Special issue : September 2010 - Transferring knowledge and innovation through grants

In this issue

In this issue we would like to share with you how IFAD’s Grants Programme is successfully addressing emerging global challenges, in line with its current strategic and operational priorities. In December 2009, the IFAD Executive Board approved the “Revised IFAD Policy for Grant Financing”. Improved guidelines and procedures for grants are expected to be issued soon.

The Asia and the Pacific Division has prepared its new Regional Grant Strategy for the current year to improve effectiveness and focus on selected priority areas. The trend is to enhance the quality of a few long-term grants that support innovations and technological change, and that reduce risks and improve the productivity of smallholders in a sustainable way. The strategy will be published on our regional platform – Knowledge Networking for Rural Development in Asia and the Pacific (ENRAP) - as soon as it is finalized.

This first special issue of the newsletter presents some new activities funded by IFAD grants, such as the 4FGF. It also takes up the future of the Asia-Pacific Knowledge Network and describes lessons learned on labour migration of poor rural people, financial empowerment, value chain development and indigenous technologies.

Enjoy the reading!

Laura Puletti
Acting Grants Coordinator

Useful link:


How grants helped to support gender mainstreaming in IFAD projects in China

IFAD’s country programme in China has emphasized gender and women’s development over the past decades. Two activities financed by the special contribution for women in development from Japan and supplementary funds from Norway for posting regional gender coordinators helped gender mainstreaming and women’s empowerment take a big step forward. 

   
 

Lao Duan in a gender training

 

IFAD’s Asia and the Pacific Division obtained two grants for its China programme to work on gender. The first grant was during 2005-2008, and the second started in 2009. The two grants have supported a continuous process of gender awareness building and mainstreaming. The main supporting activities include:

The response from participating project staff to the these activities has been positive and also reflected the capacity and awareness gap among project staff before meaningful gender mainstreaming efforts and activities took place.

In the process of supporting gender mainstreaming in the China programme, we have achieved some of the following outcomes and results:

As a result of years of capacity building and support, the gender awareness of project stakeholders has improved substantially. They have also learned different approaches to ensure gender mainstreaming, achieve gender equality and be able to apply them in their work.

 “I like my women’s group and association as these are our own organizations in which we can work together, learn from others and also sell our products together. I feel much stronger and comfortable than just being by myself, ” said a beneficiary of the IFAD funded programme  in Xinjiang.” 

The following are some lessons learned from the two grant programmes supporting gender mainstreaming:

Talking about and mainstreaming gender is a serious business and no longer something for only women staff to worry about. It requires action and a shift in attitude among all project-related staff, and even the project communities.


Helping smallholder farmers get the most out of “cash cropping” cassava

Cassava is a “pro-poor” crop.  Cassava roots provide a rich source of calories and the leaves are rich in protein for both humans and livestock. The “Programme for Linking Livelihoods of Poor Smallholder Farmers to Emerging Environmentally Progressive Agro-Industrial Markets”, supported by an IFAD grant, works with smallholder cassava farmers in Cambodia, Lao People’s Democratic Republic (PDR), and Viet Nam to improve their linkages with cassava processing industries and to promote sustainable production systems for cassava.

 

Programme for Linking Smallholder Livelihoods of Poor Smallholder Farmers to Emerging Environmentally Progressive Agro-industrial Markets
Grant number: G-1031
Grant amount: US$ 1,500,000
Grant recipient: International Center for Tropical Agriculture
Geographic region: Cambodia, Lao PDR, Viet Nam
Duration: 4 years (January 2009 to March 2013)
Approval date: 25/04/08

 
     

Cassava tolerates drought and low-fertility soils, so it can be grown on marginal lands, which are often farmed by the poorest households.  Because of its indefinite maturity period, cassava can be harvested to correspond to household needs and market opportunities.

In the uplands of tropical Asia, cassava has long been an important substitute staple crop (for rice) in times of food insecurity. As a cheap feed resource for intensifying livestock production, it has helped to increase incomes of smallholder farmers. Now, cassava is also becoming an important cash crop for poor smallholders, even in remote upland areas, because of improved trade and transport linkages and strong demands for cassava as a feedstock for a wide range of domestic and regional agro-industries.

   
 

Cassava wet starch

 

“Cash cropping” cassava puts money in farmers’ pockets. But immediate gains can be short-lived and may lead to longer-term poverty unless production systems are properly managed.  In many upland areas in the Greater Mekong Subregion, farmers harvest cassava roots, slice and dry them, then sell dried chips to local traders for export to China where they are used for animal feed or ethanol production.  Prices that farmers obtain may not be enough for them to purchase fertilizers to replace nutrients harvested. In addition, many farmers are not aware of the need to properly manage soils to ensure sustainable production.  After a few years of cash cropping without adequate inputs, yields begin to decline, fields are abandoned and, where available, new forested lands are cleared for production.

The Programme for Linking Livelihoods of Poor Smallholder Farmers to Emerging Environmentally Progressive Agro-Industrial Markets (Grant 1031-CIAT), also known as the Food, Feed, Fuel, and Fibre for a Greener Future (4FGF) Project, is working with smallholder cassava farmers in Cambodia, Lao PDR , and Viet Nam to improve linkages with processing industries and to promote sustainable production systems through improved integration of crop/livestock systems. 

The programme is being implemented by the International Center for Tropical Agriculture (CIAT) and the International Potato Center (CIP), in partnership with national research institutions, IFAD development projects and their implementing partners in the agricultural extension services, and private-sector partners in the cassava processing and livestock feed industries.

The 4FGF Project is working with extensionists and farmers supported by the Rural Livelihoods Improvement Programme in Attapeu Province (Lao DPR) and the Rural Livelihoods Improvement Programme in Kratie Province (Cambodia) to set up on-farm trials to demonstrate better practices in soil fertility management, intercropping and erosion control. 

The 4FGF Project will introduce improved chipping and drying technologies to save labour in both provinces. In Kratie, Cambodia, the 4FGF Project will also help to transfer technologies from artisanal starch processors in a neighbouring province to establish a wet starch processing cooperative with farmers in selected or “focus” communes. Establishing localized processing provides secure markets, adds value for cassava growers/processors, and it can improve sustainability of production systems if production by-products (cassava leaves containing high protein) and processing by-products (fibre residues from starch extraction, which still contain some starch and other nutrients) are used to feed livestock (see the figure).  Manure from intensified livestock production provides fertilizers to increase yields of cassava and other food crops and household energy from biogas.

 

Processing wet starch

Starch is extracted from washed cassava roots by removing the outer root bark, peeling the inner root “skin”, grating or “rasping” and pressing the root flesh, filtering the liquid “starch milk”, and then settling the starch milk in sedimentation tanks, pressing and draining off the excess water to produce “wet starch”. Wet starch with low enough water content can be stored for several months and sold without drying for a variety of uses (noodle making, glucose and maltose production, etc.).  Wet starch can also be air-dried to produce dry starch and then sold.  Most small-scale starch producers in Viet Nam sell wet starch. Large-scale starch factories produce high-quality dry starch by using capital- and energy-intensive equipment. Starch milk is dried using “flash driers.” Fibre residues (cassava root tissues remaining after extraction) are a by-product of both large- and small-scale starch processing.  Fibre residue can be a waste problem for processors, but if it is properly mixed with other locally available ingredients to balance nutrition, it can be utilized as a low-cost livestock feed resource.

 

In Bac Kan Province (northern Viet Nam), the 4FGF Project is working with a small-scale wet starch processing cooperative and farmers supported by the Pro-Poor Partnerships for Agro-forestry Development Programme to demonstrate eco-efficiencies of crop/livestock integration.  Following results of cassava wet starch market surveys to better understand market demands, trading networks and opportunities in specific locations, the 4FGF Project plans to facilitate discussions between local government authorities and investors to encourage wet starch producers to relocate from suburban Hanoi to rural areas. Relocation can provide income generation opportunities (through sales of starch or food products derived from starch) for poor rural smallholders and “waste” is better managed as a feed resource.

In Quang Binh Province (central Viet Nam), the 4FGF Project is working with a large-scale cassava dry starch factory and a feed processing company to demonstrate improved livestock feeding practices (which use mostly materials grown on-farm, rather than costly purchased inputs, and extend storage life to ease seasonal feed supply shortages) to farmers supported by the Decentralised Programme for Rural Poverty Reduction.

Eco-efficiencies gained from improved, two-way producer/processor linkages and better crop/livestock integration make production systems more competitive, as households can increase income with less cash outlay for fertilizers and livestock feed.  Society also benefits through improved natural resource management (decreased pollution from factory wastes, soil fertility maintenance, forest clearing avoided, reduced greenhouse gas emissions from production of chemical fertilizers, transport of cassava roots and wastes for distant processing, etc.), for a greener future.

Dr Keith Fahrney, Programme Manager, CIAT

Useful links:


Strategies to reduce vulnerabilities of poor rural people and financial institutions that support them

 

Programme for Accelerating the Financial Empowerment of Poor Rural Communities in Asia and the Pacific through Rural Finance Innovations
Grant number: G-875
Grant amount: US$ 1,200,000
Grant recipient: APRACA
Geographic region: Regional Duration: 5 years (January 2007-March 2012)
Approval date: 14/09/2006

 

The  recent Asia-Pacific Rural and Agricultural Credit Association (APRACA) Chief Executive Officers’ Policy Forum on Risk Management in Agriculture and Rural Lending in Tashkent, Uzbekistan on 29 June 2010 drew attention to the high vulnerability of poor rural people to natural shocks and economic risks as well as to the effect of such vulnerability on their capacity to repay and ultimately on the sustainability of rural financial institutions.

   
 

Mr. Won-Six Noh, new Secretary General, APRACA

 

This forum, under the auspices of the IFAD-supported APRACA programme “Accelerating the Financial Empowerment of Poor Rural Communities in Asia and the Pacific through Rural Finance Innovations” (FinPower Programme), provided an important avenue for about 100 APRACA and IFAD project delegates from 15 Asian countries to share their experiences in risk reduction, risk mitigation and coping strategies for farmers and banks.

The FinPower Programme is a five-year programme that promotes the financial empowerment of poor rural people in Asia-Pacific countries through policy dialogue, innovative pilot programmes, and knowledge-sharing among actors in the rural finance sector. FinPower draws innovations from its wide network of members in the Asia-Pacific region as well as from IFAD-supported projects with rural finance components.

From the discussions, it emerged very clearly that smallholders and marginal  farmers still suffer from fragmented landholdings, inefficient agricultural practices and production risks. Moreover, their use of inputs is low, resulting in poor crop productivity. These farmers are not able to take advantage of new agricultural technology offered by researchers and extension agencies. In view of their production capacity and, in most cases, their inability to form strong rural groups, they also have poor linkages with the warehousing, transportation, distribution and marketing infrastructure in the value chain. Price volatility and incidence of pest and disease are also major risk factors. Major natural shocks such as floods, droughts, denudation, landslides, desertification and extreme climate change have added to the smallholders and marginal  farmers’ miseries.

These are compounded by a “demand-supply mismatch” due to rising population and stagnant farm output, the diversion of cultivable land in favour of bio-fuel crops and an increase in inputs costs.

The delegates also emphasized the operational risk factors that financial institutions face, including the large number of small villages, lack of infrastructure, vast geographical spread, high transaction costs and poor loan recovery.

Poor rural people have used various ex-ante risk-coping strategies. One strategy is crop diversification. Diversification, as in the case of Philippine farmers can be a combination of: (a) growing several crops or diversifying farm enterprises; and/or (b) diversifying into non-farm activities. The other common strategy employed is to select the crop/variety suited for an incoming season and adjust the inputs (for example, using less fertilizer if the incoming season is predicted to carry a higher risk of yield loss). One common practice instance among rice farmers in a Philippine province is to use high-yielding varieties (which are also input-intensive) during the dry season, since there are no calamities expected during this time, and use inbred varieties (lower yield but less input-intensive) during the wet season (typhoon/rainy months). This translates to a higher yield averaging 7.5 tons per hectare during the dry season and 4.5 tons per hectare for inbred varieties during the wet season.

Another strategy is crop intensification – for example,  through re-growing of a second crop from the shoots or ‘ratoons’ of the mother crop. Other strategies include reducing food consumption, switching consumption from purchased food to own produce, obtaining emergency loans from relatives and moneylenders, receiving remittances, and receiving aid from local government and charities. Farmers also take temporary work where available.

While the tasks at hand are enormous, more innovative financial institutions, such as the Bank for Agriculture and Agricultural Cooperatives (BAAC) in Thailand, with a commanding 98 per cent outreach, have designed strategies to strengthen their capacity to provide poor but productive rural people with access to financial and finance-related services. Strategies include incentives to ensure prompt payment, such as the case with Bank Rakyat Indonesia, and for restructuring and in extreme cases, waiving of interest payment or even principal, when non-repayment is caused by external factors, such as calamities and fortuitous events.

Financial institutions likewise employ various modalities to soften the impact of risks. For instance, the Philippine Crop Insurance Corporation provides protection to agricultural producers against loss of crops, livestock and agricultural assets due to natural calamities, pests and diseases.  BAAC has a crop-pledging scheme aimed at major crops such as rice, maize and cassava to guarantee the price of farmers’ crops and shield them from price volatility. The National Bank for Agriculture and Rural Development and Land Bank of the Philippines, among others, have provided pricing and  marketing information  through electronic bulletin boards and regular contacts with farmers’ groups to help them seek a better price for their products.

Financial institutions also establish farmers’ training centres that offer farmer-to-farmer training and showcase demonstration farms to help them develop their business skills and promote gainful employment.

In addition to their normal deposit-taking functions, innovative financial institutions establish savings clubs and joint savings mechanisms  to ensure a variety ways to keep farmers’ excess funds for use during risky periods.

The forum stressed that national regulatory authorities have an important role to play as providers of a strong and client-friendly regulatory and supervisory framework, which is essential for a good risk management strategy. In the case of the Bangko Sentral ng Pilipinas (Central Bank of the Philippines), the central bank further emphasized to supervised banks the need to manage their risk exposures. It has required banks to form a risk management committee composed of at least three Board members to formulate the bank’s risk management policy and oversee its execution. Thus, it undertakes risk-based supervision. When such regulatory and supervisory framework is in place, financial institutions are more conscious of their loan portfolio, credit evaluation and collection systems and diligently monitor loan performance.

The forum challenged the participating financial institutions to be more aware of the inherent risks in rural lending but at the same appreciate the various strategies available to reduce and mitigate such risks. In the final analysis, the forum agreed that the concerns for both the stability of a financial institution and the financial inclusion of previously excluded poor rural people can be addressed in a win-win situation.

In their addresses, Mr Pham Thanh Tan and Mr Abdurakhmat Boymuratov, APRACA Chairman and Vice-Chairman, respectively, recommended closer coordination among agencies and key rural finance stakeholders, as well as stronger public-private partnership in addressing risks and shocks. They promised to continue the initiatives of the IFAD-APRACA FinPower Programme by further exploring strategies to shield the poor rural people from all types of risks and shocks.

Won-Sik Noh, Secretary General, APRACA

Useful links:

APRACA


The future of the Asia-Pacific knowledge network is you!

Knowledge Networking for Rural Development in Asia-Pacific (ENRAP) is a grant programme dedicated to strengthening knowledge-sharing networks for poverty alleviation among those engaged in rural development projects. As the programme concludes by March 2011, it leaves behind lessons and tools for IFAD staff, projects and partners to adopt and adapt in the future.

The ENRAP journey

 

Programme for Knowledge Networking for Rural Development in Asia/Pacific Region (ENRAP) – Phase III
Grant number: G-956
Grant amount: US$1,085,000
Grant recipient: International Development Research Centre
Geographical region: Regional
Duration: 3 years (September 2007-September 2010)
Approval date: 18/04/2007

 

ENRAP has been jointly supported by IFAD’s Asia and the Pacific Division and Canada’s International Development Research Centre (IDRC). The latter has also been implementing the programme. This collaborative effort has spanned ten years and three phases. In its decade of existence, ENRAP has demonstrated the usefulness of sharing what we know and finding solutions to common challenges with our colleagues across national, project and programme boundaries; it has also shown the importance of improved rural knowledge systems to better rural development practice.

   
 

Project and IFAD staff share knowledge at one of the regional events

 

The IFAD Knowledge Management (KM) strategy explicitly states that regional networks are an important asset as they offer a mechanism to share ideas and experiences. The common challenges of remoteness, linguistic and cultural diversity, weak capacities and connectivity often mean that knowledge is not shared or captured in a sharable form for disseminating to others who may find it useful. However, networking among projects provide an opportunity and experience to have peer-to-peer exchange and customized learning and collaboration within countries, which in turn have also helped strengthen networks.

Improving knowledge systems has required capacity building in documentation skills so that knowledge is available in a sharable form;  improving knowledge management skills through improved knowledge-sharing methods; and providing a facilitation mechanism to connect people online – through mailing lists and websites – and face to face – by “knowledge sharing” workshops and training  Once network members became convinced of the benefits of connecting and sharing what they know, the network effect multiplies.

   
 

Project and IFAD staff share knowledge at one of the regional events

 

Feedback from ENRAP’s monitoring survey, conducted in February 2010, noted that 85-100 per cent of respondents are sharing and seeking knowledge and information through networks. It is evident that  IFAD project staff and partners in Asia-Pacific are networking to share their knowledge on various operational and thematic concerns electronically and through face-to-face exchanges, which is beneficial to their everyday work.

ENRAP supported the creation of a Knowledge Facilitators Group which included Country Presence Officers and KM focal points. They received training on various knowledge-sharing methods to help them capture and exchange knowledge. These included techniques such as world café, peer-assist, open space and speed sharing. Training was combined with exposure to web tools such as wikis, blogs, video clips and photos to use in capturing and sharing outputs. Subsequently, the networking among this group has enhanced in-country and regional sharing. An organizational network analysis and mapping of the regional network supported by ENRAP confirmed the importance of these connections for increased information sharing. The analysis found that Country Programme Officers are sharing information regularly, which helps information flow within the network as they act as a bridge between their country programmes and the regional network.

Now knowledge-sharing activities are increasingly integrated within IFAD country programme strategies.  A successful example is the effort by the IFAD Philippines country programme team to bring together learning from projects, to exchange learning on various rural development practices and relevant policy discussions at a national  annual Knowledge and Learning Market. Other country programmes have also been interested in the learning generated from this initiative.
 
Lessons for sustained networking

As the ENRAP programme closes, one lesson learned has been the need for support to regional networking so that country programme knowledge can be shared at the regional level. ENRAP’s experience highlights the need to combine networking activities with other activities such as skills training; providing online space for storing and sharing information; and encouraging connections between interested projects for specific exchanges.  IFAD regional staff and Country Programme Managers are ideally placed within the regional network to support project staff to connect with each other and facilitate networking. This can be done through the country programme activities that they facilitate, as they connect more experienced staff with new members and the learning they bring from the country to regional events and exchanges.

In addition, key network members within specific communities of interest and country networks have emerged as facilitators. They can drive the networking initiatives by collecting ideas and moderating discussions, or by pooling resources for capacity-building or knowledge sharing events. These network members are often subject-matter/technical specialists within the IFAD pool of project staff, and their knowledge and guidance can certainly benefit newcomers.  

Another important lesson has been the need for networking based on the needs of the members themselves, especially concerning thematic discussions, and connecting them with appropriate resources. Thus, communities of interest are more likely to form around specific knowledge needs. For example, a network member wanted to learn more about preparing a gender mainstreaming strategy for her project. She was able to get ideas and practical tips and documentation from other more experienced project staff from the region by meeting them at a knowledge-sharing workshop as well as through e-discussion.

ENRAP’s exit strategy is to ensure that the benefits of networking are sustained by network members who have the motivation, skills and tools to continue sharing knowledge; and that lessons learned from this networking programme are transferred to IFAD for future network management. Towards this end, ENRAP has been transferring its experiential knowledge through documentation of its learning, which is available on the ENRAP website. 

Resources for sustainability

Progress has been made towards setting the stage for hand-over of online network resources such as website and mailing lists to IFAD. Content has already been made available for migration. Documentation capturing the learning and recommendations from the project team has also been drafted and will be shared with IFAD.

A pilot-tested Knowledge-Sharing Curriculum for IFAD staff is being finalized. This is an online resource that documents various knowledge-sharing methods and tools for those interested in providing training on the use of these tools or would like to know more about how to use these tools in their work. This curriculum has been tested by the India country programme team, which then provided inputs for refinement.
 
Guidelines on writeshop methodologies and systematizing documentation are useful for those looking to analyse and document field experiences and produce various written outputs; a systematization guide is available online and has culminated from various documentation exercises that ENRAP supported.

ENRAP conducted a study on networking mapping and using social network analysis for network management, in order to examine the evolution and change in networking. Two network mapping exercises have been conducted to analyse how frequently and how much people share information that others find useful to their work. The study demonstrates that network mapping can help managers visualize the current state of relationships between different people within networks and make informed decisions on how to improve them.

Researchers from China, India, the Philippines and Sri Lanka are currently conducting seven research studies on the use of information and communication technologies (ICTs) for enhanced rural livelihoods. The studies investigate the ways in which ICTs help rural communities, including farmers and labourers, access information that helps increase their incomes and savings – for example, by accessing crop disease information, market prices or employment exchange through mobile technologies. The findings can help development practitioners and managers decide how ICTs can be integrated within various livelihood activities.

It is hoped that the network members and facilitators will find these useful as the key drivers of the network!

Apoorva Mishra, Research Officer ENRAP

Useful links:

Knowledge Networking for Rural Development in Asia-Pacific (ENRAP)


The value chain challenge: from one- to multiple-segment development

The Pro-poor Value Chain Development Tool for Practitioners in Asia, a new project funded by IFAD and implemented by the United Nations Industrial Development Organization (UNIDO), will work with rural projects in Asia on the development of a more holistic value chain approach. The tool that this project develops will help project staff design simultaneous interventions at the different segments of the value chain rather than just focusing on one part of the value chain.

The challenge

 

Pro-poor Value chain development tool for practitioners in Asia       
Grant number: 1103-UNIDO
Grant amount: US$ 200,000
Grant recipient: UNIDO
Geographical region: Regional
Duration: 1 year (December 2009 to December 2010)
Approval date: 15/04/09

 

Many rural development projects in Asia nowadays focus on the value chain, i.e. the sequential dynamics of adding value to a commodity through production, transformation, processing, transporting, retailing and marketing to the final consumer. Value chain development is one way of fostering commercial integration of local communities in the economy, enabling poor people to generate income by participating in value addition.

   
 

Potato trading in a wholesale market in Bandung, Indonesia

 

For example, a value chain development project in West Java, Indonesia links potato farmers to markets, engaging farmers in the production of better-quality potatoes while simultaneously assisting the local farmers’ organizations to process the potatoes into chips and sell them to retailers. The farming community gets higher incomes from selling an improved primary product while also benefiting from the value addition through processing.

What does value chain development really mean in practice?

   
 

Frying potato chips in Garut, Indonesia

 

It means that governments and development agencies would need to design project interventions at the different segments of the value chain simultaneously. This is a major challenge because most agencies have their expertise at one rather than at all segments of the value chain.  Consequently, value chain development projects, after an initial analysis of the value chain context, fall back on developing an isolated part of the value chain, which in most cases is not enough to make the chain run. What is needed is the application of new tools for analysing, designing and implementing value chain development projects and the building of strategic alliances with new partners.

The new project

The IFAD-funded project was set up to meet this challenge by maximizing the impact of technical assistance grants and programmes in agricultural and rural development by applying a novel value chain diagnostic and development tool. The project is being implemented jointly by IFAD and UNIDO, a perfect match of expertise in the fields of primary agricultural production and agro-processing/agribusiness development.

The project studies value chain development experiences of IFAD and other development agencies in India, Indonesia, Sri Lanka, and Viet Nam and looks particularly at best practices in the analysis and design of value chain development projects and how they eventually led to project success. The assumption is that successful projects would have been designed in such a way that they could intervene in different segments of the value chain requiring development support.

Towards a more holistic and successful value chain development in Asia

   
 

Family owners of a small potato chip processing business demonstrating chips ready for sale in Garut, Indonesia

 

The tool should be completed by the end of 2010, followed by testing and training workshops for senior government officials in the ministries of agriculture, industry, trade, commerce and planning as well as farmers’ representatives and private-sector entities engaged in various segments of value chains in Asia.

The ultimate beneficiaries will be farmers, farmers’ groups and small to medium enterprises in Asian countries that currently operate in less-developed value chains. They will benefit from increased access to the local and global markets as well as from income and employment created through value addition.

For the group of potato growers in West Java mentioned above, this would mean that they do not only have support in producing potatoes and processing chips but they also gain access to credit, agricultural inputs, business and market information services, well-functioning transport infrastructure and further opportunities for marketing to niche markets and abroad – all of which will enable them to increase their share in  the value added that the chain generates.

Frank Hartwich, Industrial Development Officer, Agribusiness Development Unit, UNIDO

Useful links:

United Nations Industrial Development Organization (UNIDO)


Making the most of labour migration for development in the Western Hindu Kush-Himalayas

 

Programme on Livelihoods and Ecosystem Services in the Himalayas: Enhancing Adaptation Capacity and Resilience of the Poor to Climate and Socio-Economic Changes 
Grant number: G-1113
Grant amount: US$ 1,500,000
Grant recipient: ICIMOD
Geographic region: Bhutan, India, Nepal
Duration: 3 Years (July 2009 to September 2012)
Approval date: 30/04/2009

 

In recent years, global socio-economic and environmental changes have led to a considerable increase in migration in the western Hindu Kush-Himalayas (HKH) region. The Programme on Livelihoods and Ecosystem Services in the Himalayas: Enhancing Adaptation Capacity and Resilience of the Poor to Climate and Socio-Economic Changes  implemented by the International Centre for Integrated Mountain Development (ICIMOD) carried out case studies in the mountainous parts of India, Nepal, and Pakistan looking at migration in general, and the flow of remittances in particular.

Migration generates financial and human capital which, if leveraged for development, can help reduce poverty. The full benefits of labour migration have yet to be seen in the western HKH. In their case studies, ICIMOD analysed why this is the case.

   
 

A woman with her child watching the 'blessing of crops', Tangbe, Mustang, Nepal Source: ICIMOD

 

In total, 545 people, predominantly from IFAD-supported project areas, were interviewed, either in face-to-face interviews or in focus group discussions. Information was collected on the type, volume and mode of transfer of remittances; the impact of remittances in terms of financial flows and the transfer of new skills; perceptions on poverty and development; and effects on gender balance as mountain migration is predominantly male. The study identified reasons why labour migration has not yet been fully leveraged for poverty alleviation and development in the region and made recommendations as to how to address them.

Fostering and managing skilled migration

The outreach and quality of school education and vocational training in mountain areas are very low. The majority of migrants from the western HKH are unskilled. As migrants, they only qualify for low-paid jobs.

Low earnings make it difficult for migrants to save after they have covered their consumption and accommodation needs at their destination. Nevertheless, migrants learn new skills. Unskilled labour is transformed into skilled labour, which can be used at the place of origin. However, such skills mostly find little opportunity to be applied there as the necessary supportive infrastructure is lacking.

Low savings, remittances lost in repaying loans needed to finance the initial migration, and inadequate acquired skills are impediments to development in mountain areas. They can be addressed by fostering and managing skilled migration through the following interventions by development planners and policy makers

Making more financial services available in rural areas and building financial literacy

The majority of migrants cannot rely on family and friends for funds to migrate. They often turn to moneylenders for credit, as there are no formal lending services. Moneylenders charge up to 12 times the price of formal credit institutions. Savings among mountain people are low partly because they have low earnings and lose a substantial part of these earnings in paying back loans (see figure below), but also because savings and investment opportunities are rare in rural mountain areas and thus there is no incentive to save.

Overall, the western HKH lacks formal financial services for credit, saving and investment. Moreover, the financial literacy among marginalized mountain communities is limited. The studies found that, even where formal financial services are available, they are not used because people are either not aware of them or shy away from the bureaucratic procedures involved.

“Many women and old people do not understand the policies and cannot sign, so they prefer not to use the banks to receive remittances. Women say that bank staff give them a lot of problems and ask for their signature everywhere. Moreover, the banks are located in the district headquarters, which makes it a time-consuming and expensive exercise,” said Dechen Sherpawhile carrying out the Nepal Survey.

The manager of Rastriya Banijya Bank, Bajhang, Nepal does not understand the difficulties of financially illiterate people. According to him, “The process of sending money is not difficult at all. There are different mediums to remit such as International Money Express (IME), Western Union, Express Money Transfer, Banijya Remit.”  He added, “As soon as money is remitted, a control number is given. The family member has to come with citizenship and the control number. Money can be remitted in one day.”
When it comes to financial services, ICIMOD’s recommendation is twofold and directed to providers of formal financial services and development planners:

Increasing competition for remittance transfers and adopting new technologies

The major challenge involved in transferring remittances to the western HKH is the limited outreach of payout locations. In one of the surveyed districts in Nepal, the transfer of remittances through official channels is probably less than 0.3 per cent. In the few cases where payout locations are, or could be, available, regulatory issues or the limited financial literacy and awareness of communities on how to use these services prevents them from being used.

There is an urgent need for an increase in overall financial services in rural mountain areas. The following recommendations specifically address improving the transfer of remittances:

Facilitating the investment of social and financial remittances in mountain areas

   
 

A farmer in Thakuli, Uttaranchal, India Source: ICIMOD

 

Migrants return with money and new skills. In most cases, there is little opportunity to invest either, or, as the case studies showed, migrants do not recognize local investment opportunities.

Therefore, it is important to create investment opportunities that are tailored to the financial and human capital that migrants bring home. Development efforts aim to improve gains of producers or collectors of agriculture or non-timber forest products. Such agro and non-timber forest product value chains require examination and intervention to increase the returns for mountain producers. Production technologies and marketing knowledge require upgrading. Farmers need greater support in soil and water conservation, improvement in irrigation, and agricultural financing and marketing, particularly through the wider outreach of extension services

In addition, an interesting finding in India was that in each village a sizeable chunk of land is lying fallow due to the permanent migration of land owners. Possibilities may be explored to facilitate the leasing of fallow land, through the government or the private sector, to economically weak farmers with small landholdings.

At the same time, new investment opportunities require facilitation. The new skills and knowledge that migrants attain at their destination are particularly relevant. From the case studies, services such as those relevant to mountain tourism showed great potential. Both sites studied in India and Nepal are located in areas with good potential for the development of tourism, which is as yet unexploited due to lack of awareness of the opportunity, lack of skills among locals to develop it, poor accessibility, lack of marketing support by the government, and limited business models and financing products. There is a strong need to recognize returned migrants for the knowledge and skills they have acquired and could invest in their home communities and to offer tailored support and guidance.

Strong awareness must be directed to changing values and perceptions among youth, which requires an emphasis on local employment and livelihood opportunities beyond the agricultural sector in order to reduce youth out-migration or to attract them back to village life. “After studying for so many years it is pointless to go back to agriculture. If I had to be a farmer there was no need to study so much,” said one migrant from Bageshwar district, Uttarakhand.

Addressing the feminization of mountain economies

The case studies clearly underline that labour migration in the western HKH is a predominantly male phenomenon. Women are generally left behind. As a result, any intervention to increase the development impact of labour migration in the communities of origin, including in the migrants’ households, requires a strong gender perspective.
The following aspects require consideration:

These recommendations provide a guiding framework for leveraging labour migration and remittances to support development and poverty reduction in the western HKH region.

Brigitte Hoermann, Team Leader, Innovative Livelihood Options Action Area, Sustainable Livelihood and Poverty Reduction Programme (SLPR), ICIMOD, Dhrupad Choudhury, Coordinator, IFAD, SLPR, ICIMOD

Useful links


New website on pro-poor policy has been launched

Since early 2007, IFAD and FAO have joined hands in implementing a regional grant-funded programme entitled ‘Pro-Poor Policy Formulation, Dialogue and Implementation at the Country Level’. A new website has just been launched to promote sharing of experiences and lessons learned on successful policies among countries through a knowledge network.

 

Pro-poor policy formulation, dialogue and implementation at the country level
Grant number: G-821
Grant amount: US$ 1,500,000
Grant recipient: FAO
Geographical region: Cambodia, China, India, Indonesia, Nepal, Pakistan, Sri Lanka, Viet Nam
Duration: 3 years (February 2007 to September 2010)
Approval date: 13/12/2005

 

The goal of the programme on Pro-Poor Policy Formulation, Dialogue and Implementation at the Country Level is to assist Cambodia, China, India, Indonesia, Nepal, Pakistan, Sri Lanka and Viet Nam in reducing rural poverty through enhanced institutional capacity to analyse, formulate and implement pro-poor agricultural and rural development policies.

The Mid-term Review of the Programme undertaken in 2009 indicated several important country-level outputs:

The new website contains a wealth of information about the programme activities and outputs by country. For example, it includes updates from the working and advisory groups, workshop proceedings, training materials, and policy briefs based on the policy analysis studies that each country conducted.

All of you are encouraged to visit the website and use it as a working tool for sharing knowledge. Please visit the Pro-poor Policy Programme website and help us make it responsive to your needs. For any comments or suggestions, please contact Kate Braband, Programme Support Consultant, Pro-Poor Policy Formulation, Dialogue and Implementation, FAO Regional Office for Asia and the Pacific (RAP)

Ganesh Thapa, Regional Economist, IFAD


Wheelbarrows, a road and a future: South Pacific islanders rediscover their power to change their lives

 

Mainstreaming Rural Development Innovations Programme in the Pacific
Grant number: G-731
Grant amount: US$ 2,000,000
Grant recipient: FSPI
Geographical region: Pacific Islands
Duration: 3 years (June 2005 to December 2008)
Approval date: 2/12/2004

 
     

 Remote Pacific Island communities face increasing socio-economic and environmental uncertainty. The breakdown of traditional community structures has removed an important social safety net. But islanders are reasserting control of their economic and social well-being and achieving spectacular results with the help of an IFAD-supported programme.

Life in the isolated rural areas of the South Pacific islands of Fiji, Kiribati and Tonga can be challenging. These nations are groupings of scattered islands, where the outlying islands may be hundreds of kilometres from the main island. In Tonga, for example, there are 45 inhabited islands, some as far as 562 kilometres from the main island of Tongatapu.

   
 

The Hunga community raised US$ 100,000 from the government, their own people and relatives living abroad to build a road to bring goods to market.

 

Food is often scarce, and even on these remote islands the global economic crisis has had an impact: reliance on imported food has left these countries vulnerable. Locals are paying more for food as a result of higher fuel and transportation costs. Because of their isolation, remote island communities receive little support for their social and economic needs. And the breakdown of traditional community structures in recent years has removed yet another social safety net.

“There was a need to empower communities to take charge of their own development,” says Ron Hartman, IFAD’s Country Programme Manager for the Pacific Islands. Today, islanders are rediscovering the power they have to change their lives thanks to Mainstreaming of Rural Development Innovations (MORDI), an IFAD-supported programme implemented by the Foundation for South Pacific International (FSPI), a regional NGO network. The programme has been essential in supporting dozens of island communities, working in small, but highly efficient ways.

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