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INTERNATIONAL FUND FOR AGRICULTURAL DEVELOPMENT (IFAD)
Origins and Background The establishment of the International Fund for Agricultural Development (IFAD) in 1977 as the 13th specialized agency of the United Nations was one of the major outcomes of the World Food Conference, held in Rome in November 1974. The conference, organized by the international community in response to large-scale famines in the African Sahel, contributed to a new perception of hunger--not any more as the result of production failures in overall supply of food at the international and national levels, but of deep-seated structural problems associated with underdevelopment and poverty. It was further recognized that the problem of hunger is a problem confronted predominantly by the poor and, most paradoxically, by the rural poor. In this context, reducing hunger requires not only increased food production (nationally or internationally), but increased production accessible to the rural poor--which itself is primarily determined in rural areas by production by the poor. Thus IFAD was created with the unique mandate to combat hunger and rural poverty in the low-income food-deficit regions of the world and to improve the livelihoods of rural poor people on a sustainable basis. IFAD operations are based on a few very clear premises. Food security issues must be analyzed at the household level, and they relate equally to purchasing power and entitlement as to production and supply. Efforts to ensure food security must build on the already-established livelihood and coping strategies of poor people themselves. In other words, poverty and hunger are alleviated much more rapidly through stimuli directly targeted at production systems of the poor than through the indirect effects of stimulation of other economic sectors. The most sustainable response to poverty and hunger lies not in social transfers to improve consumption, nor in the improvement of social services--although these should be improved--but in strengthening the position of the poor, as economic agents, in promoting their own economic advancement through improvement of their own productive and income-generating capacities and opportunities. For IFAD, the central issue in supporting poverty alleviation involves improving the economic conditions under which the poor produce including both their resource base and its productivity. Without this, "social" measures cannot have an enduring impact upon the poor, nor will such measures be sustainable. The starting point should be a clear understanding of activities of the poor and the natural, social, economic and political environment in which they are carried out. The rural poor are not simply poor; they are poor farmers, poor herders, poor fishermen, poor entrepreneurs, poor women producers. What this means is that addressing "poverty" in general is not a meaningful proposition. What can and should be addressed are the activities associated with poverty. Effective reduction of poverty, therefore, involves identification of the economic activities in which the poor are engaged, specification of the potential for improvement, specification of the means of realizing that potential, and elaboration of a suitable supportive structure of policy, services and investment. Membership in IFAD is open to any state that is a member of the United Nations or of any of its specialized agencies or the International Atomic Energy Agency. The fund's 161 member states are classified as follows: List A (members of the Organisation for Economic Co operation and Development); List B (members of the Organization of Petroleum Exporting Countries); and List C (developing countries). List C is further divided into C1 (countries in Africa); C2 (countries in Europe, Asia and the Pacific); C3 (countries in Latin America and the Caribbean). The Governing Council is IFAD's highest decision-making authority. Each member state is represented in the Governing Council by a governor and an alternate. The Executive Board is responsible for overseeing the general operations of IFAD and for approving loans and grants. Membership on the Executive Board is determined by the Governing Council and is presently distributed as follows: List A--eight seats and eight alternates; List B--four seats and four alternates; and List C--six seats and six alternates. The President of IFAD, who also chairs the Executive Board, is elected by the Governing Council. Fawzi H. Al-Sultan of Kuwait currently serves as the President and Chief Executive Officer of the fund and, as such, is responsible for the day to-day operations of the organization. Mr. Al-Sultan was re-elected in 1996 to a second four-year term of office. IFAD has a small staff of less than 300 employees. It has implemented a programme of re-engineering and reform, which has been successful in fine-tuning a number of efficient, team-oriented work processes without, however, sacrificing personal commitment and creativity. The fund commenced operations with initial contributions of US$1,028 million in 1977 and has since had four replenishments of its resources. About two-thirds of the replenishments have been provided by the industrialized member states. Traditionally, the OPEC countries have been major supporters of the fund. A number of governance changes that were introduced in conjunction with the fourth replenishment are expected to pave the way for a more performance-related system of contributions in the future, since individual member states may now determine the level of their contributions based on an assessment of IFAD's effectiveness. IFAD is also engaged in developing a more wide-ranging concept of resource strategy in order to better respond to the changing global environment. In this connection, the fund is actively seeking new avenues of collaboration, not only with member states and other UN agencies and international financial institutions, but also with NGOs and the private sector. Thus, while continuing to be the core of IFAD's resource base, the replenishment process has now become part of an integrated resource strategy framework. Moreover, the fund is now receiving dividends from its 20 years of lending operations: loan reflows and related investment earnings provide significant revenues to cover the organization's administrative expenditures and ensure that additional sources of funding are available for new projects and programmes.
IFAD is not a relief agency. Its resources are made available on a cost recovery basis to finance projects and programmes to raise food security and income among the rural poor in developing countries, particularly the poorest developing countries. IFAD provides loans to its developing member states on highly concessional, intermediate and ordinary terms depending on the borrower's GNP per capita. Highly concessional loans carry no interest but have an annual service charge of 0.75% and a maturity period of 40 years, including a grace period of ten years. Intermediate term loans, which are made available to middle-income developing countries at a variable interest rate established annually by the Executive Board, have a maturity period of 20 years including a grace period of five years. Ordinary term loans are provided to high-income developing countries at a variable interest rate established annually by the Executive Board, with a maturity period of 15-18 years including a grace period of three years. IFAD's current annual lending level is about US$420 million. Approximately two-thirds of lending is on highly concessional terms to the poorest countries. In addition to its loans, IFAD provides technical assistance grants to institutions and organizations in support of activities aimed at strengthening technical and institutional capacities linked to agricultural and rural development. Grants are limited to 7.5% of the resources committed in any financial year. In addition to its Regular Programme (RP), IFAD has mobilized contributions for financing special programmes such as the Special Programme for Sub-Saharan African Countries Affected by Drought and Desertification (SPA) and the Belgian Survival Fund Joint Programme (BSF). Lending commitments since 1978 under IFAD's RP and SPA amount to US$6 billion. On average, each IFAD dollar loaned leverages about US$1 of domestic investment and slightly more than US$1 of aid from other sources. Thus the total value of projects financed by IFAD in 1978-1998 came to US$18.4 billion. Over the entire period of the Regular Programme some 36% of loan resources went to Asia, 30% to Africa, 17% to Latin America and the Caribbean and 17% to the Near East and North Africa. In recent years these proportions have changed to reflect the different pace of development among regions: at present approximately 39% of annual lending is earmarked for sub-Saharan Africa. Originally, IFAD was intended to be largely a financing institution. However, early experience showed that projects and programmes designed by institutions with no direct commitment to delivering benefits directly to the rural poor did not do well in targeting resources. Consequently, IFAD gradually assumed responsibility for the design of most of its projects--and today it is acknowledged as a leader in project development for the economic empowerment of poor rural producers. All projects financed by IFAD are nationally executed. IFAD has no field project staff. Projects are implemented by governments, NGOs, community groups and private contractors. Up until 1998, IFAD had not directly supervised any of its projects. The large majority of them are supervised by other international institutions--notably the United Nations Office for Project Services and the World Bank. In 1998, breaking this tradition, IFAD was authorized to supervise 15 new projects. This is being taken on without any addition to the number of staff. IFAD's operations support nine major areas: agricultural development, rural development, credit, irrigation, livestock, fisheries, settlement of displaced persons, storage, food processing, marketing and research, extension, and training. In all these areas, IFAD has always emphasized the development of participatory community-level institutions as the driving force of all its projects and programmes, and community involvement in the construction and maintenance of both economic and social infrastructures. In this context, emphasis is also placed on reaching and including the poorest of the poor, especially rural women and indigenous groups.
Collaboration with NGOs was already stipulated in the agreement establishing IFAD, which stated that "the Fund shall...cooperate closely with other intergovernmental organizations, international financial institutions, non-governmental organizations and governmental agencies concerned with agricultural development. To this end, the Fund will seek the collaboration in its activities of the bodies referred to above, and may enter into agreements or establish working arrangements with such bodies, as may be decided by the Executive Board." The development of an institutional framework for IFAD's collaboration with NGOs is essentially based upon the above-mentioned article and evolved over time with relevant decisions taken by the fund's governing bodies. IFAD perceived early on that in the context of its objective to promote community-based rural development and the creation of appropriate local institutions capable of responding to the specific requirements of small rural producers, and of linking their economy to national and international economic processes, NGOs could play a very constructive role. Their closeness to local communities; their intimate knowledge of local conditions and dynamics; their familiarity with the people's needs, aspirations, production systems and coping strategies; the trust they have built with the people--all could help IFAD design truly participatory and effective projects. IFAD/NGO partnerships have evolved within three complimentary frameworks: project collaboration in the field; the IFAD/NGO Extended Cooperation Programme (ECP); and, since 1990, the IFAD/NGO Annual Consultations. Collaboration in the Field The role of NGOs in IFAD's projects has been broadened dramatically over the years. While in the beginning their role was practically limited to the implementation of specific components, it now covers all stages of the project cycle: from formulation and design to implementation, monitoring and evaluation and impact assessment. Of course, collaboration in the field entails a tripartite partnership among the fund, the NGO and the government concerned. IFAD works with its member states to find opportunities for NGOs to participate in IFAD-financed projects and to be engaged by the government. IFAD cooperates with a variety of NGOs, ranging from well known NGOs from the North such as Association française des volontaires du progrès (France), Oxfam (United Kingdom) and Relief International (United States) and well known Southern NGOs such as MYRADA (India), to little known rural, indigenous NGOs such as SHALAMO (Zaire), Kekchi Council for Belize and Amaschina (Ghana). IFAD has made a major attempt to cooperate with NGOs from the South; 80% of all NGOs working with the fund are from developing countries. Equally diverse is the range of activities in which they are involved: socio-economic surveys, promoting group formation, managing credit delivery, farmer training, supporting the creation of small-scale enterprises, and supplementing government extension services in rural areas. NGO participation in IFAD projects has grown considerably. As of February 1999, 370 NGOs had been involved in IFAD-supported projects, compared to 173 in 1993. Of the 30 projects presented to the Executive Board in 1998, the majority involves collaboration with NGOs, most of local origin. In terms of regional distribution, 40% of the NGOs working with IFAD are in sub-Saharan Africa; 22% in Asia and the Pacific; 30% in Latin America and the Caribbean; and 8% in the Near East and North Africa, a region which also includes countries in Eastern Europe and the Commonwealth of Independent States. Given IFAD's emphasis on the development of participatory community-level
institutions as the basis of sustainable rural development, and its focus
on community resource management, local savings and credit institutions
as well as community involvement in the creation and maintenance of both
economic and social infrastructures, NGO collaboration focuses on these
areas as well. More specifically: NGO collaboration in 1998 concentrated on community mobilization; institutional strengthening and capacity building including training; implementation of rural credit and savings programmes; and technical assistance, particularly in resource management
In 1998, IFAD's NGO partners received technical assistance grants to implement activities that will enhance the achievement of a number of the fund's strategic objectives in the areas of local capacity building, increased civil society participation and knowledge gathering. For example, in Latin America the second phase of FIDAMERICA will be implemented in partnership with several NGOs in the region. An Internet-based system will expand the knowledge and information access of local communities, thus increasing their awareness of options and opportunities and their decision-making capacity in relation to such. In Asia, the Centre on Integrated Rural Development for Asia and the Pacific (CIRDAP) will identify, document and analyze best practices deriving from civil society organizations regarding the tools, methods and approaches to participation that can then be adapted within the project development, implementation and impact assessment processes. Another technical assistance grant, to the Foundation for International Community Assistance (FINCA International), will support a regional capacity building programme on micro-finance systems. Using the village-banking methodology that it pioneered, FINCA will create and strengthen local institutions that provide basic financial services to very low-income entrepreneurs, primarily women. This initiative will also support IFAD's Microcredit Plan of Action, which calls for the allocation of up to 30% of the fund's loan portfolio per year to promote financial services for the very poor, especially women, through the year 2005. Furthermore, several grants for collaborative research programmes with international agricultural research centres will involve NGO partners as the major brokers and facilitators in the interface between researchers and smallholders, and the promotion of participatory technology development driven by the farmers themselves.
Established in 1987 to further enhance IFAD/NGO collaboration, the Extended Co-operation Programme (ECP) provides direct grant financing to NGOs for pilot and innovative activities, especially in testing new technologies and institutional approaches, in support of ongoing or forthcoming IFAD projects and as an entry point for future investment by the fund and other donors. To date, 23% of ECP grants have been used to test new technologies; 45% to test new institutional approaches; and 34% to develop and implement training programmes for beneficiaries and extension personnel. An important feature of the programme is that it forms a direct link between IFAD and NGOs with consent of the host government, thus contributing to harmonized action and mutual recognition and appreciation among the three partners involved. The size of the ECP has increased considerably over the years. From US$450,000 in 1989, ECP allocation reached US$2,500,000 in 1998. By December 1998, ECP grants to NGOs totaled US$8.81 million for 139 projects, with a ceiling per grant of US$75,000. In 1998, 22 ECP grants were approved for financing. NGOs themselves contributed, in cash or kind, an additional amount of US$1,125,926. The average size of the ECP grants in 1998 was US$62,000; 70% of all ECP grants went to Southern NGOs. An NGO/ECP grant is different from other technical assistance grants for NGO services since the selected NGO is expected to use the grant to provide IFAD with prototype means of intervention that can be replicated by IFAD and its partners where similar conditions prevail. This has been, for example, the case of ECP-supported activities of CARE Zimbabwe aimed at forging effective ways of including private-sector interests in development activities. In this regard, the most interesting initiative of CARE has been the Agribusiness Entrepreneur Network and Training, or AGENT programme, which establishes a network of "agents" or agribusiness traders in remote rural areas. The agents provide smallholder farmers with locally available, comparatively low cost agri-inputs, thus promoting increased agricultural production. At the same time, having developed lasting commercial linkages with input supply firms, these agents become sources of agricultural information for farmers, effectively complementing public-sector extension services. Such was the success of the programme that different donors replicated it in other parts of the country, and the government is keen to expand further replication of this model under an ongoing IFAD-supported project using loan resources. Furthermore, a technical assistance grant was used to test and replicate the Agent Model in Kenya, Mozambique and Zambia. The experience gained in Zimbabwe is now influencing the design of market linkages in projects in Mozambique and Zambia.
Since 1990 the fund has held annual consultations with select Northern and Southern NGOs to review collectively, and exchange views on, major policy and operational issues affecting development initiatives in favour of the rural poor. The first consultation in 1990 focused on opportunities and constraints regarding IFAD/NGO cooperation in project design and implementation, and on the fund's approach to environmental sustainability and rural poverty alleviation as a propitious framework for close partnerships. An advisory group of NGOs and IFAD staff was formed to choose themes and select participants for subsequent meetings and to provide ongoing advice on ways to strengthen IFAD/NGO cooperation. Subsequent meetings have provided a forum for policy discussion through case studies of both NGO and IFAD projects of topics such as community mobilization, institutional strengthening and capacity building, implementation of rural finance programmes and conservation of natural resources. The eighth consultation, held in Rome in October 1997, was attended by
36 NGOs, of which 21 were from the South. The theme selected was Local
Action Development for Sustainable Resource Management. The lessons drawn
concentrated mainly on the NGOs' role as intermediaries in transmitting
lessons of experience to local communities and peasants' organizations.
Participants stressed the importance of new forms of organization and
incentives to mobilize people. They emphasized the problems of legislation
that often hinder NGOs in participating in development-oriented commercial
activities such as rural financial markets. NGOs recommended that the
fund should: The theme of the ninth consultation, held in Cairo (Egypt) in December 1998, was Networking and Cooperation Mechanisms. Participants examined and assessed existing modalities of collaboration between NGOs and a number of major regional and international institutions. An in-depth presentation was made on collaboration arrangements between African NGOs and the African Development Bank (AfDB), both from the perspective of AfDB and that of one of its major NGO interlocutors: Inades Formation. In addition to general policy issues, it was decided that the consultation should regularly include exchange of best practices and lessons learnt by NGOs in particular as a contribution to IFAD's efforts in collecting knowledge and experience from its NGO partners working in poverty alleviation. In this regard, the area chosen for 1998 was community development planning. For that purpose IFAD prepared an issues paper that was then examined by the NGO participants. Besides observers from local and international organizations and a number of IFAD staff, 35 NGOs attended the meeting, of which 23 were from the South. Communication IFAD's principal channels of communication with NGOs are the newsletter IFAD Update, the Annual Report, select internal documentation and reports, and the Annual IFAD/NGO Consultations. In the near future, the fund will open an NGO website. An NGO Coordination Unit, in the Economic Policy and Resource Mobilization Department, is the focal point for IFAD/NGO collaboration and partnerships. The unit maintains an NGO database which includes information on more than 900 NGOs working in rural poverty alleviation. Public access to this information will be made available through the IFAD NGO website. The Popular Coalition to Eradicate Hunger and Poverty The Popular Coalition to Eradicate Hunger and Poverty is a global consortium of intergovernmental, civil society and bilateral organizations committed to the empowerment of the rural poor by increasing their access to productive assets, especially land and water, and by increasing their direct participation in decision-making processes at local, national, regional and international levels. The primary goal of the coalition is to build strategic and innovative alliances between diverse development organizations giving particular emphasis to the role of civil society in overcoming hunger and poverty. Established as the outcome of an IFAD sponsored international Conference
on Hunger and Poverty in Brussels (Belgium) in 1995, the coalition was
formed to address two areas of common concern among the 1,000 conference
delegates. These are: Seven civil society organizations elected through an annual assembly, along with five founding intergovernmental organizations, comprise the 12-member Coalition Steering Committee. The five include the International Fund for Agricultural Development, Food and Agriculture Organization, World Food Programme, World Bank and the European Commission. While the coalition is supported by a global focal point located at IFAD in Rome, the programme of work has many different geographical nodes reflecting the coalition's diverse composition and world-wide nature. The coalition is focused on seven key areas where greater collaboration is expect to improve strategic effectiveness, policy impact and resource allocations. The Revival of Agrarian Reform. The right to land and water is basic to durable solutions to poverty and hunger. Without secure land tenure, poor rural people have no real access to productive resources, credit, improved technology and the support services needed to improve their productivity and income. The coalition is striving to create the enabling conditions, at national and international levels, for policy dialogue and programme planning to address the long-standing difficulties encountered in previous agrarian reform initiatives. Establishing Knowledge Networks. Physical isolation and scarce resources
are the constants of life for the rural poor. At present, the coalition
has formed a network supporting initiatives in 23 countries to capture
lessons learned from the practical work of civil society organizations
in land reform and tenurial security. Sharing of this knowledge will strengthen
the policy dialogue between civil society organizations and their governments.
Adding to this knowledge will be the results of an FAO-led initiative
by the coalition to identify the conditions necessary for the rural poor
to benefit from market-based land reform. The coalition will also support
the replication and up-scaling of successful experiences in order to demonstrate
the potential to governments of incorporating the experience of civil
society into their policies and programmes. Linking with the Formal Banking Sector to increase levels of microcredit
available to the rural poor. The International Loan Guarantee System is
examining the conditions by which guarantees can offset current constraints
to expanded commercial lending to the rural poor. These include lack of
collateral, high transaction costs and perceived risk of an unfamiliar
rural clientele. Contact: Sappho Haralambous, Programme Development Officer for NGOs and Civil Society, Economic Policy and Resources Strategy Department, IFAD, Via del Serafico 107, I 00142 Rome, Italy, telephone +39 06/5459 2238, fax +39 06/5459 2141, e mail <s.haralambous@ifad.org>, website (www.ifad.org). |
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