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An introduction to IFAD’s operational environment26 September 2011

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A snapshot of what we are supporting in the IFAD 8 period, in response to your instructions in the IFAD 8 consultation

• We target poor rural populations and small-scale farmers

• IFAD-supported projects reach about 36 million poor rural people a year (based on project M&E and survey data)

• IFAD is a major supporter of community-designed and managed rural development projects and farmer organizations

• We use government and local management systems rather than managing projects ourselves

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A flavour of what we are doing in our loans and grants during the IFAD 8 period

Improving basic foods and staples

Including cash crops: exports are growing

Integrating livestock to match rising demand

Developing private agroprocessing and marketing

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Supporting markets for smallholders

●Inputs

Storage●

●Processing

Marketing●

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Peru: Management of Natural Resources in the Southern Highlands Project – agriculture services

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Guinea: Fouta Djallon Agricultural Rehabilitation Project – farmer training

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India: Tamil Nadu Women’s Development Project – women’s groups

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Senegal: Village Management and Development Project – women’s training

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Niger: Second Maradi Rural Development Project – irrigation

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Mauritania: Agricultural Rehabilitation Programme II – reforestation

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Ethiopia: Rehabilitation Programme for Drought Affected Areas

Operational achievements

• POW increased by 19% in 2009-2010 (US$ 811.5 million in loans and DSF grants, US$ 45.8 million in grants)

• Quality improvements to projects and country programs• Supervising 185 ongoing projects by end 2008; 234 by September

2010; 260 by September 2011• Cofinancing with other donors expanded• Collaborative agreements (AfDB, UNIDO, FAO, UNDP, AGRA,

Global Platform, ILC, UN on food crisis, EC)• Knowledge sharing improved (Agriculture Share Fair, quality

enhancement and assurance learning notes, technical advisory notes)

• Innovation mainstreaming (value chain, rural finance, land, country strategy)

• Field offices expanded and functional• CGIAR change programme catalyzed

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0

500

1000

1500

2000

2500

2006 2007 2008 2009 2010

Domestic contributions

Cofinancing

Loan and DSF grantapprovals

IFAD loans and DSF grants, cofinancing and domestic contributions (2006-2010)

Donor cofinancingCofinancing

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Results Measurement FrameworkIFAD has delivered real results

Results Baseline year Baseline value 2009 achievement 2012 target*

People receiving services from IFAD-supported projects

Male:female ratio

2007

2007

29 m

57:43

36 m

51:49

60 m

50:50

Land under improved management (hectares)

2008 3.9 m 4.9 m Monitored

Area under rehabilitation (hectares) 2008 228 000 322 000 Monitored

People trained in crop production

Male:female ratio

2008 1.7 m 4.1 m

63:37

Monitored

Active borrowers from rural financial services

Male:female ratio

2008 4.4 m 4.8 m

51:49

Monitored

Marketing groups formed 2008 25 000 28 000 Monitored

Community action plans 2008 24 000 29 000 Monitored

* Only two targets established: Number of people receiving services, disaggregated by gender.

Key project performance indicators for IFAD’s development results

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IEE: Independent External Evaluation of IFAD, 2005ARRI: Annual Report on Results and Impact (prepared by the Independent Office of Evaluation)PCR: Project Completion ReportRMF – Results Measurement Framework

0

1020

3040

50

6070

8090

100

IEE

ARRI 2010

PCRs 2009/2010

RMF target 2012

IEE 100 67 45 55 40 40

ARRI 2010 97 77 57 86 95 65

PCRs 2009/2010 98 86 66 84 88 79 76

RMF target 2012 90 90 75 90 80 75 75

Relevance Eff ectiveness Effi ciencyRural poverty

impactGender

Innovation,

learning/scaling Sustainability

% of projects found marginally satisfaction or better on the indicators

Summary of the operational plan for 2011

• Expand programme of work by 17% to US$1 billion• Improve quality of new grants and loans to level of targets (see new

results measurement framework)• Improve quality of ongoing portfolio through supervision of projects• Cofinance US$1.5 for US$1 of IFAD lending• Deepen partnerships with other institutions• Expand country presence to 35 offices• Share knowledge better within IFAD and with partners• Strengthen innovation and upscaling successful innovation• Become more efficient (less cost per US dollar loaned or granted)• Further improve management systems, staff skills and staffing• Implement results framework, improving M&E systems• Improve staff technical skills through training, recruitment, partnerships

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RMF in the context of IFAD: Operating model

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IFAD has a knowledge management and innovation strategy, with results targets. Major outputs so far in the IFAD 8 period

- Rural Poverty Report 2011- Smallholder Agriculture Seminar 2011- IFAD portfolio review 2010- Project data for Results Measurement Framework- Contributor to UN Comprehensive Framework for Food

Security (HLTF)- Contributor to Responsible Agriculture Investment

Guidelines (with World Bank, FAO, UNCTAD)- Regional knowledge networks established in Latin

America, Africa, North Africa and Near East, and Asia

Expanded country presence

• IFAD country presence to expand from 29 to 35 countries with IFAD staff by end-2011

• Outposted CPMs to be posted in 12 of the 35 countries by end 2011; up from 4 in 2008– Of 90 countries in which IFAD operates

• CPOs to have longer term IFAD contracts

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Major contemporary agriculture issues

• Food, fuel, fertilizer price volatility and economic crisis increasing poverty

• Government and donor responses often counter-productive in short term and long term

• Past inadequacy of IFI agriculture project models to fragile states and conflict-prone countries

• Agriculture services, processing, input supply and farming itself are increasingly private; IFAD instruments should be modernized to deal with the private sector

• Climate change and environmental degradation increasingly serious and donor response inadequate

• Changing demands of middle income countries regarding agricultural assistance (South-South cooperation)

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Issue #1 – Rural poverty and hunger is stable or increasing in much of sub-Saharan Africa and some other low income countries in Latin America and Asia

• About 1 billion hungry people in the World, up from 850 million last year

• 2 billion live on less than US$2 per day

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Why are food prices rising; and why greater volatility?

• Due to rapidly rising global and local demand for food, at about 2% per annum and rising (Chatham House)– In turn caused by income growth, population growth,

dietary changes, bio-fuels

• Combined with a slowing of the increase in supply

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Issue #2 – Government responses often counter-productive

• Supply response to higher prices strongest in industrial countries, China and Brazil

• Harmful government policy responses in many developing countries– Export bans exacerbate the problem– Farm price controls and consumer subsidies exacerbate the

problem– Bio-fuel subsidies and import barriers exacerbate– Lack of investment in agriculture; too much focus on food aid

• Helpful policies include:– Reducing barriers to food imports– Eliminating price controls– Expanding investment in agriculture– Social protection for the most vulnerable

Issue #3 - How to make IFI projects in fragile states more effective

• Build on UN and bilateral donor managed projects in fragile states

• Focus more on institution building in fragile states, and less on targeting

• Introduce longer term approach, with 10-15 year partnerships reflected in 2 to 3 consecutive projects

• Don’t shy away from involvement in fragile states with poor governments– Work through civil society, NGOs, private sector

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Issue #4 – IFAD needs to modernize its instruments to deal with the private sector

VALUE CHAIN APPROACH

Research

Extension service

Input industry

ProducersFood

process industry

Food retail

industryConsumers

The market and the private sector are increasingly driving agriculture. IFAD works to adapt this evolving reality to the benefit of smallholder farmersNew private sector strategy: December 2011

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Issue #5 – Rural environmental issues and climate change have larger impact on small farmers than previously thought

• Deforestation, groundwater depletion, salinization of irrigation areas, destruction of rural biodiversity, soil loss (see UNEP Atlas of Africa)

• Agriculture contributes 13% of green house gases

• Agriculture both a cause and victim of environment problems

• Rural environment problems to worsen due to climate change (IPCC)

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SOLUTIONS: Countries to better incorporate adaptation to climate change and environmental concerns in investments and policies

• Drought resistant cultivars• Crop diversification• Alternative tillage and erosion control• Research for environmental services• Weather insurance

• Drought contingency and early warning systems• Water management, including flood response

Summary: IFAD has met and continues to meet operational commitments made in IFAD 8 consultation

• Loan and grant programme expanding

• Cofinancing and partnerships strengthened

• IFAD policy development and operational procedures

• Improved policy advice and knowledge sharing

• Measurement of results and delivery of results

• New strategic thrusts incorporated in our work

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