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Platform Speaking

Seven interviews about rural development policy in poor countries: thechallenge of confronting contentious issues, changing entrenched habits and implementing new strategies and procedures to improve the effectiveness of aid.

Content

record in rural development in LDCs and forward to ways of strengthening local authorities there.

Platform Speaking, Part one A race against time


and partner-country behaviour.

We have been part of the problem Towards a more flexible approach Platform Speaking, Part two
and opportunities for the Platform.

Christoph Kohlmeyer of Germanys BMZ spells out the rationale for coherent policy and the work of the Global Donor Platform.

The World Banks Kevin Cleaver evokes the changes needed in donor

Michael Wales of the FAO discusses new aid modalities and agriculture

Opportunities in decentralisation Listen to the people in the field The risk of donor disconnect Seeing donors from both sides

The European Commission's Philip Mikos looks back at the EU's track Willi Graf of Switzerlands SDC explains why institution-building and Jim Harvey of Britain's DFID debates issues ranging from the Doha Agenda to the retail end of rural development. receiving and funding ends of donor activities.

Mushtaq Ahmed of Canadas CIDA offers insights gathered from both the

long-term investment in projects and local staff members is so important.

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*Platform Speaking is a regular feature of our the Global Donor Platforms website. Timothy Nater, communications adviser to the Platform, conducted and edited the seven interviews in this printed series. Visit www.donorplatform.org for news and candid views on ways to tackle rural development, a central challenge of our time.

Platform Speaking* offers you exclusive interviews with people driving rural reform in the developing world. Although their views do not necessarily represent the policy of the Global Donor Platform for Rural Development (the Platform) or of their respective organisations, they address our core concerns. These include a new donor determination to ensure that host governments and ministries effectively take charge of rural development and, in partnership with them, to make measurable progress towards the alleviation of poverty. And perhaps most important of all, the Platforms 26 bilateral and multilateral member-organisations are committed to coordinating, wherever possible, their separate activities more effectively. This should result in less frustration and duplication of effort, saved time and money, and more productive investment in rural areas. As the following interviews show, the working habits and institutional flag-planting of many decades wont change overnight. But the tide is turning. Climate change, water shortages, soil erosion and the destruction of forests, fisheries and biodiversity are not only afflicting farmers and rural dwellers, they are now also at the forefront of global preoccupations. Womens rights, food security, good roads, clean water, access to education, to healthcare, to social services and markets all concern rural development. Lessons have been learned and new approaches are being developed. Governance is improving, political will is gathering and funds are building. Given the depth and breadth of opinion and experience in the Platforms membership, we have made shared learning one of our central tenets. To quote Platform Co-Chairman Dr. Christoph Kohlmeyer (see next page), the Platforms work on the new modalities of aid can provide us with a shared common empirical and analytical basis to devise the right approaches and then talk to governments as a united group. The following pages are part of this sharing. Enjoy the reading!

Introduction

Your Platform Secretariat

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Nater: Is the world finally starting to get the rural agenda right? Kohlmeyer: Most of our rural policies are anything but right. Theyre just not working, whether for our small farmers or for the rural populations of developing countries, where about 70% of all the worlds poor still live. Im a great believer in coherence. There is no coherence in agricultural policy today, either in rich or in poor countries.

Or in trade, by the look of things. Farm subsidies in rich countries have two negative consequences for trade. The first is that rich countries have to keep trade barriers against food imports high in order to maintain their own high internal market prices.

Christoph Kohlmeyer, Ph.D., says agricultural policies must make sense. His speeches pointing out the many ways they dont are met sometimes with a barrage of eggs and tomatoes from angry farmers in his native Germany. But 25 years spent in rural development, from grass-roots work in Africa and Asia to ministerial headquarters at home, have earned the agricultural economist a reputation for imperturbable diplomacy on behalf of donor cooperation. Dr. Kohlmeyer spoke with Timothy Nater in Bonn.

A RACE AGAINST TIME


Christoph Kohlmeyer, Ph.D.

What really counts is aid effectiveness

Dr. Christoph Kohlmeyer Co-Chair, Global Donor Platform for Rural Development Head of Division, Rural Development and Food Security, Federal Ministry for Economic Cooperation and Development (BMZ), Bonn

OUR OWN AFFAIRS, ADMINISTERING OUR OWN SEPARATE

Whats to be done? Heres where the Global Donor Platform comes in. INPUTS AND DEVISING EVER Our work on the new modalities of aid can provide us with a shared, common empirical and analytical MORE ONEROUS REPORbasis to devise the right approaches and then talk to TING REQUIREMENTS. governments as a united group and say, Heres how we propose to do it. This is essentially a policy dialogue,

What else has gone wrong in rural development? Donors persist in their flag-planting attitudes. Weve been particularly guilty of this, producing a patchwork of small rural development islands, with no broader impact. The net result was fruitless competition and government confusion in partner countries. Of course, we cant ignore reality: each donor agency has to go back to their respective funding sources or legislators every year to convince them of the value and usefulness of what they're doing. For example, Germanys parliamentary budget committees want to see projects clearly marked Made in Germany, and that's understandable, given the need to show taxpayers how their money is being spent. But we can still meet that need even when, for instance, Germany, France and the WERE OFTEN TOO World Bank negotiate as one donor, as a single HEAVILY WRAPPED UP IN team, with partner-countries.

But my biggest objection is that subsidies are also spent on exporting food on the world market. That gives our produce a 20% price advantage. Many developing countries cant compete. They find it cheaper to buy our farm products on world markets than to invest in producing the same goods themselves. Their farmers are disconnected from their own domestic markets. Farmers dont farm, roads arent built, rural areas remain impoverished, the WEVE GOT TO vicious cycle continues. For the last 20 years or so, deveGET A WHOLE LOT loping-country governments have preferred to tax agriculture rather than invest in it, and we donors have bowed BETTER AT OUR BUSIto their priorities.

TO WIN THIS RACE But spending on food aid is increasing. Its truly perverse: global donors today are handing out more AGAINST TIME. money on food aid and hunger relief than on promoting agri culture itself. The impact on local farm prices is ruinous. And this state of affairs will worsen until we start putting money back into agriculture again. If we go on with business as usual, well never reach Millennium Development Goal 1, namely halving the number of hungry people in the world by 2015. We have to get a whole lot better at our business if we still want to win this race against time.

NESS IF WE STILL WANT

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and the Platform is perfectly suited to do it, because we donors have real impact when we put this message out as a united group.

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Whats the Platform contributing? To start with, more advocacy on behalf of our mission. It's precisely the rural poor who are least able to draw attention to themselves and have almost no-one to speak for them. This is a role the Platform must play. Our joint paper, The role of agriculture and rural development in achieving the Millennium Development Goals has already had some impact, and we will follow up with lots more. Twenty-six donors speaking out in unison is hugely more significant than each donor doing it separately. As we learn to communicate our message more professionally, our success in getting political decision makers to rethink things will only grow. Our group has natural authority. We must bring that to bear, also by adding our voice more forcefully to the debate on agricultural policy coherence that I spoke earlier about. Even then, as the doors to more effective rural and agricultural development start to open again, we wont have much time to start demonstrating success and concrete results. First of all, we must devise common strategies and consensus on methods

As a group, then, how to get from the what to the how? We donors have all got our own management structures and cultures, each with our different rules and demands. The result is that were often too heavily wrapped up in our own affairs, administering our own separate inputs and devising ever more onerous reporting requirements, instead of agreeing on the most efficient ways of working together in support of our partner-countries. The solution is so simple and so obvious that we tend to overlook it. What counts are the principles of any good marriage: transparency and dialogue. And this is where the Global Donor Platform is making daily progress. Were building mutual trust thats a basic condition for continually improving ways of working together. Im delighted to see that were all starting to agree that what really counts is aid effectiveness. And the Paris Declaration on Aid Effectiveness of March, 2005, provides us with backing at the highest level for our pilot-project work on donor harmonisation and alignment in rural development. The Global Donor Platform is well-positioned to make important contributions here. The Global Donor Platform must feed lessons learned back into members operations.

The rural poor have almost no-one to speak for them

The Platforms third pillar is donor harmonisation and alignment in developing countries. When will we see results here? Actively learning from Global Donor Platforms pilot projects in Nicaragua, Burkina Faso, Tanzania and Cambodia means feeding the lessons learned back into our memberships operations. My vision is that, in these four countries and in two years time, we donors will already be acting as a single development partner, wholeheartedly supporting our partner countries strategies. But this also means seizing the opportunities emerging from the new aid architecture and putting them to efficient use. Our joint research projects on the rural focus of poverty-reduction strategies and sector-wide approaches to rural development will sharpen our understanding of the most effective and efficient levers to apply to accelerate our advance in the battle against poverty and hunger in rural areas.

Where does shared learning come in? BRING THAT TO Take agricultural extension. We argued throughout the 1990s amongst ourselves for more than ten years about the right BEAR. approach, thus depriving our partner countries of their right to decide for themselves while at the same time forcing through a bunch of competing approaches that rarely lasted very long because these countries had no ownership of them. That was a lost decade for agricultural advisory systems, and, in many countries today, theres nothing left of them anymore. For me, the work of the Neuchtel Initiative is a great example of how to do things better: Based on a set of principles on transparency and client-orientation for country-by-country adaptation, this group came out with a modern, cutting-edge, participatory approach to rural extension. Theres growing consensus around these things now. Rural development is chock-full of difficult issues and policies that can only show progress if we start elaborating principles, strategies and methods together and in cooperation with relevant parties in developing countries. This is how we in the Global Donor Platform intend to go about formulating our Joint Donor Rural Concept. and entry points, as well as agreement on which policies work and which dont. Second, we have to learn how to cooperate better, to trust each other and to utilise the Platforms comparative advantage in a targeted way.

AUTHORITY.

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Nater: For you, what are the main trends in agriculture and rural development? Cleaver: In the industrialised countries, theres a dramatic change going on in the supply chain. Agricultural production is being increasingly dictated by what the con sumers want in terms of quality, safety and high production standards. With that, you see the supermarkets, food processors, importers and exporters going back directly to

WE HAVE BEEN PART OF THE PROBLEM


Kevin Cleaver, Ph.D.

The World Bank calls its latest rural development strategy holistic: it seeks to reverse the decline in rural development funding by emphasising demand-driven projects across a far broader spectrum than before. Besides farming, it aims to improve healthcare and education, give a stronger voice to the rural poor, build roads and promote non-food enterprises and micro-finance. The strategys chief driver is Kevin Cleaver, Ph.D., a U.S. economist, who became Director for Agriculture and Rural Development in March, 2002. He oversees 300 professional staff and a total portfolio of outstanding loans and credits of about $15 billion to rural development and agriculture throughout the developing world. Mr. Cleaver spoke with Timothy Nater about the changes needed in donor and partner-country behaviour.

Our first objective is to reverse the


decline in assistance

Director of Agriculture and Rural Development, World Bank, Washington D.C.

What had gone wrong? We started examining the 60% of projects that we got right to see which ingredients were missing in the ones that went bad. Along with other donor agencies engaged in the same self-examination, we discovered that we had been much too focused on government services. Agriculture is a private business, and farmers, however small, are private businessmen. Input suppliers and processors, too, are private. We in the donor community, perhaps because were all bureaucrats ourselves, had treated agriculture as if it were an affair of governments. We were setting up our programmes as public-sector affairs. Of course, its not about taking government out of agriculture, but about right-sizing the role of government. Government programmes cant just serve government bureaucrats with nice cars, computers and airconditioning. Their purpose is to serve farmers and farming.

So, what can we do for small farmers in poor countries? Weve been presiding over a decline in foreign assistance to agriculture and rural development. From a high of $3.5 billion in 1995, World Bank lending in this sector had fallen to $800 million by 2002. Looking at other donors, we in the World Bank discovered that they, too, had reduced assistance to agriculture and rural development. So our first objective is to reverse the decline in assistance, simply out of recognition that most of the worlds poor live in rural areas and are directly or indirectly dependent on agriculture. We also decided we had to improve the quality of what we were doing. One reason for the decline in assistance was that many of the projects for agriculture and rural development were unsuccessful. The sector that Im director of in the World Bank had become the posterchild for poorquality projects. We also saw that other donors who also published self-evaluations had the same sort of failure rate. The rational consequence for donor agencies was to ask themselves, Why should we send good money after bad?. Their answer was to redirect aid elsewhere, and simply get out of the rural development business.

the farms for contract-farming deals. This means an industrialisation of farming, the growth of larger and larger properties, even in emerging economies, like Brazil. Along with this, innovation is continuing apace. The Green Revolution is not over in fact, its accelerating, with the biggest push coming out of the USA, Canada, Europe and Japan. With biotech, were just seeing the tip of the iceberg, greater production per hectare, qualitative change and new products. On the consumer front, I detect increasing reluctance among taxpayers to go on paying for large subsidies for their farmers. Last year, $90 billion in subsidies went to US farmers alone. My prediction is that, in the near future, well see an end to heavy subsidisation, and that agriculture will compete more and more on the basis of productivity, efficiency, technology and the ability to please the consumer, and less on the extent of government largesse. Of course, these trends are least visible in poor countries. Small farmers there are being left behind by the supply-chain developments and the technology revolution.

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But were the new strategies coordinated? We started in 2003 presenting the World Banks new agricultural and rural development strategy in various forums, mainly to my counterparts, the directors of agriculture and rural development in other donor organisations. And what struck us was the sheer number of major players in this field. There were some 30 donor agencies doing the same thing, not just the bilateral bodies but also the international financial institutions the African Development Bank, the Asian Development Bank, the IFAD, the European Commission, the Canadians, the Japanese not to speak of major NGOs like EACH OF US, THE CARE and Oxfam. WORLD BANK INCLUWhat I and my colleagues realised is that we had been part of the problem. Kenya in the 1980s was a good examDED, INTRODUCED OUR OWN ple. Each donor would come in with its own strategy for SEPARATE APPROACH, AND agricultural extension, its own agricultural credit system, THE NET RESULT WAS HAVOC its own view on what local government policy should be on subsidies and taxes. The French, the British, the AmeAND CONFUSION AND ricans, all had different views, based on their different culWASTE. tures and historical experiences. Each of us, the World Bank included, introduced our own separate approach, and the net result was havoc and confusion and waste. Most of the donor projects couldnt be sustained after the donors left. Many recipient countries wound up hopping from one donor to the next, becoming cemeteries for failed projects.

The other thing we decided to do differently was to stop ignoring or criticising the agricultural revolution in rich countries and start asking how we, as donors, could adapt some of its technology and supply-chain management techniques to benefit poor farmers. This, and the drive to reinvigorate public investment in rural infrastructure and improve land administration in many developing countries, was the main focus of the World Banks new agriculture and rural development strategy in 2003. Other donor agencies soon followed suit with new strategies of their own.

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Are donors becoming part of the solution now? My counterparts and I got together and said, given that were inventing new agricultural and rural development strategies, lets admit our past errors and do something better. We needed a new mechanism, an alliance not only to coordinate our overall approach to the new strategies we had started to work on, but also to make sure that, this time, our desire to coordinate at the top would find expression at the country level. This led to the creation of the Global Donor Platform. And thats how we identified our four pilot countries, Nicaragua, Burkina Faso, Tanzania and Cambodia, where we could act immediately and make sure our colleagues and subordinates who work there on the ground actually implement a coordinated work programme, jointly finance projects and encourage government programmes that are sustainable after the donors have left.

Who are the worst offenders? The best-behaved donors are the smallest ones, like the Swiss, the Finns or the Danes. The Finnida representative in Nicaragua was disarmingly honest about why: she told me that the smaller donor countries like hers didnt have much of a history in Nicaragua. They worked together with other donors because they had nothing to lose, whereas the Germans and Americans, for example, had been there a long time and had big projects on the ground, meaning they had a lot to lose by ceding sovereignty and sharing collective control of projects with other donors. Its a problem of size, too. The Finnida representative benefits back at headquarters in Helsinki if she can announce collaboration with the World Bank, whereas the Bank representatives manager back home is likely to ask, Who the hell is Finnida?. It struck me that the need is very great and is only going to be met when senior managers go to these places and knock heads together. And thats what I did. I admitted to the Nicaraguans that the donor agencies were part of the problem. I said to them, Ladies and gentlemen, we have to behave differently. Otherwise the evaluators of our new strategy will say the same things about us donors that we are saying about our fathers, that

We need to rally our people at the country level around the idea that theyre all working for the same client.

Why is coordination so difficult? We, the managers of rural development and agriculture in the donor agencies, need to rally our people at the country level around the idea that theyre all working for the same client, the partner-country, and not just for the World Bank, or the GTZ or DFID, for example. And, in so doing, we all need to work together as a team. In the end, were all going to be better off, because our joint programmes will be more sustainable after initial financing ends. How to do that? Im now of the opinion that we, the donor-agency directors of rural development and agriculture, will have to get involved in countries personally and directly. What I saw in Nicaragua in February this year has convinced me of that. I went there at the behest of the Global Donor Platform, so I was wearing a multidonor hat, not the World Bank hat. Now, the Platform picked Nicaragua because its a very poor country and because, or so we were told, it had relatively good donor cooperation. This looked like low-hanging fruit to us, something we could set up as a model for good donor collaboration. The truth of the matter is, the donor representatives in Nicaragua do talk to each other very nicely and have lots of personal contacts. But in terms of action, its business as usual. Everybody has their own little project the Germans, USAID, the World Bank, and so on. Theyre not acting in a coordinated, collaborative manner, but very much as donor agencies did in the past. Im very concerned about that.

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weve botched it because we were unable to see past our own narrow institutional and personal needs and unable to work together as a team, assisting our client.

How successful have country ownership and direct budget support been so far? If you want ownership by both the government and the civil society it represents, then the old donor-driven projects have to become a thing of the past. We have to ask the government, with maximum participation of the private sector and NGOs and the farmers themselves, to come up with their own programme. In an ideal world, all the donors would have to do then is to send a cheque to fund their programme, hence the notion of direct budget support. But there are problems with this approach.

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How about the Global Donor Platforms plans for a Code of Conduct for rural development? We need some broad guidelines with relevance and application for all countries, but were just at the beginning. Yes, there are some universal principles we can put down on paper,

Whats dangerous about sending a cheque? The first danger is that the cheque gets spent on something else, like a new airport, military hardware or a presidential palace. Or maybe it just gets stolen. I have seen this happen. Cheque-writing is a hazardous practice.My view, quite controversial here in the World Bank, is that cheque-writing in support of locally-owned poverty-reduction strategies works best in middle-income countries that are true democracies with real transparency and good governance Estonia or Bulgaria, for example, where Ive seen it work very well. The cheque-writing approach works least well, or not at all, in the least-developed countries that, ironically, most need the money. The institutions and structures are simply lacking. In Nicaragua, too, the safeguards need more work, along with their whole new sector-wide process. Its a very ambitious, mainly public-sector driven approach called PRORURAL and I have some serious concerns with the plan as it was presented to me last January. However, on the positive side, the Nicaraguan government has recognised that they need their own comprehensive, coherent productive rural sector programme, and not just a hodgepodge of whatever the donors want to finance. Together with many of the 22 donor agencies on the ground, theyve begun to take initial steps towards significant changes in their productive rural strategies, and a more coherent sectoral expenditure programme. That makes them an ally of the Global Donor Platform. But achieving these ambitious goals needs concerted, demonstrated commitment by both the Nicaraguan government and donors to change the way they do business, and a more central role for the private sector.

All major donors will eventually join the Platform.

SUPPORT FOR LOCALLYHow much more will it cost to do rural development right? OWNED POVERTY-REDUCTION The total amount of all worldwide aid spending in 2004, STRATEGIES WORKS BEST IN from all sources, amounted to a little more than $75 MIDDLE-INCOME COUNTRIES THAT billion. A good chunk of this goes to rural development. ARE TRUE DEMOCRACIES WITH But we could make much, much better use of this money. Better coordination between donors, a reduction REAL TRANSPARENCY AND of waste and more transparency in the ways that we and GOOD GOVERNANCE. our partner-countries operate would all have a big pay-off, while staying within the $75 billion ceiling. I know that many, including Jeffrey Sachs and the UN Hunger Task Force, on which I have served, are calling for vastly expanded aid. I dont think it is very wise, or even very useful, to vastly expand our aid amounts. I think we have to show efficiency gains first. We have to show a reduction in waste and an increased project success rate. We must first make sure these various aid budgets are being used well and that there is hard evidence of that, in independent evaluations. Only then should we ask for more money. 11

not just for our staff and colleagues but also for partner-countries, our clients. But we have to walk a fine line here. Many colleagues complain that principles are too abstract, that they cant cover the full variety of existing conditions. Critics will ask, how can you develop guidelines or a code of conduct with relevance for countries as diverse as, say, Nicaragua and Russia? General guidelines will need a great deal of adaptation to specific situations on the ground. And guidelines must make apparent to field-based donor staff, especially those that dont yet have wide experience in different countries, that a good, agriculture-sector programme is not just for the Ministry of Agriculture.

What is the future of the Global Donor Platform? The Global Donor Platform will eventually include all major donors. Together, our knowledge and experience base is huge, and we can now tap into that, as opposed to just into our own institutional bases. The first fruit of this is the Platforms joint donor narrative paper The role of agriculture and rural development in achieving the Millennium Development Goals. We did this together. Its a very broad framework, not a blueprint for getting things done but a common global vision of how agriculture and rural development play into the livelihoods of people, what the broad objectives are and how they could be met. That has given me confidence that we can now take the next step, which is to look at the modalities, at best practices, at the how-to, and even agree on how to adapt and apply these things at the local level, on a case-by-case basis.

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Nater: You have said that focusing on sector-wide approaches is pass. What do you mean? Wales: If you go for direct budget support rather than a SWAp, then the harmonisation issues all the individual conditions demanded by donors in basket-funding largely

Michael Wales oversees strategy and planning at the Investment Centre, a division of FAOs Technical Cooperation Department that employs some 80 agronomists, economists, financial analysts, and experts in irrigation and drainage, rural sociology, rural finance, the environment, forestry, fisheries and livestock. The Investment Centre helps governments and financing institutions design and put together technically and institutionally viable agricultural programmes worth about US$3 billion a year. Wales, a sharpspoken Englishman, studied economics and geography at the University of Leeds. He lived mainly in Africa for 17 years and has led over 70 missions to developing countries on behalf of the Investment Centre and financing institutions. He discussed the new aid modalities and agriculture and opportunities for the Global Donor Platform with Timothy Nater in Rome.

TOWARDS A MORE FLEXIBLE APPROACH


Michael Wales, Ph.D.

Direct budget support solves some old


Co-Chair, Global Donor Platform for Rural Development Principal Adviser, Investment Centre, Food & Agriculture Organisation of the United Nations (FAO)

problems, but raises new ones

disappear. In general, financing institutions and donors find it easier to agree on broadly-defined development milestones than to try and harmonise detailed procedures on, say, tendering. For example, we can all agree that a government needs to show progress on introducing framework legislation for private investment, but we do not necessarily have to stipulate the details of that policy. With budget support, a donor can say, My dollar going to the Ministry of Finance of a given country is the same as anyone elses dollar. If the recipient government then makes progress as agreed, you can say, Alright, heres another $100 million towards your budget. Of course, this means you must rely on national systems for procurement, management, accounting and so forth. And here, things can slip if you discover that some of the money has gone on something you dont agree with, or dont reflect national development priorities.

But the rural sector still needs a comprehensive approach, doesnt it? Yes, every country requires its own, separate comprehensive and THINGS CAN SLIP cohesive sectoral approaches, but rather than the donors stipulaIF YOU DISCOVER THAT ting what sector and what programme, the responsibility for deciding is shifted to the national level. This is fine, and all in line with SOME OF THE MONEY HAS more country ownership, and national responsibility and accounGONE ON SOMETHING YOU tability for whats being done. Is project-based assistance a thing of the past? The new aid modalities are partly supply-driven. If we all acknowledge that theres broad support for increased development assistance, both through reducing debt repayments and increasing aid flows, then we should also see that itll be difficult to do this through the project mode. You cant design blue-prints and projects that can absorb such quantities of money. If youre going to effect such a huge transfer of resources, it has to be done with money, not projects. But we must always remember the major problem of limited absorptive capacity, especially in the agriculture sector, which often leaves donors with huge undisbursed resources. But isnt harmonisation and alignment about donors getting behind a countrys strategy? Whos to say that a harmonised approach is always necessarily correct? To me, it sounds like putting all your eggs into one basket, and hoping its the right one. Whats your interpretation of donor harmonisation and alignment terminology? In the 2003 Rome Declaration, donors agreed to harmonise policies, procedures and practices, to jointly undertake analytic work, prepare common country assistance strategies and results frameworks, and jointly review implementation. My understanding of the subsequent 2005 Paris Declaration on aid effectiveness is that, whereas harmonisation is about procedures and processes, alignment is about telling a government, Well, we basically agree with your agricultural development programme and we support it, in principle. The two need to go together.

DONT AGREE WITH.

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Like what? For example, for the best part of 15 years, the donors placed their trust in the Training and Visit, or T&V, extension system, only to HAS EVOLVED INTO find in the end that it had been top-down, expensive, unsusEDUCATION , WHICH IS tainable and somewhat less than effective. T&V was pioneered in VERY DIFFERENT the Indian sub-continent, mainly for irrigated cropping, where FROM THE OLD someone can say, OK, on 15th of May were going to turn the T & V APPROACH . water on, so plant the next day. Well turn it off again on 30th of June, so this is when you should have finished. This worked in Asia, but trying to bring it to Africa, with its rain-fed conditions, was, in retrospect, a mistake. T&V extension relied on a set of simple, repetitive instructions to farmers, fed through an almost militaristic hierarchy: Heres the seeds, heres the fertiliser, plant on the 15th of May. Listen! Do it! In Africa, of course, you often dont get the seeds or the fertiliser, or it just doesnt rain by the 15th of May. Also, T&V wasnt linked to markets. So that way of doing things has become largely discredited. Of course, donors do need to align their activities to country strategies and must make sure that together, their programmes are harmonised, but its important to recognise that there are risks. Some things that donors have pinned their faith on in the past have turned out to be a disaster.

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So extension, too, is about shifting the burden of responsibility? Everything about the new aid modalities in rural development is aimed at national ownership, responsibility and accountability to the ultimate client, the farmer. Its not about relying on what some foreign expert decided 15 years ago was the best way of

What is effective extension, then? Extension has evolved into education, which is very different from the old T&V approach. The message is more nuanced. You say to the farmer, Look, there is fertiliser, and there are hybrid seeds, and this is why theyre good. But there are these risks and problems, and when you plant should depend on the moisture levels in the soil, not the calendar. If youre in an area with highly unpredictable rainfall, you dont set particular dates for action by farmers, you say, Your best strategy is to spread your risks: plant some now, plant the rest later, and maybe fertilise only the first planting, otherwise you might lose all your money if there isnt enough rain. You also broaden the training: for instance, teaching literacy to farmers means they can then use printed materials. Or educating them about HIV and AIDS will show them not just the impact on health but on their farm output, as well. And you must help them get organised and linked up to markets. An example are the farmers field schools, or FFS, that FAO helped launch together with integrated pest management in rice-producing areas of Indonesia. That was then brought to Kenya, where its also worked well, though under different conditions. Youre empowering farmers to take their own decisions, not telling them to do one thing.

What does that signify for agriculture? To start with, a big increase in ministerial responsibility and accountability. Rather than central governRATHER THAN ment in a remote capital city trying to administer CENTRAL GOVERNMENT IN a project, you have local people from the Ministry of Agriculture delivering services and A REMOTE CAPITAL CITY being accountable, face-to-face with the farTRYING TO ADMINISTER A PROmers and the farmers organisations who are JECT, YOU HAVE LOCAL PEOPLE meant to benefit from the programme. They FROM THE MINISTRY OF have to explain and justify why theyve done or not done certain things, and deal with AGRICULTURE questions like, Why havent the extension FACE-TO-FACE WITH THE people shown up? How come I wasnt warned FARMERS. about the pest thats destroying my crop? How can I sell more of my produce? All of this helps make accountability an effective tool of aid, and also help donors and financing institutions feel more comfortable about devolving responsibility to governments.

If donors are offering governments dollars instead of blueprints, whats happened to justify this kind of trust? Its largely due to empowerment and the spread of democracy. The sort of thing with which international financing institutions are now prepared to entrust governments would have been impossible with the old generation of dictatorial and military regimes. Governments today should be more responsive to the real needs of rural people, farmers in particular. They know about governance issues. They know theyre supposed to have better systems of management, cut down on corruption and show they are more accountable. Were also seeing efforts to decentralise government administration, passing responsibility down to the lowest-possible levels the principle of subsidiarity. And underpinning all these developments, strong local capacities have emerged. The situation today is not like it was 20 years ago. Governments have recently begun investing in education and thats been paying off.

delivering knowledge to farmers, but about adapting to each circumstance. Direct budget support giving money rather than imposing a project and a blueprint, which are almost impossible to change or adapt in mid-stream allows a much more flexible approach.

The downside to budget support can be a sudden end to funding

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Do the new aid modalities mean less work than before for donors in the field? Not less work, different work. The rules are changing. One new challenge for donors is how to package technical support. More than ever, developing countries need the transfer of specific skills. Whereas before technical support was wrapped into each project, now it must be delivered separately from the budget-support dollars. Another challenge is the ability of our Ministry of Agriculture partners to obtain funds. We as development institutions should now focus on increasing their capacity to do so. In the past, they had the local representative of, say, the World Bank or DFID go and lobby the Ministry of Finance on their behalf to claim their share of the budget to support an agriculture project. Now, they have to do that themselves, in competition with the Ministries of Health, Education, Public Works and others. Our experience is that the Ministries of Agriculture are often the weakest at this game. They do need our support. Why? Ministries of Agriculture have the most difficult stories to tell, and the most complex types of investment to make. They dont do tangible, measurable things like build roads or schools or health centres. Instead, they perform a whole complex of economic, social and institutional tasks that are difficult to account for and deliver. Unless they are better able to account for the way they use their resources, they will face scepticism and budget cuts by the Ministry of Finance. Hence the vital importance of good public expenditure management. Under the new aid modalities, there is no guarantee that agriculture will even get as much money as it is getting now. This is a major concern.

How do the governments benefit? Among other things, budget support is supposed to improve the predictability of development assistance. Before, you had lots of projects starting, some finishing, and uncertainty about when and where the next projects would be approved. With budget support, the pledges are longer-term: for example, you can say, Over the next five years, were going to put $200 million into your budget. Governments can count on that and plan a solid programme of work on the assumption of a guaranteed budget with a bigger total amount of resources available for public investment. The downside for governments, of course, is that if they prove less accountable, less democratic or slower to make progress than expected, donors can switch the tap off.

Good management of public spending leads to bigger MoA budgets

Development spending to encourage business? The fact of the matter is, the new aid modalities are first and foremost about how to make public expenditure more effective as a way of increasing private investment. Even if we double or triple ODA for Africa, well only get real development if were able to trigger private investment, whether its foreign direct investment or domestic.

Are you saying that the new aid modalities are bad news for the rural sector? No, but the implications of the new aid modalities for agriculture are huge. They will highlight the weaknesses of what we have always known to be a weak sector. Typically, the best and brightest civil servants havent gone out to rough it in the bush and talk to farmers, but rather into health or engineering, where theres more social prestige and money to construct hospitals or dams. So we have to invest in people and training, and incentives have to be MINISTRIES OF created. We need to help provide an environment in which AGRICULTURE HAVE people can set up companies that deliver agricultural knowledge to farmers. THE MOST DIFFICULT How could the donors help? Well, if the donors made some capacity-building resources available, we could put that into an experienced Western consulting company to work out a business plan with African entrepreneurs who could form a company to train providers of home-made extension services. That would be exciting. If you could do that, you could really scale it up, and at a fraction of the cost it takes to hire and deploy consultants from Western countries, even if theyre volunteers.

How, for example? MOST COMPLEX TYPES OF Recently we had a consortium of British consultants visit the INVESTMENT TO FAO Investment Centre to enquire about doing more business with us in Africa. They said they were having great difficulties MAKE. finding ex-colonial, shorts-and-white-socks British experts to do the work. These men have either retired or theyve made their money and arent interested. There isnt a generation of young people doing agricultural extension any more. Instead, the young ones are out working with NGOs and needy children, or doing tsunami relief. So the consulting companies are having to develop that cadre of people at the national level. Instead of looking for Brits to work in, say, Uganda, theyre looking for the Kampala taxi-driver with a nose for business and a decent education. Youre leading the work on a Global Donor Platform publication. The working title is The New Aid Modalities and their Implications for Rural Development. It reflects the need to look at a whole range of new ways of financing development in the agricultural sector, now that were moving away from projects. They include budget support, partial budget support, conditional budget support, sector-wide

STORIES TO TELL, AND THE

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How will this help the Platform? The Global Donor Platform can only hope to enter the market for knowledge-sharing and have development professionals pay attention if we have a high-quality product, done by the top experts. Well issue a number of interim summaries of the work in progress no more than two pages each, summing up where we stand, our conclusions and where we go next. In parallel, well have a webpage for comments. The Platforms publications should be a foundation for building our position and making an impact. The Platform has to come across with a nuanced message that strikes home with senior decision-makers in the financing institutions, in governments and in legislatures, where parliamentary com mittees are scrutinising ever more closely the coherence of development spending. As more THE GLOBAL money is being made available for developDONOR PLATFORM CAN ment, we really need to make the case for ONLY HOPE TO ENTER THE agriculture. The time is right.

approaches and separate packages of technical assistance, which, as I said earlier, are needed to plug gaps in the new development programmes. Weve given the main responsibility for delivering the study to the Institute of Development Studies at the University of Sussex in the UK. Theyll be supported logistically by FAO, and intellectually with peer review by professionals at the World Bank, IFAD, BMZ, DFID and FAO, among others, and by seasoned rural development consultants.

SHARING AND HAVE DEVELOPMENT PROFESSIONALS PAY ATTENTION IF

TOP EXPERTS.

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Platform advocacy: Aim at top decision-makers

MARKET FOR KNOWLEDGEWE HAVE A HIGH-QUALITY PRODUCT, DONE BY THE

Content

Platform Speaking, Part two

Opportunities in decentralisation Listen to the people in the field


strengthening local authorities there.

The European Commission's Philip Mikos looks back at the EU's track record in rural development in LDCs and forward to ways of

The risk of donor disconnect

Willi Graf of Switzerlands SDC explains why institution-building and

long-term investment in projects and local staff members is so important.

Seeing donors from both sides

Jim Harvey of Britain's DFID debates issues ranging from the Doha Agenda to the retail end of rural development. receiving and funding ends of donor activities.

Mushtaq Ahmed of Canadas CIDA offers insights gathered from both the

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Italian agro-economist Philip Mikos started his European Commission career 20 years ago as a development worker in Ethiopia, followed by stints in Burundi and Uganda. Since 1995, despite frequent trips to the field, he has settled at Commission headquarters in Brussels, where he zips to work on a bright red Vespa motor-scooter. Far more cumbersome is his job steering a clear course through the Commission bureaucracy, where he oversees environment, food security and rural development in DG DEV, the DirectorateGeneral for Development. DG DEV formulates the Commissions development policy, though spending some E7 billion a year, on 150 countries and territories is handled by EuropeAid, a separate department of the Commission. Along with many senior rural development experts at donor headquarters elsewhere, Philip Mikos must grapple with the changing paradigms of world trade and economic cooperation, evolving governance structures in developing countries, the knotty issues of donor harmonisation and alignment and new ways to empower rural development workers on the ground. He spoke with Timothy Nater in Brussels.

OPPORTUNITIES IN DECENTRALISATION
Philip Mikos

Draftingaguidelines was pretty good

example of donor harmonisation

Head of the Environment and Rural Development Unit, DG DEV, European Commission, Brussels

Drafting joint EU guidelines must be a laborious business. CUSTOMARY No, things went rather smoothly. The rural development officials of EU Member States got together in January, 2002, with LAND TENURE counterparts in the Commission. The idea was to proceed in SYSTEMS, BASED ON parallel with the World Banks own Land Policies for Growth TRADITIONAL AUTHORITIES and Poverty Reduction report and develop our own specific policy and define a common understanding on how EU AT LOCAL LEVEL, CAN donors and other multilateral and bilateral donors would PROVIDE SECURITY TO approach partner-governments in developing countries in a SMALL FARMERS. coordinated way. We commissioned a task force that in early 2004 produced a draft that was ready for civil society consultation through the International Land Coalition, and published the final version in November of that year. All in all, Id say that the guidelines are a pretty good example of donor harmonisation.
What sort of reaction do you expect from developing countries? Thats more of a challenge. Were not having a dialogue on land reform with many go-vernments yet. Unfortunately, donors tend to request a dialogue with governments

Nater: You recently coordinated an EU task force that produced the EU Land Policy Guidelines. To what purpose? Mikos: Land is the main material asset, the very basis of farming. Its an obvious area for a common EU view. Securing access to land is crucial. Tenure is what makes the difference between a passive farmer with no future and a farmer with plans and ambition. The EU guidelines were designed to start a political discussion in the European Council and Parliament on a common, effective, coherent approach by the Commission and the EU Member States to land reform in developing countries.

Why reform? Donors have pushed for Western-style land privatisation while often ignoring existing land tenure systems based on customary laws. In Africa, for example, after 40 years of donor effort, the amount of land under ownership title is still minimal. A title deed doesnt mean much to an African smallholder. Hes not likely to risk it for a loan, even if banks are willing to lend the money, which they usually are not. Thats not to say titling isnt important and useful, especially in peri-urban areas where the rule of law is strong, where land is scarce and changes hands more frequently, where farming is done on a more industrial scale and where cadasters exist to ensure that transactions and ownership are properly registered. But what an African smallholder usually needs is an enforceable right to farm, and secured access to land. Customary tenure systems, based on traditional authorities at local level, can provide that security. The essence of the EU proposal is to help draft laws that respect customary tenure systems and empower local communities and traditional authorities to manage the land.

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And the lessons learned? One: a government that knows what it wants and the Mozambicans were very positive that they wanted a sector-wide approach can bang donor heads together to good effect. Two: early consultation with the finance ministry in RD programmes is very important. When youre drawing up a sector-wide programme with a technical partner like the agricultural ministry, their tendency is to go for a mega-plan: the bigger, the better. Initially, PROAGRI was scheduled at E300 million over A GOVERNMENT five years. But the Mozambican Minister of Finance THAT KNOWS WHAT IT and Planning came on board early and asked his WANTS CAN BANG colleagues from agriculture, Are you sure you can spend that much? How much will that generate in DONOR HEADS additional recurring costs? The result was that TOGETHER TO GOOD PROAGRI was scaled down to about E200 million.

What was your first experience with donor coordination? Id say it was the PROAGRI programme in Mozambique, which was tabled in 1996 and finally got underway in 1999. That was one of the first attempts to put together a coordinated agricultural development programme, what you would call a SWAp today. I was involved with it for about five years, shuttling between Mozambique and my headquarters here in Brussels. PROAGRI was launched right after the end of the Mozambique civil war, so the programme had to deal with a devastated sector and a very complex set of issues. Though the main drivers on the donor side included the World Bank, the EU and USAID, there were a very large number of other donors present, many trying to promote different agendas, plus about 120 NGOs. Also, at the time, about 80% of Mozambiques national budget was aid money, and almost half of all spending was beyond the governments direct control. But what made all the difference was the new Mozambican government. It was tough and clear-minded and simply not willing to deal with 200300 different projects and 15 20 separate donor missions a year. And the human chemistry was strong, as well, especially with the then vice-minister of agriculture, a very forceful woman called Isidora Faztudo.

on land issues only once theyve become an urgent problem, a source of conflict, as in Namibia, for instance, or Zimbabwe, Cte dIvoire or Uganda. And once that happens, its difficult for governments to speak openly: land is very political, very sensitive, a matter of national sovereignty.

EFFECT.

No more squabbling over pencils and motorcycles

So after the first three years, PROAGRI almost collapsed. What happened next? The World Bank and European Commission people came up with a suggestion that said, in essence, Instead of discussing programme details, why dont we agree on some basic principles that government must respect, sign a five-year contract with them and then regularly monitor the programme and agree on budgets year on year?. Sixteen donor organisations, some of whom had started from very different positions, gradually came together in this common vision. We thrashed out the new system with government during a two-day marathon meeting in 1998 and PROAGRI was finally launched. In retrospect, I think that all the donors involved shared a feeling that they were doing something new. They made a real impact on government decentralisation, for example. For our part, the European Commission was the first to finance PROAGRI with budget support. We defined the basics of the common implementation system. We organised the first outsourcing operations for agricultural services. We also provided a technical team to improve accounting, auditing and financial management. Internally, the Ministry of THERES A Agriculture and Rural Development in Mozambique has benefited enormously, in terms of morale and overall HUGE ROLE FOR professionalism. GOVERNMENT

What was the effect on donor behaviour? Our thinking evolved considerably. Remember, ten years ago, structural adjustment programmes still meant pages and pages of minutely-detailed donor conditions. In Mozambique, the temptation among donors to go that way was still very strong. In fact, PROAGRI before 1999 was all about extremely detailed planning. For example, instead of donors discussing extension policy with the Ministry of Agriculture and Rural Development, there would be squabbles over the cost and allocation of pencils and motorcycles, department by department. After about three years of that sort of micromanagement and piles of documents and draft legislation that no-one could enforce, our choice was either to fail, or to change our approach.

Good M&E and reliable data remain elusive

TO PLAY IN AGRICULTURE.

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What are European Commission priorities in rural development today? Following on from our 2005 report, EU Strategy for Africa, were developing a specific agricultural strategy for Africa, working with the World Bank, DFID and others. This will build on what some donors and Member States are already doing, and it should be ready in time for the 10th European Development Fund cycle, which gets underway in 2008. Another extremely interesting topic is the actual, practical implementation of rural development. Much of the work weve done on it so far has been theoretical. Thats been helpful in gaining a better understanding of rural development, but it hasnt greatly increased the actual impact. We know rural development is very complex but were not very good at simplifying and implementing it. We need to pass the message down to our economists, desk officers, programme managers and others that there are simple ways of tackling rural development, without investing in complex strategies that try to cover all eventualities. Thats our next job, bringing rural development down to the local level.

How has PROAGRI improved the lives of Mozambican farmers? Thats the big question mark still hanging over the entire undertaking: how to measure the impact on the farmer and on the rural poor? One of the major stumbling blocks with PROAGRI Phase I was finding agreement with government on a system of proper, independent monitoring and evaluation, and on the provision of data on which government could base its decisions. I believe that PROAGRI Phase II, which got underway in 2004, focuses more strongly on the field. But the reasons for the initial resistance to monitoring may have included government fear of donor interference and also an old centralplanning mindset that said, We dont need data. We know whats best for the farmer. Some say governments can play only a minor role in agriculture, given that its essentially a private-sector undertaking. I disagree. Governments fail to promote agriculture because they havent understood their proper role. Its not just about providing fertiliser, extension and veterinary services. Its not just about inputs and marketing boards. Theres a huge role for government to play in other fields, from encouraging research through education and information campaigns to ensuring production norms and quality standards. Too many ministries of agriculture are stuck in old-fashioned thinking, and arent playing this forward-looking role. Of course, little can happen without the private sector, but I believe that governments have a vital role in steering agriculture towards where its future lies.

Our next job: bringing rural development down to the local level

Other donors seem to be doing the opposite, trying to pull rural development knowhow up from the local level into headquarters. The problem for me is not listening to the rural development experts in our offices and delegations. Its more about increasing their relative weight and importance in the eyes of their colleagues and, of course, in the eyes of the partner-government contacts with whom they discuss policy. The changes going on now in donor-government practices offer us a new opportunity. Theres one area where developing-country governUNTIL LOCAL ADMIments have changed substantially, and thats decentraNISTRATIONS HAVE A lisation. But although a large number of countries TRANSPARENT SYSTEM FOR in Africa are now decentralised, their tax collection is not. The result is lots of new local administraALLOCATING FUNDS, THEY WILL tors with no resources. Thats a recipe for disGET NO SUBSTANTIAL BUDGET aster, because staff quality stays low and there is FROM CENTRAL GOVERNMENT temptation to take money from whomever you can AND THERE WILL ALWAYS BE get it. This is where we need to work. We can reinvent FAILURE AT THE LOCAL rural development here, based on this new scenario. LEVEL. What we must do is to help cultivate systemic links between local administrators and their intended local bene ficiaries, to work out together how local administration will plan its activities and spend its budget. Until local administrations have a transparent system for allocating funds based on priorities agreed with local communities, they will get no substantial budget from the national finance ministry or treasury, and there will always be failure at the local level. But how can donors help local administrations, when the trend is to go the other way, withdraw from the field and work with central government on top-down planning and general budget support? This isnt an area where donors can intervene directly, because its at micro-management level. But we can help local and international NGOs to play a huge role here, building the awareness of local communities about decentralisation, helping to ensure effective communications between civic groups, local administration and central government, and training local officials in effective administration. What we donors must ensure, through our work with central government, is that planning, financing, accounting and monitoring are reliable at the local level. This way, wed create significant new absorptive capacity for funds. And by reinforcing decentralisation, wed also be giving local administrators a real role in the construction of civil society. And, by the way, this change will allow donors to provide systemic funding through the central budget to local territorial development. Thats a financing tool which is expanding rapidly and which, for the moment, cannot be applied to support rural development.

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Do you share the view that trade liberalisation means smaller developing countries will be the losers? Whos to say? How much of the new open markets will the big emerging nations like Brazil really be able to capture? Yes, trade agreements do have winners and losers and our job is to maximise the number of developing-country winners. On the other hand, agricultural trade patterns are changing so rapidly that its hard to get a clear picture of where this process is going. Supply chains, supermarkets, the growth of niche markets, more THE GLOBAL direct producer-buyer contact and person-to-person DONOR PLATFORM CAN relationships, more trade liberalisation, less paperwork there are a number of trends underway now HELP CREATE THE NECESthat I think will encourage investment in many types SARY CULTURE OF COLLABOof developing countries, including least developed RATION: IT HAS THE MEANS, countries that already have well-established, historical trade links with Europe. The key in a globalised THE MANDATE AND THE market will be for developing countries to anticipate FOCUS. trends and have the capacity to adapt. This is what we are working for.

How has DG DEV managed to help shape EU trade policy? For example, we worked together well with the Commissions Directorate-General for Trade to help developing countries adjust to the new EU sugar regime, which has been quite radically reformed and came into effect on July 1, 2006. Theres now a restructuring programme proposed by the Commission for sugar-producing ACP countries worth $40 million in 2006, rising to $178 million per year on average, over the next seven years. Weve also been advocating on behalf of ACP countries on the future of the Economic Partnership Agreements, or EPAs. These are WTO-compatible agreements to replace the unilateral Preferential Trade Agreements in the EU-ACP Cotonou Treaty that expires in 2008. Were convinced that EPAs offer great opportunities to strengthen regional markets and boost economic growth and investment. ACP countries are afraid that free trade will swamp their markets with goods, including agricultural products, at prices that will smash local producers. Were working with DG Trade to heighten understanding of these issues and permit either a slower phase-in of certain products or some protective measures for developing-country markets, At the same time were working to reinforce the supply-side capacity in ACP countries to ensure they can reap the benefits of greater trade. And the role of donors in this process? The relative weight of rural development experts in a donor delegation or field office will grow only if they can work creatively together, both with each other and with colleagues from other sectors and disciplines. They must be helped to put out messages and a credible plan that not only get reflected in partner-government policy but also win them a seat in general budget support negotiations with government. Negotiating that sort of

agreement in our sector needs not just economists but people specially versed in the particularities and specificity of agriculture and rural development, with the tools and training to influence the balance of power in their favour. The Global Donor Platform can help create the necessary culture of collaboration here: it has the means, the mandate and the focus. The Platform also has a big role to play in advocacy upstream. Were only rural development people and are talking mostly to each other. What we havent done yet is convince our bosses. The more often we say that agriculture and rural development are important, the better. Our bosses listen to one message out of ten, so the more messages we put out, the more likely we will be heard.

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LISTEN TO PEOPLE IN THE FIELD


Willi Graf, Ph.D.

SDC headquarters is a modern glass-lined building with an airy atrium on the outskirts of Switzerlands capital city. Inside Willi Grafs office, a large painting of the Bolivian cordillera hangs on the wall, the Andes mountains snow-capped and remote. Outside, traffic rushes by on a modern overpass. Willi Grafs 20 years in agricultural research and rural development have been divided between these two worlds, and connecting the stark realities of the field with the bustle of headquarters is one of his present challenges. The SDCs approximately 550 staff members administer an annual budget of about $950 million through some 750-odd projects in Africa, Asia and Latin America. Switzerland provides about 0.44% of Gross National Income (GNI) to development. While practically level with the average ODA-to-GNI ratio of the EU-15 countries, thats still well under the international target of 0.7%. Yet the SDC, focused largely on rural areas in the poorest countries, enjoys high respect among peers, at international level and in the field. A senior World Bank official says, Im a fan of SDC. They were early to recognise the importance of farmer participation, women's groups and micro-finance projects. Theyre a terrific partner. Willi Graf spoke about the Swiss approach to rural development with Timothy Nater.

The Swiss way: persevere in

Senior Adviser, Natural Resources & Environment, Swiss Agency for Development and Cooperation (SDC), Berne

projects and build trust with the people you work with

Give me some examples of the SDC approach. DERS IS MOSTLY Take what weve done in watershed management in India: POSITIVE. our presence there over many years has really paid off. Here are two more specific examples. The first is a programme for dry beans, started in east Africa in 1985 and now run by the Pan-Africa Bean Research Alliance. This was launched by CIAT, part of the CGIAR network, together with the SDC, CIDA of Canada and USAID. I spent six years as a crop researcher on this programme, working in the Great Lakes area of Uganda, Tanzania and Kenya. It saw many ups and downs, and several times our partners had their doubts. But we Swiss were determined to support this over the long haul and always managed to convince them to stay the course. Beans are a lucrative cash crop and an essential food crop in Central Africa. The programme has now reached about 2.6 million small farmers. Local seed systems have been started up and contribute to improved overall food security. And the coordinator of the programme is a Congolese, Dr. Mukishi Pyndji, whos been with it for more than 20 years. Another typical SDC continuity success story is CIFEMA (Centro de Investigacin, Formacin y Extensin en Mecanizacin Agrcola), in Cochabamba, Bolivia. Its the most impoverished country in South America. Very difficult climate in many parts: arid and cold. CIFEMAs speciality is agricultural implements adapted to a small farmers conditions. Its products include special, light-weight implements for equine tillage for horses and donkeys. CIFEMA was launched as the agricultural engineering center of the Greater University of San Simn in the early 1970s. Then, as always happens sooner or later, the question of sustainability arose. The idea here was to make a business out of it. The SDC and the university each took financial shares in the new company, with the Swiss shareholding eventually reverting to farmers and local investors. Of course, there were huge adjustments to make in the transition period and success was never guaranteed, but SDC stuck with it. CIFEMA director Jaime Mendoza has been in place now for over 20 years, too. I just got an email from Cochabamba saying the company is finally making money.

Nater: What is Switzerlands comparative advantage in agriculture and rural development? Graf: One thing is our belief in continuity and perseverance. Some might call it stubbornness. But in development, its expensive to drop what youre doing and start something new. Sticking to projects can pay off. Another thing is trust. Once weve developed trust with partners, we WITHIN SDC stay with them and rely on them. So our approach is to invest in the structures and the people we have, and build on that. WERE OFTEN CRITICAL Although within SDC were often critical about the long ABOUT THE LONG DURATION duration of our projects, the feedback from outsiders on OF PROJECTS, BUT THE what were doing is mostly positive.

FEEDBACK FROM OUTSI-

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Is it hard to keep rural development at the top of the SDC agenda? TECHNICAL EXPERTS LIKE On the one hand, the SDC is mainly working in rural areas. Were not big on infrastructure development or urban projects. MYSELF ON THE SDCS USE Theres general agreement on the rural focus, because of the AND ALLOCATION OF FUNDS poverty there. On the other hand, rural development cuts IS LIMITED, SO WE HAVE TO across many of our thematic sectors and tasks, so keeping proCOMMUNICATE ductive aspects of rural development at the top of the agenda is a challenge. Also, fund allocation within the SDC is decided mainly A LOT. on a geographical basis. The influence of technical experts like myself on the SDCs use and allocation of funds is limited, so we have to communicate a lot.

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THE INFLUENCE OF

How does the SDC reconcile its defense of the interests of small farmers in poor countries with Switzerlands heavy subsidies to its own farmers? By some accounts, support payments as a share of gross Swiss farm income stand at 68%, the second-highest in the world after Iceland. Its true that Swiss agriculture is one of the most heavily subsidised in the world. But Swiss agriculture is being restructured, and the SDC is helping to push that process along. Weve practically eliminated export dumping. The linkage between food aid and Swiss farm surpluses is very minor and will disappear by 2008. Also, Swiss import tariffs affect mainly products from Europe and the US, only a few from developing countries and practically none from the poorest ones. And were progressively cutting back subsidies so as to limit them essentially to multifunctional farms in remote areas of Switzerland that preserve local environmental and social systems. The intention is to ensure that our subsidies become less and less of an obstacle to open access of imported products to Swiss markets. We also feel that some of the concepts put forward by Switzerland are having a positive impact on the international debate on rural development. We believe that low-income, food-importing countries should be allowed to preserve the economic, environmental and social multi-functionality of their farms, and so must have the possibility of protecting their agriculture. If rapid liberalisation is forced upon these countries, they will be the losers. The winners would be principally the large, food exporting middleincome countries like Brazil and Argentina, not the poorest countries.

That sounds more like innovation than stubbornness. A major plus for the SDC is that weve been largely free of the sort of disruptive political influence from politicians that other nations impose sometimes on their national development agencies. Thats one of the advantages of being a small country: we dont have the political bias of, say, the old colonial powers. The other thing about the SDC is that were not expected to act as market-openers for Swiss industry, despite the fact that some Swiss companies are world-market leaders in areas important for developing countries such as food processing, seeds and pesticides.

Is it working? Its too early for a final assessment. Part of the target group are the Swiss colleagues in field offices, but they rotate out every three or four years. So even more important are the local professionals. Some of these are the best experts in their respective countries. Theyve built up long-standing experience. They dont come here to Berne very often but when they come we invite them for briefings or to give presentations. We treat Junior Programme Officers the same way. Were trying to develop networks of people who like rural development and want to talk about it. Its a bottom-up approach and its being noticed. I believe itll have effects on investments and on programme quality.

Vertical integration between headquarters and the field is supposed to be a vital condition for donor harmonisation and alignment. Do you agree? The dynamics should be created from the field, not from headquarters. Being headquarter-centered wont work. The only way to get results in H&A is to work through the people on the ground. And donor commitment to H&A is only part of it. You need something to harmonise around, a solid national programme. Like SIBTA, the Bolivian Agricultural Technology System programme in Bolivia or the national seed system there, where the Dutch, the Swiss, the British, the Danes, the Japanese, the Germans, the USA and the Inter-American Development Bank have all provided concerted support. I just hope these programmes will continue. I hear that the new Bolivian government under President Evo Morales is skeptical of institutional autonomy and wants a stronger role for the state. But

Meaning what? Were developing institutional tools and procedures that helps us reach out to colleagues. We try to do this in a coordinated and congenial way. We have a special website, the SDC Focal Point for Rural Development for discussions and information exchange with the field. We seek out our RD experts, both international and local staff, and invite them to come see us when theyre back at home base. We tell them we want to listen. Our message to them is, Youre an important person for us. We offer them an open discussion forum. We invite them to give presentations, if they want to. If not, we just invite them to talk about their concerns and to catch up on state-of-the-art discussions about rural development. We call these our rural development briefings. Whats the reaction to your outreach efforts? When colleagues are on visit from the field, they get fed up pretty quickly if you submerge them with briefing updates and five-bullet strategy papers. People are tired of PowerPoint and tired of having paper thrown at them. They want to be listened to. As in most institutions, we need better internal communication, more of a human touch.

Donors need solid local institutions to harmonise around

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Can donors do anything about that? Somebody has to stand up to local governments and insist that certain institutional conditions are met. Political appointees are still the norm, and there is little prospect of change. I think the only way to get most donors to refrain from forcing bilateral experts on governments is if partner-governments appoint technical experts in decent civil service schemes and grant them appropriate decisional autonomy and job continuity.

And the Global Donor Platform? We should focus on resolving problems on site, in the field. Our studies and reports are important, but all the research into SWAps in the world is not going to provide solutions for a specific country situation. Thats why I think that one of the great strengths of the Global Donor Platform is linkage with the pilot countries: Nicaragua, Burkina Faso, Tanzania and Cambodia. Another strength is that its a group of people convinced about the value of RD and also knowledgeable about it. Agriculture & RD are coming back onto the agenda. So the Platform must be ready with solutions. We should find a way to grow the Platforms work out of the pilot countries, out of that experience. We should spend time and energy sticking close to that experience, and synthesising it into something useful. The activities and concerns of the Platform should move closer to themes specific to rural development and away from general themes of the development agenda, such as financing schemes for SWAps. Other organisations are already covering those fields. Lets find out, for example, what we can really do to support on-going efforts in Burkina Faso. Lets take more time to listen to what our people there

What are the obstacles to good donor harmonisation and alignment? No matter how hard we try, I dont think well ever get ideal donor harmonisation. Yes, donors must team up to support local initiatives in a coordinated way and refrain from establishing their own little kingdoms in partner-countries. But weve got to be realistic, and also look beyond the donor community. I think that a major problem is the weakness of national institutions. Weve got to promote the autonomy of technical institutions more forcefully. Excessive political influence on institutions, government allocation of posts to family, friends and allies these are killers for any programme. We need to help design institutions that can effectively combine public funding with private investment. Getting the private sector on board is imperative for rural development. This is one of the most important issues to resolve in Nicaragua, for instance. Theyve got to strengthen their existing institutions to permit proper private and public involvement, and create new ones if theyre needed.

I think we can discuss and resolve this legitimate concern without disrupting the programmes.

A major problem is the weakness of national institutions

are saying, get beyond formal PowerPoint presentations in meetings in European capitals and enter into the real substance of the problems. We need to permit bottom-up flow of real-world information and know-how and then adjust our actions to this.

What makes you passionate about your work? When I was in secondary school, I realised I wanted to work in development. Im not a practicing Christian, but I was very influenced by a young pastor who was passionate about the theology of liberation in Latin America. When the time came, I asked myself, what can you study to be useful in development? I chose agriculture. My Ph.D. thesis for the Faculty of Agronomy at the ETH in Zurich was about wheat weed control on six organic farms in Switzerland. On that subject, the farmers knew more than the research institutions. I got passionate about the way people work in rural areas. Their life is authentic. You put something in the soil. Then you harvest it. Its serious. I have great respect for small farmers knowledge and values. Its made me a strong believer in the participatory approach to rural development.

What are some of the structural issues the Platform should address? One is the interaction between public and private sectors. What sort of institutions are needed for this to work? We started discussions on this at the Platforms Annual General Meeting in Brussels earlier this year. Theres no clear answer to that yet. Another issue with special significance is the dynamics between secondary cities and rural areas. A third is the complicated multi-sectoral approach that the very nature of rural development imposes on us all. How to accommodate and integrate, in a pragmatic way, the private-stakeholder-related services of the Ministry of Agriculture with those of the Ministry of Health and the Ministry of Education, for example? And more generally, I think that key messages about the role of agriculture should be incorporated into classroom teaching.

Are these also the SDCs concerns? Yes. The Platform is designed to address concerns that are shared by many donors and that potentially can be solved by donors working in concert. The SDC can add to that list, of course. I HAVE GREAT For example, how can we help organise and finance RESPECT FOR SMALL FARnetworks of institutions into demand-responsive, sustainable rural-service systems? How can we help link local MERS KNOWLEDGE AND and regional markets with local production in a way that VALUES. ITS MADE ME A makes local production competitive? And how can we STRONG BELIEVER IN THE PARdrive global policymakers to favour local and regional agricultural production over the senseless global TICIPATORY APPROACH TO shipping-around of low-value agricultural goods? RURAL DEVELOPMENT.

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Jim Harvey started as a volunteer on a research station in Botswana in the 1970s, where the station chief regularly patrolled the perimeter fence on horseback and lectured staff about the neatness of their field plots. Almost quaint-sounding today, this post-colonial experience was followed by tougher stints in what he calls the real world of development, including Western Sudan and the Middle East. Since 1990, he has worked for the Department for International Development (DFID, usually spoken as a word, diffid), a UK government department charged with managing Britain's aid to poor countries. DFID is headed by a senior Cabinet minister, reflecting the importance Britain attaches to global poverty alleviation. It has some 2,800 staff, almost half of whom work abroad, and an annual budget of around $6 billion. DFID combines a decentralised, demand-oriented approach with innovative, knowledge-based policies and business-like pragmatism, a culture that has extended the organisations influence into policy areas beyond aid and helped shape Britains role in global affairs. Jim Harvey, a member of the Global Donor Platform Steering Committee, discussed lobbying, the nature of bilaterals and trends in development assistance with Timothy Nater in London.

THE RISK OF DONOR DISCONNECT


Jim Harvey

Though several steps removed from WTO


talks, DFID is key influencer

Head, Profession, Livelihoods and Environment Groups, Department for International Development (DFID), London

What should be the focus of the Global Donor Platforms advocacy? To my mind, the Platforms greatest strength is getting people around a table to discuss and resolve issues. I personally feel most comfortable with the Platforms harmonisation and lesson-learning objectives. Different organisations, whether bilaterals or multilaterals like the World Bank and European Commission, have different operating cultures and core preoccupations, and these are reflected in their approach to the Platform. Were all looking for slightly different things. Among Platform members, the relative importance of agriculture and even rural varies from organisation to organisation.

Some research suggests that the gains from opening up THE END OF 2006. agricultural trade would accrue mainly to better-off develo ping countries like Brazil, Thailand and Argentina. Many of the poorest countries would gain little, and rapid market opening could even worsen the livelihoods of their own poor farmers. Do you agree? That's difficult to say, but in the longer term, I believe that markets for agricultural exports from poorer countries will grow. Capacity-building for trade is key. We're helping to prioritise support to the least-developed country group to ensure that their views are heard in trade negotiations. Were active with the ACP group of countries in trying to secure additional transitional sugar assistance. And were working alongside the DTI to persuade India, Brazil, South Africa and China to support poorer developing nations, and that includes encouraging these four countries to open their own markets.

What can advocates for increased investment in agriculture and rural development do to achieve a positive conclusion to the Doha Round? Bilaterals like DFID are already working through their respective government channels. Of course, were at several steps removed from the front lines. Trade is a competence of the European Commission, and within the UK government the ministry leading on trade is the Department of Trade and Industry, or DTI. But DFID does have a key role to play in influencing progress. Our aim is to achieve a successful outcome of the Doha Round by the end of 2006. We lobby in support of our developing-country partners through the UK govern ment to influence the EU, US, and other WTO members. Were DFID DOES HAVE particularly concerned with better market access for agriculture, clothing and textiles and other industries where develoA KEY ROLE TO PLAY IN ping countries have a comparative advantage. We want more INFLUENCING PROGRESS IN ambitious reductions in domestic agricultural subsidies and TRADE. OUR AIM IS TO ACHIEVE are actively promoting policies for food aid that are developmentally beneficial. A SUCCESSFUL OUTCOME OF

Variety in Platform membership makes common advocacy a challenge


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But its different for bilaterals? Bilateral donors are government agencies. There is a corporate line that must be followed. Some bilaterals may still tolerate sectoral lobbying by their own staff, but others, including DFID, dont. This doesnt mean I dont welcome the Platforms advocacy BILATERALS HAVE TO role. This is how the world works. Some people lobby for LIVE WITH THE TENSIONS urban as if rural was the competition. But we need to show that rural is in the interest of poverty reduction THAT CAN EXIST BETWEEN A and not just sectoral pleading. FULLY COUNTRY-LED APPROACH Weve done a lot of work in DFID on rural-urban linkaON THE ONE HAND AND, ON THE ges in part to break down the artificiality of working OTHER, THE IMPERATIVES OF on rural and urban in separate camps. This doesnt mean that the particular needs of rural and urban poor DOMESTIC POLITICAL CONpeople which are different dont each need special STITUENCIES. attention. But getting that attention shouldnt be a competi tion for who has the best brochure or the best statistic.

Obviously, an organisation with agriculture in its name, such as the FAO, finds it easy to advocate for agriculture. And the World Bank at least under its former President seemed to encourage competition between departments and open lobbying for attention and budget. You say bilaterals do their own lobbying. But dont they share many of the objectives of the wider development community? Of course they do. DFID is very much signed up to The Paris Declaration on Aid Effectiveness of March 2005 and the primacy of the country-led approach. In fact, Id say that the country-led approach is DFIDs main driver in 70% of all cases. But bilaterals have to live with the tensions that can exist between a fully country-led approach on the one hand and, on the other, the imperatives of our own domestic political constituencies, as expressed by through ministers, Parliament or general public interest.

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For example? Our Minister [Editors note: Secretary of State for International Development Hilary Benn] became very concerned a year or so ago that DFID wasnt doing enough about water. The answer that came back from our country offices was that they were pursuing a country-led approach, following what the respective governments had said they wanted to do. They said they were harmonising with other donors, and water (and sanitation) wasnt something that DFID had a particular comparative advantage in. Minister Benn came back right away and said, in so many words, When I was in Ghana and Tanzania and spoke to poor people they told me very clearly that water is one of their highest priorities. But this isnt reflected in our plans. We need to do more especially in Africa. This has seen DFID commit to a further increase in our spending on water.

More and more, were coping with global public goods issues.

But recipient governments still need advice. Developing-country governments like to feel that the advice they are getting is impartial, and not coming from the same people whove got the money. Thats an important separation to be upheld. Advisors and providers of technical assistance might be paid for by donors, but governments need to have faith that these people are independent and that donors are not pulling the strings.

So donor lobbying is still needed sometimes at the level of developing-country governments. Could the Global Donor Platform focus its advocacy efforts here? We should consider each situation very carefully before doing so. If, for example, youre part of a donor group in Tanzania already working effectively at a high consultative level with the government, you may not appreciate another donor-funded third party coming in and saying, Psst, you need to give more attention to agriculture! That may just open the door to other advocacy groups promoting HIV prevention, universal primary education, property rights or whatever. Thats precisely what were trying to get away from, all that fringe lobbying. The Platform has to be careful about creating a donor-funded splinter group whose advocacy might be seen as unhelpful. Im not against advocacy, but it has to be done in a subtle way more about presenting good analysis and solid evidence. And theres plenty that shows that rural is still a central poverty issue.

What, then, is the Platforms greatest value in your eyes? I think there are two areas. The first job is to back up in-country harmonisation efforts to make sure that our headquarters agendas support and dont undermine country-level efforts. But the Platform also has a huge role to play in harmonisation for rural development at the global level, because, more and more, were coping with global public goods issues. These cannot be addressed by individual states. They need collective action that goes beyond the borders of individual countries. Policy on public goods at international level can be just as prone to incoherence and lack of harmonisation as public goods at the country level. Theres clearly a need for this sort of global concertation. For example, France and Sweden in 2003 set up the International Task Force on Global Public Goods. But theyre focusing on security, communicable diseases, trade, finance and information flows. I dont know of any forum other than the Global Donor Platform in which donors can get rural development right.

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Given the different organisational cultures and expectations within the Platform membership that you described earlier, what sort of I DONT KNOW OF results do you expect, and when? I think we should be realistic. The Platform should be just that ANY FORUM OTHER a platform and not be expected to deliver products that THAN THE GLOBAL DONOR others should be delivering. But it should aim at a few, higherPLATFORM IN WHICH level outcomes around major processes. The recent dialogue around WDR 2008 is a good example. Getting a good number of DONORS CAN GET RURAL people into a room to talk about how we jointly and individually DEVELOPMENT RIGHT. can work on it thats an achievement. The joint policy products are hard work, but worth it if it means at country level we can increasingly trust each other to look after each others programmes. Whats your assessment of direct budget support? I once worked for a Sudanese project director one of the most effective and dedicated professionals Ive known who said: We know what needs to be done but we dont have the resources to do it. Why cant the donors trust us more, interfere less and let us get on with the job? So my starting point on budget support is remembering that directors words. The OECD estimates that OECD donor-countries now channel about US$ 5 billion about 5% of their aid directly to the budgets of developing country governments.

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What has DFIDs experience been with sector-wide approaches, or SWAps, in agriculture and rural development? Getting locked into a rural SWAp thats dominated by public sector reform can mean having to deal with some dysfunctional, non-harmonised national institutions, including ministries of agriculture, some of which still dont know what their job in life is. There are a number of countries I can think of in Central America and Africa where DFID has pretty much said that public-sector side of agriculture is in a mess and going nowhere fast, so were working in other areas, such as the business environment and making markets work, that are also of direct importance to small-scale producers. This is a country-by-country decision, of course, and still needs a sectoral approach and donor harmonisation, but its sometimes a better place to put effort into. But were not walking away from the long-term issues thats the reason were supporting NEPADs CAADP process to get an African-led approach to sorting out the difficult areas.

Tremendous public interest in development puts donors in spotlight

Donors, partner-countries, NGOs and civil society groups are all involved in the analysis and debate. The record so far shows up benefits and also important areas where policy and practice can be improved. Some serious studies have been done already. Birmingham University worked with 24 donors and seven partner countries to produce the Evaluation of General Budget Support report, released in May this year. The consensus seems to be that budget support isnt a panacea, but it can work in widely-differing country contexts, and it can help strengthen public financial management, transparency and good governance. Budget support also seems to strengthen WERE OFTEN TOO services like health and education. It seems that when a developing countrys governHEAVILY WRAPPED UP IN ment has the political will to reduce poverty, budget OUR OWN AFFAIRS, ADMINISsupport can be an effective way for donors to TERING OUR OWN SEPARATE deliver aid. But theres less evidence so far showing an impact on economic growth or on actual income INPUTS AND DEVISING EVERlevels for poor people. I think theres general agreeMORE ONEROUS REPORment that donors should continue to pursue a mix of TING REQUIREMENTS. mechanisms to deliver aid. There needs to be more analysis of political risks, and this should be shared amongst donors. What risks do you see in the trend towards direct budget support? The main risk is detachment. Donors to be good development partners have to hang on to some first-hand knowledge and experience of what I call the retail end of the system. To make a comparison with industry, could a component manufacturer of engiWhose job is it to improve government accountability and institutions? If you mean accountability to developing country citizens, its less and less the job of donors. Governments themselves must strengthen accountability although donors and international efforts such as the High Level Commission on Legal Empowerment of the Poor can help. But donors need to become more accountable, too its a Paris principle. And at home our parliaments and publics are looking for greater accountability, as well. In the UK a Bill has just been passed by Parliament that will increase transparency on the way that aid is provided, reported on and used its also seeking to promote coherence in government policies on development. We should welcome this. The Make Poverty History campaign last year showed that theres a tremendous public interest in development were all much more in the spotlight now.

Keeping in touch means getting out of the office and talking to people who know the story

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How can donors pursue rural development if, at the same time, they are withdrawing from rural areas? In the 1970s I lived in Aleppo, working for the International Center for Agricultural Research in the Dry Areas, ICARDA. My job was to study farming systems. It made me understand just how good so-called poor peasant farmers are at what they do. The Syrian farmers I got to know were incredi bly innovative, with a great depth of knowledge of their IF RECIPIENTenvironment and how things worked. Of course, by the 1990s, participatory and farmer-led approaches had COUNTRY GOVERNMENTS made great strides. But at the time, that sort of CAN SHOW DONORS WHATS knowledge was often systematically ignored by deveHAPPENING WITH THEIR FUNlopment experts. Now were in danger of losing those insights all DING, IF THERES A CLEAR AUDIT over again, as the whole aid business moves upTRAIL, THEN DONORS WILL stream and works at a more strategic level. Theres a USUALLY GO WITH THEM. disconnect between talking about development and delivering aid on the one hand, and actually understanding what rural peoples lives and needs are like on the other. That gulf has always been there especially between people and their governments and the risks are still with us.

Can that disconnect be prevented? DFID has just been peer-reviewed by the OECD Development Assistance Committee. They were generally complimentary about us but also said we should and I quote encourage staff currently working in headquarters to spend more time visiting the field and encourage country office staff to spend more time out of capital cities. Greater effort should be made in getting key staff closer to the development realities they support. As donor people, we need to keep in touch. This means getting out of the office and talking to people who do know the story in ministries, amongst NGOs, with the private sector. That means not just programme staff, but senior management, as well. Thats Kevin Cleavers viewpoint too, I believe. But its no longer the job of donor staff to spend long periods in rural areas or slums or hospitals or schools, for that matter to see first hand whats going on. People of my generation at least are very aware of the development tourism criticism. Its

nes afford not to know about developments in the end-market for cars? No they have to be aware of whats actually happening in the market place. Already, some donors are starting to work with developing country governments to get systems into place to track outcomes and impact, in order to justify sustained budget support. If recipient-country governments can show donors whats happening with their funding, if theres a clear audit trail, then many donors will go with them. But if not, donors have to ask some very serious questions and look for alternative routes.

more a matter of putting in place the mechanisms whereby poor people can act for themselves and strengthen their voice in policy debates. Its about building systems of accountability by governments to their people. And its about getting much better impact data and addressing some of the big capacity issues.

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SEEING DONORS FROM BOTH SIDES


Mushtaq Ahmed

Mushtaq Ahmed has an unusual dual perspective on donor activities, having been at the receiving end of donor activities in his native Bangladesh early in his career, then dispensing advice himself as a hard-pressed British Commonwealth official in Guyana and currently serving as trend-spotter and economic policy advisor for agriculture at CIDA headquarters. There is a holistic flavour to his professional background, as well. Trained to doctoral level in quantitative methods and applied econometrics, he has long moved on from crunching numbers to research stints in Peru and Mexico, desk work at the Canadian Department of Agriculture and cross-cultural teamwork in agri-environmental policy, food safety and quality and business-risk management. Now a Canadian citizen, Ahmed reflects much of that nations equanimity and inclusiveness in his views, which he shared with Timothy Nater.

Private sector a key driver in creating

Economic Policy Advisor/Agriculture, Economic Development Division, Policy Branch, Canadian International Development Agency (CIDA), Ottawa

an enabling environment for smallholders

Nater: Whats CIDAs plan for rural development? Ahmed: CIDA's five priority sectors in development assistance are good governance, health, basic education, private sector development and environmental sustainability. Cutting right across these five is the sixth theme, gender equality. By 2010, we want to be concentrating at least two-thirds of our direct country-to-country assistance on targeted sectors in 25 developing countries [1], 14 of them in Africa. Within this matrix, agriculture and rural development plays a growing part. Theres a good summary account in CIDAs 2003 brochure, Promoting sustainable rural development through agriculture. We were no exception to the general decline in donor funding for agriculture in the 1990s, but weve firmly reversed that trend, along with a majority of donors and growing numbers of partner governments. CIDA is putting US$190 million into agriculture alone in the current fiscal year. Thats a 50 per cent increase over 2001/2002, and 6.7% of total Agency budget. Out of that US$190 million, over 50% will go to increasing agricultural productivity and over 16% to promoting private sector agriculture. We are very much part of the new, worldwide commitment to restore momentum to agriculture and rural development in the developing countries. Why the emphasis on private sector development? Governments cant do it all themselves. Helped by donors, their ideal role is to prime the pump, to provide the right legal and economic structures and the right inducements to private enterprise. On top of that, PSD is a key functional link between agriculture and the wider economy. Its already been said in this interview series: farming is a private sector activity. Small farmers in rural areas often comprise the largest single segment of the private sector in developing countries. Its things like poor policies, bad roads, inadequate markets and generally weak institutions that prevent them from realising their potential. The private sector is a key driver in creating an enabling environment for the smallholder, for instance by investing in well-functioning agricultural markets. These markets strengthen rural economies and in turn help stimulate the creation of other rural businesses, like agri-processing and service companies. Youve been involved in promoting PSD yourself, havent you? In the early 1990s, I worked in Guyana for the Britains Commonwealth Secretariat as an expert with the Guyanese governments Ministry of Agriculture. It was an interesting time. A new government had started dismantling an essentially socialist economy, removing price controls, privatising a huge state-owned sector, diversifying agricultural production and encouraging foreign investment. Donors came in and embraced a World Bank privatisation programme. For my part, I was involved in capacity-building and helping to reorganise the rice sector. Along with sugar and bauxite, rice is still one of Guyanas biggest economic sectors. Guyana is beautiful but very poor. Earlier under socialistic regime, many people emigrated. So given their brain drain and my past experience in Bangladesh, I soon found myself under some pressure from the government of Guyana to become chairman of the New Guyana Marketing Corporation. The NGMC had been a central-planning agency for the buying and selling of agricultural

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CIDA was among the first to recognise the importance of womens rights, as well. Absolutely. We figure that women contribute up to 80 per cent of the expertise, time and labour that goes into agricultural production alone, and thats not EDUCATED, SELFeven counting the work they do fetching fuel, RESPECTING WOMEN ARE carrying water, and raising and feeding their THE BEDROCK OF A STABLE kids. There is massive potential here that you can unlock with equal rights and proper SOCIETY AND OF FUTURE GENEschooling. Fellow Bangladeshi, Dr. Mohammad RATIONS. IF YOU DONT RECOGYunus won this years Nobel Prize for Peace NISE THAT FACT, YOUR DEVELOPbecause he recognised that microfinance in the hands of women would be hugely empowering. MENT IS JUST NOT GOING TO Educated, self-respecting women are the BE SUSTAINABLE... bedrock of a stable society and of future genera

What lessons has CIDA learned in rural development? First and most obviously, rural developments not just about farming. You have to look at rural communities as a whole, including the non-farm economy, financial and social services, gender, the environment, rural-urban inter-action, population issues the list is long and the work is complex. Second, I guess, is that one size does not fit all. An approach that worked well in one country or even one community doesnt necessarily work in another. Project staff really need to have good knowledge of the local context. Third, you wont have sustainability unless you get local beneficiaries including men, women and children at village level to buy into planning and implementation at the early stages. Thats not always easy, because youre dealing with a multitude of different sectors. And fourth, CIDA believes in getting farmers organised into community or producer groups. There are all kinds of benefits here, from improving output, gaining market access and bargaining power to preserving local culture and traditional know-how.

produce other than rice and sugarcane, but now was being transformed into a catalyst for market development and an export facilitation service for non-traditional farm produce, like tropical fruits. It was all about promoting rural producer-groups and value chain transformation and how that fits into the rural livelihoods nexus. Of course, the Commonwealth said, You cant do that!. However, the Guyanese insisted, and, in the end, I wound up wearing two hats in Guyana, though the NGMC job was unpaid. Im glad to have had the experience. It does help to have that dual perspective, to understand the nature and needs of the private sector.

Collective, concerted research networks are a CIDA priority

So local conditions are the point of departure? All donors know by now that you dont get anywhere by just throwing equipment and instruction manuals at a rural development problem. We were doing that 30 years ago with the result that lots of expensive machinery soon broke down and stood rusting for lack of spare parts and training. A basic lesson has been that products, techniques and machinery from developed countries are only useful when theyre properly adapted to local, social, economic and environmental conditions.

And agricultural research? Thats another CIDA priority. Improved research better crop, fish and tree varieties, pest and disease control, protecting and conserving water, land and biodiversity is vital for progress on the MDGS. And it has to be done in a collective, concerted way. Collaboration and knowledge-sharing should combine modern, scientific research with on-site knowledge. You need international high-tech research networks and computer modelling as well as oral farming traditions and local customs. That way, you can build research and policy capacities at the local level, where it matters most. Canada contributed US$ 36.4 million to CGIAR in 2005 thats the third-largest country contribution after the USA and the UK. We provided US$ 3.8 million for the design and planning phase of NEPADs new Biosciences Eastern and Central Africa (BECA) facility in Nairobi, which offers state-of-the-art biosciences laboratories and training to local scientists. And were also working with FARA in Accra, which is the umbrella group for the three main sub-regional research organisations [2] and the African Unions technical arm on agricultural research for development. On that subject, quite a few developing countries say that the environment is all very well, but development takes precedence. Well, CIDA wont dispute that. Its true, the overarching goal is poverty reduction. But within this framework, you wont get improved agricultural production and stable rural development without environmental sustainability, so that remains a key objective. Sustainable development of agriculture, and therefore achievement of the MDGs, needs proper understanding and careful balancing of the potential tradeoffs between economic, social and environmental objectives.

tions. If you dont recognise that fact, your development is just not going to be sustainable. Rural development policies and institutions must have an effective gender equality component.

A front-row seat to planning disasters and triumphs

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Whats Canada doing here, for example? CIDAs priorities are to reverse current trends of land degradation, promote integrated natural resource management at farm, community as well as watershed levels, and improve the efficient, effective use of water in farming. Were doing a lot of work here under the UN Convention to Combat Desertification (UNCCD). Developing countries are also coming to understand that theres a mass of complex THERES A MASS OF environmental information out there that needs proCOMPLEX ENVIRONMENTAL per processing and efficient management inforINFORMATION OUT THERE THAT mation systems. Institutional strengthening and NEEDS PROPER PROCESSING AND improving governance help partner organisations gather, share and analyse the information. EFFICIENT MANAGEMENT INFORMATION This aids in a better understanding of the SYSTEMS. INSTITUTIONAL STRENGTHEenvironment and in better planning.

NING AND IMPROVING GOVERNANCE HELP PARTNER ORGANISATIONS

GATHER, SHARE AND ANALYSE

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How big a factor is good planning? Its crucial, and Ive seen that first-hand. The 1987 National Master Plan for Water Sector in Bangladesh THE INFORMATION. was a mostly a theoretical exercise. A huge amount of money was spent, but after five years, the plan had produced mostly paper. The water-sector models were not tested against available data, there was no clear-cut implementation plan and little political commitment to realize things on the ground. It tried to accomplish a lot but achieved little for the country. Another bitter failure was our intensive jute cultivation scheme. Jute is the golden fibre of Bangladesh, a natural, biodegradable, truly multi-use product. Even in the early 1970s, it still accounted for 70% of Bangladeshs export earnings. But by the 1980s, much of the export market had switched to cheaper polythene and other synthetic materials, so the aim was to downsize, restructure and privatise our jute sector to keep it competitive and sustainable. Under a multilateral donor agreement, the government in the early 1990s promised to close nine mills, privatise nine others and retrench 20,000 workers. But several years later, there were still 30 state-owned jute mills employing nearly 100,000 workers and losing about $90 million a year, so donor funding was halted. Both sides were guilty of unrealistic expectations, poor strategy and weak follow-through. Now, Bangladeshi jutes a declining industry.

Any bright spots? Sure, plenty of them. For example, my first contact with CIDA was in the early 1990s through its Bangladesh Crop Diversification programme. Up to then, many Bangladeshis thought that food security was just rice, rice, rice. But that programme helped us diversify into potatos, pulses, oilseeds, maize and wheat. It wound up directly benefiting one million small and marginal farm families, made a real contribution to the populations diet and nutrition and won the 1994 Canadian Award for International

At the same time, many bureaucracies are overstaffed. Yes, but not always with the right people. Capacity is a major issue. Some of the best brains are lost to emigration or private industry. Elsewhere, poor manpower management is vitiating proper identification of talent and implementation of policy. The value of trained and capable civil servants in many developing-country ministries is not sufficiently recognised and their expertise is not properly extracted. They are just shuffled around and often wind up doing clerical, routine tasks. At the same time, the incentives are often lacking, as well. For example, promotion to a higher administrative cadre is often much more rewarding, career-wise, than remaining a specialist. As a result, some of the best and the brightest wind up in senior-level offices approving budgets. Their training, very often, is lost.

Development. Two main ingredients for success were real donor harmonisation and strong research support, especially from the International Maize and Wheat Improvement Center (CIMMYT) and the International Potato Research Centre (CIP) [3]. To be fair, the food security and diversification that Bangladesh has achieved today wouldnt have been possible without the commitment of successive governments to agriculture. They have ploughed in huge investments in developing agricultural infrastructure, education, research and extension and in crucial manpower development, initially with a lot of support from USAID.

Youve cited CIDAs crop diversification scheme for Bangladesh as an example of successful donor planning. But donors are now pushing developing countries to develop their own plans. I think countries themselves now realize that they are partners in development and that they must shoulder this process. But one problem with national planning processes is that, despite much consultation with donors, there are too many PRSPs that still read like wish-lists. Where is the realistic assessment of fundamental needs? Where is the applicability? Another problem is that the donor insistence on PRSPs is robbing many countries of their what few planning resources they have. Lots of multilateral agreements with donors now need their attention. The capacity for planning has been eroded and diffused because of the new focus on PRSPs and mid-term budgetary reporting requirements. All this impinges on the ability of some countries to demonstrate coherent direction. They simply lack the manpower to do all these jobs.

Too many PRSPs read like wish lists. Where is the applicability?

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So the blame is pretty equally shared? Were seeing steady improvement on both sides. As for the donors, I think weve largely stopped expecting always to have our own way, plant our own flags and develop our own separate development philosophies. Were becoming more predictable for our partners, as well. Donors did a lot of flip-flopping in the past: Do it this way! No, do THE VALUE OF TRAIit that way! Now, on the whole, were determined to be more consistent. As a group, were realiNED AND CAPABLE CIVIL sing that our task is strengthen national capaSERVANTS IN MANY DEVELOPING cities, join efforts with other donors to proCOUNTRIES MINISTRIES PEOPLE IS mote country-led development, and stay the NOT RECOGNISED AND THEIR EXPER- course. That, in essence, is harmonisation and alignment. TISE IS NOT PROPERLY EXTRACTED. And all along the way, we need to take THEY OFTEN WIND UP DOING stock and evaluate. Weve learned that there are no signed-and-sealed ways of doing things CLERICAL, ROUTINE TASKS. in rural development. We have to continually share knowledge on what works and what doesnt, both with other donors, with partner-governments in developing countries and all development actors. The Global Donor Platform is doing its part to help this process along. Its plugging away at incountry H&A facilitation, its doing some important research on PRSPs and SWAps, its worked out its top ten Hot Topics, its developed the Joint Donor Concept for Rural Development, its playing an important role in the production of World Development Report 2008 and its working hard to support agricultural development policy in Africa through NEPAD. I think this is the right way to go.
The acronyms derive from the Spanish names for these organisation: Centro Internacional de Mejoramiento de Maz y Trigo, based in Mexico, and Centro Internacional de la Papa (CIP), in Peru. Both CYMMIT and CIP are members of the CGIAR network.
[3] [2] ASARECA, the Association for Strengthening Agricultural Research in East and Central Africa (www.asareca.org/) ; WECARD - West and Central African Council for Agricultural Research and Development (www.coraf.org/); and SADC/FANR - Southern African Development Community / Food Agriculture and Natural Resource Department (www.sadc.int/english/fanr/index.php). [1]

Africa: Benin, Burkina Faso, Cameroon, Ethiopia, Ghana, Kenya, Malawi, Mali, Mozambique, Niger, Rwanda, Senegal, Tanzania, Zambia; Latin America: Bolivia, Guyana, Honduras, Nicaragua; Asia: Bangladesh, Cambodia, Indonesia, Pakistan, Sri Lanka, Vietnam; Europe: Ukraine

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Paper Printed on special 9Lives photo paper (PaperLinx), certified according to FSC November 2006

Interviews conducted and edited by Timothy Nater, communications advisor to the Platform Published by Global Donor Platform for Rural Development, c/o Federal Ministry for Economic Cooperation and Development (BMZ) Adenauerallee 139-141, 53113 Bonn, Germany Litho Ren Adrian, Bonn, Germany Printed by W.B. Druckerei Hochheim, Germany Photos Stephan Steenken, Melissa Williams, Timothy Nater, Shanila Nuzaiya Ahmed

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Contact: Secretariat of the Global Donor Platform for Rural Development, c/o Federal Ministry for Economic Cooperation and Development (BMZ) Adenauerallee 139-141, 53113 Bonn, Germany Phone: 0049 228 535 3276 and 3699 Fax: 0049 228 535 103276 Email: secretariat@donorplatform.org Website: www.donorplatform.org Publication date: November 2006

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