen grass roots bodies such as CBNRM groups. Ensure that these are recognised as entities which give the rural poor a voice in determining rights to natural resources. Ensure that IFADs target beneficiaries are actively involved in groups and able to influence their decisions. Generally, build on and foster the progressive evolution of traditional land tenure systems (giving due weight to the core issues above) instead of establishing new systems right away. Take into account that involvement in land rights is a long term process, so ensure that implementation agencies are designed to sustain project impacts.
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Yes Land related activities build on traditional land institutions subject to minimum standards outlined in point 2. Project enhances capacity and agency of the intended beneficiaries to actively participate in the implementation of land-related project activities. Implementation agencies have a proven track record in dealing with the complexities (technical & political) of land related project activities. Partnerships have been built with Civil Society Organizations to empower beneficiaries, take part in project implementation and sustain project outcomes.
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6. The project logframe contains adequate indicators to monitor the further development of land issues identified above. 7. Project is linked to land policy initiatives and reforms at national level. 8. Project incorporates measures to systematically gather and analyze land-related project experiences which can be used for country programming, policy dialogue and in-house knowledge management.
3.8
Core issues
Accessible, transparent and remunerative markets are necessary to raise incomes and improve livelihoods of the rural poor. In developing countries, agricultural markets rarely meet these needs. Direct state involvement in marketing has seldom brought improvements and proved costly, prompting changes in the marketing systems from parastatals to the private sector. But the response of the private sector has been slow and the challenge -- to provide stable and remunerative prices to small producers remains. Although the consensus still favours a stronger role of the private sector in marketing, the core issues have not been resolved. 1. The Government policies are at times governed by a need to keep urban prices low. Policies on food aid, imports of subsidized foods or trade further expose small farmers to unfair market competition and undermine local markets to the detriment of the small producers. This issue of leveling the playing field for the smallholders remains. 2. Despite the transition to a greater role of the private sector in marketing, there is no clear consensus on the appropriate role of the government and the private sector in providing remunerative prices to the small farmers. The real purchasing power of rural producers has fallen due to the removal of subsidies and declines in farmgate prices of food crops and basic commodities, either through rising technical efficiency of production, or because of uncontrolled competition from subsidised sources in developed countries. The marketing institutions and the framework in most countries have yet to adequately address this issue. 3. Poor access to markets. Lack of competition among traders in rural areas contributes to monopolistic trading practices to the detriment of the poor and small producers. The development of micro-, small- and medium- enterprises (MSMEs) to facilitate the access of the poor to markets and enhance competition in rural areas is further constrained by a number of factors, which, inter alia, include lack of finance or the adequate availability of Business Development Services (BDS) to facilitate and guide the development of MSMEs. Moreover, such services are proving hard to sustain in rural areas and the ability of the poor to pay for them remains suspect. 4. Inadequately structured farmers associations or other similar forms of jointlyowned organizations that could interface with traders or could undertake marketing. These institutions either do not exist, or where they do, the organizations remain handicapped by: (a) low quality of, and inexperienced, management; (b) undercapitalised financial base; (c) limited access to capital; and (d) poorly paid staff. These constraints inhibit their ability to compete in the open market or adapt to changes in the marketing environment. 5. Stringent quality demands that add to costs of small producers without additional remuneration. These are demanded by private sector buyers and are often backed by increased state regulation of food safety, origin and trading standards. 6. High transaction costs that affect the viability of the supply chains. Restricted physical access, transport services and market infrastructure in many rural areas, coupled with low volume of production that is often scattered, adds to the already high collection and transport costs, especially in remote areas. The supply chains in these areas are long with many intermediaries, which, of necessity, limits the amount that can be paid to smallholders. 7. Limited bargaining power of the producers and the lack of marketing credit often forces smallholders to sell produce just after harvest when the prices are low. This linked to asymmetric market and price information also hinders smallholders from realising remunerative prices for their produce.
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4.1
Core issues
Radical institutional transformations intended to improve the lot of the rural poor risk causing antagonism and suffering implementation delays. It may be more effective to build on, or improve institutions that already exist. To decide whether improvements or more extensive transformation are appropriate will involve the following main steps or issues: 1. An institutional overview. The needs, opportunities and constraints currently facing rural people and communities need to be contrasted with the adequacy of the present institutional framework. Issues and obstacles to pro-poor change may arise from the mandates, structures, means of operation, resources or mindsets of existing organisations; national or local laws and regulations; or government policies and commitments to institutional and organisational change. 2. An assessment of institutional constraints and opportunities. The choice of steps that are appropriate and implementable to remedy the identified institutional shortcomings that exacerbate poverty among the IFAD target group will be conditioned by the above issues. Assessment of constraints will identify practical limits to the changes in institutional mandates, modes of operation, skills and staffing. The issues that will unavoidably have to be addressed relating to government laws, regulations, policies, recruitment or training for national and local administrations, and to secure the participation of the poor themselves will reveal themselves. Implications for funding of institutional transformation will emerge. 3. A rationale and strategy for change. The central focus of the strategy adopted for institutional transformation should be according to beneficiary needs. At the same time designers must take account of issues such as the need for proposals to be cost effective and implementable within an acceptable time frame; and they must minimise or sidestep, to the extent realistically possible, more difficult issues relating to laws, policy or governance. Transformations should also take account of and synergise the efforts of other donors and lenders. 4. The outcome should be a step-wise implementation plan for pro-poor institutional strengthening and transformation. This should include means to draw in and incorporate stakeholders ideas and build commitments to change from community up to national level; provisions for training and to build institutional capacities; funding and assistance requirements; suggested means and responsibilities for resolving outstanding issues; links to other donors; indicators and milestones to monitor progress; fall-back plans or alternative strategies if progress falters; and the means to maintain momentum and sustainability of enhanced institutional performance after IFAD funding ends.
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Make an institutional analysis that: identifies the links between institutional constraints and poverty; indicates how the livelihood choices of poor people could be improved through institutional transformation; flags policy, regulatory or legal constraints to such transformation; realistically assesses social and bureaucratic forces in favour of or opposed to change in terms of the extent and speed of transformation judged achievable; reviews and analyses the capacities of organizations with potential to promote or support such institutional transformation; identifies and reviews which institutions (formal public at central, regional and local levels, private, civic and informal - traditional, customary, voluntary) are best suited to deliver interventions effectively and efficiently, by understanding the institutional and organizational linkages as well as organizational factors which are critical to successful delivery of the project(s) based on the needs of the target group; assess (financial) resource adequacy of the systems and actors given the planned project objectives and activities. On the basis of the above, decide the extent to which traditional or existing institutions should be reinforced or adapted to boost pro-poor community development, versus needs to create new arrangements - ensuring that the proposed new institutional setup(s) will indeed be possible in the given country and context. The nature of communities and community structures are of equal importance to evaluate the potential for pro-poor targeting measures and the role of community participation Develop implementation proposals based on the above rationale and concept. Match transformed management and/or organizational structures to the constraints facing the target group. Take account both of needs for strengthening and capacity building, and of inertia or resistance to institutional transformation that may be encountered. Identify institutional policy issues: suggest solutions and how, by whom and by when these issues might be resolved. Develop proposals for the promotion and support of the transformations proposed, and for harmonization with other progammes and co-ordination and collaboration between community organizations, the public sector, civil society and the private sector. Ensure respective roles, functions and rights (both vertical and horizontal linkages) are clear. Exploit links between local user agencies and regional or national public agencies, to strengthen local capacities for service delivery and empowerment. Formulate an exit strategy and specify the means to sustain the strengthened and functional institutional framework after loan disbursement ends. Ensure that outputs of institutional analysis and assessment are presented in the SWOT and Stakeholder tables of the Key Files. Specify M&E indicators of pro-poor institutional transformation to be included in the logframe and Key Files.
4.2
Core issues
Technical support services, in particular research and extension, need reshaping in many developing countries to respond to changing circumstances and new demands on small farmers, such as: 1. The worlds food industry and global food marketing are changing rapidly, farmers worldwide are increasingly exposed to global competition and new regulatory frameworks are being introduced in developed and developing countries. 2. Pressures are mounting on farmers in many parts of developing countries to find alternative livelihoods and their dependence on agriculture is often decreasing. Services need to go beyond supporting input intensification on staple crops such as those that brought about the Green Revolution. They should also help those remaining dependent on the land, developing and providing advice on more diversified routes out of rural poverty, to improve coping strategies and better control of risks. More on- and off-farm jobs need to be created in rural areas. The dynamism and diversity of poverty are increasing among IFAD target groups, especially in Africa, reinforcing the need for technical support services to promote more location- or client-specific technology adaptation. Development of this technology is faster and more successful if it draws on local knowledge and builds on partnerships between researchers, extensionists and technology users themselves. Public sector research and extension services have been weakened by government spending cuts and their modus operandi is often outmoded vis--vis these new, evolving, needs. Most are unequal to future challenges; but there is seldom capacity and there are few incentives for alternative organisations, in particular for the private sector to take over former public roles. In many developing countries means to secure wider R&D contributions from the private and voluntary sectors are central to restoring effective support services. Support for reforms of technical support services should be integrated with contributions of ongoing or planned R&D support from regional and international programmes e.g. the CGIAR, IFAD and donors. Enclaves in which each donor promotes its own preferred approach should be avoided. Advantage should be taken of reformed, participatory, support services to help target groups lobby and negotiate with local administrations and political authorities, to overcome upstream and downstream technical or non-technical constraints to livelihood change.
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4.3
Core issues
Proposals for project and programme implementation should start from consideration of: 1. Potentially desirable implementation arrangements, taking account of the chosen development aims, focus, component mix and the particular characteristics of the target group. The strengths and weaknesses of implementing organisations currently available and institutional gaps (based on details given in the institutional Key Files; see also Learning Note 4.2 - Pro-Poor Institutional Transformation. Possible alternative approaches and strategies for implementation e.g. use of government line agencies vs. creation of a separate project management or coordination unit (PMU/PCU); degree of reliance on external technical assistance. As a general principle implementation arrangements should help and encourage the implementing organisations to do what they do best and avoid radical changes in responsibilities.
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The implementation arrangements adopted should: 5. 6. Take account of implementation experience and lessons of previous IFAD projects. Be based on a sustainable management structure e.g. one that avoids heavy PMU/PCU staffing, makes strategic use of outsourcing and external technical assistance etc. and avoids creating parallel or overlapping responsibilities. Ensure a mix of competencies that matches the investment strategy, focus and aims for poverty alleviation, and clearly allocates organisational and individual roles and accountabilities. Include provisions for competitive, transparent and gender-balanced recruitment procedures and give attention to gender-equality issues in TORs of project management staff. Provide for flexibility in the face of unforeseen events.
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4.4
Core issues
Community Development Funds (CDFs) are demand-driven cost-sharing mechanisms that promote participatory community development. Finance is normally channelled to groups for small projects they have themselves identified, to which they add their contributions in cash or kind and over which they maintain control. Infrastructure, social services, training or productive investments may all be eligible, but generally only public goods are funded. There is no single, ideal model. The core issues below centre on the need to tailor CDFs to particular situations: 1. There should be a clear rationale for a CDF approach: it should be demonstrably compatible with community needs and traditions in the project area or country as well as with government policies for poverty reduction and development. Conditions should allow for pro-poor targeting and transparency in CDF operations - see Learning Notes 1.1 - Project Rationale and Relevance and 2.3 Targeting. Eligibility criteria, decision-making procedures and requirements on beneficiary contributions should be designed in such a way as to promote inclusion of the poorer. An institutional structure and location are needed that allow for flexibility, efficiency and transparency, can handle many small projects, and can attract and maintain competent management and staff. Institutional arrangements should be consistent with government policies for decentralization and devolution. Needs for staff training and capacity building for CDF operations should be identified and funded. An initial menu of options for CDF support is needed. This should be backed by agreements with stakeholders on the scale of beneficiary contributions, subsequent O&M responsibilities, any cost recoveries, and demonstrations of affordability and/or profitability for the Target Group. Overlap or confusion between CDF funding and provision of credit via rural financial services should be avoided - see Learning Note 3.4 - Rural Finance). Likewise, CDF resources at the disposal of beneficiaries should be clearly separated from project finance allocated to supporting services, CDF promotion, group formation, capacity building, monitoring and evaluation, etc.
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Participation Resource Centre The Effectiveness of World Bank Support for Community-Based and -Driven Development: An OED Evaluation United Nations Capital Development Fund (for related local development funds, decentralization topics) Community-Based and-Driven Development: A Critical Review, Ghazala Mansuri and Vijayendra Rao, The World Bank Research Observer, vol. 19, no.1 Disciplining Local Leaders in Community-Based Development, Jean-Philippe Platteau and Frdric Gaspart, Centre for Research on the Economics of Development (CRED), Belgium, July 2005 Social Fund Guidelines for Design and Implementation, Soniya Carvalho, World Bank, Date Unknown Why are Social Funds so Popular?, in Simon J. Evenett, Weiping Wu and Shahid Yusuf (eds), Local Dynamics in an Era of Globalization: 21st Century Catalysts for Development, Washington: World Bank/Oxford University Press, 2000 The Rise of Social Funds: What are they a Model of?, Judith Tendler, Mimeo 1999 A Debate on Social Funds: empowering communities for development or charity relief in disguise?, in Working on Administrative and Civil Service Reform, WB Administrative and Civil Service Reform Thematic Group, Nov. 2001 The World Bank Participation Sourcebook, World Bank Evaluating Social Fund Impact a Toolkit for Task Teams and Social Fund Manager, Sarah Adam, World Bank, October 2006
5.1
Core issues
Investments that exploit technical opportunities for environmental improvement and sustainability by promoting better protection, conservation or management of natural resources will enhance the delivery of environmental services by communities. Impact will often depend on measures to improve community access to, and local control over, the resource base. For common property resources or nature reserve projects, joint management or full transfer of management and usufruct from public sector bodies to beneficiaries may be a central issue. Core issues for environmentrelated investment plans and components are needs to: 1. Optimise local control over, and access to, natural resources via gendersensitive participatory mechanisms e.g. through group sharing and exchange of knowledge, communal decision-making processes, publicised risk assessments, community monitoring and evaluation of natural resource use and trends. Address identified constraints to adoption of improved/more sustainable practices for natural resource management (NRM), distinguishing between needs of women, men and other target groups. Boost the transfer of pro-poor environmental and NRM technologies using participatory advisor-client relationships and participatory extension - see Learning Notes 3.1 - Technology Change for Livelihood Development and 4.3 Rural Technical Support Services. Provide support and incentives for those forms of community-based natural resource use and management that ensure long term sustainability. Enhance technical, legal and institutional capacities to address negative externalities including off-site and boundary effects; also to help beneficiaries mitigate any potential adverse impacts associated with project interventions, and to ease constraints on their adoption of environment-friendly, sustainable practices. Encourage positive synergies with existing/ongoing strategic NRM frameworks as set out in national poverty reduction strategies (PRSPs) and environmental action plans (NAPs, NEAPs), as well as other projects and programmes. Where appropriate, exploit opportunities to promote the use of environmentfriendly agricultural technologies such as organic fertilizers and alternative pest control techniques including integrated pest management; and promote global environmental issues addressed by GEF and/or UNCCD (the latter may involve the inclusion of project components which address the objectives of UNCCD or are eligible for GEF funding).
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5.2
Sustainability
Learning Notes Series
This Note relates to KSF5: Risks and Sustainability
Core issues
Livelihoods are sustainable when they are resilient in the face of external shocks and stresses, do not depend on unsustainable external support, maintain the long-term productivity of natural resources and do not undermine or compromise the livelihoods of others, such as: 1. Measures to ensure that livelihood benefits to the rural poor are sustainable should be integral to the design of all types of project components and outputs, whether these aim to create new physical assets, disseminate new practices, strengthen institutions, enhance social capital, empower communities, reform policies, or introduce new modes of operation such as demand-driven project implementation. Measures to ensure sustainability will be specific to each type of output: but whatever their nature it should be clear how each output will contribute to achieving sustainable livelihood improvements. In the rare cases where shortterm needs overshadow sustainability concerns (e.g. post-conflict) this should be justified. The momentum of poverty alleviation should be sustained both during and after loan disbursement. With this in mind, project components should each: 3.1. Include core sustainability measures among monitoring indicators in the Key Files, indicating when and by whom sustainability should be measured (see IFAD, 2002. Managing for Impact in Rural Development: A Guide for Project M&E, Section 5: Deciding what to Monitor and Evaluate). 3.2. Require project management and supervising Co-operating Institutions (CIs) or IFAD missions to report on progress towards sustainability during disbursement. 3.3. Contain a clear exit strategy to sustain institutional, social, environmental and financial benefits after project disbursement ends. 3.4. Detail the longer term post-disbursement operation and maintenance responsibilities and sources of funding for all infrastructure investments. 3.5. Detail how financial and organisational responsibilities for project-funded institutions (e.g. rural finance) and services (e.g. village-level extensionists or para-vets) will evolve. 3.6. Estimate the governments residual liability for recurrent expenditures after disbursement ends, suggesting fall-back or downsizing options if residual liabilities prove fiscally unsustainable, as appropriate. 3.7. Indicate how sustainability will be evaluated post-disbursement. 4. Where feasible, teams should try to design round threats to sustainability avoiding, for instance, works with major post-project operation and maintenance (O&M) costs, or production practices that depend on inputs bought with scarce foreign exchange.
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Core issues
1. For monitoring and evaluation (M&E) systems to be meaningful, several underpinning conditions for system design must be fulfilled: 1.1. All stakeholders must be involved, and their information needs specifically addressed. Ownership, especially in-country, is essential. 1.2. M&E should be seen as a key management tool to track implementation progress and improve project planning for impact rather than an exercise in data collection. 1.3. Unnecessary complications should be avoided. Simpler M&E systems tend to be more effective systems. Formulation Reports of all investment projects should include a summary of the M&E plan, which should be supported by details in an Annex. There should be a direct link between the projects logical framework and the M&E plan. Balance between quantitative indicators and qualitative information is necessary at all levels. A small set of objective, quantifiable indicators should provide the base of evidence around which qualitative information can complete the explanatory framework. That balance is illustrated in the figure below.
Measuring Results and Impact
MONITORING 1st & 2nd LEVEL RESULTS Why: To track project outputs (# wells, etc.) and monitor social processes (functioning of village development QUANTITATIVE committees, etc.). INDICATORS How: Counting / aggregating. When: Continuous, with annual reporting. EVALUATING IMPACT Why: To track any changes in anchor indicators of impact (poverty & hunger). How: Representative HH surveys. When: At benchmark, mid-term and project completion evaluation.
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QUALITATIVE INFORMATION
Why: To identify factors in rate of progress (rapid / slow) and attitudes of project participants. How: Flexible mix of qualitative methodologies, (see IFAD Guide for Project M&E). When: As needed.
Why: To explain context and perceptions of any changes in anchor indicators of impact. How: Flexible mix of qualitative methodologies, (see IFAD Guide for Project M&E).
When: At mid-term and completion evaluations, and as needed. Note: The 4 quadrants are mutually re-enforcing (not mutually exclusive) and each is potentially participatory (or non-participatory).
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Keeping track of project implementation and what has been achieved is important. In the end, what may make the most difference is how people interact, how ideas are shared, and how people are motivated to contribute. Rural peoples aspirations and their own development processes are at the heart of M&E.
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Core issues
The Global Environment Facility (GEF) provides incremental funds for development projects and activities that enhance protection of the global environment in the Focal Areas of Biodiversity, Climate Change, the Ozone Layer, International Waters, Persistent Organic Pollutants and Land Degradation. IFAD has full access to all GEF Focal Areas and grants as long as the interventions primary focus is Land Degradation (the objective is to mitigate the causes and negative impacts of land degradation on the structure and functional integrity of ecosystems through sustainable land management practices as a contribution to improving peoples livelihoods and economic wellbeing) - Operational Program 15 (consider other OPs with links to LD). GEF helps catalyze IFADs efforts in addressing the poverty-environment nexus and broaden the scope and impact of IFAD activities to improve the global environment. The development of GEF project grants should coincide with IFAD Inception or Formulation stages to ensure greater coordination, convergence of implementation support, and operational strategies between the GEF and IFAD interventions. Design of components for IFAD-GEF projects should, as a minimum, cover: 1. consistency with GEF focal areas and operational programmes, strategic priorities and relevant country and regional strategic frameworks; 2. institutional coordination and support: core commitments and linkages; consultation, coordination and collaboration between and among the GEF Agencies; 3. monitoring and evaluation project design incorporating lessons from similar projects and describing the proposed M&E system in harmonization with the overall IFAD initiative; 4. sustainability (including financial sustainability): factors that influence continuation of project benefits after completion of project implementation together with a well defined exit strategy plan; 5. replicability: an outline of measures to replicate the project lessons and transfer experience as well as the proposed approach to knowledge transfer, if any; 6. stakeholder involvement and intended beneficiaries: major stakeholders relevant to project objectives and means to ensure participation in project development; GEF support should cover the same geographical area as the IFAD initiative; 7. financing modality: details for co-financing plans indicate the sources of co-financing, how they are classified (i.e. GEF Agency, Government, Multilateral Agency, Bilateral Development Cooperating Institution, NGO, Private Sector, Beneficiaries), and the type of co-financing (i.e. grant, loans, credits, equity investments, committed in-kind support, others-specified). It is important to indicate which activities will be co-financed by the IFAD Initiative. The co-financing has to be on a one to one basis (one USD GEF for a one USD co-financing).
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Design of IFAD/GEF-related regional initiatives and partnership platforms should be primarily linked to IFADs projects and its respective regional strategies and opened-up to relevant partners in relation to their comparative advantages. Ensure cost-effective design (particularly in terms of implementation arrangements).
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7.2
Core issues
The United Nations Convention to Combat Desertification in Those Countries Experiencing Serious Drought and/or Desertification, Particularly in Africa (UNCCD), to which IFAD is an active partner, is a Convention which strongly emphasises the role of participation, gender-equity, partnerships, integrated sustainable development, community empowerment, local expertise and traditional knowledge in combating desertification. As GEFs Executing Agency and host of the Global Mechanism, IFAD has an important role in advancing the UNCCDagenda. According to Art.1 of the UNCCD, combating desertification includes activities which are part of the integrated development of land in arid, semiarid and dry sub-humid areas1 for sustainable development. The Convention highlights that: (i) human beings in affected or threatened areas are at the centre of concerns to combat desertification; (ii) desertification is caused by complex interactions among physical, biological, political, social, cultural and economic factors; and (iii) desertification affects sustainable development through its interrelatedness with important social problems such as poverty, poor health and nutrition, lack of food security, etc. Often IFADs objectives at a country level overlap with those spelt out in the Convention. Desertification ranks among todays greatest environmental challenges in developing countries, particularly in Africa, Middle East and parts of Asia, and has serious local and global impacts, especially in areas affected by drought, deforestation and climate variability. Combating desertification is a priority in efforts to ensure food security and enhance the livelihoods of more than 2 billion people. Desertification often triggers economic, environmental, and social hardships for poor rural people, who are sometimes both the cause and the victims of desertification. To combat desertification, there is a need to:
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Recognise that causes of desertification are many, complex and highly context-specific. These are typically classified as: (i) direct (i.e., proximate causes), such as inappropriate agricultural practices; overgrazing; deforestation; and infrastructure extension, and (ii) indirect (i.e., underlying drivers), including nonconducive economic, social as well as environmental policies, laws and institutions; limited and/or inequitable availability of and accessibility to land, institutional resources, technologies, markets, inputs, water, etc; population pressure and displacement; inappropriate customs and practices; and lack of alternative livelihood strategies/opportunities. Ultimately, what IFAD is interested in addressing is how these causes interact with and influence poverty and environmental sustainability. Acknowledge that many activities are potentially relevant to combating desertification. Because perceptions, intensities, extents, consequences and causes of desertification are multiple and vary in both time and space, activities that may contribute to combating desertification are equally so. National Action Programmes (NAPs) are one of the vehicles for CCD implementation and may include a wide array of activities, policies and strategies aiming, directly and indirectly, at (a) preventing; (b) rehabilitating; and/or (c) reclaiming land degradation. Successful NAPs outline long-term strategies and are formulated with the active participation of local communities, aspects which are essential in ensuring sustainability, ownership and continuity for longterm programming. Mainstream NAP-priorities and pursue synergies. Combating desertification is necessary for achieving the MDGs in drylands and NAP implementation should occur in the context of broader government strategic and planning processes (e.g., PRSPs) and country strategies (e.g., RB-COSOPs. Furthermore, iterative and complex interactions between desertification, climate change and biodiversity highlight the importance of pursuing synergies among the conventions adopted in the Rio process (UNCCD, CBD and UNFCCC). Mainstreaming UNCCD-priorities and seeking synergies are required to avoid duplication of efforts, enhance collaborative endeavours and use scarce resources more efficiently. Article 8.1 of the UNCCD explicitly encourages such coordination of activities. Also the current UN Reform is focusing in that direction.
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arid, semiarid and dry sub-humid areas are defined as areas other than polar and sub-polar regions, in which the ratio of annual precipitation to potential evapotranspiration falls within the range from 0.05 to 0.65 referred to as drylands
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