How external support can avoid the dependency syndrome and contribute to building more autonomous/self-sustaining farmers' organizations (with reference to the experience of IFAD regional grants to farmers' organizations)

Since the launch of the Farmers’ Forum in 2006, farmers’ organizations have steadily requested IFAD to increase its direct financial support to them. In 2006, the Synthesis of Deliberations of the Forum recommended direct financing for capacity building. The priority areas were related to: (i) engagement with policies; (ii) the economic role of farmers’ organizations; (iii) better communication among farmers and with broader society; and (iv) development of a national charter between farmers’ organizations and governments. Requests for continued direct financial support to FOs were part of the Synthesis of Deliberations presented during the 2008 and 2010 global meetings of the Farmers’ Forum.

The analysis of the partnership between IFAD and farmers’ organizations that was conducted for the 2012 Farmers’ Forum reveals that grant funding to farmers’ organizations for capacity building has reached almost 80 national farmers’ organizations in 60 countries during this biennium (including 36 national farmers’ organizations in sub-Saharan Africa). Although the amount, modalities and purpose of this demand-led funding are very diverse from one region to another, this is a unprecedented achievement for IFAD. Grant funding allows financial or technical support to be provided to farmers’ organizations independently from national government. This is of particular importance as it enables farmers’ organizations to engage independently in policy dialogue, lobbying and advocacy, and to conduct their own studies, research or consultation in the interests of their members. Significant results have been achieved in this regard in a number of countries of sub-Saharan Africa (with the support of SFOAP¹ programme), Asia (MTCP ²   programme) and Latin America (COPROFAM and REAF programmes).

Such steady and continued direct financial support from donor organizations like IFAD can be a challenge to the financial sustainability of farmers’ organizations at all levels. External financial dependency  can influence the ability of farmers’ organizations to represent the concerns of members in policy dialogue processes. It could also soften their accountability FOs vis-à-vis their members while increasing the accountability of the farmers’ organizations Secretariat to the donors.

Based on the exchange of farmers’ experiences from different parts of the world, this Working Group of the Farmers’ Forum 2012 will:

• discuss how farmers’ organizations are defining strategies and approaches to improve their financial sustainability
• analyse how financial dependency from donors and/or the public sector could weaken the accountability of farmers’ organizations to their base
• identify three or four sets of recommendations to be incorporated into the Synthesis of Deliberations of the Farmers’ Forum:

• to farmers’ organizations –  on processes and strategies to enhance their financial sustainability and how to tackle the issue of accountability and external financing; 
• to governments and regional economic commissions – on how partnership can be developed with them by farmers’ organizations providing services of public good type (e.g. advisory services, education, information);
• to IFAD – on how the partnership between IFAD and FOs (and in particular the next generation of generation of regional grants) should take into account a process that ensures the financial sustainability of farmers’ organizations;
• Other general recommendations – on financial sustainability and FOs arising from the discussion.

It is suggested that focused discussion place around the following issues:

Issue 1: Key factors for the financial sustainability of farmers’ organizations  

Sustainable farmers’ organizations are those capable of contributing to increased incomes of their members (through profitable engagement in the business of agriculture), which in turn could lead to higher membership fees. Such an approach – by far the more sustainable – is the most challenging, especially for organizations of poor rural smallholders and for organizations that are representing farmers in processes that are not directly linked to market engagement.
At the same time, some farmers’ organizations are providing a range of public-good type of services (such as advisory services, information and education) for which it would be difficult to raise funding from their members and that can be funded and supported by the public sector.

Discussion issues: What are the key factors to establish sustainable farmers’ organizations FOs and how can they be ensured? How do these factors differ according to the  sphere of intervention in which farmers’ organizations are operating (primary organization or a federation at national or sub-regional/regional level)? How can a virtuous circle be created whereby income-generating activities of farmers’ organizations’  members are increased and memberships contribution are also increased to pay the management costs of farmers’ organizations?

Issue 2: Financial dependency and weakening of accountability 

The financial sustainability of farmers’ organizations is highly relevant, in terms of their political and social autonomy and for their accountability to their members. Permanent or long-term donor support could increase the risk of supporting farmers’ organizations for specific advocacy campaigns rather than treating them as organizations capable of defending policy and social rights of their members and of providing services to them. It could also create financial dependency, especially for recurrent costs of management structures and other fixed costs. Such dependency could lead management structures to be accountable to donors rather than to members.

Discussion issues: What strategic partnerships should farmers’ organizations actively develop to reduce the risk of dependency on donor support? What kinds of strategic partnerships can be developed by organizations that are providing services of public good type? How can farmers’ organizations ensure a balance between their accountability to external financers and their membership base? How does dependency on external financing create tension between downward and upward accountability and to what degree?

Issue 3: Partnership between IFAD and farmers’ organizations

IFAD has increased its direct financial support to farmer’s organizations over the last six years, particularly grant support through their regional/global networks. In some cases, this approach has strengthened both national farmers’ organizations and their regional networks in a mutually reinforcing way. For IFAD, the systematic use of regional/global grants (instead of country grants) to support national farmers’ organizations has considerably reduced the transaction costs and has enabled the reaching of many national FOs has compared to the past.

The business model for IFAD loan-supported programmes and projects is to provide funding for investments – not for recurrent costs. Hence IFAD grant support to farmers’ organizations should be enabling FOs – at least in the medium term – to generate additional resources to promote sustainable FOs’ development trajectories.

Discussion issues: How should second-generation regional grant initiatives be designed to avoid pushing the dependency syndrome too far? How can continued and steady partnership between IFAD and farmers’ organizations, along with IFAD’s additional financial support, not threaten the political and social autonomy of farmers’ organizations and undermine downward accountability?

---