2020 Annual Report on Results and Impact of IFAD operations
The 2020 Annual Report on Results and Impact of IFAD operations (ARRI), the flagship report of the Independent Office of Evaluation of IFAD (IOE) presents a synthesis of IFAD’s performance, lessons and challenges to enhance its development effectiveness.
To improve its relevance to the evolving priorities and demands of the Fund, the 2020 ARRI has a new, streamlined structure, and focuses on the factors that the independent evaluations have highlighted as recurring in the design and implementation of IFAD-supported projects. The new ARRI format does not include recommendations; rather, its findings are expected to orient further action on the part of IFAD Management and IOE to address the recurring issues.
The rating performance carried out by the 2020 ARRI was based on 259 projects completed between 2007 and 2018. The report confirms that overall, the performance of IFAD operations has been positive, with some exceptions. In the recent period (2016-18), 72 per cent of IFAD-supported projects have been rated moderately satisfactory or better on Overall Project Achievement criterion. Over 80 per cent of projects assessed against the criteria of relevance, IFAD’s performance as a partner and environment and natural resources management have scored moderately satisfactory or better during the same period.
The 2020 ARRI notes that the ratings for environment and natural resources management, and adaptation to climate change, have performed well, mostly rising since 2010-2012. However, the report also highlights that the portfolio performance trend is flat or declining in five criteria in the past five years, most significantly for government performance as a partner.
Corporate-level evaluation on IFAD’s support to innovations for inclusive and sustainable smallholder agriculture
Innovations in rural development approaches and solutions are crucial to improve the effectiveness of agrifood systems and better meet the rising demand for food worldwide. Innovations are thus critical for IFAD to achieve its mandate of investing in rural people and enabling inclusive and sustainable rural transformation.
The evaluation found that innovations are indeed key in boosting the performance of agrifood systems. IFAD-supported innovations are generally institutional or organizational in nature, and usually originate with IFAD or project staff, based on ideas or solutions already proven in a different country or context. As for developing genuinely novel ideas or processes (especially those addressing smallholder agriculture challenges), loan investment projects have little appetite to provide support in this respect, given the risk potentially associated with such innovations; grants are thus especially useful in promoting them.
Moving forward, the evaluation notes that “bundling” together different innovations to address the diverse challenges across the agrifood system is more likely to lead to transformative change, that can be sustained and scaled up. To enhance the bundling of innovations for transformative change, the evaluation recommends (among other things) setting corporate goals for IFAD’s innovation agenda and implementing an operational framework aligned with these goals, as well as fostering the innovation culture within the Fund.
Ardahan-Kars-Artvin Development Project
The Independent Office of Evaluation of IFAD (IOE) has prepared a performance evaluation report on the Ardahan-Kars-Artvin Development Project (AKADP), in Turkey.
The project was implemented between 2010 and 2017 as a response to some of the country’s key rural agricultural development priorities, particularly the need to shift local practices from subsistence agriculture to more market-oriented ones. Targeting almost 60,000 households, AKADP sought to increase the incomes of poor smallholders and of small rural entrepreneurs and to improve rural infrastructure.
The evaluation found that the rural infrastructure improvements, particularly those related to rangeland roads, contributed to promoting the well-being and market access of smallholder farmers. Also, the modernization of livestock markets resulted in a noticeable increase in trade volume and contributed to the Government’s efforts to improve regulation of the livestock trade.
However, the project was less successful in addressing gender inequalities, partly because of the absence of a gender strategy and the lack of capacity to engage with women to identify and implement activities that responded to their needs and promoted their empowerment.
Moving forward, the evaluation recommends that IFAD should clarify guidance on the targeting approach and gender strategy, engaging in policy dialogue to ensure that laws and regulations do not pose barriers to women accessing public finances to farming activities.
Hunan Agricultural and Rural Infrastructure Improvement Project
The Independent Office of Evaluation (IOE) has prepared a performance evaluation report on the Hunan Agricultural and Rural Infrastructure Improvement Project (HARIIP) implemented in the People’s Republic of China from 2012 to 2017.
The evaluation found that the project contributed to rural development and poverty reduction for the 182,000 households in the remote areas targeted. This was achieved mainly through adoption of a strategy combining development of rural infrastructure, pursuit of diversified market-oriented agriculture and building villagers’ capacities in agriculture and infrastructure operations and maintenance.
However, the project’s results in terms of reaching the rural poor and the women among them were less successful, partly due to the absence of a tailored approach. Any benefit derived by lower-income families tended to be the form of low-paid, unskilled work; as this is less likely to foster economic and self-development capacities, questions arise as to the sustainability of the project’s impact on income generation for the poor.
Moving forward, the evaluation recommends continuing support to diversified agricultural production through the IFAD-supported follow-up project, developing tools to increase households’ access to project activities, redefining the approach to gender equality and women’s empowerment, and orienting innovations towards project implementation processes.
Tejaswini Women’s Empowerment Programme
The Independent Evaluation Office of IFAD (IOE) has prepared a project performance evaluation (PPE) report on the Tejaswini Rural Women’s Empowerment Programme. The project was implemented in India, in the states of Madhya Pradesh and Maharashtra, between 2007 and 2018.
The evaluation found that the project demonstrated a promising model for women’s empowerment. The development of successful self-financing SHG apex organizations provided valued economic and social services to the target populations, while the effective system to manage the performance of SHGs facilitated access to further sources of financial support.
The evaluation noted some areas for improvement. For example, value chain activities were incorporated at a late stage and were mostly supply-driven: this limited the improvement in household income that the project could bring about. In addition, sustainable and climate-resilient practices could have been integrated further into project activities.
Moving forward, the evaluation makes a number of recommendations, including continued application of the SHG models developed, adopting a market-aware approach to economic empowerment that is responsive to the needs of different groups of women and including an explicit focus on climate change resilience and sustainable natural resource management.
Agriculture Services Support Project
The Independent Office of Evaluation of IFAD (IOE) has prepared a performance evaluation report on the Agriculture Services Support Project (ASSP) in Botswana.
The project was implemented between 2012 and 2018 to help the target groups adapt to potential cuts to government agricultural subsidies. Targeting about 20,000 smallholder farmers in rural areas throughout the country, ASSP sought to (1) promote conservation agriculture practices; (2) pilot a wastewater irrigation scheme; and (3) build agricultural service centres (ASCs) for promoting market-driven extension services.
Thanks to the wastewater irrigation scheme, horticultural production no longer depended on the country’s erratic rainfall; however, the operation was costly and was undertaken on a pilot scale. Conservation agriculture was not taken up among target groups due to a lack of adequate equipment for the timely preparation of farms. The evaluation found that only two of the ASCs had been completed, against a target of 15 at design, and only one of the ASCs demonstrated delivery of market-led extension services.
Going forward, the evaluation recommends that IFAD focus on engaging in a technical support role, in line with the policy priorities and capacities established by the Government of Botswana.
Small Irrigation Development Project – Phase II
The Independent Office of Evaluation (IOE) has prepared a performance evaluation report on the Small Irrigation Development Project - phase II in the Republic of Haiti, implemented from 2008 to 2016. The aim of the project was to increase the incomes and improve the living conditions of poor and vulnerable rural households by targeting landless smallholders and farmers (especially women and young people) working on small plots of irrigable land.
The evaluation found that the project contributed to better organization and empowerment of the target groups, and to building their capacity to maintain the irrigation infrastructure. The project also helped build the capacities of decentralized bodies providing technical support to producers, and introduced drip irrigation technology in the country.
However, the project’s achievements in terms of income generation and watershed management were limited. Due to Haiti’s exposure to natural disasters, key recommendations are related to implementation of an integrated watershed management approach, coupled with the protection of natural resources, as well to promotion of a value chain approach in interventions.
Sierra Leone Country Strategy and Programme Evaluation
This is the first country strategy and programme evaluation carried out in Sierra Leone by the Independent Office of Evaluation of IFAD (IOE). The report reviews the joint work of IFAD and the Government of Sierra Leone from 2003 to 2019, covering five projects.
The period covered by the evaluation was highly dynamic, characterized by the efforts to reconstruct the economic and productive sectors and to promote sustainable growth in the aftermath of the lengthy civil war. The evaluation found that the IFAD adapted well to the rapidly evolving national priorities and strategies, shifting focus from basic agricultural inputs and infrastructure to fostering access to rural finance and strengthening commercial agriculture. In addition, the portfolio’s outreach was remarkable, achieving targets by 100 per cent or close; well over 80 per cent of the community banks, while financial services were successfully made available to over 200,000 households.
However, the report highlights some areas for improvement. Financial inclusion could be enhanced, to encompass a greater proportion of smallholders. The value chain for rice, a main staple crop in Sierra Leone, could be strengthened, with particular focus on the linkages between producers and processing and marketing actors. In addition, activities to attract more youth to agriculture could be implemented.
Moving forward, the report recommends, among other things, to bolster the development impact of agricultural growth by focusing on strengthening value chains, increase the level of engagement in rural finance by building on existing rural financial structures in the country and develop a country-specific youth strategy.
Rural Livelihoods Economic Enhancement Programme
The Independent Office of Evaluation (IOE) has prepared a performance evaluation report on the Rural Livelihoods and Economic Empowerment Programme (RLEEP) in the Republic of Malawi. The programme took place from 2009 until 2018, with a total project cost of US$26.1 million. Of this sum, IFAD contributed US$8.9 million as loan and US$6 million as grant.
The PPE concludes that the programme took an innovative approach, which was largely effective. The programme increased overall productivity and provided a good foundation for pro-poor value chain development by establishing useful partnerships and initiatives that facilitated farmers’ access to markets. The grant facility was an appropriate mechanism for collaboration with NGOs, which greatly enhanced outreach and group formation activities. Some farmer groups managed to grow into cooperatives and strengthen market linkages.
However, the targets of the programme proved to be overly ambitious and would have required stronger technical capacities to be achieved. The programme implemented a large number of activities in parallel and there was little time for adjustments when challenges arose. Participation of the private sector was still insufficient. Lastly, the programme did not have sufficient time to address the structural issues undermining value chain development.
IFAD is preparing for the second phase of the programme in Malawi, called Transforming Agriculture through Diversification and Entrepreneurship (TRADE). The report offers several recommendations for this follow-up programme, including: greater participation by government partners, enhanced partnerships and complementarities among development partners, promotion of innovative approaches to service provision, and greater attention to farmers’ empowerment in the development of value chains.
Community-driven development in IFAD-supported projects
The Independent Office of Evaluation of IFAD (IOE) has prepared an evaluation synthesis report on Community-Driven Development (CDD), based on an in-depth review of a representative sample of IFAD projects carried out since 1978.
CDD has played a pivotal role in IFAD’s operations for over 30 years. Indeed, CDD is an important pathway to empower the rural poor – an objective that lies at the heart of Agenda 2030 – and works particularly well within the contexts that IFAD engages in, such as marginal and fragile situations.
The synthesis found that IFAD operations that used a CDD approach performed better than non-CDD projects on several criteria, including effectiveness, gender and sustainability, especially when sufficient time and resources were available for meaningful engagement at local level. The commitment shown by IFAD’s regional divisions was crucial in promoting and enhancing learning on CDD.
CDD remains a relevant approach for IFAD. Moving forward, the Fund should build further on its comparative advantage in CDD, making it visible throughout its strategies and institutional functions and ensuring that appropriate resources and financial instruments are allocated to fully reap the benefits expected of the approach.
United Mexican States Country Strategy and Programme Evaluation
This is the second country strategy and programme evaluation carried out in the United Mexican States by the Independent Office of Evaluation of IFAD. It covers the partnership between the Government and IFAD from 2007 to 2018. During this period, IFAD has invested in seven projects and programmes in the country with a total cost of US$250.56 million, of which US$132.95 million was financed by IFAD.
The programme focused on supporting groups of rural producers living in poverty who had not previously been reached by public programmes. In addition, Mexico is highly vulnerable to the effects of climate change and these projects showed that it is possible to achieve a balance between local economic needs and positive environmental impact.
However, the performance of the portfolio was weakened by changes in agricultural sector policies, to which ongoing projects were not adapted, as well as design weaknesses such as a lack of innovative approaches to training producers and their organizations in financial services and market access. The grants programme opened up opportunities for consultation on rural policy issues and options, by supporting rural dialogue groups and multinational studies on conditional cash transfer programmes and ways to combine them with inclusive production measures.
The evaluation sets forth the following main recommendations: (i) fine-tune the country programme’s geographical and agro-ecological targeting; (ii) improve the technical and innovative quality of project design; (iii) improve monitoring of and capitalization on lessons learned; (iv) strengthen IFAD’s capacity to provide operational and strategic support for the programme; and (v) promote greater government engagement in project design and implementation, as well as adequate budgetary allocation for implementation.
Federal Republic of Nepal Country Strategy and Programme Evaluation
This is the third country strategy and programme evaluation carried out in Nepal by the Independent Office of Evaluation of IFAD (IOE). The report reviews the joint work of IFAD and the Government of Nepal over the past seven years (2013 -2019), covering eight projects.
Over the past decades, farm fragmentation and low crop productivity have endangered the economic viability of traditional farming systems in the country. According to the report’s findings, IFAD has helped increase the productivity of small farms by focusing on improved production of high-value crops, such as spices, off-season vegetables, fruits, cereal and dairy products.
Linking small-scale farmers with value chains was important to enhance their economic opportunities. The programme has helped improve farmers’ access to markets, including international markets, as well as the transparency, stability and predictability of prices.
However, the report highlights some areas for improvement. The evaluation recommends supporting federalization in the country, focusing on how to adapt the projects to the new system and as well as on how to support local governments in promoting rural development.
According to the report, IFAD should bring back into its funding spectrum the support to community development, basic infrastructure and services as a preparatory step for further economic opportunities. Finally, the evaluation recommends strengthening partnerships for specialized technical support and for cofinancing.
Smallholder Tree Crop Revitalization Support Project
The Independent Office of Evaluation of IFAD (IOE) has prepared a performance evaluation report on the Smallholder Tree Crop Revitalization Support project (STCRSP) in the Republic of Liberia, the first evaluation it has conducted in the country.
The project was implemented between 2011 and 2017 with the objective to reduce post-conflict poverty and food insecurity, and to improve the livelihoods and living conditions of rural communities. The target population of 15,000 smallholder cocoa/coffee farmers was extremely poor, with very low levels of literacy, and their contact with the wider economy and society was limited by lack of roads and services.
The project successfully rehabilitated 85 per cent of the targeted 15,000 hectares of cocoa and coffee farms, which enabled cocoa farmers to increase production and improve quality, and to obtain a higher price for their produce. The project has also been able to rehabilitate 133.1 km of roads and increase famers’ access to markets. STCRSP thus successfully contributed to improved livelihoods and enabled farmers to make the transition from survival mode to recovered livelihoods. In addition, the project was effective in reinforcing the extension services offered by public and private providers, and in strengthening farmers’ organizations.
However, the evaluation also concluded that the project design could have better supported food security, as there was no significant difference in food security indicators between STCRSP beneficiaries and non-beneficiaries.
The report recommends that future IFAD value chain development projects focus on addressing constraints upstream and pay increased attention to nodes downstream of the value chain, for instance, focusing on interventions that support farmers and their organizations to add value to their produce, and that promote an equitable share of benefits.
Rehabilitation and Community-based Poverty Reduction Project
The Independent Office of Evaluation of IFAD (IOE) has prepared a project performance evaluation (PPE) of the Rehabilitation and Community-based Poverty Reduction Project (RCPRP) in the Republic of Sierra Leone, implemented in the country from 2006 to 2017.
The project was to be an integrated response to rehabilitating and sustaining essential services in the country, and restoring basic production capacity to pre-conflict levels by providing support to the short-term recovery of rural communities and their farming systems, while laying the basis for long-term rehabilitation and participatory development.
The report highlights that the project achieved its objectives related to increasing production of rice and cocoa – the main commodities at the basis of agriculture and rural development in Sierra Leone – and met its targets in terms of rehabilitating roads.
However, the project was less successful, for example, in creating effective links between primary producers and the market. Also, the effectiveness of the project’s climate- and environment-related interventions was mixed.
As a result, the evaluation noted, among its recommendations, the need to promote effective and efficient market participation by smallholder farmers, and to strengthen institutional expertise and the financial capacity of marketing organizations. In addition, where adaptation to climate change is specifically pursued, it should be treated as an intrinsic part of project design, not merely an accessory.
Niger: Food Security and Development Support Project in the Maradi Region
IOE has prepared an impact evaluation of the Food Security and Development Support Project in the Maradi Region (PASADEM).
Maradi is one of Niger’s most vulnerable regions, with a prevailing poverty rate of 87 per cent and a child (0-59 months) severe chronic malnutrition rate of 54 per cent. PASADEM aimed to improve the food and nutritional security of 65,000 rural households by establishing five economic development hubs (EDHs), combining support to agro-pastoral productivity, market access and food resilience for vulnerable households.
The impact evaluation highlights important achievements as well as rural poverty issues that still need to be addressed. It found that PASADEM contributed to important improvements in food security and resilience: for example, the period of food sufficiency was extended by one month.
However, the costs and time required to construct the infrastructure associated with EDHs had been underestimated, and the limited infrastructure constrained access to the market centres developed.
One of the evaluation’s recommendations is to augment – within the EDH framework – actions to improve the food and nutritional security of poor and vulnerable rural populations. In addition, the implementation of at least one EDH in each region should be finalized, in order to assess the effectiveness and impact of EDHs as development models.
Technical Innovations for Rural Poverty Reduction
The Independent Office of Evaluation has prepared an evaluation synthesis report on Technical Innovations for Rural Poverty Reduction, drawing information from evaluations undertaken between 2010 and 2018. The report serves as a building block for the upcoming corporate-level evaluation on Innovation and Productivity Growth for Inclusive and Sustainable Agriculture, which will provide a wider assessment of IFAD’s work on innovation.
The evaluation synthesis report found technical innovations to be mainstreamed in IFAD. In fact, the majority of IFAD projects feature a variety of innovations, especially in the categories of crop diversification, livestock and crop management. The innovations have brought about principally two types of change: productivity enhancing and, to a lesser extent, transformative change. Productivity enhancing innovations improve returns to land, labour and capital through incremental changes to the farm business. Transformative innovations, on the other hand, significantly alter farming system structures and functions by introducing new enterprises or radically different ways of agricultural technologies.
While transformative innovations are considered higher-risk and usually require broader packages of support to be successful, they have the potential for higher rewards. IFAD should enhance its focus on transformative processes, including by leveraging its strengths in providing the necessary support and facilitating relevant partnerships, while ensuring that the risks associated with innovations are carefully managed.
Western Uplands Poverty Alleviation Project
The Independent Office of Evaluation of IFAD has prepared a performance evaluation report on the Western Uplands Poverty Alleviation Project (WUPAP), implemented in Nepal between 2003 and 2016.
The project was designed to strengthen the capacity of 115,000 households to mobilize their own resources, gain access to external resource and “live their lives in dignity”.
The report highlights that one of the main achievements of the project was the implementation of effective targeting approaches appropriate to various contexts. Through the community investment plan, virtually all IFAD investments reached the poorest beneficiaries and were spent according to their choice and needs.
The performance was, however, weakened by the fact that the original integrated rural development project design was too complex for the fragile political context and remote districts. Poor road networks and infrastructures further hampered WUPAP’s achievements.
As a result, the evaluation highlighted, among other recommendations, the need for Government stakeholders at all levels to provide strong and continued engagement in IFAD projects in the mid-and uplands.
2019 Annual Report on Results and Impact of IFAD operations
The 2019 Annual Report on Results and Impact of IFAD Operations (ARRI) presents a synthesis of IFAD’s performance and highlights results and systemic issues from independent evaluations conducted in 2018. The quantitative analysis draws on ratings from 344 evaluations conducted since 2002.
The report confirms that overall the performance of IFAD operations has been positive. Seventy-five per cent of all evaluation ratings are moderately satisfactory or better in the period 2007-2017. Currently, 80 per cent or more projects assessed against the criteria of relevance, innovation, scaling up, rural poverty impact and IFAD performance as a partner are rated moderately satisfactory or better. The 2019 ARRI highlights however that the portfolio performance trend is flat or declining in most criteria in 2015-2017. The most significant decline is for IFAD and government performance as partners. Only adaptation to climate change reached its Tenth Replenishment (2016-2018) Results Measurement Framework targets based on IOE ratings.
“Relevance of IFAD project interventions” is the learning theme of the 2019 ARRI. Based on the findings, the ARRI recommends to determine earlier the need to adjust project designs to ensure their “continued relevance” to the country context.
Agricultural Rehabilitation and Poverty Reduction Project
The Independent Office of Evaluation (IOE) of IFAD has prepared a performance evaluation report on the Agricultural Rehabilitation and Poverty Reduction Project (PRAREP), implemented in Côte d’Ivoire from 2009 to 2015.
The objective of PRAREP was to reduce poverty and food security in the wake of the conflict and improve living and working conditions for the most vulnerable rural communities. The project came at the right time, as it provided an immediate response to the situation of food insecurity, vulnerability and increased poverty.
The report highlights the encouraging results achieved by PRAREP in reviving agricultural production in the target areas, and its contribution to improving productivity, production and farmers’ incomes.
The performance of PRAREP was, however, weakened by the fact that close to half of the project financing was never mobilized, and thus, the agricultural infrastructure subcomponent was not implemented. Moreover, weaknesses in building organizational capacity of producers had an adverse effect on the sustainability of the input supply arrangements set up by the project.
As a result, the evaluation highlighted, among other recommendations, the need to systematically include capacity-building for farmers’ organizations, even in a post-crisis context.
Corporate-level Evaluation on IFAD’s Engagement in Pro-poor Value Chain Development
The attention to value chain development is becoming increasingly important for IFAD as traditional food systems are being replaced by organized value chains. Over the last decade, the number of value chain- relevant projects supported by IFAD has increased from 41.5 per cent to 72.3 per cent, while the volume of loans approved has gone from 50 per cent to 81 per cent. This major shift posed challenges as the value chain approach was new to many IFAD staff and government staff in charge of managing IFAD-funded projects.
The evaluation found that project design has improved over time, reflecting a better understanding of the value chain concept. However, analytical gaps remain. Few designs have been supported by market intelligence to prioritize the choice of commodities and steps within the value chain in order to achieve pro-poor outcomes.
The evaluation suggests that it is possible to reach out to poor and very poor producers through value chain approaches, but this requires specific attention. The most convincing pro-poor outcomes occurred in projects where IFAD had experience and where multi-stakeholder platforms were created to enable dialogue between value chain actors.
The evaluation recommends that a corporate strategy be prepared for IFAD’s support to pro-poor value chain development that clarifies the objectives and principles of engagement as well as the resources required. It suggests a “programmatic” approach to value chain development, recognizing the need for long-term engagement. Finally, the evaluation emphasizes the importance of promoting an inclusive value chain governance and regulatory environment.
Belize Rural Finance Programme
The Independent Office of Evaluation has prepared a performance evaluation report on the Belize Rural Finance Programme, co-financed by IFAD and the Central American Bank for Economic Integration (CABEI). The evaluation was conducted in close collaboration with the Evaluation Office of CABEI.
The report highlights that the programme's support to the credit union movement in Belize was both timely and relevant. It focused on capacity building at micro level (through credit unions) and at meso level (through the Belize Credit Union League), providing appropriate technical assistance and introducing an innovative member share account incentive scheme to attract new rural members.
The rural poor who joined credit unions enjoyed modest improvements in incomes, assets, quality of life, economic activities, education and health, but it is unlikely that access to credit union financing significantly improved agricultural productivity or rural enterprise performance.
Although the business case for serving the rural poor remains to be made for most credit unions, the Government, IFAD and other partners, intend to continue supporting credit union activities in rural areas in Belize.
Inclusive financial services for the rural poor
Access to financial services is essential to lift people out of poverty as it allows them to seize economic opportunities and increase their welfare. It is seen as an important component of the inclusive rural transformation agenda of IFAD, which, since 1981, has financed over 1,000 projects, worth US$3.4 billion.
The Independent Office of Evaluation (IOE) has prepared an evaluation synthesis report on IFAD’s Inclusive Financial Services for the Rural Poor. The evaluation synthesis draws information from evaluations undertaken between 2008 and 2017.
In 2007, IOE conducted a corporate-level evaluation of rural finance in IFAD, which paved the way for a new Rural Finance Policy that was introduced in 2009. The synthesis found that the mix of financial instruments in the portfolio has not changed since 2009. Loan guarantee funds, lines of credit and matching grants are overly represented in the mix. Projects still tend to use traditional financial services, mainly savings and borrowing. New types of services promoted by IFAD, such as leasing, insurance, warehouse receipts and value-chain financing, were rarely used or, when included at the design stage, they were found less feasible during implementation. The transition to new types of financial services requires significant investments in technical assistance, market studies and capacity, for which governments were often hesitant to use loan funds. The availability of qualified financial services, their capacity and their presence in rural areas were the main factors determining IFAD's approach on the ground.
The principles of the revised Rural Finance Policy emphasize the need to move towards market-led and demand-oriented approaches, offering a diverse set of services and products. While the diversity of instruments, services and products has increased, they have been offered within traditional supply-led approaches, leading to a lack of demand orientation on the part of country interventions. A key related issue is in the weak implementation capacity on the ground. These issues must be addressed for IFAD to remain relevant and be in demand as an Inclusive Financial Services player.
Democratic Socialist Republic of Sri Lanka Country Strategy and Programme Evaluation
In a context characterised by the end of a long standing conflict and recovery from the Indian Ocean Tsunami, IFAD-supported projects have contributed to improved agricultural production and productivity in several districts throughout the Democratic Socialist Republic of Sri Lanka. Such outcomes were achieved through activities including support to smallholder farmers to establish or upgrade tea and rubber plantations, rehabilitate irrigation schemes and access improved technologies. These achievements were the main contributing factors for increased incomes and assets. The projects also succeeded in improving access to markets and finance and in income diversification.
On the other hand, the improvements in agricultural production were not necessarily driven by improved and innovative technologies which promoted resource use efficiency (e.g. water) or strengthened climate resilience. Furthermore, in pursuing partnerships with agribusinesses, there was scope for more careful consideration on how to ensure added value of public funding.
The report recommends that future operations pay greater attention to promoting innovative technologies which also strengthen climate resilience and that IFAD and its partners explore ways to innovate and leverage more systemic improvements in the rural finance sector in Sri Lanka. The evaluation also underlines that IFAD should look to play a more catalytic role, going beyond individual investment projects.
Rural Financial Services and Agribusiness Development Project
The Independent Office of Evaluation of IFAD has prepared a performance evaluation report on the "Rural Financial Services and Agribusiness Development Project" in the Republic of Moldova. The project, implemented between 2011 and 2016, responded to important challenges in the country's rural sector. The main goal was to provide credit and develop value chains for small and medium-sized enterprises, thereby indirectly benefiting the poor through increased and decent employment opportunities.
The evaluation found improved access for both small and medium-sized enterprises and new target groups such as young entrepreneurs and microentrepreneurs thereby addressing an existing financing gap. The project was less successful in improving pro-poor value chains because of mistrust between buyers and producers and volatile market prices, which resulted in contracts not being adhered to.
The report highlights the need for explicit targeting strategies as well as careful ex ante examination of the assumed "trickle down" effects. It also notes that projects should monitor the linkages between investments in enterprises and the direct and indirect benefits, to ensure they help reach poor farmers. IFAD has successfully provided loans through lines of credit to small and medium-sized enterprises, however, there is a need to strengthen the savings culture, which is currently not very strong in Moldova.
Finally, this evaluation recommends that future IFAD projects focus on agribusiness and agro-processing development for smallholders. This would enable them to add value to their primary products, build their capacity to deal with different value chains, and shift swiftly from one value chain to another.
Read more: Approach paper
Kirehe Community-based Watershed Management Project
Project performance evaluation
The Independent Office of Evaluation of IFAD has prepared a performance evaluation report on the "Kirehe Community-based Watershed Management Project" in Rwanda. The project was successful in achieving its objective of fostering increase of traditional crops such as rice, maize, vegetables and milk production. Women beneficiaries were not left behind economically, and innovations such as the flexi-biogas system freed the time they had spent in fetching firewood.
Yet, the lack of effective marketing linkages and competitive prices for producers meant that the attempt at integrating farmer beneficiaries into complete value chains remained incipient. The project also failed to link beneficiaries with rural financial institutions – linkages which would have been important for financing production and value addition.
The evaluation highlights the need to adopt a longer-term programmatic approach in the case of development projects that involve a simultaneous, coordinated and comprehensive approach to rural poverty alleviation in a particular area. It also recommends ensuring that value chain development is truly demand-oriented by involving market actors such as traders and private companies when integrating value chain components in principally supply-side projects.