IFAD Learning Notes

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IFAD Learning Notes Version January 2008 Enabling the rural poor to overcome poverty

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Enabling the rural poor to overcome poverty

Transcript of IFAD Learning Notes

Page 1: IFAD Learning Notes

IFAD Learning Notes

Version January 2008

Enabling the rural poor to overcome poverty

Page 2: IFAD Learning Notes
Page 3: IFAD Learning Notes

About

Learning

Notes

For pro-poor rural

development investments

Learning Notes are intended to serve as reminders of key issues and main tasks in the design and implementation of pro-poor investment projects in rural areas. They are based on lessons learned from experience, accumulated knowledge and current innovations.

The intended users of these Learning Notes are IFAD Country Programme Managers and team leaders/members at all stages in the design (inception, formulation and appraisal), review, supervision and evaluation of investment projects and programmes.

The first section identifies ‘Core issues’ to be considered. The second section indicates the ‘Key tasks for design and review’ to generate robust investment plans. The final section, ‘Sources of information and examples of good practice’, directs users to some relevant examples drawn from IFAD’s portfolio of loan and grant-financed projects, studies, and other sources of best practices and relevant information.

The Learning Notes aim to assist project design teams to generate the information required to prepare and enhance the quality of IFAD's Project Design Documents, the supporting logframes and Key Files.

Comments and suggestions for the improvement of Learning Notes are welcome. These, together with requests for further information, should be addressed to [email protected]

Introductory Note

List of Abbreviations

Issues related to Key Success Factor 1: Country relevance, commitment and partnerships

1.1 Project Rationale and Relevance

1.2 Pro-Poor Policy Dialogue for Change (draft) Issues related to Key Success Factor 2: Poverty, Social Development and Targeting

2.1 Gender

2.2 Food Security, Health and Nutrition

2.3 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 Technology Change for Livelihood Development

3.2 Agricultural Water Infrastructure and Management

3.3 Livestock and Rangeland Development

3.4 Rural Finance

3.5 Micro and Small Enterprise (MSE) Development

3.6 Financial and Economic Analysis for Investment Projects

3.7 Land Tenure (draft)

3.8 Marketing and the Rural Poor (draft) Issues related to Key Success Factor 4: Implementation arrangements and institutional aspects

4.1 Pro-Poor Institutional Transformation for Community-Based Development

4.2 Rural Technical Support Services

4.3 Designing for Implementation

4.4 Community Development Funds

Issues related to Key Success Factor 5: Risks and Sustainability

5.1 Environment and Natural Resource Management

5.2 Sustainability Issues related to Key Success Factor 6: Innovation, Learning and Knowledge Management

6.1 Monitoring and Evaluation

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Table of Contents (continued)

More guidance…

7.1 Environment Learning Document (GEF Projects) (draft)

7.2 Mainstreaming the UNCCD-objectives in IFAD operations (draft)

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About

Learning

Notes

For pro-poor rural

development investments

Learning Notes are intended to serve as reminders of key issues and main tasks in the design and implementation of pro-poor investment projects in rural areas. They are based on lessons learned from experience, accumulated knowledge and current innovations.

The intended users of these Learning Notes are IFAD Country Programme Managers and team leaders/members at all stages in the design (inception, formulation and appraisal), review, supervision and evaluation of investment projects and programmes.

The first section identifies ‘Core issues’ to be considered. The second section indicates the ‘Key tasks for design and review’ to generate robust investment plans. The final section, ‘Sources of information and examples of good practice’, directs users to some relevant examples drawn from IFAD’s portfolio of loan and grant-financed projects, studies, and other sources of best practices and relevant information.

The Learning Notes aim to assist project design teams to generate the information required to prepare and enhance the quality of IFAD's Project Design Documents, the supporting logframes and Key Files.

Comments and suggestions for the improvement of Learning Notes are welcome. These, together with requests for further information, should be addressed to [email protected]

IFAD’s Strategic Framework for 2007-2010 reiterates the Fund’s 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 [email protected].

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About

Learning

Notes

For pro-poor rural

development investments

Learning Notes are intended to serve as reminders of key issues and main tasks in the design and implementation of pro-poor investment projects in rural areas. They are based on lessons learned from experience, accumulated knowledge and current innovations.

The intended users of these Learning Notes are IFAD Country Programme Managers and team leaders/members at all stages in the design (inception, formulation and appraisal), review, supervision and evaluation of investment projects and programmes.

The first section identifies ‘Core issues’ to be considered. The second section indicates the ‘Key tasks for design and review’ to generate robust investment plans. The final section, ‘Sources of information and examples of good practice’, directs users to some relevant examples drawn from IFAD’s portfolio of loan and grant-financed projects, studies, and other sources of best practices and relevant information.

The Learning Notes aim to assist project design teams to generate the information required to prepare and enhance the quality of IFAD's Project Design Documents, the supporting logframes and Key Files.

Comments and suggestions for the improvement of Learning Notes are welcome. These, together with requests for further information, should be addressed to [email protected]

Abbreviations

ACSAD Arab Center for the Studies of Arid Zones and Dry Lands AR Appraisal Report ASARECA 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 Développement 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

IEC Information, Education and Communication ILC International Land Coalition ILO International Labour Organization IMI Innovation Mainstreaming Initiative ILRI International Livestock Research Institute IMAWESA Programme for Improved Management of Agricultural Water in

Eastern and Southern Africa

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Abbreviations (continued)

IMI Innovation Mainstreaming Initiative IP Indigenous Peoples IPTRID International Programme for Technology and Research in Irrigation and Drainage KSF Key Success Factor LD Land Degradation LEAD Livestock, Environment and Development LN Learning Note M & E Monitoring and Evaluation MIX Microfinance Information Exchange MSE Micro and Small Enterprises MSMEs Micro-, Small- and Medium- Enterprises NAP National Action Programme NAPA National Adaptation Programmes of Action NBSAP National Biodiversity Strategies and Action Plan NEAP National Environment Action Programme NGO Non-Governmental Organization NRM Natural Resource Management O & M Operation and Maintenance ODI Overseas Development Institute (UK) OED Operations Evaluation Department (World Bank) OP Operational Programme PAT Productive Assets and Technology (IFAD Strategic Objective 2) PA Western and Central Africa Division (Africa I) PB President’s Bulletin PDF Project Development Facility PRSP Poverty Reduction Strategy Paper PT IFAD Technical Advisory Division PCU Project Coordination Unit PMU Project Management Unit R&D Research and Development RBA Rural Business Adviser RB-COSOP Results-based Country Strategic Opportunities Programme RF Rural Finance RFI Rural Financial Institution RIMS Results and Impact Management System RUPES Rewarding the Upland Poor of Asia for the Environmental Services they Provide SCN Standing Committee on Nutrition (UN) SEED Small Enterprise and Employment Development SME Small and Medium Enterprise SOF Special Operations Facility SWOT Strengths Weaknesses Opportunities Threats SWAp System-Wide Approach TA Technical Assistance TOR Terms of Reference UNCCD United Nations Convention to Combat Desertification UNFCCC United Nations Framework Convention on Climate Change WB World Bank WHO World Health Organization WP Working Paper WUA Water User Association

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This Note relates to KSF1: Country relevance, commitment and partnerships

About

Learning

Notes

For pro-poor rural

development

investments

Learning Notes are intended to serve as reminders of key issues and main tasks in the design and implementation of pro-poor investment projects in rural areas. They are based on lessons learned from experience, accumulated knowledge and current innovations.

The intended users of these Learning Notes are IFAD Country Programme Managers and team leaders/members at all stages in the design (inception, formulation and appraisal), review, supervision and evaluation of investment projects and programmes.

The first section identifies ‘Core issues’ to be considered. The second section indicates the ‘Key tasks for design and review’ to generate robust investment plans. The final section, ‘Sources of information and examples of good practice’, directs users to some relevant examples drawn from IFAD’s portfolio of loan and grant-financed projects, studies, and other sources of best practices and relevant information.

The Learning Notes aim to assist project design teams to generate the information required to prepare and enhance the quality of IFAD's Project Design Documents, the supporting logframes and Key Files.

Comments and suggestions for the improvement of Learning Notes are welcome. These, together with requests for further information, should be addressed to [email protected]

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.

2. 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.).

3. 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.

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.

5. 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.

6. 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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Project Rationale and Relevance 1.1

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Key tasks for design and review

1. Demonstrate why an IFAD project is needed and how it would make a difference, given what others are doing and/or expected socio-economic and policy trends. Evaluate the borrower country’s need for, and willingness to take on, an IFAD loan.

2. Through rural diagnosis, stakeholder consultation, data searches etc., gain a clear understanding of potential target group identities, locations, rural livelihood strategies, constraints, opportunities, needs, coping mechanisms, priorities and the dynamics of their poverty.

3. Note and exploit precedents and lessons learned from past poverty reduction efforts. Assess their replicability. 4. Brainstorm with stakeholders and potential beneficiaries the development concepts, investment approaches or

project designs that, taking account of the above points, may overcome important constraints. Consider alternative or more innovative options carefully before any are discarded.

5. From this dialogue and participation, outline a development proposal, implementation plan and financing needs that are rational and relevant to the intended beneficiaries.

6. Identify social, economic, legal or policy constraints that, if unresolved, could impede implementation or prevent support of the type proposed reaching the target group; suggest solutions, indicating how, by whom and by when they would be achieved.

7. Favour design approaches that build on the strengths of the poor instead of only remedying their weaknesses. Design to cater for future trends in the socio-economic and poverty situation that are likely to affect project impact and the interest of the target group (e.g. the changing role of agriculture in response to increasing urban migration; long-term environmental or climate change).

8. Show how the proposals would make the poor less vulnerable. 9. Build into designs and implementation arrangements sufficient flexibility to adapt to evolving or unexpected

trends and events or emerging implementation experience, and the means for longer-term fiscal sustainability.

Sources of information and examples of good practice

IFAD-financed resources � Results-based Country Strategic Opportunities Programme (RB-COSOP)

IFAD project experience � India - Livelihood Security Project for Earthquake-Affected Rural Households in Gujarat (2001), Appraisal

Report: Working Paper 2 - Present Livelihood Systems and Coping Strategies � Dominican Republic - Social and Economic Development Programme for Vulnerable Populations in the

Border Provinces (2002), Appraisal Report � Sudan - Gash Sustainable Livelihoods Regeneration Project (2003), good poverty analysis, Appraisal Report:

Working Paper 1 - Socio-Economic Characteristics and Targeting

Sources of information and expertise outside IFAD � World Bank. The PRSP Sourcebook - a guide to assist countries in the development of poverty reduction

strategies � FAO Investment Centre � Id21 Rural Development � Eldis: Planning for Poverty Reduction

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This Note relates to KSF1: Country relevance, commitment and partnerships DRAFT

About

Learning

Notes

For pro-poor rural development

investments

Learning Notes are intended to serve as reminders of key issues and main tasks in the design and implementation of pro-poor investment projects in rural areas. They are based on lessons learned from experience, accumulated knowledge and current innovations.

The intended users of these Learning Notes are IFAD Country Programme Managers and team leaders/members at all stages in the design (inception, formulation and appraisal), review, supervision and evaluation of investment projects and programmes.

The first section identifies ‘Core issues’ to be considered. The second section indicates the ‘Key tasks for design and review’ to generate robust investment plans. The final section, ‘Sources of information and examples of good practice’, directs users to some relevant examples drawn from IFAD’s portfolio of loan and grant-financed projects, studies, and other sources of best practices and relevant information.

The Learning Notes aim to assist project design teams to generate the information required to prepare and enhance the quality of IFAD's Project Design Documents, the supporting logframes and Key Files.

Comments and suggestions for the improvement of Learning Notes are welcome. These, together with requests for further information, should be addressed to [email protected]

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 IFAD’s 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 IFAD’s 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 IFAD’s 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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Key tasks for design and review

1. Clearly identify and justify needs or opportunities for policy dialogue. 2. Analyse and clarify specific policy constraints to successful pro-poor development – for instance flag the overall

importance of policy issues for poverty reduction or the sustainability of project activities; ensure the policy changes advocated correctly address the policy and institutional constraints faced by the target group.

3. Avoid calls for policy changes that exceed those realistically attainable in the context of an investment project of the scale proposed; where possible exploit strategies to minimise policy adjustment.

4. Explore alternatives to national policy change, such as testing of provisional modifications on a pilot/local basis or for specific categories of beneficiary.

5. Review implementation proposals for completeness: ensure design documents do not have gaps relating to the implementation strategy, process and its management; that topics for policy change and potential allies in raising leverage are clearly stated; that allocation of human resources for dialogue is sufficient; that proposals include a credible timetable for implementation, milestones and M&E indicators for impact; and that responsibilities for closure of agreements on policy change and formal acceptance are spelled out.

6. Build clear links between policy dialogue and investment activities within the project. Provide for horizontal communication between local groups, forums etc., and vertical communication between dialogue at local, regional and national levels; include robust mechanisms to ensure that the poor are represented and their voices heard in each forum and at each level.

7. Integrate policy dialogue activities into the Key Files and Log Frame: specify indicators for impact, M&E strategy or economic analysis.

Sources of information and examples of good practice

IFAD-financed resources � Source book on pro-poor institutional and policy analysis for change. Crispino Lobo (2005) available from PT. � Practitioner’s guide for institutional analysis of rural development programmes, Alain Onibon and Norman Messer for PA,

2004 � Grant 635: IFPRI - Empowering the rural poor under volatile policy environments in the Near East and North Africa

Region, 2003-2006

IFAD project experience � India – Livelihood Improvement project for the Himalayas (2003) – Formulation Report - engaging in the analysis of policy

constraints and identifying policy issues for further dialogue; strong on policy dialogue topics, Appendix 14 of the design document contains a clear and useful table on follow-up actions required on policy issues.

� Paraguay – Empowerment of Rural Poor Organizations and Harmonization of Investment (2005) – Design document, February 2005, in English p.37-38, in Spanish Main Report p.39-40 and Working Paper 4 – Well designed policy dialogue component, including good example of log frame which aims at strengthening partnerships of national and international development institutions in order to implement ENREP and rural development

� Albania – Mountain Areas Development Program (1999) – Annual Work Plan and Budget 2004, specifically on the Mountain Area Development Fora, see p.7-12.

Sources of expertise outside IFAD � Participation Resource Centre � Power Tools: An excellent set of tools � Livelihoods Connect website, go to key documents and search “policy”. Includes Influencing Policy Processes for

Sustainable Livelihoods: strategies for change, Lessons for change in Policy & Organizations, James Keeley, No. 2, 2001 Changing Organisations for Watershed Management in India: from policy to practice, Kath Pasteur, 2002

� Advocacy, what is it all about? – A guide to advocacy work in the water and sanitation sector, WaterAid, November 2001, London

� World Bank: DevComm

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This Note relates to KSF2: Poverty, social development and targeting

About

Learning

Notes

For pro-poor rural

development investments

Learning Notes are intended to serve as reminders of key issues and main tasks in the design and implementation of pro-poor investment projects in rural areas. They are based on lessons learned from experience, accumulated knowledge and current innovations.

The intended users of these Learning Notes are IFAD Country Programme Managers and team leaders/members at all stages in the design (inception, formulation and appraisal), review, supervision and evaluation of investment projects and programmes.

The first section identifies ‘Core issues’ to be considered. The second section indicates the ‘Key tasks for design and review’ to generate robust investment plans. The final section, ‘Sources of information and examples of good practice’, directs users to some relevant examples drawn from IFAD’s portfolio of loan and grant-financed projects, studies, and other sources of best practices and relevant information.

The Learning Notes aim to assist project design teams to generate the information required to prepare and enhance the quality of IFAD's Project Design Documents, the supporting logframes and Key Files.

Comments and suggestions for the improvement of Learning Notes are welcome. These, together with requests for further information, should be addressed to [email protected]

Core issues

Gender equality and women’s 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 IFAD’s Plan of Action 2003-2006 “Mainstreaming a Gender Perspective in IFAD’s Operations”, investments should follow a three-pronged strategy to achieve gender equity and mainstreaming: expansion of women’s 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.

2. In line with the “Prerequisites of Gender-Sensitive Design” of IFAD’s 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 women’s participation in project-related decision-making bodies;

2.3. allocate resources for specific activities to support gender mainstreaming and women’s 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.

4. 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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Gender

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Key tasks for design and review

Using guidance in the IFAD 2003 Gender Plan of Action as a basis, teams should: 1. Analyse and document gender-specific roles and needs and gender differences in access to resources among the

intended target group and across the project area. 2. Use the above findings to design the project’s gender strategy: devise mechanisms to ensure that investments

will target women and their needs directly even when they are not heads of household. 3. Ensure that general borrower statements on, and commitments to, the importance of targeting women are linked

to operational measures that create equal opportunities for women and men. 4. Ensure that improving women’s economic empowerment and improved welfare is reflected through

organisational mechanisms that specifically include women in project-related decision-making bodies. 5. Clearly define responsibilities within the project management structure for gender mainstreaming. Design

recruitment and training plans that include gender mainstreaming aims and components. 6. Ensure sex-disaggregation of logframe indicators.

Sources of information and examples of good practice

IFAD-financed resources � IFAD Gender website contains knowledge notes, thematic and country studies, tools and guidelines � IFAD Gender Plan of Action � Guidelines for Incorporating the Gender Approach into Rural Development Projects � IFAD’s Household Food Security and Gender Memory Checks � “Polishing the stone” shares some of IFAD's knowledge and experience in promoting gender equity in rural development

projects, July 2007 � Regional gender programmes � Training document produced by the PROGENDER programme: "Cerrando Brecha, Manual para Orientar a Organizaciones

Rurales Hacia la Equidad de Genero", Guatemala 2003 � The Structure and Operation of a Performance-Based Allocation System for IFAD, (Executive Board Paper, Sept. 2003) and

Report of the Panel on the Performance-Based Allocation System (Executive Board Paper, Dec. 2003); Annex 1, pages 14-15, D. Gender Issues

IFAD project experience � China - Environment Conservation and Poverty Reduction Programme in Ningxia and Shanxi (2002), Appraisal Report

addresses the issue of present and likely availability of field staff to ensure outreach to women: Working Paper 5- Social Development

� India - Orissa Tribal Empowerment and Livelihoods Programme (2002), the Appraisal Report provides an excellent example of a gender-disaggregated logframe: Appendix I - Logical Framework

� Laos - Oudomxai Community Initiative Support Project (2002), the Appraisal Report represents a “best case” in terms of project gender strategy: Working Paper 2 - Gender Study

� Jordan - Yarmouk Agricultural Resources Development Project (1999), the Appraisal Report provides an example for developing small-scale business enterprises for women in a project that helps farmers combat land degradation and restore soil fertility: Annex I - Poverty, Gender and Target Group

� Niger - Project for the Promotion of Local Initiative for Development in Aguié (2002), the Appraisal Report contains an excellent gender analysis which led to a grant for sensitization and training in gender and vulnerability analysis, which enabled the community to decide that benefits of project should go to women and youth: Working Paper 2 - Strategie en Termes de Genre

Sources of expertise outside IFAD � Useful Gender and Household Food Security Links � Rural Poverty Portal: Gender and Rural Poverty � UN gateway to information and resources on gender equality and empowerment of women � FAO Gender and Food Security � World Bank, Gender and Development � Gender and Diversity Programme of the Consultative Group on International Agricultural Research (CGIAR) � DFID/ODI/DGIS “Key Sheets for Sustainable Livelihoods” Policy Planning and Implementation - ‘Gender Mainstreaming’

Page 15: IFAD Learning Notes

This Note relates to KSF2: Poverty, social development and targeting

About

Learning

Notes

For pro-poor rural

development

investments

Learning Notes are intended to serve as reminders of key issues and main tasks in the design and implementation of pro-poor investment projects in rural areas. They are based on lessons learned from experience, accumulated knowledge and current innovations.

The intended users of these Learning Notes are IFAD Country Programme Managers and team leaders/members at all stages in the design (inception, formulation and appraisal), review, supervision and evaluation of investment projects and programmes.

The first section identifies ‘Core issues’ to be considered. The second section indicates the ‘Key tasks for design and review’ to generate robust investment plans. The final section, ‘Sources of information and examples of good practice’, directs users to some relevant examples drawn from IFAD’s portfolio of loan and grant-financed projects, studies, and other sources of best practices and relevant information.

The Learning Notes aim to assist project design teams to generate the information required to prepare and enhance the quality of IFAD's Project Design Documents, the supporting logframes and Key Files.

Comments and suggestions for the improvement of Learning Notes are welcome. These, together with requests for further information, should be addressed to [email protected]

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:

1. food insecurity, including duration of hungry season, sufficiency of household food stores;

2. malnutrition, including the prevalence of chronic and acute malnutrition among children aged less than five years;

3. 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.

2. The scale and costing of project components should respond to the significant concerns drawn from the above evidence and the priorities expressed by communities.

3. 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).

4. 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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Food Security, Health and Nutrition

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Key tasks for design and review

1. Ensure that the poverty/vulnerability analyses:

1.1. generate meaningful analyses of food insecurity, malnutrition and the burden of disease;

1.2. document qualitative methodology for determining community priorities, ensuring the findings are connected to project components.

2. Include appropriate considerations for implementation where the following sub-components are part of project design:

2.1. Clinic Facilities:

4. incorporate adequate provisions for clinic maintenance, re-supply and outreach; 5. ensure government agreement to staff clinics with necessary personnel.

2.2. Information, Education and Communication (IEC):

6. specify messages and channels of communication to be used; ensure they are adapted to the needs of the project area and its people (such as use of traditional communicators, and rural radio in local language). 2.3. Community-based Workers:

7. specify selection criteria, realistic workloads and gender balance for community workers; 8. ensure planned training is sufficient and includes periodic refresher training; 9. include provisions for motivating community workers in the long term.

Sources of information and examples of good practice

IFAD-financed resources � Household Food Security and Nutrition website � Tools and Guidelines on Household Food Security � IFAD Training Video: “Benchmark Assessment of Impact Indicators”

IFAD project experience � Uganda - District Development Support Programme (1998), particularly for the logical framework, Appendix II of

President’s Report and supervision reports, 2002 and 2003 � Guinea - Programme for Participatory Rural Development in Haute-Guine (1999), IFAD/IRAN Baseline Survey Report � Morocco - Rural Development Project in the Mountain Zones of Al-Haouz Province (2000), Appraisal Report: Working

Paper 9 - Nutrition Survey � Kenya - Southern Nyanza Community Development Project (2003), Appraisal Report: Working Paper 2 - Primary Health

Care and Working Paper 3 - Domestic Water Supply � All Belgian Survival Fund (BSF) projects in Africa II Division (e.g. Kenya, Tanzania, Uganda)

Sources of expertise outside IFAD � Food Insecurity and Vulnerability Information and Mapping Systems (FIVIMS) � The Health Manager’s Electronic Toolkit � World Health Organization (WHO) � World Bank - Health, Nutrition and Population � United Nations Standing Committee on Nutrition (SCN) � DFID/ODI/DGIS “Key Sheets for Sustainable Livelihoods” Policy Planning and Implementation - ‘Food Security’: and

‘HIV AIDS and Development’

Page 17: IFAD Learning Notes

This Note relates to KSF2: Poverty, social development and targeting

About

Learning

Notes

For pro-poor rural

development

investments

Learning Notes are intended to serve as reminders of key issues and main tasks in the design and implementation of pro-poor investment projects in rural areas. They are based on lessons learned from experience, accumulated knowledge and current innovations.

The intended users of these Learning Notes are IFAD Country Programme Managers and team leaders/members at all stages in the design (inception, formulation and appraisal), review, supervision and evaluation of investment projects and programmes.

The first section identifies ‘Core issues’ to be considered. The second section indicates the ‘Key tasks for design and review’ to generate robust investment plans. The final section, ‘Sources of information and examples of good practice’, directs users to some relevant examples drawn from IFAD’s portfolio of loan and grant-financed projects, studies, and other sources of best practices and relevant information.

The Learning Notes aim to assist project design teams to generate the information required to prepare and enhance the quality of IFAD's Project Design Documents, the supporting logframes and Key Files.

Comments and suggestions for the improvement of Learning Notes are welcome. These, together with requests for further information, should be addressed to [email protected]

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 IFAD’s 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 pro-poor 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 community-based 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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Key tasks for design and review

1. Ensure that geographic and social targeting criteria are clearly defined and easily applicable in practice, and socially acceptable.

2. Review and take account of evidence of the borrower’s real commitment to poverty targeting – for instance in cases of extensive non-compliance with targeting objectives in previous projects, re-design future targeting mechanisms.

3. Clearly specify modalities and institutional responsibilities to monitor and ensure compliance with targeting criteria (e.g. the process to be used for district/village selection, reporting by the PCU and CI, monitoring indicators or quotas on micro-projects to the benefit of certain groups).

4. Make social and gender-differentiated livelihood analyses that are sufficient to validate the self-targeting options that are proposed.

5. Devise effective means to target and monitor the special needs of pockets of poverty in high-potential areas.

Sources of information and examples of good practice

IFAD-financed resources � Innovation Mainstreaming Initiative (IMI): Innovative Approaches to targeting in demand-driven projects, 6 volumes

including the Main Report, country-case studies and the chapter on targeting in Community Development Funds in IFAD Projects: some emerging lessons for project design

� Análisis Cualitativo de los activos y de los sueños de la población rural pobre en ocho comunidades de los departamentos de Apurímac, Ayacucho y Huancavelica, Oct. 2005

� IFAD Targeting Policy: Reaching the Rural Poor, Nov. 2006

IFAD project experience � Kenya - Southern Nyanza Community Development Project (2003), Appraisal Report, pages 7-17 and Working Paper 1

show IFAD’s targeting approach starting with poverty statistics from Kenya’s Poverty Report to identify the poorest areas with large numbers of poor people and then supported by a field level socio-economic study to analyse wealth categories in communities and develop a targeting approach to reach the poorer categories

� Syria - Idleb Rural Development Project (2002), Appraisal Report, July 2002, Annex 1: Poverty, targeting and women development

� Cape Verde - Rural Poverty Alleviation Programme (1999); community-based targeting; role of community associations in targeting; project inter-cycle review report and plan for phase II; volume 3 ibidem, 2005

� India - Jharkhand Chattisgarh Tribal Development Programme (1999), Appraisal Report, October 1999, pages 11-15 and Annex 1, socio-economic situation of tribal population; strong commitment to targeting and community-based targeting and IMI volume 2 ibidem

Sources of expertise outside IFAD � Q2 - Combining Qualitative and Quantitative Approaches in Poverty Analysis � “Targeting Revisited”, Dominique van de Walle, World Bank Research Observer, vol. 13, no. 2 (August 1998), pages 231-

248 � “Disciplining Local Leaders in Community-Based Development”, Jean-Philippe Platteau and Frédéric Gaspart, June 2004 � “ Is Micro-Finance reaching the Poor? An Overview of Poverty Targeting Methods”, Verónica Gonzáles Aguilar � DFID/ODI “Key Sheets for Sustainable Livelihoods” Policy Planning and Implementation - ‘Social Capital’

Page 19: IFAD Learning Notes

This Note relates to KSF3: Alignment of design features with IFAD Strategic Objectives and lessons learnt;

analysis and results framework

About

Learning Notes

For pro-poor rural development

investments

Learning Notes are intended to serve as reminders of key issues and main tasks in the design and implementation of pro-poor investment projects in rural areas. They are based on lessons learned from experience, accumulated knowledge and current innovations.

The intended users of these Learning Notes are IFAD Country Programme Managers and team leaders/members at all stages in the design (inception, formulation and appraisal), review, supervision and evaluation of investment projects and programmes.

The first section identifies ‘Core issues’ to be considered. The second section indicates the ‘Key tasks for design and review’ to generate robust investment plans. The final section, ‘Sources of information and examples of good practice’, directs users to some relevant examples drawn from IFAD’s portfolio of loan and grant-financed projects, studies, and other sources of best practices and relevant information.

The Learning Notes aim to assist project design teams to generate the information required to prepare and enhance the quality of IFAD's Project Design Documents, the supporting logframes and Key Files.

Comments and suggestions for the improvement of Learning Notes are welcome. These, together with requests for further information, should be addressed to [email protected]

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.

2. 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.

3. 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.

4. 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.

5. 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.

6. 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.

Key tasks for design and review 1. Generate convincing descriptions and assumptions regarding the present situation in the project

area – e.g. of the productive potentials/risks of the agro-ecological setting, the composition and circumstances of the target group, their farming systems, the dynamics of the evolving role of crops and livestock in household livelihood strategies, or changes in employment potentials for the poor.

2. Make a convincing and realistic analysis of opportunities and constraints for technology change and their ability to benefit resource-poor farmers, taking gender differences into account.

3. Ensure consistency of the technical strategy with the above – e.g. take advantage of potentials for crop:livestock integration to stabilise incomes, conserve plant nutrients or augment draught power; avoid assuming uptake of inputs that are unavailable/unaffordable/too risky; allow for gender, social education or health constraints that restrict options for technology change or employment for the poorest beneficiaries; do not over-estimate market accessibility/opportunities/returns for diversification products.

4. Ensure realism in expectations of project service providers – e.g. allocate sufficient resources to adapt public research and extension services accustomed to top down input-based intensification to promoting participatory NRM; provide NGOs or private sector contractors that are intended to take-over technical support roles with adequate project support and training; develop means to bring in new service providers if necessary and build their support capacities.

5. Avoid making over-optimistic and excessively time-consuming crop budgets and/or farm models.

Assume uptake only of inputs that can be made available to the IFAD target group and that they

could be expected to use; limit assumed increases in cash costs or commitments of family labour

to levels that are compatible with the resources or strategies for risk avoidance of poor farmers; in

the case of technical strategies expected to generate work for the poor, ensure these impacts are

estimated.

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Key tasks for design and review (continued)

6. Proposals for technology change and its technical support – see Learning Note 4.3 Rural Technical Support - can be combined by the team Agronomist/Agriculturalist in a Working Paper, using the headings in the Reference Box.

An Outline for the Presentation by Agriculturalists of Proposals for Technology Change

A summary of the Agro-Ecological Setting, stressing biophysical opportunities and constraints to agricultural progress in the project area (e.g. soils, climate, topography, vegetation etc.). A description of the Role of Agriculture in the Livelihoods and Survival Strategies of the Target Group. Show how farming and/or employment as farm-workers contribute towards their livelihoods. Describe trends. A description of the Main Farming Systems in the Project Area, especially those practised by the target group. Show how current husbandry practices reflect their risk-avoidance strategies and explore opportunities for the project to exploit: e.g. to accelerate on-going changes in farming systems, crop diversification, and non-agricultural changes, or to exploit new roads, and/or marketing opportunities. A summary of the Main Socio-Economic Opportunities/Constraints Relevant to the Agricultural Activities of the Target Group. Issues may concern gender, age, social structure, access to land, water or markets, and inputs or services (e.g. seeds, agro-chemicals, extension) infrastructure, environment, health, nutrition, education, or the influence of government policies. Stress those constraints, opportunities and issues that the project could logically and feasibly address through investment. A Technical Strategy that exploits the opportunities that are realistically achievable, whilst addressing constraints that can be realistically remedied (emerging from the previous analysis). Summarise changes in technology and production practices that might be advocated/facilitated/promoted for which categories of rural people, indicating how they would respond to current and future needs of the target group and why the proposed technologies would be adoptable. A Facilitation Strategy that identifies measures needing investment support in order to achieve the technical strategy. Include information on any need to generate and/or improve access to new technologies; test/disseminate improved technology. Identify actions required to remove/reduce “upstream” constraints, (e.g. credit and inputs); and remove/reduce “downstream” constraints (e.g. market access). Include any capacity building and/or institutional-strengthening requirements. An Organisation and Management Proposal showing how the strategy would be implemented. Propose means of involving beneficiaries both in planning and implementation of change, to ensure relevance of new technologies and delivery arrangements. Focus on the allocation of organisational and individual responsibilities to promote and facilitate participatory technical change. Indicate how capacity of managers and/or service providers would be enhanced or supported. Show how a focus on the needs of the target group would be ensured. A list of Investment Categories and Physical Quantities that includes the main items required to implement the proposed technical changes, (for use in calculating aggregate project costs). Evidence of Adoptability of technology changes of the sorts envisaged through a small number of illustrative crop budgets and farm models. Highlight changes in returns to labour (especially family labour) cash costs and cash flows for typical members of the target group that would realistically result from project interventions within an acceptable period. The issue of marketing and prices for incremental production should also be taken into account. Where appropriate, estimate impacts on job creation.

10.

Sources of information and examples of good practice

IFAD-financed resources � Technology Systems for Small Farmers” edited by A.M. Kesseba, publisher Westview Press (1989)

IFAD project experience � Nepal - Western Uplands Poverty Alleviation Project (2001), Appraisal Report: Working Paper 4 - Crop and Livestock

Production � Grenada - Rural Enterprise Project (2001), Appraisal Report: Working Paper 3 - Rural Production and Services � Jordan - Yarmouk Agricultural Resources Development Project (1999), Appraisal Report: Annex 3 - Agricultural

Development

Sources of expertise outside IFAD � “Agricultural Compendium for Rural Development in the Tropics and Subtropics”, EUROCONSULT, The Netherlands,

ELSEVIER 1989 � “Crop Production in Tropical Africa”, Raemaekers, Romain H., Directorate General for International Co-operation,

Brussels, Belgium, 2001 � “Farming Systems and Poverty. Improving farmers’ livelihoods in a changing world”, J. Dixon, A. Gulliver, D. Gibbon.

Published by FAO and World Bank, 2001 � “Farming solutions” website � The World Bank: Agriculture and Rural Development website � FAO WAICENT portal � Technical Centre for Agricultural and Rural Cooperation ACP-EU (CTA) � Consultative Group on International Agricultural Research (CGIAR) � DFID/ODI/DGIS “Key Sheets for Sustainable Livelihoods” Resource Management ‘Sustainable Agriculture’

Page 21: IFAD Learning Notes

This Note relates to KSF3: Alignment of design features with IFAD Strategic Objectives and lessons learnt;

analysis and results framework

About

Learning Notes

For pro-poor rural development

investments

Learning Notes are intended to serve as reminders of key issues and main tasks in the design and implementation of pro-poor investment projects in rural areas. They are based on lessons learned from experience, accumulated knowledge and current innovations.

The intended users of these Learning Notes are IFAD Country Programme Managers and team leaders/members at all stages in the design (inception, formulation and appraisal), review, supervision and evaluation of investment projects and programmes.

The first section identifies ‘Core issues’ to be considered. The second section indicates the ‘Key tasks for design and review’ to generate robust investment plans. The final section, ‘Sources of information and examples of good practice’, directs users to some relevant examples drawn from IFAD’s portfolio of loan and grant-financed projects, studies, and other sources of best practices and relevant information.

The Learning Notes aim to assist project design teams to generate the information required to prepare and enhance the quality of IFAD's Project Design Documents, the supporting logframes and Key Files.

Comments and suggestions for the improvement of Learning Notes are welcome. These, together with requests for further information, should be addressed to [email protected]

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 IFAD’s 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.

2. 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.

3. 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.

4. 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.

5. 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.

6. 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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Key tasks for design and review

The work of design and review teams will need to cover many, and often most, of the following points or caveats: 1. All proposals should take account of the policy and legislative requirements affecting water use. 2. Do not assume that AW management refers solely to irrigation; other rural uses should also be considered, thus making

assumptions on the extent and sustainability of water supplies available more accurate. 3. Take sufficient account of the weaknesses, poor management, conflicts of interest or negative mindsets of public water

management agencies, limitations of some private sector operators, and reluctance of private sector suppliers/contractors to do business with some public water management agencies.

4. The capacity/will of public agencies to change their approach to AW development should not be over-estimated. Combined with inappropriate water legislation or regulations and poor governance, such organisational inertia can put at risk project plans to improve access to, and control of, AW by the poor. Remedial measures may need to be financed.

5. AW development proposals must give full attention to the rights of access or usufruct of poor beneficiaries to land, as well as water. When compounded by unrealistic assumptions for agricultural development – see Learning Note 3.1 Technology Change for Livelihood Development and failure to take sufficient account of other externalities (e.g. potential damage by transhumant livestock, urban encroachment) AW proposals become implausible.

6. Specify means to overcome the many obstacles to beneficiary participation in planning, construction and O&M. 7. Tendencies to over-design or over-cost AW works vis-à-vis the needs and capabilities of small farmers, or to under-estimate

construction and commissioning times, should be resisted by design teams. 8. Alternatives to design assumptions or fall-back options in the event of deviations from expectations need to be explored

with beneficiaries and other stakeholders. 9. Clear and realistic plans should be agreed with beneficiaries for O&M handover; the roles of grants and subsidies vs.

expectations and the affordability of cost recovery should be clear. 10. Links to broader issues in water governance (upstream vs. downstream, urban vs. rural) should be specified. 11. Disaster forecasting systems (storms, floods, drought) should receive attention as part of design. 12. Summarise findings on institutional capacities, stakeholder involvement & M&E proposals in the Key Files.

Sources of information and examples of good practice

IFAD-financed resources � Grant 517 - Applied research programme for the utilization of brackish/saline water in North Africa - Countries: Algeria, Libya,

Tunisia (ACSAD, 12/2000) � Grant 520 - Appropriate water-lifting technology for West Africa, final report (IPTRID, 2004) � Grant 536 - Methodologies & approaches for effective introduction of participatory irrigation management - Armenia, Egypt,

Morocco and Tunisia (CIHEAM, 04/2001) � Grant 708 - Regional Water Demand Initiative in MENA region, WaDIMENA 2004 - 2008 (IDRC, 09/2004) � Grant 800 - Improved management of agricultural water in Eastern & Southern Africa, IMAWESA (ASARECA, 09/2005) � The Structure and Operation of a Performance-Based Allocation System for IFAD, (Executive Board Paper, Sept. 2003) and

Report of the Panel on the Performance-Based Allocation System (Executive Board Paper, Dec. 2003); Annex 1, page 7, C (ii) Access to Water for Agriculture

IFAD project experience � Evaluation du programme spécial pour les pays d'Afrique sub-Saharienne touchés par la sécheresse et la désertification (EPSA, 1998) � 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; INBO-

RIOB, 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

Page 23: IFAD Learning Notes

This Note relates to KSF3: Alignment of design features with IFAD Strategic Objectives and lessons learnt;

analysis and results framework

About

Learning Notes

For pro-poor rural development

investments

Learning Notes are intended to serve as reminders of key issues and main tasks in the design and implementation of pro-poor investment projects in rural areas. They are based on lessons learned from experience, accumulated knowledge and current innovations.

The intended users of these Learning Notes are IFAD Country Programme Managers and team leaders/members at all stages in the design (inception, formulation and appraisal), review, supervision and evaluation of investment projects and programmes.

The first section identifies ‘Core issues’ to be considered. The second section indicates the ‘Key tasks for design and review’ to generate robust investment plans. The final section, ‘Sources of information and examples of good practice’, directs users to some relevant examples drawn from IFAD’s portfolio of loan and grant-financed projects, studies, and other sources of best practices and relevant information.

The Learning Notes aim to assist project design teams to generate the information required to prepare and enhance the quality of IFAD's Project Design Documents, the supporting logframes and Key Files.

Comments and suggestions for the improvement of Learning Notes are welcome. These, together with requests for further information, should be addressed to [email protected]

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 women’s 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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Key tasks for design and review

1. In generating proposals for expanded livestock production, planners should pay close attention to selecting plausible technical parameters and making realistic implementation assumptions. Social issues and family labour constraints that will influence adoption and adaptation should be also taken into account.

2. Targeting mechanisms to reach the more disadvantaged – especially women and youth – should be explored and developed to the extent possible in discussion with communities and the target group.

3. Interactions over use of resources between crop and livestock producers should be identified analysed and possible solutions explored. Where feasible stakeholders or their representatives and local political authorities should be involved in seeking resolution.

4. 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.

11.

Sources of information and examples of good practice

IFAD-financed resources � Rural Poverty Portal - Livestock Knowledgebase � “Livestock Services and the Poor: A global initiative”, IFAD 25th Anniversary Publication (IFAD, DANIDA/DAAS, WB

and University of Reading), 2004

IFAD project experience � Morocco - Livestock & Rangelands Development Project in the Eastern Region - Phase II (2003), Appraisal Report � Nepal - Leasehold Forestry & Livestock Project (2004), Appraisal Report: Working Paper 4 - Leasehold Forestry &

Livestock � Sudan - Gash Sustainable Livelihoods Regeneration Project (2003), Appraisal Report: Working Paper 3 - Livestock &

Rangeland Management � Tanzania - Agriculture Sector Development Programme - Livestock: Support for Pastoral and Agro-Pastoral Development

(2005) for mainstreaming smallstock innovations, Appraisal Report � Tunisia - Agropastoral Development and Local Initiatives Promotion Programme for the South-East (2002), Appraisal

Report: Annex 4 - Conservation, Development and Management of Pastoral Resources

Sources of expertise outside IFAD � The Global Livestock CRSP � International Livestock Research Institute (ILRI) � FAO: Animal Production and Health Division � FAO: Livestock, Environment and Development LEAD Initiative � Livestock’s long shadow Environmental issues and options, FAO LEAD, Rome, 2006 � DFID/ODI “Key Sheets for Sustainable Livelihoods” Service Delivery - ‘Livestock Services’ � FARM Africa � FAO: Pro-Poor Livestock Policy Initiative

Page 25: IFAD Learning Notes

This Note relates to KSF3: Alignment of design features with IFAD Strategic Objectives and lessons learnt;

analysis and results framework

About

Learning Notes

For pro-poor rural development

investments

Learning Notes are intended to serve as reminders of key issues and main tasks in the design and implementation of pro-poor investment projects in rural areas. They are based on lessons learned from experience, accumulated knowledge and current innovations.

The intended users of these Learning Notes are IFAD Country Programme Managers and team leaders/members at all stages in the design (inception, formulation and appraisal), review, supervision and evaluation of investment projects and programmes.

The first section identifies ‘Core issues’ to be considered. The second section indicates the ‘Key tasks for design and review’ to generate robust investment plans. The final section, ‘Sources of information and examples of good practice’, directs users to some relevant examples drawn from IFAD’s portfolio of loan and grant-financed projects, studies, and other sources of best practices and relevant information.

The Learning Notes aim to assist project design teams to generate the information required to prepare and enhance the quality of IFAD's Project Design Documents, the supporting logframes and Key Files.

Comments and suggestions for the improvement of Learning Notes are welcome. These, together with requests for further information, should be addressed to [email protected]

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. IFAD’s 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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Key tasks for design and review

1. IFAD’s Policy on RF and IFAD’s Decision Tools for Rural Finance (see references below) provide detailed guidance for design and review teams on RF issues. Priority tasks and important caveats are flagged below.

2. Confirm that minimum conditions for viability of an RF intervention are met. Evolve a clear rationale for RF intervention based on analysis of gender-differentiated needs, demands and constraints or overall RF demand; however, avoid tendencies to put RF components into all projects.

3. Seek out and involve potential RFI partners at national or international levels. To build their interest and/or assess credibility, discuss and validate concepts and plans with potential partners and local RF experts. Evaluate demand for rural financial services (especially through existing small or informal funds), and assess gender and equity concerns. Agree interest rate policies and lending criteria with relevant authorities.

4. For RF partners to be selected at the formulation stage, generate realistic targets for achievement: avoid over-optimism in their growth projections or provisional financial statements concerning outreach or financial performance.

5. Ensure a balance in project financing between funding essential capacity building and technical assistance (TA), versus creating/expanding credit lines. Ensure that provisions for international TA are adequate, especially for project inception.

6. When an apex institution is planned, develop a clear rationale for choosing this instrument (are there enough RFIs to be supported; what is the apex added value?). Devise means to shelter the apex institution from political interference – for instance, government representatives should not be allowed to dominate apex governance structures.

7. Keep data on formulation documents and evaluations of ongoing operations concise and to the point. Focus on potential or current RF partners and their future interest or current performance as co-operators with IFAD.

12.

Sources of information and examples of good practice

IFAD-financed resources � IFAD Policy on Rural Finance, June 2000 � Decision Tools for Rural Finance � Ghana: Combined analysis of financial and social performance (through use of the CGAP Poverty Assessment Tool) � The Structure and Operation of a Performance-Based Allocation System for IFAD, (Executive Board Paper, Sept. 2003) and

Report of the Panel on the Performance-Based Allocation System (Executive Board Paper, Dec. 2003); Annex 1, page 9, C (i). Enabling Conditions for Rural Financial Services Development

IFAD project experience � Pakistan - Microfinance Innovation and Outreach Programme (2005), support to RF innovation (outreach mechanism and

products) through an Innovation and Outreach Facility, Appraisal Report: Working Paper 5 - Finance for Livestock Enterprise Development

� Mozambique - Rural Finance Support Project (2003) for the analysis of gender-differentiated needs and constraints regarding RF services, Appraisal Report: Working Paper 3 - Demand for Rural Financial Services

� Madagascar - Rural Income Promotion Programme (2003), for the analysis of the project area’s status in terms of supply of RF services (existing operators, with their penetration rate and performance) and demand for financial services with type of funding needs, Appraisal Report: Working Paper 4 - Rural Finance

� Armenia - Agricultural Services Project (2001), building a successful cooperative bank, Appraisal Report: Annex 6 - Micro-Finance

� Comoros - Support to Economic Grass Roots Initiatives Project (1994), Appraisal Report: Appendix 2 Rural Financing Component

Sources of expertise outside IFAD � Rural Poverty Portal: Rural Finance and Rural Poverty � Agriculture Microfinance: CGAP Occasional Paper no 11 � Handbook for the Analysis of the Governance of Microfinance Institutions, Cerise - IRAM, 2005 � The Consultative Group to Assist the Poor (CGAP) website � The Microfinance Information eXchange � Microfinance Gateway � Rural Finance Learning Centre � DFID/ODI “Key Sheets for Sustainable Livelihoods” Service Delivery - ‘Rural Finance’

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This Note relates to KSF3: Alignment of design features with IFAD Strategic Objectives and lessons learnt;

analysis and results framework

About

Learning Notes

For pro-poor rural development

investments

Learning Notes are intended to serve as reminders of key issues and main tasks in the design and implementation of pro-poor investment projects in rural areas. They are based on lessons learned from experience, accumulated knowledge and current innovations.

The intended users of these Learning Notes are IFAD Country Programme Managers and team leaders/members at all stages in the design (inception, formulation and appraisal), review, supervision and evaluation of investment projects and programmes.

The first section identifies ‘Core issues’ to be considered. The second section indicates the ‘Key tasks for design and review’ to generate robust investment plans. The final section, ‘Sources of information and examples of good practice’, directs users to some relevant examples drawn from IFAD’s portfolio of loan and grant-financed projects, studies, and other sources of best practices and relevant information.

The Learning Notes aim to assist project design teams to generate the information required to prepare and enhance the quality of IFAD's Project Design Documents, the supporting logframes and Key Files.

Comments and suggestions for the improvement of Learning Notes are welcome. These, together with requests for further information, should be addressed to [email protected]

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 country’s 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.

2. 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.

3. The business opportunities and evolving demand in the project area. Agriculture-related (agro-processing, input selling, food trade) and non-agricultural 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.

4. 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.

5. 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.

6. 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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Key tasks for design and review

Assessment of the constraints and opportunities for MSE development, followed by the planning and implementation of steps to address them, should, to the extent possible, be done on a participatory basis with the concerned population. They and other local stakeholders are generally the people best informed on the types of business that are attractive, as well as on prevailing input and output prices. Main tasks to be addressed in this way are listed below:

1. Develop plans and initiate/reinforce means to ease any constraints posed by existing MSE policies or the operational framework for business – including trading laws and regulations, capital and administrative requirements, credit services, legal status, etc. When policy, legal or regulatory issues are found to require government attention, suggest solutions and set a timetable and responsibilities for action.

2. Assess demand, market and profitability of MSE products or services in the project area (prices, market demand, marketing constraints, etc.).

3. Develop simple enterprise models to illustrate the potential profitability and financial viability (cash flow generation) of sample MSE investments; quantify potential job creation among the target group; work out appropriate lending conditions/grace periods and/or cater for the need for complementary small business-related financial instruments (e.g. revolving start-up funding).

4. On the basis of identified constraints and opportunities, evolve differentiated strategies to reach diverse categories of enterprises and clients (e.g. micro vs. small; male vs. female managed).

5. Assess, and reinforce as necessary, institutional capacities to provide specialised support to MSE start-up and/or to existing rural entrepreneurs at national, regional or local level. Numbers of rural business advisers will depend on the size/importance of the area to be covered and accessibility of the target clientele. The scale of formulation support should match the degree of design innovation.

6. Initiate an institutional strategy that will eventually phase out project-financed service providers in the project area through the selection, recruitment and training of alternative, ad-hoc, business counselling capacities. Include in this strategy the means to maintain the technical competence of support to working MSE entrepreneurs after project closure.

7. Estimate the physical quantities and costs for the MSE support proposed. 8. Ensure inclusion of relevant M&E indicators, institutional assessments & responsibilities etc., in the Key Files. 13.

Sources of information and examples of good practice

IFAD-financed resources � IFAD Rural Enterprise Policy, Rome, 2004 � IFAD Private Sector Development and Partnership Strategy, Executive Board (EB) document, Rome, April 2005 � The Structure and Operation of a Performance-Based Allocation System for IFAD, (Executive Board Paper, Sept. 2003) and

Report of the Panel on the Performance-Based Allocation System (Executive Board Paper, Dec. 2003); Annex 1, page 10, C (ii) Investment Climate for Rural Businesses

IFAD project experience � Mauritius - Rural Income Diversification Programme (1999), Appraisal Report: Annex VI - Micro-Enterprise and Micro-

Finance � Senegal - Rural Micro Enterprise Project (1995), Mid-Term Evaluation � Ghana - Rural Enterprise Project (1993), Mid-Term Evaluation � The Philippines - Rural Micro-Enterprise Finance Project (1996), Mid-Term Evaluation � Armenia - North West Agricultural Services Project (1997), Completion Evaluation Report 2001 (specifically on ANIV

Foundation) � Rwanda - Rural Small and Microenterprise Project Phase II (2003), Appraisal Report: Working Paper 8 - Support for the

Sustainable Development of Financial Services � Colombia - Rural Micro-enterprise Development Programme (1996), Informe de Evaluacion de Medio Termino, Diciembre

2004

Sources of expertise outside IFAD � ILO: sub-website on Small Enterprise and Employment Development) (SEED) � Donor Committee on Small and Medium Enterprise (SME) (sub-website of the DC on the specific issue of Business

Development Services (BDS) for SME but also covering Micro enterprise Development) � DFID/ODI/DGIS “Key Sheets for Sustainable Livelihoods” Policy Planning and Implementation - ‘Non-Farm Income in

Rural Areas’

Page 29: IFAD Learning Notes

This Note relates to KSF3: Alignment of design features with IFAD Strategic Objectives and lessons learnt;

analysis and results framework

About

Learning Notes

For pro-poor rural

development investments

Learning Notes are intended to serve as reminders of key issues and main tasks in the design and implementation of pro-poor investment projects in rural areas. They are based on lessons learned from experience, accumulated knowledge and current innovations.

The intended users of these Learning Notes are IFAD Country Programme Managers and team leaders/members at all stages in the design (inception, formulation and appraisal), review, supervision and evaluation of investment projects and programmes.

The first section identifies ‘Core issues’ to be considered. The second section indicates the ‘Key tasks for design and review’ to generate robust investment plans. The final section, ‘Sources of information and examples of good practice’, directs users to some relevant examples drawn from IFAD’s portfolio of loan and grant-financed projects, studies, and other sources of best practices and relevant information.

The Learning Notes aim to assist project design teams to generate the information required to prepare and enhance the quality of IFAD's Project Design Documents, the supporting logframes and Key Files.

Comments and suggestions for the improvement of Learning Notes are welcome. These, together with requests for further information, should be addressed to [email protected]

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 IFAD’s 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 project’s 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 IFAD’s contribution may not be the appropriate decision tool.

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Key tasks for design and review

1. Describe the project costs clearly and succinctly in the project document and the cost tables, in appropriate depth. Above all, keep the project expenditure accounts transparent and unambiguous in all cases, and include estimates of fees and per diems for services paid by the project in distinct accounts. Use standard software (COSTAB) to enable: the aggregation and display of investment and recurrent costs at different levels and forms; the presentation of unit costs and quantities; the links to disbursement and procurement accounts; and the estimation of physical and price contingencies. Present clearly the assumptions and the sources of data.

2. Formulate the without-project scenario in the financial and economic analysis, taking into account underlying trends in technology, policy, local economy and physical environment in the project and wider system area, in order to reflect changes in productivity (positive or negative) that would have occurred without the intervention. For the with-project scenario in economic analysis, check for possible substitution effects to determine net incremental output and impact.

3. For the financial analysis, present appropriate measures of the attractiveness of the investment to the target group. Return to capital calculations can be supplemented with returns to labour and land. Check the assumptions underpinning the enterprise models with regard to availability of inputs, labour, and –when relevant- access to credit. Estimate uptake rates for the proposed project activities based when possible on past project experiences, and preferably with references to M&E and supervision reports. Examine the distribution of incremental benefits and incremental private costs along the value chain in order to arrive at realistic producer prices.

4. Include an analysis of demand (with due consideration to willingness to pay and affordability for IFAD target groups) for project supported services that are provided on a partial or full cost recovery basis.

5. Undertake economic analysis using standard shadow pricing methods for the adjustment of financial prices and the elimination of transfer payments to reflect the economic prices of resources. Extend shadow pricing to estimate significant non-marketed project outputs and impacts.

6. Calculate rates of return at the level of the whole project where the total cost of infrastructure, agricultural development, irrigation, and other ‘hard’ investments, is dominant in the cost tables. The analysis will be more informative if rates of return are also calculated separately per component and/or a combination of them.

7. Test key project assumptions and risks using sensitivity and risk analysis. At the enterprise level, important parameters for testing are variability of yields and seasonal price volatility; and at the project level implementation delays and availability of counterpart financing (especially the projected contributions from targeted communities and government institutions to meet O&M and other recurrent costs; and donor co-financing for critical investment components). Use switching values for sensitivity analysis, and justify the choice of scenarios examined.

14.

Sources of information and examples of good practice

IFAD-financed resources � Thematic Study on Comparative Advantage and Agricultural Marketing – Regional Comparative Advantage Analysis, PN,

CEN sub-region.

IFAD project experience � Cambodia - Rural Poverty Reduction Project in Prey Veng and Svay Rieng (2003) Formulation Report, Working Paper 8,

Financial And Economic Analysis � India - Livelihood Improvement Project for the Himalayas (2003), Formulation Report, Annex 17, Financial and Economic

Analyses � Algeria - Rural Development Project in the Traras and Sebaa Chioukh Mountains of the Wilaya of Tlemcen (2004),

Formulation Report, Working Paper 9, Financial And Economic Analysis � Yemen - Pilot Community-Based Rural Infrastructure Project for Highland Areas (2005), Formulation Report, Working

Paper 3, Financial And Economic Analysis

Sources of information and expertise outside IFAD � ADB: Applied microeconomic studies: reference materials on economic analysis of operations � ADB: Applied microeconomic studies: learning program materials � European Commission: Guide to cost-benefit analysis of investment projects, 2002 � World Bank, Economic Analysis of Investment Operations: Analytical Tools and Practical Applications, 2001 � World Bank, Economic Analysis of Agricultural Projects, Gittinger, J.P., 2nd ed. 1982 � World Bank, Economic Analysis of Projects, Lyn Squire , Herman G van der Tak, 1975

Page 31: IFAD Learning Notes

This Note relates to KSF3: Alignment of design features with

IFAD Strategic Objectives and lessons learnt; analysis and results framework

About

Learning Notes

For pro-poor rural development

investments

Learning Notes are intended to serve as reminders of key issues and main tasks in the design and implementation of pro-poor investment projects in rural areas. They are based on lessons learned from experience, accumulated knowledge and current innovations.

The intended users of these Learning Notes are IFAD Country Programme Managers and team leaders/members at all stages in the design (inception, formulation and appraisal), review, supervision and evaluation of investment projects and programmes.

The first section identifies ‘Core issues’ to be considered. The second section indicates the ‘Key tasks for design and review’ to generate robust investment plans. The final section, ‘Sources of information and examples of good practice’, directs users to some relevant examples drawn from IFAD’s portfolio of loan and grant-financed projects, studies, and other sources of best practices and relevant information.

The Learning Notes aim to assist project design teams to generate the information required to prepare and enhance the quality of IFAD's Project Design Documents, the supporting logframes and Key Files.

Comments and suggestions for the improvement of Learning Notes are welcome. These, together with requests for further information, should be addressed to [email protected]

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 IFAD’s 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 IFAD’s 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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Key tasks for design and review 1. A land tenure assessment should be an integral part of project inception / formulation. Key questions are: 1.1. Would the current land tenure situation seriously hinder project implementation or undermine incentives for IFAD target

groups to participate in project activities? 1.2. What are the likely distributional impacts – intended or unintended – of project activities on target groups and other

members of the rural society? 2. The assessment should take into account potential influences of land tenure arrangements on livelihoods at household level

(considering impacts on women, men, youth and the elderly), within communities (e.g. for different ethnic groups, sharecroppers and landlords), and between the community and outsiders (e.g. threatening of indigenous people’s land rights by mining companies).

3. The land tenure assessment should be based on: 3.1. A participatory poverty analysis that identifies for the intended project area the key elements of the land tenure system,

including i.) types of land rights and their core features in terms of security, duration and inclusiveness , ii) main features of the land administration system (de facto and de jure), iii) interrelationships between land tenure and livelihood strategies.

3.2. An analysis of current land policy, including the legal framework and recent policy initiatives. 4. Phasing of project components: If the land tenure assessment reveals serious land issues projects may need to include facilitation

or more specific measures to resolve the most pressing land issues, before implementation of major investment components such as irrigation infrastructure or community resource development funds can begin.

5. Measures to address the identified land issues should ensure that: 5.1. Weaker and / or temporary rights are acknowledged in favour of the target groups. 5.2. Efforts to enhance women’s land rights go beyond formal prerequisites (e.g. participation in CBNRM groups) and include

complementary measures to empower women to directly influence decisions regarding their access to land. 6. Design of implementation arrangements should take full account of political sensitivities. Teams should: 6.1. Choose implementation partners that have a proven track record and/or are strong enough to carry out these highly political

tasks. 6.2. Investigate whether and how alliances can be built with Civil Society Organizations to create the critical mass necessary to

implement pro-poor land policies and sustain project results after implementation. 6.3. Strengthen the ability of the rural poor to enhance and secure their land rights.

Sources of information and examples of good practice IFAD-financed resources � IFPRI Grant 635 (2002). Empowering the rural poor under volatile policy environments in the Near East and North Africa region � Guidelines for the incorporation of land tenure issues into IFAD’s operations in Eastern and Southern Africa, Rome. IFAD (2004) � Strategic paper on the role of civil society organizations: Land, Empowerment and the Rural Poor: Challenges to Civil Society and

Development Agencies. Rome: IFAD, Borras, Saturnino M. Jr. (2006) � Strengthening IFAD’s Capacity to Enhance Access to Land by the Rural Poor: Findings from an Initial Desk Review and Suggestions for a

Way Forward, Rome: IFAD, Hollinger, Frank and Jes Weigelt (2006)

IFAD project experience � Ecuador - Indigenous and Afro-Ecuadorian People’s Development (1997), good example how IFAD enhanced land access of indigenous

communities using, inter alia, a land fund to buy land (Stocktaking paper, section C; and evaluation of the land fund). � Madagascar – good example of i) how grants and loans can be combined and ii) how local level experience feeds into national level policy

making (Stocktaking paper, section C) � Mauritania - Maghama Improved Flood Recession Farming Project (1992), good example of how irrigation infrastructure rehabilitation and

redistribution of land rights can be combined (Stocktaking of IFAD’s experience case study) � Nepal - Hills Leasehold Forestry and Forage Development Project (1989), good example how IFAD enhanced the access of its target groups

to common property resources in the context of community-based resource management (Interim Evaluation: and paper prepared in the context of the Shanghai conference on scaling up poverty reduction.

� Sudan - Gash Sustainable Livelihoods Regeneration Project (2003), good example of an institutional analysis; Appraisal Report: Annex 1: Institutional and Policy Reforms and their Implications for Project Organization

Sources of expertise outside IFAD � Rural Poverty Portal: Land and rural poverty � Advocacy: ILC; FIAN; Via Campesina � Donors: FAO; GTZ; World Bank. � International Conference on Agrarian Reform and Rural Development � Tools for the assessment of implementation partners: IFAD Learning Note “Designing for Implementation”, Dfid: Sustainable Livelihoods

Guidance Sheets (4 & 5). � Tools for Land Tenure Analysis: Leap project – Framework to assess tenure security � Research: Land Tenure: University of Wisconsin-Madison – Land Tenure Centre; Management of Common Property Resources: Indiana

University – Workshop in Political Theory and Policy Analysis; Digital Library of the Commons � FAO’s Land Tenure Series for technical information regarding: gender & land, cadastral surveys, leasing arrangements for agricultural land,

rural property tax systems, land consolidation, decentralization & rural property taxation. � A multilingual thesaurus of technical terms (English – French - Spanish) can be downloaded: Part I and Part II.

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Land Tenure Essential Design Criteria: Checklist Yes No Partial Issues and

Recommendations

1. Project document contains land1 tenure assessment (incl. participatory analysis & analysis of legislation) that covers the following subjects

• Different types of rights (transfer, control, use; primary and secondary) and their security and duration

• Distribution of land rights, both horizontal (between members of a household, community) and vertical (individuals, households, clans, communities, state;)

• Key features of the land administration systems, both de facto and de jure, in terms their appropriateness for IFAD target groups (formality,, accessibility, accountability, impartiality, efficiency and costs)

• Interface between rights to land and to other natural resources and their administration

• Trends in land policy, land-related legislation and the land tenure situation in the project area

2. The current land tenure setting in the project area does not pose serious constraints to the implementation of core project activities

• The land tenure system is sufficiently inclusive and land rights are sufficiently secure to ensure full participation of all target groups in project activities (e.g. maintenance of infrastructure, sustainable management of natural resources).

• The land tenure system does not preclude community members with no or weak land rights from participating in decision making regarding project activities (e.g. community development funds, CBNRM groups).

• Absence of violent conflicts about land and other natural resources

3. Project design has assessed possible negative impacts of project activities on land rights of direct and indirect target groups and includes, if necessary, mitigation measures at different levels

• Intra-household (e.g. gender, age) • Intra-community (e.g. ethnic groups, castes,

socio-economic strata)

• Between community members and external stakeholders

• Between primary and temporary users 4. Project examines whether the land tenure setting undermines the intended distribution of project benefits.

5. Project actively addresses any serious land issues identified above:

• Project embarks on specific measures to enhance land access of its target groups.

• Project defers major investment components until minimum land tenure standards have been achieved.

1 The term land refers to the main land-based livelihoods resource of IFAD’s target groups. It may include forests, pastures and water.

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Yes No Partial Issues and Recommendations

• 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.

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.

Page 35: IFAD Learning Notes

This Note relates to KSF3: Alignment of design features with

IFAD Strategic Objectives and lessons learnt; analysis and results framework

About

Learning Notes

For pro-poor rural development

investments

Learning Notes are intended to serve as reminders of key issues and main tasks in the design and implementation of pro-poor investment projects in rural areas. They are based on lessons learned from experience, accumulated knowledge and current innovations.

The intended users of these Learning Notes are IFAD Country Programme Managers and team leaders/members at all stages in the design (inception, formulation and appraisal), review, supervision and evaluation of investment projects and programmes.

The first section identifies ‘Core issues’ to be considered. The second section indicates the ‘Key tasks for design and review’ to generate robust investment plans. The final section, ‘Sources of information and examples of good practice’, directs users to some relevant examples drawn from IFAD’s portfolio of loan and grant-financed projects, studies, and other sources of best practices and relevant information.

The Learning Notes aim to assist project design teams to generate the information required to prepare and enhance the quality of IFAD's Project Design Documents, the supporting logframes and Key Files.

Comments and suggestions for the improvement of Learning Notes are welcome. These, together with requests for further information, should be addressed to [email protected]

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 farm-gate 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 jointly-owned 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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Key tasks for design and review

Project or programme support can conveniently be divided into four main categories: policy adjustment, capacity building, infrastructure and diagnosis of value chains.

1. Policy. Adjustments to policies, regulatory frameworks and incentives are prerequisites for more efficient markets but practical progress could require alliances with other like-minded donors and discussions with Government. Progress could be slow. Designers should judge what is achievable and work within this framework. Funding may cover:

a. training and studies for marketing reforms to provide level playing field for smallholder produce. b. strategic studies to defend markets and margins of national producers and traders in the face of the

‘supermarket revolution’ and globalisation or subsidised exports from developed countries; and c. dialogue leading towards agreement on revised future public and private sector roles in rural

marketing. 2. Capacity building and provision of finance. To facilitate the operation of agreed policy and regulatory changes

and enhanced participation of smallholders/disadvantaged groups in rural markets, the following may be necessary:

a. Creation, training and support to producer associations/MSMEs to improve the bargaining power of small farmers.

b. Promotion of MSMEs to facilitate access to markets. c. Capacity creation for provision of Business Development Services. d. Measures (including temporary fiscal incentives or subsidies if appropriate) to promote growth and

diversity of trade in agricultural inputs and outputs and ensure gender and social equity in benefits. e. Technical innovation in agricultural products and processing; market research and promotion for

new products. f. Investments in market information gathering and dissemination, including mass media, fax,

telephone and real-time computer access systems. g. Provision of finance for marketing and processing. h. Where appropriate, strategies for up-stream distribution and market penetration.

3. Infrastructure. ‘Hard’ items such as rural access roads, transport facilities and market infrastructure are likely to be the largest cost items in marketing projects. However they risk becoming white elephants unless the policies, incentives, and necessary human resource development is ensured for their effective use.

4. Diagnosis of Value Chain. Marketing proposals based on interventions in the value chain should include overviews of the main market actors and institutions; commercial practices; prices, price structures, trends and movements; marketing costs; local strengths, weaknesses, constraints and opportunities. Investment budgets should also provide for monitoring, evaluation, periodic reviews and mechanisms for on-course adjustments during implementation.

Sources of information and examples of good practice

IFAD-financed resources � Facilitating Access to Markets for the Poor: Recommended Practises (Second Discussion Draft, December 2005) � Taking stock of IFAD Experience in Market Access. IMI Discussion Draft (November 2004) � IMI: Towards a Global Programme on Market Access, Report of the Pilot Phase. (October 2004). Promoting market Access

for the Rural Poor in Order to Achieve the Millennium Development Goals (February 2003, GC 25 Discussion Paper) � Trade and Rural Development: Opportunities and Challenges for the Rural Poor (February 2004, GC 27 Discussion Paper) � Southern Africa: PhytoTrade � Latin America and the Caribbean: PROMER: Regional Programme of Support for SMEs

IFAD project experience � Sao Tome and Principe - Participatory Smallholder Agriculture and Artisanal Fisheries Development Programme (2001) � Nepal - Western Uplands Poverty Alleviation Project (2001) � Lebanon - Smallholder Livestock Rehabilitation Project (1992)

Sources of expertise outside IFAD � The SEEP Network � DFID: Agricultural Marketing keysheet � IDS insights #59 December 2005 � FAO: Agricultural Marketing

Page 37: IFAD Learning Notes

This Note relates to KSF4: Implementation arrangements and institutional aspects

About

Learning Notes

For pro-poor rural development

investments

Learning Notes are intended to serve as reminders of key issues and main tasks in the design and implementation of pro-poor investment projects in rural areas. They are based on lessons learned from experience, accumulated knowledge and current innovations.

The intended users of these Learning Notes are IFAD Country Programme Managers and team leaders/members at all stages in the design (inception, formulation and appraisal), review, supervision and evaluation of investment projects and programmes.

The first section identifies ‘Core issues’ to be considered. The second section indicates the ‘Key tasks for design and review’ to generate robust investment plans. The final section, ‘Sources of information and examples of good practice’, directs users to some relevant examples drawn from IFAD’s portfolio of loan and grant-financed projects, studies, and other sources of best practices and relevant information.

The Learning Notes aim to assist project design teams to generate the information required to prepare and enhance the quality of IFAD's Project Design Documents, the supporting logframes and Key Files.

Comments and suggestions for the improvement of Learning Notes are welcome. These, together with requests for further information, should be addressed to [email protected]

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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Key tasks for design and review

1. 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.

2. 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

3. 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.

4. 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.

5. Formulate an exit strategy and specify the means to sustain the strengthened and functional institutional framework after loan disbursement ends.

6. 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.

Sources of information and examples of good practice

IFAD-financed resources � “Practitioner’s Guide for Institutional Analysis of Rural Development Programmes”, Alain Onibon and Norman Messer, 2004 � “Transforming Rural Institutions in Order to Reach the Millennium Development Goals”, roundtable discussion paper for 25th

Anniversary session of IFAD’s Governing Council, 2003 � IFPRI: Empowering the rural poor under volatile policy environments in the Near East and North Africa Region, 2003-2006 � The Structure and Operation of a Performance-Based Allocation System for IFAD, (Executive Board Paper, Sept. 2003) and Report of the

Panel on the Performance-Based Allocation System (Executive Board Paper, Dec. 2003); Annex 1, page 4, A(i) Policy and Legal Framework for Rural Organizations

� Institutional and organizational analysis of pro-poor change: Meeting IFAD’s Millennium Challenge, a Sourcebook, Crispino Lobo, 2006

IFAD project experience � Sierra Leone - Rehabilitation and Community Development Project (2003), Formulation Report, Key File table 3, Main report page 43

and Working Paper 3 - a good analysis of community organizations, leadership structures, participation traditions and clear SWOT analysis

� Morocco - Livestock and Pasture Development in the Eastern Region, Phase II (2003), Appraisal Report, pages 18 to 23 and Working Paper 3 - a clear design on institutional support to co-operatives in formulating, financing and implementation of cooperative development plans

� Mauritania - Oasis Sustainable Development Program (2003), Evaluation pages 11-16 and page 43 - successful implementation of legal and institutional framework

Sources of expertise outside IFAD � Eldis (search institutions) � Power Tools, an excellent set of tools � Empowerment and poverty reduction, a source book, Deepa Narayan, World Bank, 2002 � Participation Resource Centre � Livelihoods connect website: go to key documents and search “policy”, includes “Influencing Policy Processes for Sustainable

Livelihoods: strategies for change”, “Lessons for change in Policy and Organizations”, James Keeley, No. 2, 2001, “Changing Organisations for Watershed Management in India: from policy to practice”, Kath Pasteur (2002)

Page 39: IFAD Learning Notes

This Note relates to KSF4: Implementation arrangements and institutional aspects

About

Learning Notes

For pro-poor rural development

investments

Learning Notes are intended to serve as reminders of key issues and main tasks in the design and implementation of pro-poor investment projects in rural areas. They are based on lessons learned from experience, accumulated knowledge and current innovations.

The intended users of these Learning Notes are IFAD Country Programme Managers and team leaders/members at all stages in the design (inception, formulation and appraisal), review, supervision and evaluation of investment projects and programmes.

The first section identifies ‘Core issues’ to be considered. The second section indicates the ‘Key tasks for design and review’ to generate robust investment plans. The final section, ‘Sources of information and examples of good practice’, directs users to some relevant examples drawn from IFAD’s portfolio of loan and grant-financed projects, studies, and other sources of best practices and relevant information.

The Learning Notes aim to assist project design teams to generate the information required to prepare and enhance the quality of IFAD's Project Design Documents, the supporting logframes and Key Files.

Comments and suggestions for the improvement of Learning Notes are welcome. These, together with requests for further information, should be addressed to [email protected]

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 world’s 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.

3. 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.

4. 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.

5. Public sector research and extension services have been weakened by government spending cuts and their modus operandi is often outmoded vis-à-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.

6. 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.

7. 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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Key tasks for design and review

1. To document proposals which respond to the core issues above, users of this LN are referred to the Working Paper Outline in ‘Key Tasks for Design and Review’ of Learning Note 3.1 Technology Change for Livelihood Development. In summary, proposals should be developed which cover: a definition of the intended target group/s and the technical strategy proposed to respond to their constraints and opportunities; a description and analysis of the present state and capacities of technical support services; a summary of relevant lessons for reform; a rationale for reforms that will address the requirements of the target group; and a description of the revised modus operandi and future organisation and management of research and extension.

2. The roles and contributions of technology users themselves, revamped public sector services, NGOs, the private and commercial sectors, producer/processor organisations, and facilitators of farmer participation should be explained, together with the means to be used to attract/involve new participants and any external technical assistance that would be provided for reform.

3. Proposed funding mechanisms and channels should be described – e.g. reliance on direct budgetary support to service providers or beneficiary groups vs. competitive grants vs. payment by users for advice and services; costs should be presented and exit strategies proposed for eventual financial sustainability.

4. Proposals should stress how services will enrol farmers as equal partners and draw on local knowledge to generate and disseminate adaptations tailored to the circumstances of target groups.

5. Design and review teams should also highlight how access to other available sources of technical knowledge will be widened and organised – e.g. to exploit potentially relevant contributions from IFAD grants, the CGIAR, universities, or in innovative fields such as biotechnology – and how activities would be co-ordinated with those of other lenders or donors.

6. Funding and implementing responsibilities should be allocated for socio-economic evaluations of emerging technology needs or potentials, essential to maintain relevance of extension and research programmes to the needs of IFAD target groups.

7. Explore the possibility of community contracting and the transfer of responsibility for direct managing public funds to users and their organisations.

8. The institution-building priorities of the extension and research investments should be clear - whether the main aim is technical (introducing modern technology or accelerating uptake), social (expanding farmer participation or spread of indigenous knowledge), organisational (forging new partnerships between service providers) or job creation.

9. Realistic time-frames should be assumed for project-financed R&D. To generate adoptable, new pro-poor technologies within the disbursement period of one project is rarely achievable; successor projects are more likely to benefit.

10. As for other project components or programme activities, M&E indicators should be proposed and institutional information should be summarised in the SWOT and Stakeholder Key Files.

Sources of information and examples of good practice

IFAD-financed resources � Grant 543 Environnement Développement Action (ENDA): Evaluating the impact of Research Partnerships (2001-2002). Countries:

Niger and Mali and Grant 590: Participatory Research Approaches in Higher Education (2002-2003) in Niger � Grant 427 FAO: East African Subregional Pilot Project for Farmer-Field Schools in Kenya, Tanzania and Uganda. � The Structure and Operation of a Performance-Based Allocation System for IFAD, (Executive Board Paper, Sept. 2003) and Report of the

Panel on the Performance-Based Allocation System (Executive Board Paper, Dec. 2003); Annex 1, page 8, B (iii). Access to Agricultural Research and Extension Services

IFAD project experience � Mali - Income Diversification Programme in the Mali Sud Area (1994), Appraisal Report � Jordan - Yarmouk Agricultural Resources Development Project (1999), Appraisal Report: Annex III - Agricultural Development � Syria - Coastal/Midlands Agricultural Development Project (CMADP) (1995) and Idleb Rural Development Project (2002), Appraisal

Report: Annex IV - Community Participation and Capacity Building � Niger - Project for the Promotion of Local Initiatives for Development in Aguie (2002), Appraisal Report and preparatory documents � Mauritania - Oasis Development Project (1994) farmer extension system (vulgarization paysanne) mainstreamed in the Oasis Sustainable

Development Programme (2003), Appraisal Report: Working Paper 3 - Capacity Building of Community Organizations

� Innovative Experiences of IFAD Projects in Peru, Office of Evaluation, June 2004

Sources of expertise outside IFAD � “Developing Technology with farmers. A trainer’s guide for participatory learning”, L.V. Veldhuizen, A Waters-Bayer and H. De Zeeuw,

ZED Books, ETC Netherlands � International Centre for development oriented Research in Agriculture (ICRA) � International Service for National Agricultural Research (ISNAR) � Users’ Perspectives with Agricultural Research and Development (UPWARD) � International Potato Center (CIP) � ODI - Agricultural Research and Extension Network � USDA Agricultural Research Service � DFID/ ODI “Key Sheets for Sustainable Livelihoods” Service Delivery - ‘Agricultural Research’ and ‘Agricultural Extension’

Page 41: IFAD Learning Notes

This Note relates to KSF4: Implementation arrangements and institutional aspects

About

Learning Notes

For pro-poor rural development

investments

Learning Notes are intended to serve as reminders of key issues and main tasks in the design and implementation of pro-poor investment projects in rural areas. They are based on lessons learned from experience, accumulated knowledge and current innovations.

The intended users of these Learning Notes are IFAD Country Programme Managers and team leaders/members at all stages in the design (inception, formulation and appraisal), review, supervision and evaluation of investment projects and programmes.

The first section identifies ‘Core issues’ to be considered. The second section indicates the ‘Key tasks for design and review’ to generate robust investment plans. The final section, ‘Sources of information and examples of good practice’, directs users to some relevant examples drawn from IFAD’s portfolio of loan and grant-financed projects, studies, and other sources of best practices and relevant information.

The Learning Notes aim to assist project design teams to generate the information required to prepare and enhance the quality of IFAD's Project Design Documents, the supporting logframes and Key Files.

Comments and suggestions for the improvement of Learning Notes are welcome. These, together with requests for further information, should be addressed to [email protected]

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.

2. 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.

3. Possible alternative approaches and strategies for implementation – e.g. use of government line agencies vs. creation of a separate project management or co-ordination unit (PMU/PCU); degree of reliance on external technical assistance.

4. 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.

The implementation arrangements adopted should:

5. Take account of implementation experience and lessons of previous IFAD projects.

6. 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.

7. 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.

8. Include provisions for competitive, transparent and gender-balanced recruitment procedures and give attention to gender-equality issues in TORs of project management staff.

9. Provide for flexibility in the face of unforeseen events.

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Key tasks for design and review

IFAD Formulation, Appraisal, Supervision or Review teams may be required to: define implementation responsibilities and budgetary needs; prepare operational plans to fill implementation gaps or overcome bottlenecks; develop and introduce new modes of operation; promote needed changes in implementers’ behaviour; or improve implementation skills and capacities. Depending on the stage of the project cycle, team priorities may be to: 1. Identify potential implementing organisations and assess implications or requirements for organisational change

and strengthening, including organisational gaps to be filled and any policy changes or other reforms needed. 2. Develop plans and budgets to introduce and support change within the chosen organisations and resolve issues

arising from their new implementation roles. Tackle any unwillingness or inability of government services or contracted service-providers to take on new modes of operation; overcome any persistence of past paternalistic approaches and mindsets.

3. Work with key stakeholders to build capacity and commitment within chosen organisations to improve or adapt their implementing roles, accept change, absorb strengthening and assistance, support investment aims, meet specific needs of the target group, and contribute counterpart funds in a timely manner. Help implementation partners to co-ordinate their work and resist pressures for over-centralisation of management processes.

4. Address obstacles to availability, recruitment or retention of acceptable management staff; devise means to achieve the stipulated gender balance or gender sensitivity of attitudes among project management; overcome inadequacies in the incentives (in cash or kind) for field presence of support staff.

5. Ensure the compatibility of any changes in implementation arrangements with existing national development policies, poverty reduction strategies, development plans and programmes, administrative procedures, inter-organisational links, and available human resources.

6. Maximise the response of implementing organisations to the specific needs of the target group through introduction and promotion of participatory planning procedures, while excluding participatory procedures that are vulnerable to political manipulation or raise unrealistic expectations among the target group.

7. Set achievable, realistic targets for implementation and change, in particular for: 7.1. the pace and depth of capacity building, ensuring also that budget allocations match the scale of capacity

building or organisational change that are proposed; 7.2. start-up and procurement procedures, identifying and focusing on the easing of critical paths to pre-empt

potential bottlenecks; 7.3. extent of reliance on external technical assistance, balancing needs for timely start-up and implementation

against risks of jeopardising the pace at which sustainable local capacity for implementation can emerge.

Sources of information and examples of good practice

IFAD-financed resources � The Structure and Operation of a Performance-Based Allocation System for IFAD, (Executive Board Paper, Sept. 2003) and

Report of the Panel on the Performance-Based Allocation System (Executive Board Paper, Dec. 2003); Annex 1, page 14, E. Allocation and Management of Public Resources for Rural Development

IFAD project experience � Syria - Idleb Rural Development Project (2002) � Jordan - Agricultural Resources Management Project - Phase II (2004), Appraisal Report, pages 36-40 Section VII:

Organization and Management

Sources of information and expertise outside IFAD � FAO Investment Centre

Page 43: IFAD Learning Notes

This Note relates to KSF4: Implementation arrangements and institutional aspects

About

Learning Notes

For pro-poor rural development

investments

Learning Notes are intended to serve as reminders of key issues and main tasks in the design and implementation of pro-poor investment projects in rural areas. They are based on lessons learned from experience, accumulated knowledge and current innovations.

The intended users of these Learning Notes are IFAD Country Programme Managers and team leaders/members at all stages in the design (inception, formulation and appraisal), review, supervision and evaluation of investment projects and programmes.

The first section identifies ‘Core issues’ to be considered. The second section indicates the ‘Key tasks for design and review’ to generate robust investment plans. The final section, ‘Sources of information and examples of good practice’, directs users to some relevant examples drawn from IFAD’s portfolio of loan and grant-financed projects, studies, and other sources of best practices and relevant information.

The Learning Notes aim to assist project design teams to generate the information required to prepare and enhance the quality of IFAD's Project Design Documents, the supporting logframes and Key Files.

Comments and suggestions for the improvement of Learning Notes are welcome. These, together with requests for further information, should be addressed to [email protected]

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.

2. Eligibility criteria, decision-making procedures and requirements on beneficiary contributions should be designed in such a way as to promote inclusion of “the poorer”.

3. 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.

4. Needs for staff training and capacity building for CDF operations should be identified and funded.

5. 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.

6. Overlap or confusion between CDF funding and provision of credit via rural financial services should be avoided - see Learning Note 3.4 - Rural Finance).

7. 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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Key tasks for design and review

1. Keep CDFs simple; avoid multiple and overly ambitious goals, menus or geographic coverage. Test on a pilot scale if necessary.

2. The relation of funds with other project actions has to be considered. 3. Focus on detailed planning of operational, administrative and managerial aspects but keep menu choices

flexible. 4. Avoid adopting operating procedures and access conditions that could favour the better off and/or lack

transparency, and so could unwittingly exclude the poorest. 5. Allocate investment resources for CDF promotion/publicity; and for training, forming and supporting the

operations of CDF user groups. 6. Ensure that chosen CDF support services and intended suppliers have the skills and capacity for their identified

tasks. Design training and capacity building components to cover identified gaps. 7. Agree with stakeholders on the arrangements for post-disbursement handover and consolidation, e.g. to meet

future recurrent costs of the CDF to forge permanent links between local government and communities, or to operate and maintain items financed.

8. Prepare cost estimates and a financing plan for the proposed CDF. 9. For larger CDFs, make arrangements to draft an Operating Manual as part of project start-up. 10. Ensure that M&E indicators in Key Files will monitor the evolution of grass-root capacity and that findings will

feed into management decision-making - see Learning Note 6.1 - Monitoring and Evaluation. 7.

Sources of information and examples of good practice

IFAD-financed resources � CDFs: some emerging lessons for project design, Executive Summary, IFAD/PT, Rome, August 2004, vol. 6 � IFAD Community Based Projects in West Africa: Review of Project Design, Policy and Performance, Draft Report &

Annexes, IFAD/PA, Rome, July 2003

IFAD project experience � Cambodia - Rural Poverty Reduction Project in Prey Veng and Svay Rieng (2003), Appraisal Report, Dec. 2004, main

report, appendix 22; the Manual for the Commune Infrastructure Development Fund which includes Guidelines for the Eleven Steps Planning Process, illustrates comprehensive design-stage planning of arrangements and procedures, which is appropriate in this situation

� Ghana - Northern Region Poverty Reduction Programme (2001), Appraisal Report, Main Report p.19-20, and Working Paper 2

� Dominican Republic - Social and Economic Development Programme for Vulnerable Populations in the Border Provinces (2002), Appraisal Report

� Malawi - Rural Livelihoods Support Programme (2001), Post-Appraisal Report, Sept. 2003, Annex 3 - Local initiatives and village investment funds, two types of CDF (socio-economic infrastructure and livelihood activities) are being put in place, in line with the recently approved decentralized expenditure framework

Sources of expertise outside IFAD � World Bank, Inter-American Development Bank, Eldis (for all search - social funds) � 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 Frédéric 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

Page 45: IFAD Learning Notes

This Note relates to KSF5: Risks and Sustainability

About

Learning Notes

For pro-poor rural development

investments

Learning Notes are intended to serve as reminders of key issues and main tasks in the design and implementation of pro-poor investment projects in rural areas. They are based on lessons learned from experience, accumulated knowledge and current innovations.

The intended users of these Learning Notes are IFAD Country Programme Managers and team leaders/members at all stages in the design (inception, formulation and appraisal), review, supervision and evaluation of investment projects and programmes.

The first section identifies ‘Core issues’ to be considered. The second section indicates the ‘Key tasks for design and review’ to generate robust investment plans. The final section, ‘Sources of information and examples of good practice’, directs users to some relevant examples drawn from IFAD’s portfolio of loan and grant-financed projects, studies, and other sources of best practices and relevant information.

The Learning Notes aim to assist project design teams to generate the information required to prepare and enhance the quality of IFAD's Project Design Documents, the supporting logframes and Key Files.

Comments and suggestions for the improvement of Learning Notes are welcome. These, together with requests for further information, should be addressed to [email protected]

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 environment-related investment plans and components are needs to:

1. Optimise local control over, and access to, natural resources via gender-sensitive 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.

2. 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.

3. 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.

4. Provide support and incentives for those forms of community-based natural resource use and management that ensure long term sustainability.

5. 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.

6. 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.

7. Where appropriate, exploit opportunities to promote the use of environment-friendly 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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Key tasks for design and review

Design of environmental projects and components should be based on an Environmental Screening and Scoping (ESS) exercise, which can be funded from PDFF resources. President’s Bulletin 94/03 and its attached Operating Statements should be followed; Environmental Screening and Scoping Notes (ESSNs) should follow IFAD’s Administrative Procedures for Environmental Assessment, Doc 4-1. Design and review teams will need to: 1. Demonstrate the links between poverty and environmental degradation and show that the proposed investments

will address these links. 2. Develop and agree with natural resource users, other stakeholders and the borrower sustainable and practical

solutions to solve or avoid conflicts over land use and resource access. Solutions are likely to feature initiatives for co-management or user-based resource management that are development-oriented, people-centred, and which reflect traditional/indigenous approaches and include an understanding of those factors that facilitate successful collective action and deliver environmental benefits and services.

3. Identify any legal or regulatory constraints to the application of the above initiatives; propose remedial actions to the borrower and agree how, by whom and by when resolution will be achieved.

4. Focus the attention of environmental support services on capacity building to reduce disparities in the environmental protection/management capacities of target groups.

5. Promote conservation measures or NRM technology that can combine environmental benefits with improved economic growth and security for the target group - or at least not undermine them.

6. Give close attention to design & operation of environmental monitoring and evaluation systems, including risk assessment. Include site-specific, impact-oriented and easily verifiable environmental indicators in Key Files.

7. Ensure that project budgets include all costs associated with the environmental mitigation measures and supporting actions that are proposed.

Sources of information and examples of good practice

IFAD-financed resources � “Administrative Procedures for Environmental Assessment (EA) in the Project Cycle”, President’s Bulletin No 94/03 � “ Incentive systems for NRM: The Role of Indirect Incentives”; FAO Investment Center - Report No. 99/023 IFAD-RAF:

Environment Report Series 2, FAO 1999 � Grant 456 ICRAF (2000-2002): Diversification of Smallholder Farming Systems in West and Central Africa through

Cultivation of Indigenous Trees (countries: Cameroon, Equatorial Guinea, Gabon and Nigeria) � Grant 534 ICRAF: Rewarding the Upland Poor of Asia for the Environmental Services they Provide (RUPES).

Environmental service payments have potential to provide a new source of income for the rural poor and, in some cases, have already proved to have impact on national level institutions and policies

IFAD project experience � Jordan - Agricultural Resources Management Project - II (2004), Appraisal Report: Working Paper 9 - Sustainable Land

Management (GEF Concept Note) � Kenya - Mt Kenya East Pilot Project for NRM (2002), the GEF-financed component provides a good example for on- and

off-farm environmental conservation and rehabilitation practices, Appraisal Report: Working Paper 3 - Environmental Conservation

� Nepal - Leasehold Forestry and Livestock Project (2004), Appraisal Report: Working Paper 4 - Leasehold Forestry and Livestock

� Rwanda - Umutara Community Resource and Infrastructure Development I and II (2001), Appraisal Report: Working Paper 6 - Environmental Assessment of the Umutara Province and Environmental Related Measures

� Venezuela - Sustainable Rural Development Project for the Semi-Arid Zones of Falcon and Lara States (PROSALAFA II) (2003), Appraisal Report: Working Paper 4 - Rehabilitation, Conservation and Management of Microwatersheds

Sources of expertise outside IFAD � Rural Poverty Portal: Rural poverty and desertification � FAO – Natural Resources Management and Environment Department � Global Environment Facility (GEF) � Global Mechanism of the UNCCD � United Nations Environment Programme � World Agroforestry Centre � Katoomba Group � DFID/ODI/DGIS “Key Sheets for Sustainable Livelihoods” Resource Management ‘Participatory Watershed Development’

Page 47: IFAD Learning Notes

This Note relates to KSF5: Risks and Sustainability

About

Learning Notes

For pro-poor rural

development investments

Learning Notes are intended to serve as reminders of key issues and main tasks in the design and implementation of pro-poor investment projects in rural areas. They are based on lessons learned from experience, accumulated knowledge and current innovations.

The intended users of these Learning Notes are IFAD Country Programme Managers and team leaders/members at all stages in the design (inception, formulation and appraisal), review, supervision and evaluation of investment projects and programmes.

The first section identifies ‘Core issues’ to be considered. The second section indicates the ‘Key tasks for design and review’ to generate robust investment plans. The final section, ‘Sources of information and examples of good practice’, directs users to some relevant examples drawn from IFAD’s portfolio of loan and grant-financed projects, studies, and other sources of best practices and relevant information.

The Learning Notes aim to assist project design teams to generate the information required to prepare and enhance the quality of IFAD's Project Design Documents, the supporting logframes and Key Files.

Comments and suggestions for the improvement of Learning Notes are welcome. These, together with requests for further information, should be addressed to [email protected]

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.

2. 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 short-term needs overshadow sustainability concerns (e.g. post-conflict) this should be justified.

3. 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 government’s 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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Key tasks for design and review

1. Review and reach agreements on who will take over key management, technical support and O&M operations once project-funded staff is no longer available. This should be done also for second or third phase IFAD investments or Flexible Lending Mechanism projects.

2. Define means to meet post-project financial liabilities or agree an exit strategy, thus ensuring that a requirement for a second phase project does not arise semi-automatically, simply in order to salvage the benefits of the original investment.

3. Avoid unsupported assumptions that the government is committed and able to automatically take over operation and maintenance – e.g. of roads – or that communities can/will undertake, and can afford the costs of, Operation and Maintenance.

4. Develop clear indicators and methodology to track sustainability during the disbursement period; include in logframes and Key Files; agree how and by whom sustainability will be monitored subsequently.

5. Give priority to consideration of the preferences or priorities of poor people in making fall-back choices on how to reshape post-project support, when project personnel and funds become more scarce.

6. Analyse trade-offs and possible conflicts between sustainability and the short term livelihood improvements or survival needs of the rural poor.

7. Take into account and plan for the accumulating impacts of significant longer-term trends such as rising input prices versus stagnant farm gate prices, progressive over-use of water and land resources, climate trends, or livelihood shifts of poor farmers out of agricultural production.

8.

Sources of information and examples of good practice

IFAD-financed resources � Managing for Impact in Rural Development: A Guide for Project M&E: IFAD, 2002

IFAD project experience � Cape Verde - Rural Poverty Alleviation Programme (1999), creation of a permanent institution, recognized by government,

to channel resources for poverty alleviation at rural level � Bangladesh - Microfinance for Marginal and Small Farmers Project (2005), channelling project management resources

directly to permanent apex institution for financing NGO credit operations directly through budgetary channels rather than special project units and accounts

Sources of information and expertise outside IFAD � Focus on Sustainability 2004, World Bank, 2005

Page 49: IFAD Learning Notes

This Note relates to KSF6: Innovation, Learning and Knowledge Management

About

Learning Notes

For pro-poor rural development

investments

Learning Notes are intended to serve as reminders of key issues and main tasks in the design and implementation of pro-poor investment projects in rural areas. They are based on lessons learned from experience, accumulated knowledge and current innovations.

The intended users of these Learning Notes are IFAD Country Programme Managers and team leaders/members at all stages in the design (inception, formulation and appraisal), review, supervision and evaluation of investment projects and programmes.

The first section identifies ‘Core issues’ to be considered. The second section indicates the ‘Key tasks for design and review’ to generate robust investment plans. The final section, ‘Sources of information and examples of good practice’, directs users to some relevant examples drawn from IFAD’s portfolio of loan and grant-financed projects, studies, and other sources of best practices and relevant information.

The Learning Notes aim to assist project design teams to generate the information required to prepare and enhance the quality of IFAD's Project Design Documents, the supporting logframes and Key Files.

Comments and suggestions for the improvement of Learning Notes are welcome. These, together with requests for further information, should be addressed to [email protected]

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.

2. 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 project’s logical framework and the M&E plan.

3. 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.

� 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.

� 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 track any changes in anchor indicators of impact (poverty & hunger).

� How: Representative HH surveys.

� When: At benchmark, mid-term and project completion evaluation.

� Why: To track project outputs (# wells, etc.) and monitor social processes (functioning of village development committees, etc.).

� How: Counting / aggregating.

� When: Continuous, with annual reporting.

QUANTITATIVE INDICATORS

QUALITATIVE INFORMATION

MONITORING 1st & 2nd LEVEL RESULTS

EVALUATING IMPACT

Measuring Results and Impact

Note: The 4 quadrants are mutually re-enforcing (not mutually exclusive) and each is potentially participatory (or non-participatory).

4. 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 people’s aspirations and their own development processes are at the heart of M&E.

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Key tasks for design and review

1. The narrative M&E plan in the Main Report and associated Annex should: 1.1. Describe means and responsibilities for data collection and use, including participatory M&E, and estimate

personnel needs for implementation (with training for managers as needed); 1.2. Specify the use of M&E by project managers for reporting implementation progress, and discuss the ways

in which the M&E system will contribute to planning for improved project impact; 1.3. Explain how those who will gather and use M&E information will have a voice in refining the M&E

system, indicators and decision-making; 1.4. Adequately incorporate the IFAD Results and Impact Management System (RIMS) guidelines; 1.5. Make coherent distinction 1st level results (outputs), 2nd level results (outcomes) and impact; 1.6. Establish a balance between quantitative indicators and qualitative information at all levels; 1.7. Ensure the narrative M&E Plan is fully consistent with the logical framework.

2. The project Logical Framework should (subject to additional IFAD guidance on logical frameworks): 2.1. State anchor indicators of impact for all projects; 2.2. Match 1st level results (outputs) and 2nd level results (outcomes) to project activities and processes (see

RIMS doc. para. 12, Annex Table 1); 2.3. Specify the means and sources of verification for indicators (such as rural financial institutions for savings

and credit data, and representative household surveys for anchor indicators of impact). 3. Project cost tables should include an M&E sub-component under project management, with appropriate line

items (such as personnel, field visits for regular monitoring, the three impact surveys, etc.). M&E costs should generally approximate 3 - 5% of the project budget.

Sources of information and examples of good practice

IFAD-financed resources � Results and Impact Management System (RIMS) – First and Second Level Results Handbook, November 2007 � IFAD Office of Evaluation � Document - A Guide for Project M&E, IFAD 2002 (extensive source, stronger on qualitative techniques) � RIMS Materials � Document - Framework for a Results Management System (RIMS) for IFAD-Supported Country Programmes, Executive

Board Document EB 2003/80/R.6 (best source for general guidance on quantitative results and impact in project design) � Document - Basic information and tools for reporting project results (September 2004) � Document - Practical Guidance for Impact Surveys (March 2006) � Software - RIMS survey data entry, analysis and reporting � Contact Address: [email protected] � IFAD Training Video - “Benchmark Assessment of Impact Indicators” (contact the Technical Advisory Division) � Grant 468 - DESCO: Programme for Strengthening the Regional Capacity for Monitoring and Evaluation of Rural Poverty-

Alleviation Projects in Latin America and the Caribbean (PREVAL) - PHASE II � Conceptos Clave de Seguimiento y Evaluacion de Programas y Proyectos, Breve Guia, produced by Veronica Viñas and

Ada Ocampo. May 2004 � RIMS First and Second Level Results Handbook (5 December 2007)

IFAD project experience � Five RIMS pilot projects carried out impact surveys in 2005, survey reports

Sources of information and expertise outside IFAD � Millennium Development Goals and Indicators � UNDP Evaluation: Guidance � UN Evaluation Forum � World Bank: IDA Results Management System � MEASURE Evaluation � Online source for management software

Page 51: IFAD Learning Notes

This Note provides general guidance on particular aspects of design DRAFT

About

Learning

Notes

For pro-poor rural development

investments

Learning Notes are intended to serve as reminders of key issues and main tasks in the design and implementation of pro-poor investment projects in rural areas. They are based on lessons learned from experience, accumulated knowledge and current innovations.

The intended users of these Learning Notes are IFAD Country Programme Managers and team leaders/members at all stages in the design (inception, formulation and appraisal), review, supervision and evaluation of investment projects and programmes.

The first section identifies ‘Core issues’ to be considered. The second section indicates the ‘Key tasks for design and review’ to generate robust investment plans. The final section, ‘Sources of information and examples of good practice’, directs users to some relevant examples drawn from IFAD’s portfolio of loan and grant-financed projects, studies, and other sources of best practices and relevant information.

The Learning Notes aim to assist project design teams to generate the information required to prepare and enhance the quality of IFAD's Project Design Documents, the supporting logframes and Key Files.

Comments and suggestions for the improvement of Learning Notes are welcome. These, together with requests for further information, should be addressed to [email protected]

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 intervention’s 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 people’s livelihoods and economic well-being) - Operational Program 15 (consider other OPs with links to LD). GEF helps catalyze IFAD’s 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).

Key tasks for design and review 1. Project Rationale and Justification: demonstrate why a GEF investment is needed and what

would be its added-value. The project should be placed in its wider context with strong links to country or regional policy and strategic trends. Indicate the contribution of the project to sectoral policy objectives, institutional development, and other objectives that would not be achieved without incremental GEF funding.

2. Project design. Show that the project is consistent with the objectives of the respective GEF OPs and selected Strategic Priorities. Demonstrate that project design is in line with main IFAD’s strategic priorities and comparative advantages as a GEF EA and ensure that linkages with IFAD’s baseline interventions are operational, well integrated/planned and cost effective. Devise operational modalities for harmonization/synergy (institutional processes, financial, geographical coverage, targeting, lessons learned) of GEF-funded activities with IFAD and other initiatives and ensure synergies between international environmental conventions.

3. Design of IFAD/GEF-related regional initiatives and partnership platforms should be primarily linked to IFAD’s 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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Key tasks for design and review 4. Targeting: Ensure that geographic and social targeting criteria are in line with IFAD’s operational measures for targeting - see

Learning Note 2.3 – Project Targeting. 5. Poverty-environment nexus. Show the links between the ecosystem (structure and functional integrity) and socio-economic

dynamics, then present these in the context of a blended IFAD-GEF intervention linking the root causes of problems to threats, and generate a logical sequence of activities to address these causes. Flag any technical, institutional, economic and policy/legal shortcomings - see Learning Note 5.1 - Environment and Natural Resource Management.

6. Incremental costs. Apply and analyse the concept of incremental costs, as well as quantification of costs related to baseline activities (i.e. ongoing activities in the country’s national interest in the sectors and geographic areas related to those of the alternative). Clearly define the alternative ‘with GEF’ scenario (what occurs in addition to the existing baseline in order to achieve the outcomes) and show which activities and outputs suggested in the alternative scenario are incremental (producing global benefits) and which are not. Co-financing of the GEF alternative should be at least equal to or higher than 50% but avoid complex co-financing arrangements. Evidence/letters of co-financing should be provided. Incremental cost analysis should follow GEF requirements (see section C – GEF Background Information - reference “e” below for details).

7. Institutional coordination. Design and agree on the organisational arrangements and responsibilities for implementation and monitoring. Carry out institutional/policy analysis of the capacities/capabilities of potential implementing agencies and service providers for project implementation; plans should address shortcomings in main sectors involved and linkages. Also explain how IFAD will ensure a high quality technical and financial implementation of the project (e.g. international project coordinator, supervision by country-based staff or HQ, or arrangements with other involved cooperating institutions) – see Learning Note 4.2 - Pro-Poor Institutional Transformation .

8. Replication. Identify potential IFAD and any other relevant and cost-effective tools and mechanisms that could be used for replication at the country, the region and the global scales.

9. M&E / Logical Framework. (a) Provide relevant, time bound quantitative/measurable indicators. Distinguish between impact and performance indicators.. (b) Estimate baseline values for indicators and the Global Objective in the logical framework. (c) Develop linkages and ensure consistency between IFAD loan and GEF Monitoring and Evaluation systems/logframes. (d) Include a detailed annex on GEF M&E modalities, roles and responsibilities. Project cost should articulate such elements with

appropriate line items. 10. Other key tasks for consideration:

(a) Project Concept and PDF-B design should be simple and output-oriented to ensure easy and timely PDF-Bs implementation. (b) IFAD projects that have GEF components should not include GEF funding in their costabs unless such grants are secured. (c) Project costs should make clear distinction between activities that are eligible for GEF funding and those that should be born

by baseline investments and co-financing. i.e. project operating costs and M&E-associated costs should be on the GEF grant. Also Project start up workshops should be included under the grant and not be funded through the SOF facility.

(d) As GEF projects are not eligible to SOF, start-up workshops should be financed by the GEF Grant. (e) Risks should be assessed and effective mitigation measures should be identified and integrated into overall project design and

cost.

Sources of information and examples of good practice

GEF background information � GEF Grant Templates and Guidelines for all Focal Areas � Operational Strategy of the GEF � Operational Programs for Biodiversity (OP 1-4, 13), Climate Change (OP5-7, 11), Land Degradation (OP15), and

Multifocal Area (OP 12): � Convention Priorities and Action Plans: Convention on Biological Diversity; United Nations Convention to Combat

Desertification; United Nations Framework Convention on Climate Change � Incremental Cost Analysis Guidelines � Resource Allocation Framework and Addendum � GEF Project Cycle Timeline

IFAD background information � Results-Based Country Strategic Opportunities Paper or Regional Strategic Opportunities Paper � IFAD Regional Strategy for Rural Poverty Reduction � Relevant Inception or Formulation reports

Project grant experience � Mali. “Biodiversity Conservation and Participatory Sustainable Management of Natural Resources in the Inner Niger Delta

and its Transition Areas, Mopti Region” (OP#1, #2, #12, #15) � Brazil. “Sustainable Land Management in the Semi-Arid Sertao” (OP#15) � Kenya. “Mount Kenya Ecosystem Conservation Initiative.” (OP #12 with links to OP#15) � Sri Lanka. “Participatory Coastal Zone Restoration in the Eastern Province of Post-Tsunami Sri Lanka.”(OP#15 and Pilot

Operation Approach to Adaptation) � Venezuela. “Combating Land Degradation in the Arid and Semi-Arid Zones of Falcon and Lara States.” (OP#15)

Page 53: IFAD Learning Notes

This Note provides general guidance on particular aspects of design DRAFT

About

Learning

Notes For pro-poor rural

development

investments

Learning Notes are intended to serve as reminders of key issues and main tasks in the design and implementation of pro-poor investment projects in rural areas. They are based on lessons learned from experience, accumulated knowledge and current innovations. The intended users of these Learning Notes are IFAD Country Programme Managers and team leaders/members at all stages in the design (inception, formulation and appraisal), review, supervision and evaluation of investment projects and programmes. The first section identifies ‘Core issues’ to be considered. The second section indicates the ‘Key tasks for design and review’ to generate robust investment plans. The final section, ‘Sources of information and examples of good practice’, directs users to some relevant examples drawn from IFAD’s portfolio of loan and grant-financed projects, studies, and other sources of best practices and relevant information. The Learning Notes aim to assist project design teams to generate the information required to prepare and enhance the quality of IFAD's Project Design Documents, the supporting logframes and Key Files. Comments and suggestions for the improvement of Learning Notes are welcome. These, together with requests for further information, should be addressed to [email protected]

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 GEF’s Executing Agency and host of the Global Mechanism, IFAD has an important role in advancing the UNCCD-agenda. 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 IFAD’s objectives at a country level overlap with those spelt out in the Convention. Desertification ranks among today’s 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:

1. 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 non-conducive 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.

2. 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 long-term programming.

3. 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.

Key tasks for design and review 1. Recognise and address the poverty-desertification nexus and promote sustainable development in drylands

(see Learning Note 5.1 - Environment and Natural Resource Management). i. Consider the links between environmental sustainability and poverty, health, social and economic

policies, subsidies, migration dynamics, drought, institutional failures, etc. (see Learning Note 2.3 - Project targeting).

ii. Consider the degree (and risk) of desertification that a community faces. Prevention is a lot more cost-effective than rehabilitation.

iii. Recognise that several activities, related to agriculture, irrigation, forestry, livestock, land reform, tourism, energy, infrastructure development, etc., may have both positive and negative consequences on desertification. Minimise the potential adverse environmental and social impacts of activities and build on the positive linkages between poverty reduction, economic efficiency and environmental sustainability. Promote a menu of win-win approaches and appropriate technologies that seek to enhance the ecological integrity of threatened/affected drylands, such as agro-forestry systems, sustainable land/livestock management, terracing, preservation of traditional varieties, etc. Also provide alternative livelihood opportunities that reduce the pressure on natural resources, including energy substitution, rural financial services to promote off-farm income generation activities and micro-enterprises, etc. (see Learning Note 3.1 - Technology change for livelihood development ).

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1 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

Mainstreaming UNCCD objectives in

IFAD operations (strategies and programmes) Learning Notes Series

7.2

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Key tasks for design and review 2. Ensure that UNCCD/NAP objectives are properly mainstreamed and that alignment to UNCCD-objectives/NAP is explicit.

i. Interventions should also take the NAP/National Reports into account. ii. Involve the relevant Ministries/Institutions, partners (including UN country teams) as well as the UNCCD national focal point.

iii. Indicate, in the ESSN, whether the project area includes affected or threatened drylands. 3. The approach needs to be sensitive to local conditions affecting poor rural people, integrated, proactive, programmatic, flexible, gender-sensitive,

participatory and receptive to local/traditional knowledge. Pay attention to existing planning processes and how these affect poverty, land degradation and sustainable development in drylands. It is often necessary to build capacity and commitment, across various levels (see Learning Note 1.1 - Project rationale and relevance). i. Include rural people/stakeholders who affect and/or are affected by desertification and who best understand the fragile environments they inhabit, since

they must be the starting point for efforts to combat land degradation and desertification-induced poverty: problems and solutions related to desertification should be defined through their participation and should be clear to them. Use participatory processes that empower poor rural people to: draw on the ecology and management expertise that they possess; overcome the constraints they face; create a sense of ownership; and ensure support for the project’s implementation and sustainability. Recognise and address inequalities in negotiating power(see Learning Note 4.2 - Pro-poor institutional transformation).

ii. A thorough understanding of the set of proximate causes and underlying driving forces is required. Projects need to adopt a multidisciplinary, flexible and multi-institutional approach, integrating environmental aspects into broader socio-economic frameworks.

iii. Also assess, analyse and integrate gender-perspectives and the role of youth in food production and in the management of natural resources. Empower women and other vulnerable groups (e.g., indigenous peoples, pastoralists, nomads, etc.) to manage their social and natural capital (see Learning Note 2.1 - Gender).

iv. Inducing private individuals to enhance the natural resource base requires both short- and long-term incentives. This may also require compensating users when compromises are necessary to ensure long-term benefits and sustainability. To enhance sustainability, efforts usually need to be supported over longer periods (see Learning Note 5.2 - Sustainability).

v. Capacity-building, across various levels, and particularly an information, education and communication strategy, may significantly enhance impact. In recognition of the multi-ministerial and multi-institutional facets of mainstreaming UNCCD-concerns, strengthening local and institutional capacities and commitment is fundamental. The communication strategies should seek to secure the support of key ministries, such as Finance and Planning, by clearly articulating the costs and benefits of combating desertification in terms clearly discernable to the target audience. Identify needs for research and innovation.

vi. Desertification concerns should be reflected in monitoring and evaluation: identify the need for an early warning system, incorporating also traditional/indigenous knowledge at the local level. Develop and apply multidisciplinary data sets and SMART indicators that reflect the Poverty-Environment nexus and serve the needs of key stakeholders in promoting ecosystem integrity (see Learning Note 6.1 - Monitoring and evaluation).

4. Identify and align priorities between IFAD’s strategies and: the NAPs of the UNCCD; the National Biodiversity Strategies and Action Plans (NBSAPs) under the CBD; and the National Adaptation Programmes of Action (NAPAs) for least developed countries of the UNFCCC. Mainstream UNCCD/NAP priorities in RB-COSOPs. Formulate interventions which seek to implement shared objectives.

5. Desertification has multiple causes and consequences and cannot be tackled by a single organisation. Advocacy and greater coordination and integration of efforts are required. Partnerships, including a broad range of government and nongovernmental stakeholders, could be established for various purposes, for instance funding, technical assistance/research, learning and knowledge sharing, implementation, M&E, strategy formulation, etc. Potential partners that are active in combating desertification include, inter alia: GEF, GM, UNEP, NGOs, DANIDA, GTZ, UNDP, World Bank, FAO, ADB, ILC, CIDA, CGIAR, OECD, EC, the private sector, etc. IFAD could also play a role in promoting South-South and North-South collaboration. Also analyse existing mechanisms at the country-level.

Sources of information and examples of good practice IFAD-financed resources � Rural poverty portal – desertification (select as topic) � “Administrative Procedures for Environmental Assessment (EA) in the Project Cycle”, President’s Bulletin No 94/03 � Gender and Desertification; Community-based Natural Resource Management; Portfolio Review (draft currently available on DESK only) � Grant 485 Sustainable Management of Natural Resources and Improvement of Major Production Systems of the Arabian Peninsula – Phase II (ICARDA

2000) and Grant 816 Community Action in Integrated and Market-Oriented Feed-Livestock Production in Central and South Asia (ICARDA 2005)

IFAD project experience � Bolivia - Management of Natural Resources in the Chaco and High Valley Regions Project (2000) excellent example of mainstreaming across all design

documents. Working Papers Anexo VIII and Anexo VI particularly relevant � Burkina Faso– Community Investment Programme for Agricultural Fertility (2003) Provides a good example of a holistic approach that addresses the

poverty-environment nexus. Working Papers 9 and 10 particularly relevant. Links to the GEF Country Partnership Programme. � Mexico - Sustainable Development Project for Rural and Indigenous Communities of the Semi-Arid North-West (2005) good example of mainstreaming.

Proactive and participatory approach, with GEF and the Global Mechanism as active partners. Addresses the poverty-environment nexus. Annex 1 of the Appraisal Report (ESSN) and Working Papers 4 and 6 particularly interesting

� Mali - Northern Regions Investment and Rural Development Programme (2005) good example of alignment to CCD objectives. Working Papers 11 and 14 (ESSN) particularly interesting

� Jordan - Agricultural Resource Management Project - Phase II (2004) holistic approach, involving GEF as partner. CCD-objectives also mainstreamed in COSOP. ESSN, Working Papers 3 and 9 (GEF Concept Note) are of particular relevance.

� Morocco - Rural Development Project in the Eastern Middle Atlas Mountains (2004) participatory, gender-sensitive and holistic approach. Working Papers 4, 6 and 10 particularly relevant.

� Examples of UNCCD-mainstreaming in COSOPs: Eritrea 2006; Nigeria 2001; Pakistan 2003; China 2005; and Argentina 2004.

Sources of expertise outside IFAD � UNCCD website - particularly Action Programmes, Official Documents of and Country Reports to COPs and CRICs, focal points , text of the Convention ,

Publications etc. Also see UNFCCC and CBD websites. � IFAD/GEF site, particularly GEF Operational Program on Sustainable Land Management, related Publications and Global Environment Facility Learning

Document (LN 7.1). Global Mechanism website, particularly FIELD � UNEP and UNDP Drylands Development Centre sites, particularly UNEP success stories in combating desertification, UNEP-UNDP Poverty-Environment

Initiative; UNEP’s Global Environment Outlook, UNEP’s World Atlas of Desertification � OECD DAC site, particularly The DAC Guidelines: Integrating the Rio Conventions into Development Co-operation; European Commission on Sustainable

Land Management; World Bank site, particularly Land Resources Management and related Publications � Millennium Ecosystems Assessment Reports, particularly Synthesis on Desertification; FAO website, particularly LADA and Properties and Management of

Drylands; CGIAR (particularly ICARDA and ICRISAT. See also the Challenge Programme OASIS); IIED site, particularly on drylands � Other sources of information: UNEP/GM/UNDP Draft Generic Guidelines for Mainstreaming (draft currently available on DESK only), Guide to Land-Use

and Land-Cover Change (CIESIN Thematic Guide)

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