Lesson 1: credit for the poorest

Jordan’s financial institutions, including ACC, are at present not geared to servicing small scale producers who, apart from the problem of easy access, often find it difficult to meet credit terms and conditions, particularly relating to collateral requirements. The MTE found that ACC had developed a sound system of delivery of credit under ARMP, with due attention to sustainability of its operations. By promoting self-employment and income generation in resource-poor areas of Karak and Tafila, the ARMP credit activities, albeit in limited way, are assisting Jordan to resolve the two major macroeconomic challenges of poverty and unemployment and are also contributing to gender equity. To date, credit disbursements under ARMP constitute 76% of the appraisal target. This impressive achievement is due to much greater demand than anticipated for IGA loans from rural women. By comparison, credit disbursements for land consolidation and supplementary SWCs are far below the appraisal estimate, mainly because the demand for such loans was grossly over-estimated at the design stage.

The main weakness is that assetless poor and destitute rural women within the target group have no access to credit because of ACC’s stiff collateral conditions and the absence of any specific intervention or mechanism under ARMP to encourage and direct credit to these rural disadvantaged. Therefore although examples can be found where the effects of the credit have been to mitigate poverty, and these should not be under-estimated, these are specific to those cases where there is a guarantor acceptable to the bank.

Although mitigating poverty is a high priority for GOJ, ACC’s loan terms and conditions are stringent and not appropriate to ARMP’s poverty alleviation objectives. If IFAD’s development assistance strategy in Jordan is to continue support for GOJ’s efforts to improve the social and economic well-being of the rural poor, especially women, then either an alternative window needs to be opened through ACC, with appropriate support to mitigate the increased risks, or another credit channel needs to be tried or developed. In addition, the present loan repayment terms used for Income Generating Activities mean that the borrowers are penalised because they have to sustain the burden of debt service for unduly long periods. The result is that this undermines the poverty alleviation potential. The issue is for ACC to be concerned with the viability of the activity financed, rather than solely the ability of the borrower or the guarantor to repay the loan. This means relating the loan size and repayments to a typical activity model and cashflow prepared and updated for different packages. To address these concerns the MTE has formulated a detailed proposal for an appropriate credit window.

Recommendations:

• Extending Credit Outreach.To provide women from the most disadvantaged households with access to credit, the project management and ACC should, in mutual consultation, initiate action to develop alternative mechanisms that broaden the credit outreach. The objective should be to demonstrate the effectiveness and sustainability of a micro-credit development model (this is further detailed in the report).

• Determination of Loan Amounts and Repayment Periods. Loan amounts should be strictly limited to the outlay required for the IGA financed, as the burden of debt service for a higher loan than necessary results in a reduction of the financial impact in terms of increased income for the borrower. In addition, instead of the present standard period of 8 years, loan repayment periods should be adjusted to the net cashflow of the activity financed and include, where justified, appropriate grace periods. The implementation of these measures would permit ACC to service a larger number of borrowers with the available loan funds.

• Increasing Funds Allocation for the Women’s Programme. Since the demand for loans for land consolidation is very low, consideration should be given to the re-allocation of these credit funds to meet increased demand under the women’s credit programme. In addition, further use of substantial funds allocated for institutional strengthening is unlikely, and these might also be used in the credit programme.

Lesson 2: the selection of income generating activities

The MTE found that that there were many positive impacts from the promotion of IGAs. The project lending has helped to generate rural employment, developed entrepreneurial skills among rural women and enhanced their economic clout and recognition. Goat and sheep breeding loans, and to a lesser extent loans for dairy/milk processing were found to be having positive impacts in terms of returns to family labour, addition to household income, and improvements in family nutrition. The impact is, however, marginal in the case of loans for food processing due mainly to marketing problems. It was estimated that for the 220 women borrowers who had actually undertaken enterprise development with loans from ACC at the time of the MTE, the average increase in incomes has been about JD 150 per activity. This represents an increase in annual family income of about 10% to 12%. Despite this, one of the findings from the socio-economic survey conducted by MOA was that out of the women who had taken loans from ACC under the project, only 37% had actually started enterprises. The principal reason given was the inability to sell the produce from the IGAs. This serves to undermine the poverty alleviation objectives of the project.

The MTE concluded that at the moment women do not have access to sufficient information or guidance to make informed choices about their investment decisions, and these choices are far too limited and, in many instances, insufficiently financially attractive. In addition there appeared to be considerable potential for assisting women to undertake these activities on a group basis.

In addition, the cohesiveness of the overall programme is lacking at the moment because of the need for a comprehensive approach which addresses the development process for women in its totality. The gaps are in information, appropriate levels of funding geared to the cashflows of the selected IGAs, marketing assistance and generalised support and encouragement. There is a need for the beneficiaries to become the centre of the development effort, and for the services provided to be focussed on responding to their needs.

Recommendations:

• Improved Technical Support. The appraisal included TA intended to fill the knowledge gaps and refine the project design. This TA, which has not so far been activated, should be immediately initiated, covering:

a feasibility study to identify a wider range of suitable and profitable income generating activities;

NGO support under contract to assist in pre-credit activities for women, including group formation and training;

action-oriented market research to assist women market their products.

• Production and Marketing centres. The project needs to address the twin problems faced in establishing and maintaining production standards, and in marketing. The approach recommended is to establish, on a trial basis, district-based production and marketing centres, using funds which would otherwise be unutilised from the women’s programme. These centres should be established in districts where NGOs or CBOs are willing to take the responsibility for implementation, with the project supporting initial set-up costs. The centres could also be used for training. Technical assistance should be employed for developing proper brand names, the standardising of product specifications, proper packaging and sales. They could also act as consolidation and marketing outlets for village based production units, which would comprise groups formed to undertake production activities jointly. Group based activities should be encouraged, possibly by the provision of storage and processing equipment.

• Staff Training. There is a need to provide institutional and technical support to WID staff through additional training in enterprise development, group formation, communication skills and monitoring and evaluation skills.

Lesson 3: participation in the project

Although the project design describes an overall participatory community-based approach for the implementation of ARMP, in practice there is no systematic approach to community participation and in most cases ARMP and ACC staff deal with individual beneficiaries. There is a strategic and urgent need both in the project and for the benefit of MOA in its approach to implementing development projects generally, for more participatory approaches to mainstreamed. Unless this opportunity is taken, the longer term benefits, especially in terms of sustainability and the transfer of responsibility for setting the development agenda to the local communities, will be lost. For IFAD, it is important that GOJ demonstrate a growing commitment to such approaches, so that project designs can be implemented in the way agreed.

Under the soil and water conservation, agricultural development and olive rehabilitation programmes, community participation would help to disseminate information more widely and would assist with proper identification of intended beneficiaries. Under the mini-dams, hafirs and spring rehabilitation components, community participation would ensure that scheme location and design reflects the needs of the beneficiaries, would help to mobilise community resources and would contribute to scheme sustainability. Community participation in the women’s programmes would help to manage the enterprises on a more professional basis and create opportunities for economies of scale in production and marketing.

For MOA overall, a revised approach to include a greater degree of community participation in the second half of the project would provide the opportunity to assess the increased benefits from this approach and would expose staff to a learning process for the benefit of future projects.

The participation of an NGO to lead the social intermediation process would be highly desirable, especially in some of the collective projects such as spring rehabilitation, mini-dams and Hafir construction. However, the current experience and approach of NGOs with spring rehabilitation does not add much value to ARMP. There were no NGOs found in the project area dealing with community participation aspects of mini-dams and Hafirs. The only real scope for participation of NGOs under ARMP seems to be with NGOs operating marketing programmes for women. For other components, it is concluded that ARMP should itself develop an approach to community participation that would add value to its work and enhance the sustainability of its investments.

Recommendations:

It is strongly recommended that MOA utilise the remaining three years of project life to develop its own approach to participatory methods for use in its projects. This would involve a number integrated activities, as follows:

• A clear policy statement on participation needs to be made and operational guidelines and instructions prepared for the implementation of the policy.
• In the case of ARMP, the post of Community Development Officer in the PMU, which was scrapped at the beginning of the project, needs to be reinstated, and four more field officers appointed in the Field Units.
• The participatory approach needs to be integrated into the work plans and work habits of all members of the ARMP team or it will be unlikely to succeed, hence an orientation, training and visits programme needs to be devised for ARMP and MOA headquarters staff in community participation approaches to agricultural development.
• ARMP should make use of its technical assistance budget to employ short-term TA for community participation.
• Once these steps have been undertaken, then community participation approaches appropriate to each activity (described in detail in the report) should be introduced in the remaining period of project life. The community participation approach suggested differs from one activity to the other, keeping in mind whether the activity is household based or community based, and is designed to improve the implementation methodology by empowering the community for local level decision-making for agriculture and resource management. Where activities are designed for individual households, the community role is to mediate and negotiate decisions based on consideration of equity and sustainability.  
• There is need for careful monitoring of the value added and impact of adopting a community participation approach. The existing monitoring and data collection system should therefore be upgraded to include impact indicators for community participation.

Lesson 4: extending environmental benefits

A major aim of ARMP is to limit environmental degradation by enhancing soil and water conservation. The recent IFAD Country Strategy and Opportunities Paper emphasised the critical situation in Jordan with respect to water availability, pointing out that water resources are presently being exploited at 150% of sustainable yield levels. For water conservation, the project should easily exceed its appraisal target, resulting not only in more water for livestock, but also increased recharge of groundwater. In addition the achievements for stone walls are impressive – so far about 70% of appraisal targets have been met.

In early 1997, Yasin heard about the IFAD funded Agricultural Resources Management Project through staff members of the project on a field visit to his village. He applied for the development of his land under the soil and water conservation component, and received financial assistance worth JOD 1130 for the construction of a cistern, stone wall terracing and fencing to protect the land against free grazing animals. He contributed labour and materials worth JD 900 for enlarging the cistern from his own sources. With the help of the project, he planted his newly developed land with olives. He hopes to earn a yearly income of upto JOD 1000 once the olive trees start fruiting. He is grateful to the project for helping him undertake investments that were beyond his capacity.

The project staff from ARMP also consulted his village before building the Om-Ganeem mini-dam about 1-2 kilometres from his village. He hopes that once the rain comes, this dam will help to collect and store water and help him to reap greater benefits from the investment in his land. Women and children from the Rashaidi clan pose in front of their house to which they can now lay claim.

The impacts of soil and water conservation will not become immediately apparent as it take a number of years for the stone walls, in particular, to become effective in reducing soil erosion and water runoff. Nevertheless, as technical interventions, these conservation structures are virtually permanent (with minimum maintenance) and they will therefore directly help to realise government and project objectives. The combined effect of SWC improvements will result in the increased robustness of the farming systems, and greater water availability for both irrigation and municipal/domestic uses. On reclaimed upland areas the fruit tree planting programme is likely to provide useful increases in incomes for the beneficiaries: the MTE estimated about JOD 250 per dunum for new planting, which should be adequate to encourage planting and help realise the investment in conservation activities. Not surprisingly, there has been a continuing high demand by farmers for participation in the SWC programme as a whole. Experience at the mid-term has led the Project Management to suggest the adjustment of physical targets and to propose a re-allocation of funds, in order to expand the SWC programme.

Recommendations:

• The project funds should be re-allocated along the lines put forward by the project management. However, before a re-allocation is submitted the project should examine the full consequences of the re-allocation on all project interventions, submitting justifications for the quantitative revisions. In addition the increased number of beneficiaries and the flow of benefits should be projected. ARMP should consider asking IFAD to assist with the preparation of this document, and should indicate the increased contributions expected from GOJ and the beneficiaries.

Lesson 5: water for irrigation

Springs. Springs are the major water resource for many villages and provide domestic water, drinking water for animals and supplementary irrigation for crops, particularly perennial tree crops (such as olives, grapes and figs) and vegetables. The Spring Rehabilitation programme seeks to protect springs against falling debris and contamination from livestock and other sources, while the main channels are lined to reduce water losses. A lower limit of 2 dunum was placed on involvement in this activity. The MTE assessed that the project had achieved 43% of its spring rehabilitation programme (and 141% of the canal rehabilitation target), with most spring rehabilitation works appearing to be well-constructed. Overall, the MTE considered that the project efforts in spring rehabilitation were sustainable and concluded that these activities would increase the amount of water available in the field by about 25-33%, which would ultimately lead to a sustained productivity increases.

However, the MTE concluded that limited staff numbers and shortage of transportation was affecting this programme. Each District Field Unit has only one project extension officer responsible for spring rehabilitation (along with their other duties in olive rehabilitation and cereal crop demonstrations), and there are no Field Engineers located in the districts. Increased beneficiary consultation and involvement, although desirable, would exacerbate this situation. In addition the lower area limit is excluding some of the poorest and most needy farmers from participating.

Cisterns. The MTE concluded that cistern construction and rehabilitation was an important mechanism for achieving project objectives: in addition they facilitate savings on the purchase of (domestic) water, which can range from JOD 0.4 to JOD 5 per m³. So far 1 170 cisterns have been completed, covering about 70% of the number of farms included in the SWC programme. This number represents about 37% of the targeted number of cisterns. There has been a continuing high demand by farmers for cisterns, however substantial under-costing at appraisal has resulted in expenditure of almost 64% of the budget. Management proposals for the second half of the project are to increase in the volume of water stored in cisterns by nearly 20% above present plans, and to rehabilitate old 100 cisterns.

Recommendations:

• Additional resources, including a field engineer and vehicle, should be provided in each field unit to be responsible for spring rehabilitation and canal lining activities. This would allow for greater concentration of effort on spring rehabilitation, plus greater beneficiary involvement in all the activities.
• The size restriction of 2 dunums should be lifted to allow staff to work with groups of farmers in spring areas, both for technical reasons (common spraying against pests such as scale insects and olive stem borer) and to increase benefits from spring rehabilitation works.
• The proposed 30% increase in the number of cisterns (from 1 730 to 2 240) should be approved since there is a high demand from farmers and there are substantial potential benefits in providing supplementary irrigation, especially during the planting and establishment phase of fruit trees. The overall target should be reviewed again towards the end of the project to determine if it could be increased further.
• Consideration should also be given to widening the cistern activity to include farmers that already have fruit trees and meet poverty criteria, who are not presently included in the soil conservation programme, including farmers who have participated in previous programmes.
• There should be an expanded demonstration and field testing of other water harvesting methods (such as micro-catchments) by NCARTT/Extension system, with the project role including the identification of farmers and assisting in the organisation of field days and training.

Lesson 6: poverty vriteria for reaching the poor

There are several factors in the ARMP criteria that have the potential for excluding the poor. This exclusion could happen as a result of the minimum land criteria, the requirement to produce funds up-front for some of the project activities, the submission of original land papers for SWC activities (which the poor are reluctant to do), and the requirement for monthly salary deductions for loans. ARMP has no records of the socio-economic profiles of the beneficiaries. Using proxy indicators for determining the income status of the beneficiaries, such as educational level, family size and source of employment and comparing these with the results of the recent MOA survey it appears that the beneficiaries of ARMP can generally not be described as the poorest. ACC records some information on the income and land holdings of its borrowers; these figures indicate that in Karak and Tafila, households that have taken loans from ACC have incomes that are 100% and 81% above the GOJ poverty lines for the respective Governorates. The lesson is that the poor and vulnerable households have to be specifically targeted if they are the intended beneficiaries of a programme.

Estimates of how poverty and gender are related vary. The Living Conditions Survey of 1996 indicated that there was no significant difference in poverty by gender. However, a study of poverty in the Highlands showed that women headed households are poorer and with less economic assets compared to male headed households. These figures suggest that unless women are specifically targeted they will not have access to loans for land development. Women reportedly have difficulty obtaining loans from ACC for activities outside the specific women’s programme, primarily due to the lack of land and the required collateral. However, no specific effort is made to target female-headed households under the SWC and agricultural development programmes.

Recommendations:

• Poverty criteria are needed to identify the poor – not landholdings. The approach to targeting the poor, female headed households and households with a greater reliance on agriculture has to be carefully determined and included in the operating policy and procedures of the project. ARMP is in a strong position to reconcile the twin objectives of poverty alleviation and agriculture growth, but only if the selection criteria are relaxed. The recommendation is for ARMP management and staff to examine the operating procedures of the project to identify changes necessary to re-orient their approach, and so to make targeting of the poor more realistic.
• There is a need specifically to reinforce a targeting criterion for female headed households, to ensure that such households are not being excluded from benefiting from project activities.