IV. LESSONS LEARNED

67. IFAD financed projects in Honduras have formed the basis of pioneering experiences in different fields such as sustainable agriculture, development among indigenous peoples and the construction of rural roads. However, it has to be pointed out that even though the area development projects have played an important historical role in certain areas of the country, their influence in the struggle against rural poverty at a national level has been limited. The four IFAD financed projects in Honduras are 'area development projects', located in zones of greatest rural poverty as well as in border areas. This has enabled them to have positive geo-political effects by acting as 'social security valves', but they have had only a limited effect on increasing earnings for the target population. These experiences show that an alternative for future IFAD support in Honduras (could be to support national programmes, participating in their design (and eventually their financing). Such programmes could be focused on specific questions which could contribute in a more effective way to improving the well being of the rural population. Such issues could include small watersheds and rural poverty, land acquisition by the rural poor, indigenous populations, rural women, generation and transfer of technology, agroforest and grazing systems and rural financing.

68. For example, an alternative could be the design of a National Support Programme for Rural Women. This could focus on gender issues and should not be based on sponsoring women groups but on the promotion of rural women integrated in their social environment. This programme could approach the problems of rural poverty through actions aimed at adequate training of the staff of institutions which operate in the rural area.

69. The basic strategy of the projects, working with groups confirmed that this procedure saved costs and increased coverage. However, the projects’ experience showed that when projects developed activities with groups which already existed, the results were better than when groups had to be organised by the projects themselves or when it was necessary to organise farmers so that they could have access to credit. Therefore, projects should initially dedicate a significant part of their activities to identifying pre-existing groups which are already organised to a certain extent, particularly in the case of those groups which are homogenous as far as production possibilities of their members are concerned.

70. However, projects should also cooperate in organising and gradually training new groups. This should be done not only with a view to using the groups to implement projects but also because the formation of such groups could help build up social capital, and solid organisations at a basic level which is vital for sustainable rural development.

71. Project design overestimated the availability of agricultural technology (especially for cereals) suitable for increasing yield by area and improving cost-effectiveness on mountainous land. This meant that increases in production and earnings of the target population were not up to expectations. Something similar happened with the soil conservation technologies which were advocated. With a few exceptions, these required intensive labour inputs and were therefore not adopted or were not sustainable. The limited agricultural potential of these areas meant that farmers had to dedicate more time to maintenance and had less time for conservation work.

72. The lack of development potential for basic cereals means that it is very important to look for solutions based on diversification (which in practice happened more during the implementation of the project than in its design) and special consideration should be given to non-agricultural solutions (such as rural microenterprises) for the rural poor.

73. Project design was unable to take into account all the changes which took place during implementation and experience has shown that it is impossible to foresee all possible changes. So allowance should be made for on-going adjustments during the execution phase, according to changes in social, economic and political realities. Given the uncertainty during the design phase due to factors which may come to light during the execution phase, less resources should be allocated to the pre-approval phase and more to the execution phase. This could be done, for example, through an ad-hoc 'technical assistance fund' for adjusting the project in order to make it easier to adapt it to changes taking place in the project’s environment.

74. All the projects became too credit oriented. Too much emphasis was given to placing credits funds. This meant that a dominant role was given to credit in the operational strategy. One of the main indicators used to measure the advance of the projects was the level of placements reached, while other equally at least (or even more) important aspects were ignored. Even technical assistance was subjected to credit, which meant that technical assistance as an independent tool for improving the situation of the target population was not fully developed. The fact was not recognised that credit might be neither useful nor necessary for many individuals or organisations. The projects still operating have a credit biased approach.

75. Estimates of agricultural yield and loan disbursements were unrealistic. Project design assumed that within a five year period yields would greatly increase, and that this would require loans for the rural poor at levels much higher than those which were actually demanded. One of the reasons for such unrealistic estimates was that traditional economic evaluation techniques were used in the design process. The critical values of the parameters (such as the internal rate of return) were expected to be similar to those reached in traditional projects, although neither the distribution effects foreseen for this type of project (directed towards fighting rural poverty) nor environmental effects were explicitly included. In the future, yield and credit demand estimates would be more realistic if IFAD and the Government of Honduras innovate in the application of social costs benefit techniques, incorporating poverty alleviation effects.

76. Certain elements in the projects, such as credit and agricultural extension, were generally not orientated towards landless populations or towards those who do not hold the title to the land, which represent a significant part of the rural poor. To include the landless population non-agricultural activities and/or interventions in the land market could be instrumental. The Intibucá-La Paz project was, in part, an exception to this since one of its objectives was the provision of land titles, including some to indigenous populations. There are other important projects in Honduras (including those, for example, of the Belgian Cooperation) which intervene on the land market to enable the rural poor to buy land.

77. So the problem of how to deal with the landless population persists in the projects. Given that the main resource of the poor is their own labour, they can be helped by widening the possibilities of participating in the labour market as wage earners. Activities of commercial producers can be stimulated to create more opportunities for earning more. This can be done in the case of small producers and also by developing the capacity of intermediaries (merchants, processing and transport agents). In future Fund interventions, the possibility should be examined of incorporating medium producers or intermediaries into projects cofinanced with other institutions (for example World Bank or IDB), while IFAD directly finances the rural poor. In this way the demand for labour in rural areas could be increased.

78. Support for rural women through the formation of women’s' groups resulted in some partial achievements. It did not, however, lead to an integrated approach to issues relating to rural women (their needs in the productive field and their time limitations were not taken sufficiently into account). Moreover, very little was achieved by the projects as far as improving the situation of rural women in Honduras at the national level is concerned.

79. The rural roads built by the projects have reduced transport costs, thereby facilitating access to and from the communities, both of goods and services. This has helped improve the quality of life of rural families (including the landless, wage earning workers).

80. The projects under way have not focused on indigenous populations as a target group warranting special attention. In the future, it should be ensured that new projects involving indigenous populations take into account their local political organisation as well as the implications that their customs and cultural-religious beliefs have in the design and implementation of project activities (for example, given the religious value of local maize varieties for the native indigenous population, the attempts to introduce new maize varieties in the Intibucá-La Paz failed, but there was scope for improving agricultural practices. At the same time, new bean varieties could be introduced without any cultural restriction).

81. The implementation of the first three IFAD financed projects in Honduras was seriously affected by the instability and quality of management and technical personnel. In the case of PLANDERO, long term contracts have been established as well as mechanisms for an open contest process which will help reduce these problems. But they will only be solved once detailed procedures have been adopted indicating which steps to follow in the selection, contracting and periodic evaluation of project personnel. An important factor which made implementation more difficult was the fact that management and technical personnel were insufficiently trained in strategic and operational planning. This was missing in project design. Another vital aspect is that management and technical personnel should develop strong bonds with the local society which means that they must live in the area in which the projects are implemented.

82. Project supervision was affected by 'communication gaps' between IFAD and the CIs . Since the project design cannot possibly foresee all the critical aspects and changes which will take place during execution, supervision plays a vital role in supporting and controlling the implementation process. In order for the supervision process to function adequately, the Fund should make it quite clear what it expects from the supervision process being handled by the Cooperating Institutions, both at the beginning of the projects as well as periodically updating the requirements. The quality of the supervision process may increase without an increase in its cost, combining supervision with technical assistance funds provided as part of the loans. Thus, the CIs could identify problems and contribute to their solutions by mobilizing technical assistance funds included in the projects’ budgets.

83. The monitoring and evaluation systems have not performed satisfactorily for a series of reasons. One of the key factors for their non-performance has been the merger of the monitoring function with the evaluation function within a single administrative unit, the "monitoring and evaluation unit". These units were requested to be at the same time independent from project management, for the sake of evaluation, and to strongly support project management. These were inconsistent requirements and the actual experience was highly conflictive. Progressively, the monitoring function has become the most important one, and in the design of PLANDERO it is separated from the evaluation function (which is not operative neither in PLANDERO nor in Intibucá-La Paz).

84. Another limiting factor for the performance of the M&E systems have been the lack of orientations on M&E for supervision missions. In the short term a way to facilitate supervision of M&E is through the application of the analytical guide prepared by OE ("FRAMES"). Furthermore, agreements should be established with national and Central American institutions with capacity to carry out evaluative studies. Another avenue for improvement is to ensure the relevance of the loan agreement clauses relative to M&E. Last but not least, the projects did not allow for enough beneficiary participation in the M&E system, thus restricting the possibility to incorporate the "voice" of the rural poor in the implementation process. The existence of grassroot organisations, such as the "Comités de Desarrollo Local" and the "Patronatos", could be used by the projects in order to involve beneficiaries in a participatory way in M&E (and in other aspects of the projects).

85. The implementation period for project execution as foreseen in the appraisal reports were not met since they were too short. All the IFAD cofinanced projects in Honduras were intended to have an execution period of five years. The Honduras experience (and that of other countries) show that projects financed by IFAD are normally carried out in not less than seven years. During the first years of implementation there is an initial 'learning' period of one or two years when strategies are being defined and operative procedures tried out. This must be taken into account when designing future projects.

86. There is an important element which has not received due attention in the formulation of the Honduras portfolio of projects. This is the fact that the geographical location, the similarities in the design of the components and the conditions of the target population mean that much can be learnt from other projects. Although this has occurred from time to time, it was not done systematically, so that each new project sometimes had to repeat experiences which others have already gone through and relearn what others have already learnt.

87. In a wider sense, this lack of sharing experiences between projects can be extended to other Fund projects which are not in Honduras but in neighbour countries. Thus, in adjoining areas, (west of Honduras, north of El Salvador and east of Guatemala) there are currently five IFAD financed projects being executed, literally side by side. These projects together represent US 101 million dollars and are striving to benefit a total population of 31 000 rural families. However, since they are located in three different countries, they are not seen as a homogenous group. There is a significant potential for horizontal technical assistance, exchanges and joint studies (for example, commercialisation of products from one project could be marketed in another since they are so close to each other).

88. Finally, an institutional, national and regional potential exists that could provide more support in rural poverty alleviation. National and regional Central American institutions specialising in themes related to agricultural and rural development (such as the CATIE, the Zamorano School, INCAP and CIAT), and some of the NGOs working in Honduras have a potential for greater contributions to rural poverty alleviation which could be mobilized and coordinated via programmes, projects and grants.

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