Special issue: September 2009

Working together in South Asia: IFAD and the World Bank

Message from Adolfo Brizzi, Simeon Ehui and Thomas Elhaut

We spend so much time just handling the day-to-day requirements of managing projects that it is easy to overlook important elements of our work – partnerships, for instance. 

IFAD and the World Bank have been close collaborators in the South Asia region for years, and this collaboration has been critical to the success of many interventions. Our current programmes intersect in Afghanistan, Bangladesh, India, Maldives, Nepal, Pakistan and Sri Lanka at both the policy and programme levels.

A partnership framework was developed four years ago and has been monitored annually through staff and management consultations and reviews. It has allowed us to better identify areas of synergy and complementarity as well as achieve a much closer alignment on the strategic thrust of our work in agriculture and rural livelihoods.

This joint newsletter captures some of our collaborative efforts on the ground. We hope that it successfully brings to light the important partnership between our two organizations and inspires each of you to identify opportunities for joint collaboration and reach out to your colleagues in other organizations to work together even more closely on our shared development goals.

Adolfo Brizzi, Former Sector Manager, Sustainable Development Department, Agriculture and Rural Development Unit, South Asia Region, World Bank; Simeon Ehui, Sector Manager, Sustainable Development Department, Agriculture and Rural Development Unit, South Asia Region, World Bank; and Thomas Elhaut, Director, Asia and the Pacific Division, IFAD

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Promoting innovation and competition to increase productivity and food security in Bangladesh

   
 

A women's group meeting

  

Increasing population, a declining land base and stagnating yields threaten self-sufficiency of rice in Bangladesh. Increased demand for rice can have negative implications on the country’s food security. To address these challenges, IFAD and the World Bank are assisting the Government of Bangladesh through the National Agricultural Technology Programme. The programme aims to strengthen the national agricultural technology system – its research and extension services to farmers.

Challenges in agriculture

No country has moved out of poverty without first developing its agriculture sector. In Bangladesh, where half the population is still below the poverty line and about 85 per cent of people live in rural areas, poverty remains a rural phenomenon and the agriculture sector remains central to poverty reduction efforts. The sector accounts for about 23 per cent of the gross domestic product (GDP) and another 33 per cent comes from the rural non-farm economy, which is largely linked to agriculture.

Over the last three decades, production of rice has increased to near self-sufficiency levels, but other commodities have had lower growth. According to researchers, Bangladesh will need to add 330,000 MT of additional rice to its output each and every year for the next 20 years just to keep up with population growth.

But increasing population, a declining land base, and stagnating yields threaten such an achievement. Moreover, lagging yield growth in other commodities, lack of technology at the field level, an under-developed agro-processing industry, and low private-sector involvement all weaken the ability of Bangladeshi agriculture to compete in the 21st century.

Recognizing the challenges facing agriculture, the Government of Bangladesh requested support to create a decentralized, problem-solving, pluralistic and demand-driven agricultural extension system. This would help the country develop a long-term strategy for strengthening its technology system, taking into account the new challenges and the changing roles of the public and the private sectors. The World Bank and IFAD responded with the National Agricultural Technology Programme. 

A ‘home-grown’ initiative

The programme was designed by local experts after long consultations with stakeholder groups on how best to address the challenges currently facing the agriculture sector. It will strengthen the national agricultural technology system – research and extension services to farmers – through innovation systems and demand orientation of services.

The programme, which began in May 2008, is being implemented jointly by the Ministry of Agriculture and the Ministry of Fisheries and Livestock over a five-year period.  This unique and innovative programme has three main components:

It focuses on revitalizing the agricultural technology system, getting research and technology on the ground and in farmers’ hands, improving post-harvest management, and forging the final link to markets.

Programme innovations

One of the very innovative features of the programme is the Competitive Grants Programme, which is managed by the Krishi Gobeshona Foundation (KGF), a non-profit organization established in 2007. KGF is managing the programme of competitive grants for short- to medium-term projects in high-priority research areas. The goal is to draw on the ideas and innovation of government, the private sector, academia and civil society to help the agriculture sector. 

By November 2008, the first tranche of 30 grants had been awarded to a broad spectrum of organizations working in areas such as:

The Competitive Grants Programme will be an ongoing initiative that will provide seed funding to innovative research and help develop and strengthen the agriculture innovation systems of the country.  

Beyond innovations in the supply of research and technology, the programme is developing farmer demand for services. The project’s extension component is mobilizing communities engaged in cropping, livestock and fisheries, so they can participate in bottom-up planning exercises to develop demand-driven extension plans. Plans are also under way in ten selected upazilas (sub-districts) to link community groups and producer organizations with markets by developing supply chains for agricultural products such as vegetables, dairy and fish.

Watch the programme’s developments over the next four years, as results begin to show on the ground!  It can make important contributions to Bangladesh’s goal of increasing agricultural productivity and improving the food security of its people. 

The National Agricultural Technology Programme is jointly funded by the World Bank (International Development Association – IDA – Credit of US$62.6 million), IFAD (loan of US$19.4 million), and the Government of Bangladesh (US$2.6 million). The IFAD loan for the programme is being supervised by IDA. The programme was developed under the leadership of Mohinder Mudahar (World Bank) and Nigel Brett (IFAD). For more information, please contact the current task team leader, Animesh Shrivastava or Farzana Morshed.

Farzana Morshed, Operations Analyst, Agriculture and Rural Development, South Asia Region, World Bank-Dhaka

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Who are the poor? Targeting poor people in the Poverty Alleviation Fund in Nepal

   
 

In village meetings like this one the results of poverty targeting are presented and approved

  

A participatory approach has taken the front seat in rural development. Experience shows that poor targeting is one of the main reasons why desired outcomes are often not achieved in poverty alleviation programmes. Furthermore, experience of successful community-based programmes, both in Nepal and elsewhere, shows the critical importance of supporting careful capacity building and social mobilization. Through the Poverty Alleviation Fund, Nepal (PAF Nepal), IFAD and the World Bank support poor and excluded people, whom they target carefully.

To reduce poverty, accurate targeting of poor people within communities is essential. At the same time, the distinction between the ‘poor’ and ‘not poor’ can be very slight. Careful measures are required to ensure that no social tension is created when targeting project participants.

With support from the World Bank and IFAD, under the PAF Nepal project, targeting of the project participants is performed at the district and village levels, and in a participatory manner at household levels. The objective of PAF Nepal is to support the Government of Nepal to reach poor and excluded communities. By reaching these people, the aim is to improve access to income-generation projects and community infrastructure for groups that have tended to be excluded by reasons of gender, ethnicity and caste, as well as for the poorest groups in rural communities.

The villagers have defined the socially and economically disadvantaged rural households as those falling into the categories of the excluded groups and those who were very poor. The excluded were those who normally had ‘no say’ in the decision making in the society – mainly women, dalits and janajatis (indigenous population). Poor households are selected based on the number of months that they have sufficient food supply.   

The hardcore poor are those with three or fewer months of sufficient food supply. The medium poor have food sufficiency for three to six months and the poor for six to twelve months. The partner organizations facilitate discussions among the villagers and help them identify the poorest households based on the agreed criteria of food sufficiency. Income-generating activities are then supported among the poor households identified.

In PAF Nepal, 68 per cent of households selected to be in the project’s community organizations – the basic units of organization of the poor in the project – were hardcore poor, 24 per cent medium poor and 8 per cent were poor. A total of 32 per cent of those included were dalits, 44 per cent janajatis and 24 per cent others (their respective share in the total population are 12 per cent, 19 per cent and 69 per cent). Women accounted for 67 per cent of the total number of members of the community organizations.

Effective targeting of poor people has been one of the most successful components of PAF Nepal. Its application did not cause community grievances during the project implementation. Communities have accepted participatory identification of poor people as a true indicator of determining the poverty levels of an individual household from their own perspective.

Smriti Lakhey, Junior Professional Associate, Agriculture and Rural Development, South Asia Region, World Bank

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Supporting small-scale dairying in Sri Lanka through community-driven development

   
 

A simple shed for cows constructed with the help of the programme

  

Since 2006, IFAD and the World Bank have been working together to alleviate poverty in the dry zones of Sri Lanka. This partnership started when the Bank was formulating the Community Development and Livelihood Improvement Project (known as ‘Gemi Diriya’), and IFAD was designing the Dry Zone Livelihood Support and Partnership Programme (DZLiSP). The World Bank became the cooperating institution to the IFAD-supported programme, supervising activities and supporting community-driven development (CDD) approaches to dairy farming. 

The programme operates in four dry zone districts of Sri Lanka, two of which – Badulla and Moneragala – are very poor and are also Gemi Diriya districts. The Dry Zone Programme focuses on developing:

The multitude of components and innovative features – such as decentralized management at the district level and greater involvement of non-public-sector service providers – can address poverty reduction in a holistic manner. However, they make the programme’s implementation complex. Consequently, the approach to implementation has evolved to simplify some components, such as upland agriculture and livestock.

   
 

Community mobilizers reviewing the progress of a subproject investment supported by the programme

  

To implement the livestock component, the programme design document recommended the Farmer Field School (FFS) approach. New technologies or practices are adopted in FFS on a pilot scale with the participation of a group of farmers. The cost of inputs is shared between the group and the project, and the public- or private-sector institutions provide technical advice. At the end of the pilot, participants are expected to adopt the piloted practices on their farms. Under this approach, the development of livestock – mainly dairy farming – faced several obstacles such as budget limitations for dairy demonstration and unavailability of service providers who could support supplying and insuring cows, organizing credit and providing training to farmers.

The District Programme Managers (DPMs) of DZLiSP in Kurunegala and Moneragala moved away from the FFS concept, which puts the extension officer at the centre of implementation, and adopted some features of the CDD approach in which the beneficiaries make the decisions and manage the money for their investments. Through the Gemi Diriya Project, the World Bank demonstrated the effectiveness of the CDD approach in Sri Lanka, which usually:

The Bank’s experience with the CDD approach and its supervision and implementation support processes influenced the current implementation methods of the programme in dairy development. The approach, adopted by the DPMs in Kurunegala and Moneragal, led to the following results:

   
 

A dairy farmer is proud of her new structure for two cows that was provided with the programme's support

 

The dairy model of the programme demonstrates that beneficiaries and their dairy societies can be resourceful partners rather than passive participants in the development process. With the strong willingness of the societies to initiate the investment, the programme played a catalytic role by providing farmers with basic training, organizing community resource people, creating credit linkages, and linking farmers with private and public institutions for additional support and investment.

In supporting dairy activity, the programme targeted people who have a resource base such as water, land of about half to one acre and the initial capital to construct the cattle sheds, which are essential start-up requirements for dairy. Other programme components do not require such start-up resources. As such, dairy beneficiaries are wealthier than those identified under other components.

Collectively, the dairy societies are becoming more responsive to the market’s demand for quality products. They are also becoming sustainable and more cost-effective to implement than they would have been with the FFS approach.

Anura Herath, Country Programme Management Facilitator, Sri Lanka

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Innovative financial services for the poor rural in Pakistan

   
 

A veterinarian vaccinates a calf

 

In partnership with IFAD, the World Bank-funded Pakistan Poverty Alleviation Fund (PPAF) launched the Microfinance Innovation and Outreach Programme in 2006. The programme offers microfinance services to poor rural people in Pakistan to improve their livelihoods. It provides space for developing innovative financial products, such as livestock insurance, leasing arrangements and equity partnerships, as well as Islamic modes of financing based on profit sharing. This article offers some examples of the programme’s innovations.

PPAF’s partnership with IFAD through the Microfinance Innovation and Outreach Programme has brought new approaches to designing, implementing and funding projects aimed at improving the lives of poor rural people and providing partners the space to experiment and innovate.

The programme targets small farmers, livestock owners, traders and micro entrepreneurs, with an emphasis on providing new opportunities to women and households headed by women. The programme itself is implemented through partner organizations (POs).

The Innovation and Outreach Facility (I&O) – the largest component of the programme – aims to help POs pilot new projects, conduct action research and scale up new microfinance products and services in rural Pakistan. The POs set up low-cost settlement branches to enhance their outreach by serving neglected rural areas and providing loans to poor women to buy livestock for commercial purposes. The programme has launched pilot projects to test and develop new microfinance products and services such as livestock insurance.  

The programme has supported the provision of Islamic microfinance products in areas where conventional services were not practicable. Two partners have used funds from the programme to launch Islamic microfinance products such as ‘murabaha’ and ‘ijara’. The concept of ‘murabaha’ is based on equity partnership between the POs and the client. Instead of conventional loan repayment instalments, in the case of ‘murabaha’ the client pays a share of the profit and purchases the equity stake of the organization in the asset through instalments. ‘Ijara’, on the other hand, is the Islamic form of leasing. The lessee makes rental payments on an asset and then purchases the asset on previously agreed terms once all payments are made.

In order to make loan utilization more productive, PPAF has set up a ‘Social Safety Net’ project, aimed at graduating destitute households to mainstream microfinance. This model operates on the premise that the poorest communities need grants, food aid and subsidized employment to provide for their basic survival needs. Once these needs are met, livelihood training and carefully sequenced financial services coupled with asset transfers can help clients graduate from dependence on safety net programmes and become full-fledged microfinance clients.

Finally, the Young Partner Programme (YPP) component expands PPAF’s capacity to provide microfinance services to rural areas by supporting youth organizations and dedicated individuals. YPP has three main initiatives: the Young Professionals Scheme (YPS); International Linkage Partner Initiative (ILPI); and Young Partner Development Initiative (YPDI).

   
 

A worker milks cows at a project veterinary station

 

YPS supports PPAF’s current internship programme for young professionals who possess certain qualifications and the willingness to work in the POs of PPAF. A four-month training programme is currently progressing successfully. To date, three groups of young professionals who have completed their trainings are currently working with different POs. This approach builds the capacity of young professionals from rural areas to join development sectors such as microfinance.  

The objective of ILPI is to identify young professionals and link them to renowned microfinance institutions for nine months and provide them with a credit line, and technical and capacity-building assistance to establish microfinance institutions in Pakistan. Similarly, YPDI enables organizations working in rural areas to become serious microfinance providers.

The IFAD-PPAF partnership has brought a new approach to the microfinance sector in Pakistan. The programme will be a key to serving neglected, isolated and poor rural populations throughout the country. 

Yasir Ashfaq, General Manager, Credit Enterprise Development (CED) Unit  at PPAF, Pakistan

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Upcoming events and missions

Bangladesh

Nepal

Pakistan

Sri Lanka

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