4th High Level Forum on Aid Effectiveness

// Evidence Paper on Agriculture and Rural Development for HLF-4 Busan

Global Donor Platform for Rural Development

This publication can be downloaded from the website of the Global Donor Platform for Rural Development at: www.donorplatform.org/resources/publications Hard copies can be requested from the publishers: Secretariat of the Global Donor Platform for Rural Development, Dahlmannstrasse 4, 53113 Bonn, Germany Email: secretariat@donorplatform.org The views expressed herein are those of the authors and do not necessarily represent those of individual Platform members. All rights reserved. Reproduction and dissemination of material in this information product for educational or other non-commercial purposes is authorised, without any prior written permission from the copyright holders, provided the source is fully acknowledged. Reproduction of material in this information product for resale or other commercial purposes is prohibited without written permission of the copyright holders. Applications for such permission should be addressed to: Coordinator, Secretariat of the Global Donor Platform for Rural Development, Dahlmannstrasse 4, 53113 Bonn, Germany, or via email to: secretariat@donorplatform.org. Global Donor Platform for Rural Development 2011

4th High Level Forum Table of Contents Evidence Paper on Agriculture and Rural Development for HLF-4 Busan

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Table of Contents

Preface Acronyms Summary Introduction Ownership Alignment Harmonisation Managing for development results Mutual accountability Aid effectiveness indicators ARD Way forward Annexes

02 03 04 06 08 12 15 18 21 24 26 27

Tables Table 1: Aid to Agriculture 1995-2009 OECD and other definitions Table 2: Estimated Scale of Aid to and Investments in Developing Countries from Emerging Donors Table 3: Aid to ARDFS by main component, 1995-2009 Table 4: Aid Effectiveness Indicators and Performance in the ARD Sector 07 11 14 24

Text Box Text Box 1: Emerging donors and grant-makers 11

Annexes Annex 1 (a): Aid Flows to ARD and Food Security, 1995-2008 (Commitments) Annex 1 (b): Expanded definition of Aid to Agriculture, Rural Development and Food Security Annex 2: CAADP: Countries with Compacts/Investment Plans, March 2011 Annex 3: CAADP Post Compact Process: Review of Investment Plans for Ghana, The Gambia, Nigeria, Sierra Leone and Liberia

27 27 28 29 30

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4th High Level Forum Evidence Paper on Agriculture and Rural Development for HLF-4 Busan Preface

and Rural Development for HLF-4 Busan

Preface
The Fourth High Level Forum of Aid Effectiveness (HLF-4) at the end of 2010 in Busan will be a landmark for international development. In reflecting the efforts of all development partners to improve the quality of aid, it will draw conclusions about the commitments and targets of the Paris Declaration (PD) and the Accra Agenda for Action (AAA). Discussion and decisions at the upcoming HLF-4 will be informed by quantitative and qualitative evidence of progress and challenges in implementing specific commitments. The Global Donor Platforms Evidence Paper aims to support the inclusion in HLF-4 of such evidence in Agriculture and Rural Development by providing examples of progress and challenges in implementing specific Paris and Accra commitments in this field. The material is destined to inform the preparation of the Progress since Paris report and the Busan Outcome Document, to provide key themes and messages for political debates and also to display knowledge and good practice for thematic interactive sessions at HLF-4. The Global Donor Platform for Rural Development (Platform) is a network of 34 bilateral and multilateral donors and international financing institutions that share a common vision of the role that agriculture and rural development plays in reducing poverty. They are committed to achieving increased and more effective aid for agriculture and rural development. The Platforms work is achieved through implementing twin pillars of advocacy and knowledge-sharing. We hope that our evidence will also help to inform forward-looking issues and shape the future agenda.

4th High Level Forum Acronyms Evidence Paper on Agriculture and Rural Development for HLF-4 Busan

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Acronyms
AAA AAP AE AFSI AU AUC ARD BRIC CAADP Accra Agenda for Action Agriculture Action Plan Aid effectiveness LAquila Food Security Initiative African Union African Union Commission Agriculture and Rural Development Brazil, Russia, India, China Comprehensive Africa Agriculture Development Programme CAADP Partnership Platform CAADP Task Team Country Assistance Strategy (of World Bank) Country flow-of-funds mechanism Country Strategic Opportunities Programme (of IFAD) Country Policy and Institutional Assessment Country Performance Rating Country Partnership Strategy Creditor Reporting System (OECD-DAC) Civil society organisation Development Policy Loan Economic Community of West African States Agricultural Policy for the Economic Community of West African States Foreign Direct Investment Global Agriculture and Food Security Programme Global Environment Facility Global Donor Platform for Rural Development Global Food Crisis Response Programme JAS LDC LIFT IDA IEG IFC IFPRI International Development Association Independent Evaluation Group International Finance Corporation International Food Policy Research Institute Joint Assistance Strategy Least developed Countries Livelihoods and Food Security Trust Fund (Myanmar) Mutual Accountability Framework Millennium Challenge Corporation Millennium Development Goal Multi-Donor Trust Fund Managing for development results New Partnership for Africas Development NEPAD Planning and Coordinating Agency Non-State Actor Programme-based Approach Paris Declaration Project Implementation Unit Poverty Reduction Strategy Paper Results-based budgeting Rural Development Strategy Regional Economic Community Regional Strategic Analysis and Knowledge Support System Sector Wide Approach Vision to Action World Bank World Bank Group World Development Report

MAF MCC MDG MDTF MfDR NEPAD

CAADP PP CAADP TT CAS

CFFM COSOP

NPCA

CPIA

NSA PBA PD PIU PRSP RBB RDS REC ReSAKSS

CPR CPS CRS CSO DPL ECOWAS

ECOWAP

FDI GAFSP

SWAp V2A WB WBG WDR

GEF GDPRD

GFRP

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4th High Level Forum Evidence Paper on Agriculture and Rural Development for HLF-4 Busan Summary

and Rural Development for HLF-4 Busan

Summary

1. AGRICULTURE IS A UNIQUELY POWERFUL TOOL FOR ACHIEVING MDG 1. Three out of every four poor people in developing countries live in rural areas and almost all depend upon agriculture. There is strong evidence that agriculture is more effective than nonagriculture in reducing poverty among the poorest of the poor. The performance of agriculture in developing countries has been impressive, with sector GDP growing at 2.6% per year between 1980 and 2004. 2. THERE IS AN URGENT NEED TO STRENGTHEN THE APPLICATION OF AID EFFECTIVENESS PRINCIPLES TO THE AGRICULTURE AND RURAL DEVELOPMENT SECTOR. The priority in aid effectiveness should be to extend and expand the application of Paris Declaration (PD) principles and the Accra Agenda for Action (AAA) in the agriculture and rural development (ARD) sector. In view of the unique role that ARD plays in eradicating poverty and hunger and achieving MDG 1, it is urgent to deploy aid effectiveness measures (AE) in the sector. Substantial progress has been made in enhancing AE at the government-to-government level, with the principles of ownership, alignment and harmonisation broadly accepted and applied. Although governments and donors have taken important steps in bringing AE to the sector, the time has come for much more focused efforts to be made in ARD. It is here that country- and sector-specific challenges remain, especially in results management and reporting, and the inclusion of all stakeholders in a better accountability mechanism. 3. FOCUS ON DEVELOPMENT EFFECTIVENESS DEMANDS DEMONSTRABLE RESULTS IN ARD. The recognition that ownership, harmonisation and alignment are only means to an end has brought greater focus on managing for development results (MfDR). This principle draws attention to the need to consider development effectiveness at the sector level where tangible results can be shown. It also requires that, for results to be achieved, ownership, harmonization and alignment must be applied to each sector.

4. OWNERSHIP OF ARD STRATEGIES IS UNDER THREAT. Full country ownership and leadership is now broadly accepted as a key necessary condition for aid to be effective. The alignment of donors to national strategies is also a fundamental principle of aid but is being reinterpreted by donors in pursuit of results and value for money. Achieving genuine ownership of strategies in ARD to which donors can align is difficult because the sector is hard to define and responsibilities and strategies cross ministerial portfolios. In Africa, the Comprehensive Africa Agriculture Development Programme (CAADP) has demonstrated how a sound technical framework at continental and regional levels and inclusive processes at country level can enhance ownership. The appearance of large emerging donors and foundations in the sector can put ownership under pressure. 5. ALIGNMENT IS ONLY A MEANS TO AN END RESULTS IN ARD MUST BE SHOWN. Confronted with ARD strategies and the setting by governments of goals and approaches that may not always be convincing in the context of global good practice, donors are less willing to compromise on achieving good development results by aligning at any cost. CAADP provides valuable experience of how a sound framework for agriculture can facilitate alignment, for example, around a common agricultural research and technology dissemination programme (CAADP Pillar 4). However, donors have their own corporate strategies and there appears to be a growing interest on the part of some to actively influence national strategies through analysis, information and dialogue and even to make aid payment dependent upon results. Alignment is, after all, only a means to an end.

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6. THE GOAL OF HARMONIZATION HAS BEEN ESPECIALLY CHALLENGING IN ARD. Donor harmonisation in ARD has worked best at the country level through donor working groups (DWGs). Moving towards common arrangements and financial harmonisation through sector-wide approaches (SWAps) in ARD has yielded mixed results. CAADP has shown that Country Compacts can facilitate harmonisation through a programme-based approach (PBA) and the value of multidonor trust funds (MDTFs) to harmonise technical support to the sector and reduce transaction costs. Harmonisation at sub-national level is a challenging but important task in ARD with increasing decentralisation, but a Vietnam pilot is showing the way. 7. MANAGING FOR DEVELOPMENT RESULTS HAS BECOME THE GOLD STANDARD FOR AID EFFECTIVENESS. The quest for positive and sustainable development outcomes underpins all other AE principles. Showing results and value for money is particularly difficult in ARD because the link between public expenditure (including aid) and results is long and complex and involves decisions made by the private sector whose activities dominate the sector. There is some evidence that the absence of clear results is tempering donor interest in the sector. The need to develop sound M&E systems and statistics is strongly indicated. There are emerging good practices on country information systems and CAADP is tackling the task of creating a credible M&E system for the continent. 8. NON-STATE ACTORS HAVE CENTRAL ROLE IN DOMESTIC MUTUAL ACCOUNTABILITY IN ARD. Recognition of the importance of mutual accountability is spreading but is at an early stage and has not been institutionalised in ARD. However, it has some promising successes to show. Governments play a pivotal role in accountability with respect to each other and to their respective citizens as recipients of aid or as taxpayers. Non-State Actors have a crucial role to play in developing country domestic accountability in ARD because of the dispersed nature of the rural population, especially where parliamentary accountability and oversight of budgets is limited. CAADP has developed a Mutual Accountability Framework (MAF) which shows how this can work and the capacity development needed. Donors have not completely lived up to their commitment to enhance the predictability of aid to the sector but there are some examples, such as the LAquila Food Security Initiative (AFSI), which are a step in the right direction. The CAADP MDTFs are also important in enhancing the predictability of funding. The main tool for reporting aid flows, however, is flawed.

9. GLOBAL CRISES AND QUICK FIXES THREATEN DEVELOPMENT EFFECTIVENESS AND LONG TERM AGRICULTURAL DEVELOPMENT. Global events, such as the world food and financial crises, threaten the continued implementation of the PD commitments as developing country partners and donors attempt to address immediate political imperatives and seek shortcuts to achieving them that are not necessarily consistent with earlier commitments. Indeed, there seems to be an increasing trend towards the allocation of aid for emergencies and quick fixes that outweigh and may even undermine investment in long term development of agriculture. 10.THE WAY FORWARD FOR ARD FOCUSES ON RESULTS AND ACCOUNTABILITY. The ARD sector must urgently enhance its management for development results and this is an area in which real progress can be shown. Establishing viable mutual accountability mechanisms in the sector is also a priority because agriculture is an overwhelmingly private activity which demands the systematic engagement of a wide range of stakeholders.

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4th High Level Forum Evidence Paper on Agriculture and Rural Development for HLF-4 Busan Introduction

and Rural Development for HLF-4 Busan

Introduction

11. AGRICULTURE IS A UNIQUELY POWERFUL TOOL FOR ACHIEVING MDG 1. Three out of every four poor people in developing countries live in rural areas and almost all depend upon agriculture. Especially in the agriculture-based economies, agriculture is essential to growth and to reducing poverty. Agriculture is a major economic activity as a source of growth, as a livelihood and provider of environmental services1. Cross-country econometric evidence indicates that agriculture is significantly more effective than nonagriculture in reducing poverty among the poorest of the poor (as reflected in the $1-day squared poverty gap). It is also up to 3.2 times better at reducing $1-day headcount poverty in low-income and resource-rich countries (including those in sub-Saharan Africa)2. As well as directly addressing MDG 1, the eradication of extreme poverty and hunger, ARD also contributes to the achievement of MDG 3 promoting gender equality and empowerment of women, and MDG 7 ensuring environmental sustainability. The performance of agriculture in developing countries has been impressive, with sector GDP growing at 2.6% per year between 1980 and 2004. 12. AID EFFECTIVENESS GOVERNS THE POLITICAL ECONOMY OF HOW RICH DONORS AND POOR NATIONS INTERACT. Aid effectiveness as defined by the Paris Declaration (PD) principles and elaborated by the Accra Agenda for Action (AAA) was conceived out of the need to improve the way the donor community and developing country partners interact. It describes, in effect, the political economy of the way rich and powerful donor countries and organisations work with poor countries. It has focused on the need to change the behaviour of donor governments and their agencies by encouraging their alignment behind national strategies, institutions and procedures, the harmonization of their activities in a transparent and more effective collective way. Partner countries have been urged to take more effective leadership of development policies and strategies and to coordinate development actions.

13. THERE IS AN URGENT NEED TO STRENGTHEN THE APPLICATION OF AID EFFECTIVENESS PRINCIPLES TO THE AGRICULTURE AND RURAL DEVELOPMENT SECTOR. Progress has been made in enhancing aid effectiveness at the government-to-government level, with the principles of ownership, alignment and harmonisation broadly accepted and applied up to a point. Although governments and donors have taken important steps in bringing AE to the sector, the time has come for much more focused efforts to be made in ARD. It is here that country- and sector-specific challenges remain, especially in results management and reporting, and the inclusion of all stakeholders in a better accountability mechanism. It is particularly urgent to enhance the application of AE to the ARD sector because of the sectors unique role in achieving MDG 1. In a recent survey of government representatives, parliamentarians and CSOs in Asia Pacific, the need to apply aid effectiveness principles to different sectors was ranked top as priority topic for discussion at Busan3. Although a recent study points out that the limits to what may be achieved from applying AE principles in ARD are determined by what public planning can achieve in this sector4, the overwhelming influence of the private sector and civil society underline the need for better, more inclusive consultative mechanisms. 14. APPLYING AID EFFECTIVENESS PRINCIPLES IS CHALLENGING IN AGRICULTURE. Agriculture is a special case when it comes to aid effectiveness. Unlike service delivery in social sectors such as health and education which is almost exclusively in the hands of the public sector, agriculture is overwhelmingly a private sector activity. Furthermore, whereas the outcomes of improved health and education can be directly attributable to investment in public sector service delivery, in agriculture outcomes are not only difficult to measure but are also the result of a complex interaction of public sector investment and private sector activities. Changes in the role of the state, especially in delivering services5, and due to its sheer size, diversity and complexity, means that applying AE to agriculture

1 2 3 4 5

World Development Report 2008. Christiansen, Demery & Kuhl, UNU-Wider, 2010 Capacity Development for Development Effectiveness (CDDE) Newsletter February 2011. Platform Knowledge Piece I (PKP I), Policy Coherence for Agricultural and Rural Development, GDPRD, 2011 (draft) Cabral, L., Accra 2008: The bumpy road to aid effectiveness in agriculture, ODI Natural Resource Perspectives, April 2008.

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has to be country-specific. As home to the largest number of poor people, facing the most intractable problems of poverty reduction, rural areas in many developing countries require policies that will enhance production and livelihoods as well as social protection measures that can reduce asset loss at times of stress and underpin longer term incomes though productive safety nets. 15. THE FOCUS ON RESULTS IS ABOUT DEVELOPMENT EFFECTIVENESS IN AGRICULTURE. The recognition that ownership, harmonisation and alignment are only means to an end has brought greater focus on achieving development results. This principle draws attention to the need to consider development effectiveness at the sector level where tangible results can be shown. It also requires that, for results to be achieved, ownership, harmonization and alignment must be applied to each sector. Reservations about the development effectiveness of resources devoted to agriculture both aid and domestic resources lies behind the evident neglect of the sector by both donors and ministries of finance for many years. 16. BUT AID TO AGRICULTURE IS NOW INCREASING. Notwithstanding the difficulties of showing credible results, especially at country level, aid to agriculture has been rising in absolute terms and as a share of overall

ODA since the mid 2000s. In 2009, aid to agriculture, forestry and fishing, measured in commitment terms, reached $9.3 billion. (See Table 1 and Annex 1 (a); also Annex 1(b) for an explanation of the expanded definition of aid to ARD). However, if Creditor Reporting System (CRS) purpose codes covering agricultural production, processing and marketing, rural socio-economic development, and emergency relief and welfare (the ODI definition) are included, aid to the sector is much larger. The narrow definition of agriculture rises from a low point in 1999 of US$4.3 billion, to a high point of US$9.8 billion in 2009. The broader definition rises from US$8.5 billion in 1995 to over US$18 billion in 2009, which is 80% higher than the narrow definition. 17. IN TERMS OF SHARE OF ODA, HOWEVER, AGRICULTURE PLUMMETED FROM AROUND 10% IN 1996 TO 4% IN 2006 (according to the basic OECD-CRS definition) before beginning to rise, reaching over 6% in 2009. 18. THIS PAPER ATTEMPTS TO EXPLORE WHAT PROGRESS AND GOOD PRACTICES IN AE CAN BE IDENTIFIED IN THE AGRICULTURE AND RURAL DEVELOPMENT SECTOR AND THE PARTICULAR CHALLENGES TO ENHANCING AE IN THE SECTOR. It follows the five pillars of the PD and concludes with some recommendations for next steps.

Table 1: Aid to Agriculture 1995-2009 OECD and other definitions

20,000 18,000 16,000 14,000 US$ million 12,000 10,000 8,000 6,000 4,000 2,000 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Sector allocable aid to agriculture, forestry and fishing

Extended DAC definition

ODI definition
Source: PKP II, March 2011

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4th High Level Forum Evidence Paper on Agriculture and Rural Development for HLF-4 Busan Ownership

and Rural Development for HLF-4 Busan

Ownership

Country ownership of national strategies is under threat because of the increasing pursuit by donors of results and value for money. Achieving ownership of strategies in ARD is difficult because the sector is hard to define and responsibilities cross ministerial portfolios. In Africa, CAADP has demonstrated how a sound technical framework at continental and regional levels and inclusive processes at country level can enhance the quality of strategies. The appearance of large emerging donors and investors in the sector can also put ownership under pressure. The scale of FDI in developing countries dwarfs ODA, especially in the agriculture sector.

19. COUNTRY OWNERSHIP IS DIFFICULT TO ACHIEVE IN ARD. The supremacy of country ownership is unquestioned as the basis for effective delivery of aid. It means commitment by government to a set of national strategies, policies and programmes. In practical terms, ownership must be broken down into commitments at the sectoral level by the ministry responsible for a particular sector. The process of achieving ownership at sectoral level is particularly challenging in agriculture because commitments will be to sets of strategies that almost always cross ministerial portfolios. For example, there may be distinct strategies by ministries responsible for agriculture (often meaning crop production), livestock, fisheries and forestry, or for marketing or cooperatives. Ownership in rural development is even more difficult to define because there is often no clear ministerial mandate in this area except perhaps, as in the case of Ethiopia or Vietnam, where it is defined by a super-ministry.

20. COUNTRY LEADERSHIP IS OFTEN LACKING. Beyond the complexity of the sector in organisational terms, the leadership that is essential for translating strategies into action and securing a coherent approach for the sector by both domestic and international stakeholders is often lacking. In addition to capacity constraints that are common in ministries of agriculture around the developing world, there is also the issue of true stakeholder engagement6. Genuine ownership and leadership is also difficult in agriculture because the private sector dominates activities and decision-making in the sector. Governments are notoriously bad at fostering links with the private sector. All too often, the engagement of parliaments and those giving voice to rural stakeholders, is weak. Although farmers may well be consulted in planning processes there are few examples of genuine representation by input suppliers, traders and agro-industries which play such a critical role in the agricultural economy. An interesting example of where strong leadership can make a difference is in the reform of the Office du Niger in Mali. A key reason for success was strong leadership by the Malian government that decided to setup an independent and high level delegation attached to the prime minister to manage the reforms7. 21. A REGIONAL FRAMEWORK AND INSTITUTIONS CAN STRENGTHEN COUNTRY OWNERSHIP. The Comprehensive Africa Agriculture Development Programme (CAADP) was founded on the principle of it being Africa-owned and led. In the African context, with a history of colonial domination and post-colonial development that was plagued by false starts (such as the Lagos Plan of Action) and ultimately aid dependence, the idea of African ownership had more than symbolic meaning. CAADP was conceived in response to the slow progress in agricultural development in the continent and to the lack of coherence of approaches at regional and sub-regional levels. It was built upon a wave of political commitment to reducing desperate poverty and hunger through substantially increasing investment in the agriculture sector and achieving this based upon African ownership and leadership. Although it was slow to emerge, CAADP has become the strongest sectoral programme in the New Partnership for Africas Development (NEPAD)8.

6 7 8

Platform Knowledge Piece I (PKP I), Policy Coherence for Agricultural and Rural Development, GDPRD, 2011 (draft) Ibid, Mali country case study CAADP Review, NPCA, 2010

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22. CAADP HAS GREATLY STRENGTHENED COUNTRY OWNERSHIP AND THE QUALITY OF PROGRAMMES IN AGRICULTURE. In the agriculture sector, the concept of ownership is exemplified through the role that CAADP has started to play in providing a framework at continental level that brings shape and substance to country agriculture strategies and policies. CAADP has not only raised the profile of the agriculture sector on the development agenda of African countries, it has also provided a framework and benchmarks against which policies and strategies can be assessed through Country Compacts (see Annex 2). There has been collective commitment to reform and to formulating sector strategies that are of higher quality. A recent study of CAADP in Ethiopia, Ghana and Rwanda9 has concluded that there is evidence that all three case-study countries have made improvements in their incentive policies and feel strongly aligned to CAADP. However, a review of five Technical Review Reports shows that institutional reforms are still urgently needed especially in terms of creating an enabling environment for the private sector and FDI (see Annex 3). 23. ENHANCED PROGRAMME QUALITY STRENGTHENS OWNERSHIP. Although not uniform in terms of quality, the 25 Country Compacts that have been signed and the strategies for agriculture behind them, represent a unique exercise in establishing ownership at the sector level. Examples of particularly powerful ARD strategies include the Strategic Plan for Agricultural Transformation under the Economic Development and Poverty Reduction Strategy in Rwanda, the first Compact to be signed, and the Food and Agriculture Sector Development Policy in Ghana. In Uganda, the CAADP framework and processes have strengthened the quality of the Agricultural Sector Development Strategy and Investment Plan under the National Development Plan10.

24. CAADP PROVIDES A COHERENT FRAMEWORK AND SYSTEMATIC PROCESSES. Although it was originally expected that CAADP would be a vehicle for external assistance for national and regional investments, despite its name, it has come to be seen rather as a framework for agricultural development. The framework enables CAADP to lead the reform agenda for the development of agriculture in the continent and also helps to bring coherence to programmes at all levels. CAADP has brought a more systematic approach in an increasing number of countries to evidence-based strategy formulation at national level, incorporating thorough stocktaking, econometric modelling and expenditure reviews of the sector11. The four pillars12 have been used to provide not just a checklist of what needs to be considered in developing the sector, but also a mechanism for the provision of technical support and good practices from around the continent through a set of African CAADP Pillar Lead Institutions. 25. CAADP COUNTRY COMPACTS ARE THE EXPRESSION OF A NETWORK OF OWNERSHIP. The CAADP processes described ensure a network of ownership that extends through CAADP processes from consultative planning through Country Compacts to investment programmes, and through stakeholder inclusion from politicians and ministers to civil society, private sector including farmers. This is ultimately expressed in the signing of a CAADP Compact by all stakeholders including the ministries of agriculture and finance, as well as others such as trade and industry. Farmers representatives, civil society and the private sector also sign the Compact, signalling that they have engaged in and agree to the strategy and policies behind the Compact. By March 2011, 25 CAADP Compacts had been signed. Achieving the formulation of CAADP Compacts in so many countries has been a slow process, but is now widely admired... as a way to improve coordination, the fruit of a painstaking, if lengthy, process of engagement with REC [regional economic communities] and national governments13 The setting up of CAADP Country Teams dedicated to the task was a critical step. The Compact process has undoubtedly strengthened the quality and ownership of strategies in the sector but also, through the PostCompact process, has enabled that sense of ownership to be transferred to the actual investment plans that are submitted for financing.

CAADP in Practice: Highlighting the Successes, ODI, November 2010 Uganda CAADP Compact p.1 CAADP Review, NPCA, 2010 Pillar 1: Land and water management; Pillar 2: Rural infrastructure and market access; Pillar 3: food security; Pillar 4: agricultural research an technology dissemination Platform Knowledge Piece I (PKP I), Policy Coherence for Agricultural and Rural Development, GDPRD, 2011 (draft)

10 11 12

13

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4th High Level Forum Evidence Paper on Agriculture and Rural Development for HLF-4 Busan Ownership

and Rural Development for HLF-4 Busan

26. OWNERSHIP OF REGIONAL STRATEGIES IN ARD IS MORE DIFFICULT TO ACHIEVE. From the beginning, the principal building blocks of CAADP have been the regional economic communities (RECs). It was hypothesised, reasonably, that the countries of Africa stood to benefit from regional cooperation especially in trade and knowledge sharing. However, it has proved more difficult to achieve ownership of regional strategies for agricultural development than national ones. For a start, there are many RECs in Africa about 14 which have overlapping membership and with quite different mandates including political, trade, and monetary. Furthermore, the members of the RECs are themselves often ambivalent about the role played by the REC (or RECs) to which they belong. This results from the perception that most of the RECs are technically weak, as well as fears that they might interfere in matters of national sovereignty. Part of the problem has been to clearly define the boundaries between regional issues such as trade harmonization and responsibilities in the agriculture sector which are clearly sovereign matters. For all these reasons, the formulation of regional agriculture strategies has been slow. In West Africa, ECOWAS has been able to achieve this task and has brought the West Africa Agriculture Action Plan (ECOWAP) to the stage of a regional Compact, signed by all 15 member states. 27. POLITICAL BUY-IN AT REGIONAL AND COUNTRY LEVEL IS CRUCIAL. Despite initial ambiguity about the part that CAADP would play in the political economy of Africa, the African Union (AU) has come to be a key player in ensuring political support at the level of Heads of State. Strongly linked to the AU and the African Union Commission (AUC), the NEPAD Planning and Coordinating Agency (NPCA) and the regional economic communities (RECs) have worked vigorously to promote ownership of the CAADP process. At continental level, political support has been sustained well through meetings of Ministers of Agriculture and through CAADP being on the agenda at the Summits of African Heads of State14. 28. COUNTRY OWNERSHIP IS PUT UNDER PRESSURE BY THE APPEARANCE OF EMERGING DONORS. The coherence of the strategies formulated and their effectiveness in guiding aid programmes depends upon the willingness of governments to adhere to certain strate-

gic principles especially consultation and accountability. This is often difficult in the face of attractive external assistance outside the scope of aid delivered from OECD members that dwarfs traditional sources (see Table 2). A fundamental principle of country ownership is that this is a reflection of agreement and commitment by all stakeholders. The appearance during the last decade of non-traditional donors, especially the BRICS15, has dramatically shifted the balance of influence. Fast-growing developing countries have emerged as an important source of investment (including South African and Chinese investment in Africa). Outflows of developing countries foreign direct investment (FDI) have increased, from about US$ 55 billion in the mid 1990s to near US$ 300 billion in 2008. Much of the capital flow between developing countries is on concessionary terms. China, India, and Brazil have substantial assistance programmes, including aid, export, investment and debt cancellation to Least Developed Countries (LDCs)16. 29. FUNDING FOR LAND ACQUISITION AND FDI IN THE SECTOR IS ALSO OUTSIDE NORMAL CHANNELS. In Africa and Asia, countries with large and underutilised land and water resources are the target of what has been characterised as land grabbing. Although difficult to document, it has been estimated17 that over the period 2006-09, in pursuit of securing food supplies, deals have been struck on some 22 million ha of land, almost 19 million ha of which is in Africa. In addition, over US$5 billion has been invested in the agriculture sector in Africa, and a massive US$63.5 billion is earmarked globally in so-called Agricultural Investment Funds. These figures dwarf ODA to agriculture in 2008 of just US$9.8 billion. The main investors in land are the Gulf States, China and South Korea, mainly targeting Africa but also South-East Asia and South America18. Trade and development agreements that are negotiated at the highest political level and are neither transparent nor consultative in the context of all national stakeholders undermine the legitimate development process of country ownership. Although there may well be growth and employment benefits from such schemes, the fact that they occur in countries where tenure rights are insecure, causes concern. Other new donors such as Venezuela, which have a strong ideological alignment, can have a large impact off-budget, for example in Nicaragua19.

14 15 16 17 18

CAADP Review, NPCA, 2010 BRICS now defined as: Brazil, Russia, India, China and South Africa. UNU-WIDER Policy Brief No. 6, 2010 Land grabbing by Foreign Investors in developing Countries: Risks and Opportunities IFPRI Policy Brief 13, April 2009 Land Grabbing in Developing Countries: Foreign Investors, regulation and Codes of Conduct!, Dipartimento di Scienze Economiche, University of Cassino, Italy, Working Paper 3/2011, March 2011 Platform Knowledge Piece II (PKP II): Aid Finance for Food Security and Agricultural and Rural Development, Country Case Study Nicaragua (draft)

19

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Table 2: Estimated Scale of Aid to and Investments in Developing Countries from Emerging Donors
Africa Investments in Land (2006-09): Land acquisitions (million ha) Investments (US$ billion) Agricultural Investment Funds (US$ billion) Foreign Direct Investment (US$ billion) (2008): Inward FDI Global Inward FDR: Agriculture, shing, forestry, hunting Food, beverages, tobacco Ofcial Development Assistance (US$ billion) (2008): Total ODA Agriculture ODA 30. NON-TRADITIONAL DONORS SUCH AS FOUNDATIONS, AS WELL AS NGOS ALSO OPERATE OUTSIDE AID EFFECTIVENESS FRAMEWORK. Foundations such as AGRA wield considerable weight in the agriculture sector in Africa because of the resources they control. NGOs are also big players in the agriculture sector in many countries, often with resources supplemented by funds from bilateral donors (see Text Box 1). In Nicaragua for example, it is estimated that Text Box 1: Emerging donors and grant-makers Apart from ODA, there are many new sources of aid flowing into agriculture from emerging donor countries, foundations and NGOs. In 2009, the UAEs (United Arab Emirates) ODA was over US$ 1 billion. This is more than the aid flows from several of the DAC member countries, and it places UAE with Saudi Arabia and China in terms of the leading non-DAC development donors. Cargill, an international agricultural, food and finance corporation, will move an anticipated US$ 9 billion to Cargills philanthropic arm. In 2009, the Bill and Melinda Gates Foundations expenditure for grants and other charitable expenses was US$ 3 billion, of this, agricultural development accounted for US$ 316 million. Asia Other

18.9 4.8 0.1

2.4 0.5 1.0

0.8 62.5

87.0

390.0 3,384.9 15.8 61.8

140.0

53.9 3.2

55.7 2.5

6.7 0.3

NGOs contribute the equivalent of 20-30% of normal ODA to the sector20. They invariably operate off-budget and are not necessarily obliged to adhere to the processes and procedures that apply to traditional donors. They also operate under strongly-held visions of how to tackle agricultural development for example, focusing on value chain development and marketing or food security and their financing priorities are guided by this. AGRA, the Alliance for a Green Revolution in Africa, with a budget of close to US$400 million, had approved 116 grants valued at US$83 million in 14 countries (as of June 2009). The Aga Khan Development Network (AKDN) provides grants for rural development and environment. In 2008, the AKDNs annual budget for nonprofit development activities was approximately US$ 450 million. The Interchurch Organization for Development Cooperation endows grants for projects in agriculture, water supply, adaptation to climate change, among other things. In 2008, it had a total budget of 139 million. Apart from the well established NGOs in the Western hemisphere, hundreds more are emerging in the developing countries. Also, private philanthropy is gaining ground in the societies of Latin America, India, China the Middle East, and other parts of the developing world.
Source: Terra Viva Grants Directory www.terravivagrants.org

20

Platform Knowledge Piece II (PKP II): Aid Finance for Food Security and Agricultural and Rural Development, Country Case study Nicaragua (draft)

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and Rural Development for HLF-4 Busan

Alignment

Donor alignment behind national programmes in ARD is often difficult because it is multi-sub-sectoral in nature. CAADP provides a valuable example of how a sound framework for agriculture can facilitate alignment. However, donors have their own corporate strategies and there appears to be a growing interest on the part of some to influence national strategies through analysis, information and dialogue. Alignment is, after all, only a means to an end.

sub-sectoral. In this case, aligning implies confidence in coordination mechanisms that operate across a number of different ministries and an array of departments. Cross-ministerial coordination is always difficult and even sector-wide approaches (SWAps) in agriculture have tended to be defined by the mandate of the main ministry in the sector. A review of the five country Technical Review Reports currently available (of the 17 Investment Plans prepared under CAADP) points to unclear coordination and consultation mechanisms as a continuing problem (see Annex 3). 33. CAADP FACILITATES GENUINE ALIGNMENT. Each of the Country Compacts signed is based on country strategies for agriculture. Each Compact is signed not only by the principal ministries involved but also by all of the donors active in agriculture in the country concerned. This important first step in alignment to country agriculture strategies will be further tested as the details of sector programmes are translated into specific Investment Plans through a Post-Compact planning process. So far 17 country Agriculture Investment Plans have been drafted and technically reviewed and some have been submitted to detailed scrutiny in Business Meetings where donors and governments come face-to-face to take decisions about financing (see Annex 3). 34. IN SOME CASES THE CRITERIA FOR ALIGNMENT ARE NOT RIGOROUS. Although donors have moved actively to align with national strategies, in some cases, the criteria for alignment are not very rigorous because country ARD strategies are sometimes weakly articulated. In four country case studies, it was found that although progress had been made on harmonising aid for agricultural and rural development and aid-funded programmes were aligned well with national strategies, this was only because those strategies were so permissive that almost any donor initiative could be seen as aligned. In each case, national strategies and plans chronically failed to make explicit choices and these choices tended to arise just before or during implementation22. It is inevitable that some country strategies for ARD are less well conceived than others, leaving scope for donors to define their own programmes that inevitably align.

31. AT THE SECTORAL LEVEL, THE USE OF PARTNER SYSTEMS IS NOT AN ISSUE. For the most part, the extent to which donors align behind national systems is an economy-wide issue. Systems of public financial management, accounting, procurement, monitoring and evaluation etc are nation-wide and not specific to any sector. However, there are grounds for having less confidence in these systems applied in ARD than in other sectors because of the complexity and scale of the sector, the variety of public services provided and the invariable weakness of capacity in the sector. 32. DONOR ALIGNMENT WITH COUNTRY STRATEGIES IS SOMETIMES RHETORICAL. Donor alignment with country strategies and programmes has become a fundamental principle of aid programmes. However, unlike the principle of country ownership, which is seen as a prerequisite for effective implementation, alignment has come to be interpreted in a less rigorous way, with distinct sectoral and donor differences. Indeed, some see a high degree of donor resistance to alignment around country objectives21. In general, the procedures and legal constraints surrounding the way multi-lateral institutions operate ensure a substantial degree of compliance with agreed international procedures. For example, the extensive consultative processes involved in the formulation of the World Banks Country Assistance Strategies (CASs) and IFADs Country Strategic Opportunities Programme (COSOP) go a long way to ensuring alignment with country strategies and use of national systems. However, there are not necessarily such strong incentives at the bilateral level. It is more difficult for donors to unambiguously align behind a programme in agriculture or rural development because the programmes will almost always be multi21

Africa Network, presentation at the Multi Stakeholder Forum on Aid and Development Assistance in Agriculture and Rural Development, Dar-es-Salaam, Tanzania, April 2011. Platform Knowledge Piece I, GDPRD 2011 (draft)

22

4th High Level Forum Alignment Evidence Paper on Agriculture and Rural Development for HLF-4 Busan

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35. NOT ALL COUNTRIES SEEK DONOR ALIGNMENT. In addition, some governments find it difficult to set priorities for the sector and still follow an aid maximisation approach23, or seek quick fixes rather than investment in long term development. For example, it seems clear that Cambodia has deliberately sought to attract as many development partners as possible in order to increase the scale of development assistance to the sector. 36. DONORS HAVE THEIR OWN CORPORATE STRATEGIES FOR ARD. The major donors and international financing institutions (IFIs) devote considerable time and resources to formulating their own corporate development strategies for ARD in response to what are perceived to be priorities globally and in different regions. For example, over the last 15 years the World Bank has formulated a succession of strategies that express not only its own diagnosis of the problems in ARD but also its own priorities and approaches to address them. From Vision to Action launched in 1997, through Reaching the Rural Poor A Renewed Strategy for Rural Development which ran from 2002 to 2007, and the current Agriculture Action Plan (201012), the Bank has set forth its changing vision for ARD. Although these strategies in no way preclude alignment at country level, they at least offer a strong voice in the dialogue with governments. The World Bank seeks alignment through ensuring that its Country Assistance Strategies are aligned with national PRSPs24. However, first generation PRSPs seldom referred to ARD and even subsequent iterations gave less prominence to ARD than to social sectors. In some cases, country level diagnosis of the sector on the part of the donors in effect becomes national strategy, defeating the principle of ownership25.

37. THERE ARE GROWING CONCERNS ABOUT UNRESERVED ALIGNMENT. Many donors are beginning to push back against blind alignment to national strategies, partly because these strategies are often weak, but also because they may not be deemed to reflect good practice in certain areas26. For many years the World Bank was driven by the imperatives of country ownership and the need to align behind national priorities. When governments failed to prioritise agriculture, this was to the detriment of Bank support to the sector. However, recently the framework for the Banks relations with developing country partner governments has begun to change. Rather than somewhat passively accepting the priorities of government, a more proactive approach is being adopted27. As a partner in development, the Bank is fulfilling its responsibility to provide data and analysis to help inform government decisions about the size and scope of support it requests from the Bank. The setting of lending projections (otherwise to be taken as targets) by the Banks senior management for the ARD sector reflects a return to a more proactive stance on the part of donors to the balance of resources applied at country level. 38. CRISES, EMERGENCIES AND QUICK FIXES CAN ALSO DOMINATE DONOR DIALOGUE. The food price and financial crises of 2007-08 triggered a host of donor initiatives targeting enhanced agricultural productivity as well as social protection and trade measures. For example, the US$1 billion Global Food Crisis Response Programme (GFRP) in the World Bank and the Global Agriculture and Food Security Programme (GAFSP) which emerged from the UN High Level Task Force on Food Security, and the LAquila Food Security Initiative (AFSI) offered substantial extra resources to governments that were able to meet certain criteria of readiness. In its support to Africa at least, GAFSP has deliberately targeted the financing gaps identified in CAADP national Agriculture Investment Plans. In overall aid flows to the sector, emergency assistance has steadily increased over the last 15 years, from less than US$1 billion per year in 1995 to over US$4 billion in 2009 (see Table 3).

23 24 25 26 27

Platform Knowledge Piece I, GDPRD 2011 (draft) An Evaluation of Donor Coordination in Low Income Countries by the World Bank: Approach Paper, IEG, World Bank 2010 Platform Knowledge Piece I (PKP I), Policy Coherence for Agricultural and Rural Development, GDPRD, 2011 (draft) ibid Platform Knowledge Piece II, Global Donor Platform 2011 (draft)

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Table 3: Aid to ARDFS by main component, 1995-2009 (commitments, constant US$ million)
12,000 10,000 US$ million 8000 6000 4000 2000 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Agricultural production, processing & marketing including policy services

Rural socio-economic development

Emergency relief and welfare

Source: PKP II

All too often emergency responses override national programmes. However, especially in countries that are prone to natural disasters such as drought or flood donors broadly align behind national disaster preparedness plans where they exist.

39. ALIGNMENT IS ONLY A MEANS TO AN END. In reality, alignment is only a means to an end and may often be sacrificed in the interests of enhanced outcomes. Compromises might be needed particularly in the ARD sector where the link between public expenditure and results is complex and models of change are not universally shared.

4th High Level Forum Harmonisation Evidence Paper on Agriculture and Rural Development for HLF-4 Busan

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Harmonisation

Donor harmonisation in ARD has worked best at the country level through DWGs. Moving towards common arrangements and financial harmonisation through SWAps has yielded mixed results. CAADP has shown that Country Compacts can facilitate harmonisation through a programme-based approach (PBA) and the value of multi-donor trust funds (MDTFs) to harmonise technical support to the sector and reduce transaction costs. Harmonisation at sub-national level is a challenging but important task in ARD with increasing decentralisation, but a Vietnam pilot is showing the way.

40. DONOR HARMONISATION IN ARD REMAINS LIMITED. The limitations to donor harmonisation in ARD stem from the invariably weak sectoral capacities to plan, manage, implement and account for results, as well as the continued dominance of the project modality. Several large donors to the sector (especially USAID and Japan which are responsible for around half of ODA to agriculture) are not able to use common flowof-funds mechanisms or budget support and continue to mainly finance projects28. The emergence of vertical funds in the sector, such as AFSI and GAFSP29, whilst being harmonised themselves, also limit the scope of harmonisation in the sector. Outside the limited number of countries where Joint Assistance Strategies (JASs) have been agreed, there is no evidence that any significant division of labour has occurred amongst donors to the sector. However, the recent expansion in World Bank lending to ARD has triggered important steps in harmonisation. With lending to ARD projected to be 2-3 times the level of just five years ago, at the same time as the number of staff dedicated to ARD has fallen by 50%, the Bank has started to explore the opportunities for partnerships with other organisations, in particular USAID and IFPRI, to conduct analytical work jointly30.

41. HARMONIZATION CAN WORK BEST AT LOCAL LEVEL. The attempts by donors to work towards greater harmonization are increasingly manifest at the country level where donor agriculture/food security working groups (DWGs) have become more effective at facilitating the sharing of information, joint programming, monitoring, planning of missions etc at a day-today level. Where DWGs meet regularly and where members interact in a transparent manner, as for example in Ethiopia and Tanzania, they can be one of the most practical manifestations of the principles of harmonization. In some countries, such as Vietnam, it appears information sharing among donors is largely ad hoc without any official forum except at sub-sector level, for example, the Forest Sector Support Partnership31. Local DWGs take on a much more important role as donors increasingly decentralise and delegate authority to the country level. Such decentralisation is one of the key measures urged on donors by OECD in order to incentivise staff to increase aid effectiveness32. 42. JOINT ASSISTANCE STRATEGIES DO NOT ALWAYS GET FULL BUY-IN. Joint Assistance Strategies (JASs), which were pioneered by the UN system, have played an important part in harmonizing donor approaches at country level33. However, there are JASs in only 11 countries and, attempting to cover the full range of development assistance they do not provide a particularly useful forum for the resolution of issues in the ARD sector. A recent review of Tanzania, Zambia and Mozambique, noted that the initial enthusiasm and high expectations for JASs have waned and a high degree of scepticism can be found34. In each case there has been a major crisis with general budget support which has undermined harmonisation and a number of major donors have stayed outside the country-led JAS process. In some cases their objectives and aid instruments have competed with or directly undermined harmonisation principles. In one particular case, Zambia, the JAS seems to have played a perverse role in allowing donors to gang up against government over policy disagreements in the agriculture sector35.

28 29 30 31 32 33 34

Cabral, L., Accra 2008: The bumpy road to aid effectiveness in agriculture, ODI Natural Resource Perspectives, April 2008. GAFSP claims that it is not a vertical fund because it operates through the procedures of the individual contributing supervising entities (SEs). Platform Knowledge Piece II (PKP II): Aid Finance for Food Security and Agricultural and Rural Development Platform Knowledge Piece II (PKP II): Aid Finance for Food Security and Agricultural and Rural Development, Country Case Study Vietnam (draft) OECD-DAC Joint Venture on Managing for Development Results, 2008 Global Donor Platform 2008 Oden and Wohlgemuth, Where is the Paris Agenda Heading? Changing relations in Tanzania, Zambia and Mozambique, ECDPM Briefing Note No 21, February 2011. Ibid.

35

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43. FINANCIAL HARMONIZATION IN THE SECTOR HAS HAD MIXED RESULTS. The bringing together of all external financial assistance to agriculture through a sector-wide approach (SWAp) has been the holy grail of harmonization. However, the limited number of attempts to achieve harmonization in ARD through SWAps has met with mixed results. The earliest examples (such as Proagri in Mozambique) are seen to have been less than successful in achieving their objectives and have led to the withdrawal of some donors. Proagri largely failed to deliver convincing results to the sector as a whole. It focused disproportionately on promoting donor alignment and harmonisation and on building systems and capacity in the Ministry of Agriculture while failing to ensure effective service delivery at field level36. Consequently, there is sometimes less harmonization than before37. There are also indications that, although SWAps may have been successful in reducing the burden upon government by, for example, joint programming and missions, there is little evidence that transaction costs have actually been reduced38. 44. CAADP COUNTRY COMPACTS HAVE HELPED TO HARMONIZE DONOR SUPPORT FOR ARD. Under CAADP, the Country Compacts represent a strong political commitment to harmonization by the donors, partnering key national ministries (Agriculture, Finance, Trade and Industry etc), civil society and the private sector. The main added value of CAADP may indeed be that it has enhanced the dialogue between donors and development partners in general about African agriculture at the continental, regional and country levels39. It has certainly strengthened the capacity of governments to engage with DPs on sector issues. However, as mentioned above, it is yet to be seen the extent to which full harmonization can be achieved in the funding of national Investment Plans. The four pillars of CAADP have also played an important part in bringing coherence to donor support for the sector. For example, around eight donors have come together through a MDTF to support a single programme for Pillar 4 agricultural research and technology dissemination which covers the activities of four subregional research organisations and the umbrella organisation, the Forum for Agricultural Research in Africa (FARA). The same vehicle is being used to extend Pillar 4 activities into tertiary agricultural education around a common programme.

45. A COHERENT PROGRAMME-BASED APPROACH MIGHT BE MORE ACHIEVABLE. The Investment Plans that are being formulated under the CAADP Post-Compact process ultimately aim to bring programmatic coherence and harmonization to external assistance in the sector by committing donors to finance parts of a single programme the Investment Plan for the sector. Although the ideal model for an Agriculture Investment Plan is a SWAp, countries have generally settled on something less ambitious, closer to a Programmebased approach (PBA). This aim is more realistic than trying to achieve a basket funding mechanism and can even accommodate donors who insist on making their contributions off-budget. 46. HARMONIZATION OF SUPPORT TO CAADP PROCESSES IS A SIGNIFICANT STEP FORWARD. Although the replication of a SWAp model for ARD has not been achieved under CAADP, significant progress has been made in harmonizing donor support for the process itself. This has been achieved through the establishment of a CAADP Task Team (TT) comprising the main donors interested in financing African agriculture. The 12 donors concerned have signed a Joint Statement of support for the CAADP process at country level40. Originally an informal network of donors, this has been formalised and expanded in remit through the creation of a CAADP Partnership Platform (PP) whereby the main donors meet with their African partners annually41. The CAADP PP serves not only as a mechanism for mutual accountability (see below) but also facilitates the harmonization of donor assistance. A recent study has concluded that whilst in the past much of the donor coordination has consisted of information exchange and occasional joint-funding arrangements by groups of bilateral donors, CAADP marks a step change in donor coordination with much stronger direction being given to donors and accepted by them42. 47. MULTI-DONOR TRUST FUNDS CAN HARMONIZE DONOR TECHNICAL SUPPORT. A US$60 million CAADP Multi-Donor Trust Fund (MDTF), with contributions from six donors, has been set up as a direct result of the PP with the objective of harmonising donor support in the provision of technical support services to the CAADP process. The CAADP MDTF is managed by World Bank and channels funds to the CAADP Secretariat, pillar lead institutions and RECs against fully-

36 37 38 39 40 41 42

Platform Knowledge Piece I (PKP I), Policy Coherence for Agricultural and Rural Development, GDPRD, 2011 (draft) Ibid. Evans et al, Formulating and Implementing Sector-wide approaches in agriculture and rural development: A Synthesis Report, GDPRD CAADP Review, NPCA 2010 CAADP Guidelines for Donor Support Until the PP meeting in Yaounde in April2011, the PP had been meeting every six months. CAADP in Practice: Highlighting the Successes, ODI, November 2010

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appraised project documents. A separate MDTF channels harmonized support for CAADP Pillar 4 (research, advisory services and agricultural education) through the Forum for Agricultural Research in Africa (FARA). According to FARA43, this has brought alignment and harmonisation to donor support as well as financial predictability to the programme. Pooled funding, a fiveyear funding horizon and reduced transaction costs by virtue of management of the MDTF by World Bank are the major benefits of this arrangement. 48. HARMONISATION AT SUB-NATIONAL LEVEL IS A CHALLENGE. With the growing trend towards decentralisation of administration and devolution of responsibility for planning and budgets to provincial or district level, the task of harmonisation on the part of donors becomes even more difficult. An interesting case how this might be tackled in ARD comes from Vietnam44. CIDA and DANIDA are piloting quasi-provincial budget support where funds are channelled through the provinces budgets but remain earmarked for particular activities and in particular support to ARD sector policy planning and programmes. Authorities at subnational levels decide almost half of budget expenditures and provincial governments have a much greater authority to allocate resources based on their own priorities. Funds are used to support selected provinces to develop their ARD plan and to finance specific activities within these plans, in line with donors priorities. 49. THERE HAS BEEN LIMITED PROGRESS IN ADOPTING COMMON PROCESSES AT COUNTRY LEVEL. The lack of progress in adopting common procedures for reporting, monitoring, procurement etc, at country level is a generalised problem that affects ARD as much as other sectors. Donors continue to demand adherence to their own formats, especially when it comes to M&E45. Similarly, the use of national systems for budget, financial management, reporting and procurement, remains limited46, although some multi-lateral institutions such as IFAD have moved towards using national systems whenever possible. In many cases, most of the funds may not even enter the national system, being administered by a field office of the funding agency. Indeed, there are evidently some cases where special units for implementation (the formerly derided Project Implementation Units (PIU)), for example in Honduras under the Millennium Challenge Corpora43 44 45 46

tion (MCC), are believed to have contributed to success47 In Mozambique, the Gorongoza park, and in Honduras the training and credit for commercialising small farmers and the suppliers programmes are successful examples of special units that have been set48. In Honduras, the unit set up at the prompting of the Millennium Challenge Corporation to run the training and credit programme was admired by stakeholders for its transparency. Similarly, in Laos, PIUs in the Ministry of Agriculture and Forestry are seen as a mechanism for defining accountability to the donors and a chain of command and decision making which would not exist if they were fully integrated into government. By providing an alternative to managing funds through the Government system they can be more flexible and enable Government staff leading a project to take risks and be innovative49. However, there are plans to reduce dependence upon PIUs in the sector in Laos. 50. HARMONIZATION UNDER DIFFICULT CIRCUMSTANCES: MYANMAR. In Myanmar, as a consequence of economic sanctions and the Common Position of the European countries, there are severe restrictions on the ways in which donors can operate. The US$100 million Livelihoods and Food Security Trust Fund (LIFT) provides grants to local NGOs and international NGOs in partnership with local NGOs to deliver agriculture and food security projects. As of March 2011, some 30 NGOs and consortia had been contracted. The main donors operating in the country who are financing LIFT have come together in a pioneering Joint Collaboration Agreement which commits members of the Donor Consortium to working together in a transparent manner. They have reached an understanding and common procedures for consultation and decision-making, disbursement mechanisms, monitoring and reporting, review and evaluation, auditing, financial management and exchange of information and cooperation. This approach is fully aligned with the informal Partnership Group on Aid Effectiveness which has been set up to enhance joint working between existing and emerging donors and to ensure that the limited donor resources available in the country are managed in ways that maximise benefit for the poor. The LIFT in Myanmar offers a test-bed for ways in which donors can operate directly with NGOs, both international and local, on large programmes.

Presentation at Pillar 4 Workshop, Zurich, April 2011 Platform Knowledge Piece II (PKP II): Aid Finance for Food Security and Agricultural and Rural Development, Country Case Study Vietnam (draft) Platform Knowledge Piece I (PKP I), Policy Coherence for Agricultural and Rural Development, GDPRD, 2011 (draft) Oden and Wohlgemuth, Where is the Paris Agenda Heading? Changing relations in Tanzania, Zambia and Mozambique, ECDPM Briefing Note No 21, February 2011. ibid Platform Knowledge Piece I (PKP I), Policy Coherence for Agricultural and Rural Development, GDPRD, 2011 (draft) PD Monitoring Survey 2011: Lao PDR Country Report

47 48 49

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Managing for development results

The quest for development outcomes underpins all other AE principles. Showing results and value for money is particularly difficult in ARD because the link between public expenditure and results is long and complex and involves decisions made by the private sector. There is some evidence that this is tempering donor interest in the sector. The need to develop sound M&E systems and statistics is strongly indicated. There are emerging good practices on country information systems and CAADP is tackling the task of creating a credible M&E system for the continent.

ning, budgeting and statistics are hardest here. It is also a challenge because the link between public expenditure (including aid) and outcomes in ARD is long and complex. It not only involves key decision-making and large investments by the private sector which is outside the control of government, but also the technical solutions or approaches proposed are not uncontested50. 53. THERE IS A NEED FOR EVIDENCE OF THE IMPACT OF ARD AT COUNTRY LEVEL. The existence of empirical evidence of the importance of investment in ARD does not obviate the need for solid evidence of aid performance in the sector at country level. Aid effectiveness demands that performance in the sector at country level is properly monitored and that credible results can be shown. Strengthening the fragile statistical systems especially in agriculture and in rural areas is clearly called for. Too often M&E systems are project-based and unsustainable. At the country level, ARD is in effect competing for resources with all other sectors and not just from external sources but also from the ministry of finance which allocates domestic budget and recurrent expenditures as well. 54. COUNTRY INFORMATION SYSTEMS ARE ESSENTIAL TO COMMUNICATING RESULTS IN AGRICULTURE. SISEVA (Sistema de Seguimiento, Evaluacin y Aprendizaje) as part of the PRORURAL SWAp in Nicaragua started in 2006 as an information system that includes financial and physical data, indicators and costs, which allows analysis of the results that are being achieved51. It includes disaggregated data according to funding, donor country, executing state institutions, crops-products funded and indicators according to the expected outcomes. It is a unique system managed by all institutions involved with PRORURAL, including donors, but the information is not open to everybody. After many attempts, SISEVA has now harmonized indicators according to the PRORURAL National Human Development Plan, a strategic document summarizing the main policies of the government. In Vietnam, databases have been developed primarily to enable the Government to track disbursements made and monitor project implementation processes52. The Planning Department of the Min-

51. MANAGING FOR DEVELOPMENT RESULTS HAS BECOME THE GOLD STANDARD FOR AID EFFECTIVENESS. Of all the principles enunciated at Paris and reiterated in Accra, it is managing for development results (MfDR) that has become the gold standard for aid effectiveness. It goes above and beyond the more narrowly-defined principles of ownership, harmonization and alignment. This underlines the shift towards development effectiveness as opposed to aid effectiveness that is taking place in the development community. It also shifts the focus towards the way in which governments utilise their own resources and not just externally-sourced funds. As with most other measures to enhance aid effectiveness, it is more challenging to improve policy, programme design and results-management systems in ARD than in other sectors. 52. RESULTS AND VALUE FOR MONEY ARE INCREASINGLY DEMANDED IN TIMES OF AUSTERITY. The increasing focus on MfDR is a potential threat to agriculture because this is the sector where it is most difficult to define and measure systematic and credible performance indicators. This shift in focus has come about in part because of the world economic recession and severe cuts in the budgets of the traditional donor countries. Donors are increasingly explicit in demanding results and value for money for the development assistance that is provided. In the case of ARD, this poses particular challenges because putting in place the basic requirements of an effective M&E framework and data gathering system, proper plan50 51 52

Platform Knowledge Piece I (PKP I), Policy Coherence for Agricultural and Rural Development, GDPRD, 2011 (draft) Platform Knowledge Piece II (PKP II): Aid Finance for Food Security and Agricultural and Rural Development, Country Case Study Nicaragua (draft) Platform Knowledge Piece II (PKP II): Aid Finance for Food Security and Agricultural and Rural Development, Country Case Study Vietnam (draft)

4th High Level Forum Managing for development results Evidence Paper on Agriculture and Rural Development for HLF-4 Busan

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istry of Agriculture and Rural Development (MARD) keeps its own database of investment projects which not only tracks foreign capital but also local capital since some projects are co-funded by donors with the State, and also potentially the domestic and international private sector. The Government of Vietnam is also developing an integrated M&E system and MARD collects information on projects and programmes it manages. 55. FOCUS ON MfDR IN AFRICA. The African Community of Practice (AfCoP) on Managing for Development Results (MfDR) aims at creating strong and effective institutions as the basis for achieving sustainable development outcomes in Africa and to make member organizations more performance-oriented. AfCoP has accumulated valuable experiences as case studies on ways of enhancing MfDR53. A particularly interesting case study is one in which the International Fund for Agricultural Development (IFAD) piloted a M&E and Knowledge Management System in conjunction with the Government of Madagascar. In the integrated rural development project in Upper Mandrar Basin, the project developed several initiatives aimed at establishing a sound M&E system to assist with decision making. This was seen as being central to the ultimate success of the project. It adopted a bottom-up approach to M&E and recognised the role of communications as the link between M&E and results-based management. It was also able to effectively link project M&E with the MfDR mechanisms of its financing partners the Ministry of Agriculture and IFAD. AfCoP is also building support for MfDR by creating a platform for discussion of good practice and peer to peer learning, providing advisory services and strengthening capacity for MfDR as well as improving country visibility on results54. It has some interesting examples of progress on establishing communities of practice in MfDR in Zimbabwe, Niger and Senegal. 56. CREATING A CREDIBLE M&E FRAMEWORK IN AFRICA. It is widely recognised that the existence of a credible performance monitoring system for African agriculture is crucial to attracting increased development assistance and investment. For this reason, CAADP has devoted considerable time and resources to setting up a continental M&E framework. The overall framework was validated in 2010 and will report annually to NPCA and AUC as well as to the CAADP Partnership Platform (a joint meeting of donors and African

partners, which meets every six months). It will monitor trends in agriculture sector performance and spending by donors and by African governments, against the Maputo Declaration 10% target. It will draw data from primary sources from the Regional Strategic Analysis and Knowledge Support System (ReSAKSS) nodes and secondary sources such as WDI, FAO, and other UN agencies. Although it focuses more on continental trends, it also disaggregates information by region and in some cases, by country. Its results are complemented by a synthesis of relevant literature by organizations such as OECD, World Bank and IFPRI. 57. IS THE DIFFICULTY OF MEASURING RESULTS TAKING DONORS AWAY FROM ARD? There are indications that, in the search for results and value for money, some donors are beginning to question the utility of allocating aid to agriculture. For example, the recent statement of aid strategy from DFID55, announced in March 2011, has clearly put the emphasis on health and education as sectors where results can be unambiguously seen. At World Bank in the launch of IDA-16, it was noted that the Bank has a relentless focus on results. In this context, it is disturbing that, in the preparations for the IDA-16 replenishment, the Bank did not report on core sector indicators for agriculture. By contrast, its analysis was able to provide clear indicators of results for education, health, road transport and water supply, but none for ARD. The World Bank is discussing the introduction of a new lending instrument that will further strengthen its focus on results. The Program-for-Results (P4R) would disburse upon achievement of tangible results. This move is part of a major modernization of the Banks business in an attempt to make development finance much more results-focused, responsive to client partners, and much more focused on strengthening the country institutions that deliver results. Funds will flow when the results of programmes defined by the countries themselves, are achieved and verified. It will focus on building client institutional capacity so that their own systems can be used. Several disbursement-linked indicators are used as examples, but none of them relate to ARD.

53 54

AfCoP CaseBook 2010 Presentation by AfCoP at the Multi Stakeholder Forum on Aid and Development Assistance in Agriculture and Rural Development, Dar-es-Salaam, Tanzania, April 2011. DFID Press release

55

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58. THE INTRODUCTION OF RESULTS-BASED BUDGETING IS CENTRAL TO IMPROVING PERFORMANCE. AfCoP has also documented several countries where results-based budgeting (RBB) has been successfully introduced. RBB is about cost effectiveness in the allocation and expenditure of financial resources for implementation of achievable and results-oriented projects and programmes. Each ministry produces a performance framework that spells out the specific outputs to be produced by the end of the financial year, with a detailed work plan of how these outputs are to be achieved from a given budget. Expected outcomes and impact are also specified. Although the RBB system is not intended to penalise managers, it is not clear what incentives the system can provide for better performance. Although better utilisation of budgets can be expected to result from RBB, the documenting of results in agriculture will remain a huge challenge and one that could indeed penalise the sector. 59. MfDR NEEDS STRONG NATIONAL OWNERSHIP AND STRATEGIES. Where there is limited national ownership and weakness in formulating national STRATEGIES for ARD, in particular failure to set priorities and allocate resources accordingly, MfDR is severely undermined56. However, the focus on results should not distract attention from the importance of building capacity and developing sound processes at country level. There is some evidence that a weak MfDR system, as well as detracting from the overall goal of achieving MDG1, may also lead to an implicit bias in favour of consumers, allows capture of resources by powerful elites or facilitate the evasion of official policy for example, the land tenure programme in Honduras57.

56 57

Platform Knowledge Piece I (PKP I), Policy Coherence for Agricultural and Rural Development, GDPRD, 2011 (draft) Ibid.

4th High Level Forum Mutual accountability Evidence Paper on Agriculture and Rural Development for HLF-4 Busan

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Mutual accountability

Governments play a pivotal role in accountability. NonState Actors have a crucial role to play in developing country domestic accountability in ARD because of the dispersed nature of the rural population, especially where parliamentary oversight is limited. CAADP has developed a Mutual Accountability Framework (MAF) which shows how this can work but a lot of capacity development is needed. Donors have not completely lived up to the commitment to enhance the predictability of aid the sector but there are some examples, such as AFSI, which are a step in the right direction. The CAADP MDTFs are also important in enhancing the predictability of funding. The main tool for reporting aid flows, however, is flawed.

60. GOVERNMENTS HAVE A PIVOTAL POSITION IN MUTUAL ACCOUNTABILITY. Mutual accountability is a process by which partners hold one another responsible for the commitments that they have voluntarily made to each other. It is a mechanism for regulating behaviour between autonomous parties within the framework of a shared agenda and agreed commitments. On the one hand, developing country governments should be accountable both to their donor partners and to their citizens through enhancing the role of parliaments and also through strong participatory approaches to planning, implementation and monitoring. Equally, donor governments should be accountable to their developing country partners especially by providing timely, transparent and comprehensive information on aid flows, and also to their own citizens the taxpayers.

61. NON-STATE ACTORS PLAY A VITAL ROLE IN DOMESTIC ACCOUNTABILITY ESPECIALLY IN AGRICULTURE. In countries where democracy has only shallow roots and parliaments exercise limited control over budgets, the purposive and systematic involvement of civil society and the private sector in ARD policy and strategy formulation is crucial for domestic accountability. Although consultation is now commonly practiced, for example, in the CAADP Country Compact process, it is not necessarily institutionalised. Some observers note that the involvement of CSOs is often tokenistic and may involve just one-off consultations rather than involvement in monitoring implementation58. The failure to achieve expected outcomes in a programme often reflects the lack of a countervailing constituency that demands the effective delivery of goods and services59. A recent study has concluded that there is evidence that CAADP has had a positive impact on the wider engagement with non-state agricultural stakeholders60. 62. SIMPLE CONSULTATION CAN ALSO HELP. The value of consultation and engaging stakeholders effectively has been shown to good effect in the rehabilitation of Gorongoza National Park in Mozambique61. One of the factors attributed with the success of the Gorongoza National Park project was the strong interaction with local communities to promote conservation and sustainable agricultural practices. Indeed, in the successes seen in four country case studies recently conducted, the common element was the way in which stakeholders had been brought together early in the process to form a group with an interest in seeing the policy, reform, or programme through to a successful outcome62.

58

Africa Network presentation at the Multi Stakeholder Forum on Aid and Development Assistance in Agriculture and Rural Development, Dar-es-Salaam, Tanzania, April 2011. Platform Knowledge Piece I (PKP I), Policy Coherence for Agricultural and Rural Development, GDPRD, 2011 (draft) CAADP in Practice: Highlighting the Successes, ODI, November 2010 Platform Knowledge Piece I (PKP I), Policy Coherence for Agricultural and Rural Development, GDPRD, 2011 (draft) Ibid.

59 60 61 62

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4th High Level Forum Evidence Paper on Agriculture and Rural Development for HLF-4 Busan Mutual accountability

and Rural Development for HLF-4 Busan

63. A MUTUAL ACCOUNTABILITY FRAMEWORK IS ESSENTIAL. Mutual accountability is central to the philosophy of CAADP. It is reflected in the Country Compacts signed by government, donors, civil society and the private sector. It is a key element in the formulation and assessment of country Investment Plans. The Business Meetings, where financing is secured, include commitments by all parties to implement a mutual accountability framework (MAF)63. A MAF for use under CAADP was validated by NPCA/AUC in 2010, and specific Guidelines for the Participation of Non-State Actor Participation in CAADP Processes for country, regional and continental levels, have been prepared64. Its target is producers and consumers, organisations involved in food and agriculture such as farmers, private sector, women, CSOs/NGOs and knowledge institutions, as well as collective bodies such as farmer organisations and chambers of commerce. A key part of involvement of non-state actors is in accountability holding CAADP partners and Non-State Actors themselves accountable for delivery on behalf of target beneficiaries. 64. IDENTIFYING AND STRENGTHENING PLAYERS IN THE ACCOUNTABILITY SYSTEM. In line with Accra, there is an evident willingness under CAADP for CSOs to engage in dialogue on ARD issues with government and other stakeholders. In a large and complex sector like agriculture, it is crucial that the selection of those to be held accountable is done in a transparent way, building champions for CAADP, ensuring that they are truly representative of, consult with and disseminate information to their constituencies, and have gender balance. However, representatives of Non-State Actors may be unfamiliar with advocacy, policy-making, negotiation, consultation, and budget tracking and analysis. They may also have limited knowledge on technical aspects of agricultural policy, and struggle to access the latest evidence from which to formulate an informed position. For this reason, Non-State Actors often need capacity development to be able to play their part effectively. For example, the National Farmers Platform the Gambia, which serves as a forum for channelling farmers concerns and aspirations to government, has received assistance through an international NGO to support capacity building and to facilitate their engagement with CAADP.

65. MUTUAL ACCOUNTABILITY ON FINANCE, ACTIONS AND RESULTS REQUIRES THAT COMMITMENTS ARE CLEAR. The architecture for accountability has often been ambiguous. If commitments are unclear, data on performance are unavailable, and there are few platforms for debate, then Non-State Actors cannot fulfil their watchdog role on behalf of their constituencies. Key elements of the CAADP MAF comprise recording all commitments publicly, generating M&E and mutual accountability reports and presenting them at technical and political fora. Rwanda provides a strong example of how this can work. The Government of Rwanda introduced frameworks to enhance the political accountability of the government to its citizens including holding senior civil servants to account; mutual accountability of government and donors (a Common Performance Assessment Framework) and a Development Partners Assessment used by the government and development partners to assess donor performance, and the overall transparency of government practice. 66. THE MOST CHALLENGING ASPECT OF MUTUAL ACCOUNTABILITY IS THE INCLUSION OF THE PRIVATE SECTOR. At national and regional levels, it is often difficult to identify the legitimate representatives of the private sector. The diversity of the private sector, including inter alia large-scale commercial growers, smallholders, input suppliers, agro-processors, and traders, makes representation a tricky task. Even organised structures such as farmer organisations are not necessarily representative of all farmers65. A review of five of the Technical Review Reports currently available66, for example, reveals that links between government and the private sector is a common weakness and the roles of the private sector and civil society are still unclear (see Annex 3). 67. THE NEED FOR A PUBLIC FORUM FOR MUTUAL ACCOUNTABILITY. The CAADP Partnership Platform (PP), bringing together the main donors engaged in supporting African agriculture and representatives of AUC and African governments, meets annually and provides a potential mechanism for open and transparent mutual accountability. Both African partners and development partners also come together in a sixmonthly business meeting.

63 64 65 66

CAADP Post-Compact Guidelines, 2010 Guidelines for the Participation of Non-State Actor Participation in CAADP Processes, NPCA, 2011 CAADP Pillar 2: Framework for Improving Rural Infrastructure and Trade Related Capacities for Market Access Ghana, The Gambia, Nigeria, Sierra leone, Liberia

4th High Level Forum Mutual accountability Evidence Paper on Agriculture and Rural Development for HLF-4 Busan

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68. AFRICAS ACCOUNTABILITY MECHANISM. Accountability at the national level addresses fundamental issues of political economy. In this regard the political commitment by African leaders to the Maputo Declaration that 10% of national budgets will be allocated to agriculture is an important part of Africas accountability to the donor community. There has been slow but definite progress on this. Data from the Regional Strategic Analysis and Knowledge Support System (ReSAKSS) suggests that in 2005, on average, African governments allocated 6% of budgets to agriculture, which is an increase from 4.5% in 2003, but only four met the 10% goal and three were in the 8-10% range. The most recent data, for 2009, suggest that there had been some progress, with seven countries meeting the 10% target and nine coming close67. 69. ACCOUNTABILITY BY THE DONOR COMMUNITY. On the donor side, there have been efforts to enhance accountability in terms of fulfilling pledges, delivering on commitments and meeting predictability. The LAquila Food Security Initiative (AFSI) is the most important attempt to do this in agriculture and food security. Initially it fell short, with only 30% of the US$22 billion pledged being additional resources. However, the major part of the L'Aquila pledge came from aligning current funding streams and programmes behind national and regional agriculture and food security investment plans that have been developed through the CAADP process68. AFSI has ultimately demonstrated commitment by donors to the food security agenda. Similarly, the contributors to the Global Agriculture and Food Security Programme (GAFSP) have been able to provide around US$321 million to eight countries (Bangladesh, Haiti, Rwanda, Sierra Leone, Togo, Ethiopia, Mongolia and Niger) and have stimulated discussion around proposals in five other countries. It has also opened an innovative US$100 million private sector window managed by IFC. Delivery on the commitments and consideration of further proposals, however, has been stalled by failure to mobilise the full US$900 million that had been promised. Part of this is the fact that the USA had only deposited US$67 million of the US$475 it had pledged69.

70. LITTLE DONOR COMMITMENT TO REPORTING ON AID FLOWS IN ARD. The international system for reporting on aid flows (that is, on ODA) is the OECD-DAC Creditor Reporting System (CRS). Although all OECD donors report to CRS, there appears to be little commitment and few incentives to providing accurate or useful figures70. In general, the system is neither able to track the content of aid nor the different instruments used in any detail. Its main advantage over other potential sources of data such as AidData is that it is the only source of consistently-defined time series data, spanning more than 30 years. It also confusingly mixes data on sectors (such as agriculture) with themes (such as rural development) and financing instruments (such as budget support). Individual donors have widely different internal coding systems that are tailored to their internal budget systems, performance tracking and public communications and these do not readily map to the CRS codes. The current presentation of DAC data makes it difficult to track any link between aid flows and policy or institutional changes because the categories do not capture important ARD aid commitments and disbursements that fall under non sector allocations71. Furthermore, the CRS does not align with the reporting of individual donors against specific commitments, such as AFSI, which does not report commitments or disbursements using CRS. 71. A MORE COMPREHENSIVE CODING OF AID TO ARD YIELDS QUITE DIFFERENT RESULTS. The definition of agriculture (Agriculture, Forestry and Fishing) that is commonly used to track aggregate aid to the sector substantially under-reports the actual flows. The current DAC measurement adds certain other categories Rural Development, Emergency Food Aid, Developmental Food Aid to its Agriculture data to provide an overview of aid for Agriculture and Food Security.72 If CRS purpose codes covering Agricultural Production, Processing and Marketing, Rural Socio-Economic Development, and Emergency Relief and Welfare are included, a much larger figure for aid flows to ARD emerges. The narrow definition of agriculture rises from a low point in 1997 of US$4,380, to a high point of US$9,819 million in 2008. The broader definition rises from US$7,190 in 1995 to US$17,652 million in 2008. In the most recent year, the broader definition is 80% higher than the narrow definition.

67 68 69 70 71 72

ReSAKSS 2010 CAADP in Practice: Highlighting the Successes, ODI, November 2010 Partnership to Cut Hunger and Poverty in Africa (PCHPA) Policy Brief No 11, October 2010 Platform Knowledge Piece II (PKP II): Aid Finance for Food Security and Agricultural and Rural Development, draft PKP II Methodological Note on Calculating ARD and Food Security Aid Flows. OECD-DAC (2010) Measuring Aid to Agriculture, April. Available at www.oecd.org/stats/agriculture.

24

4th High Level Forum Evidence Paper on Agriculture and Rural Development for HLF-4 Busan Aid effectiveness indicators ARD

and Rural Development for HLF-4 Busan

Aid effectiveness indicators ARD

72. At best, only eight of the 12 indicators used to monitor progress in aid effectiveness can be reported on for the agriculture and rural development sector, and then only in a narrative form (see Table 4). Most of the 12 in-

dicators are relevant at national, economy-wide level where ARD is a taker rather than a maker of aid effectiveness measures.

Table 4: Aid Effectiveness Indicators and Performance in the ARD Sector

Ownership 1 Partners have operational development strategies Number of countries with national development strategies (including PRSs) that have clear strategic priorities linked to a medium-term expenditure framework and reected in annual budgets. Alignment 2 Reliable country systems Number of partner countries that have procurement and public nancial management systems that either (a) adhere to broadly accepted good practices or (b) have a reform programme in place to achieve these. Aid ows are aligned on national priorities Percent of aid ows to the government sector that is reported on partners national budgets. Strengthen capacity by co-ordinated support Percent of donor capacity-development support provided through co-ordinated programmes consistent with partners national development strategies. Use of country public nancial management systems Percent of donors and of aid ows that use public nancial management systems in partner countries, which either (a) adhere to broadly accepted good practices or (b) have a reform programme in place to achieve these. Use of country procurement systems Percent of donors and of aid ows that use partner country procurement systems which either (a) adhere to broadly accepted good practices or (b) have a reform programme in place to achieve these.

Progress and Application to the ARD Sector Sound agriculture and rural development policies and strategies are increasingly common. In Africa, 25 Country Compacts backed by strategies have been signed. Several countries have embarked on ARD sector MTEFs.

Economy-wide measures not specic to the sector.

Economy-wide measures not specic to the sector.

CAADP US$60 million Multi-Donor Trust Fund managed by World Bank provides capacity development and technical support to CAADP institutions. Some multilateral agencies (e.g. IFAD) use partner PFM systems whenever possible.

5a

5b

Some multilateral agencies (e.g. IFAD) use partner PFM systems whenever possible.

4th High Level Forum Aid effectiveness indicators ARD Evidence Paper on Agriculture and Rural Development for HLF-4 Busan

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Strengthen capacity by avoiding parallel implementation structures Number of parallel project implementation units (PIUs) per country. Aid is more predictable Percent of aid disbursements released according to agreed schedules in annual or multi-year frameworks.

PIUs continue to exist in ARD and are even attributed with successful implementation.

Specic commitments to food security: AFSI only around 30% is new funding and disbursements after one year was 27%73; GAFSP disbursed US$321 million out of US$900 million committed after 2 years. Economy-wide measures not specic to the sector.

Aid is untied Percent of bilateral aid that is untied. Harmonization

Use of common arrangements or procedures Percent of aid provided as programme-based approaches.

Under CAADP 17 Agriculture Investment Plans prepared along the lines of PBA.

10

Encourage shared analysis Percent of (a) eld missions and/or (b) country analytic work, including diagnostic reviews that are joint.

Some multilateral organisations (e.g. World Bank) partnering with others (e.g. USAID, IFPRI) in analytical work in ARD

Managing for Results 11 Results-oriented frameworks Number of countries with transparent and monitorable performance assessment frameworks to assess progress against (a) the national development strategies and (b) sector programmes. Mutual Accountability 12 Mutual accountability Number of partner countries that undertake mutual assessments of progress in implementing agreed commitments on aid effectiveness including those in this Declaration. Economy-wide measures not specic to the sector. Economy-wide measures not specic to the sector.

73

G-8 Accountability Report 2010

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4th High Level Forum Evidence Paper on Agriculture and Rural Development for HLF-4 Busan Way forward

and Rural Development for HLF-4 Busan

Way forward
73. The ARD sector must urgently enhance its management for development results and this is an area in which real progress can be shown. ARD sector ministries are notorious for their poor management, being weak in spending and the absence of a results focus. This means enhancing the capacity of management and administration in the ARD sector and especially in national strategy formulation, investment planning, national systems of planning, and results-based budgeting. Specific attention to M&E, agricultural statistics, and ARD sector reviews of public expenditure is needed. 74. Establishing viable mutual accountability mechanisms in the sector is also a priority because, unlike social sectors such as health and education, agriculture is an overwhelmingly private activity which demands the systematic engagement of a wide range of stakeholders. It is essential that the private sector and civil society is actively engaged in all aspects of strategy and policy formulation and in the setting of priorities for aid. This implies devoting resources and knowledge to setting up or strengthening Mutual Accountability Frameworks in the ARD sector and to institutionalising the involvement of Non-State Actors. 75. The quality and ownership of strategies and programmes in ARD are strengthened by commonlyagreed regional frameworks and support systems. Greater attention should be given to facilitating the formulation of regional strategies and approaches to ARD as a framework and benchmark against which national strategies and policies can be assessed. 76. Country leadership of programmes in the sector, which also enhances donor alignment, must be strengthened by establishing solid consultation mechanisms with rural stakeholders and fostering more active engagement by parliaments in agriculture and rural strategies. It is particularly important to ensure that such consultative mechanisms are employed when dealing with donors and investors outside the traditional aid community. 77. The engagement of non-traditional donors emerging donors, foundations and NGOs in implementing AE principles is especially important for the ARD sector. Efforts should be made to engage more actively with emerging donors, foundations and NGOs to bring them into the AE agenda. 78. Programme-based approaches structured around sound agriculture sector strategies and MDTFs to harmonise technical support to the sector should be encouraged as useful mechanisms for greater harmonisation, alignment and accountability of donor support to ARD. 79. The crucial importance of Non-State Actors in domestic accountability demands that more effort be put into delivering to them the necessary skills to fulfil this role effectively. 80. As governments redefine the scale and scope of their responsibilities in delivering public goods in ARD, the exploration of better ways for donors to work with NGOs and CSOs becomes increasingly urgent. 81. In the interests of promoting long-term investment in sustainable agriculture, new initiatives and associated funds should be discouraged and the trend towards allocating increasing amounts of resources to emergency assistance should be discouraged.

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Annexes
Annex 1 (a)
Aid Flows to ARD and Food Security, 1995-2008 (Commitments) (constant US$ million)
Agricultural production, processing & marketing 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 5,173 5,736 4,380 4,468 4,211 3,837 4,354 4,196 4,729 4,946 5,779 6,225 7,976 9,819 Rural socio-economic development 1,513 1,598 1,786 2,252 3,619 2,739 2,684 3,080 2,603 2,254 2,312 2,806 2,745 3,225 Emergency relief & welfare 503 435 420 604 1,475 795 665 1,588 2,660 2,255 3,120 2,741 2,899 4,608 TOTAL

7,190 7,769 6,586 7,324 9,305 7,371 7,703 8,864 9,992 9,456 11,210 11,771 13,62 17,652

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4th High Level Forum Evidence Paper on Agriculture and Rural Development for HLF-4 Busan Annexes

and Rural Development for HLF-4 Busan

Annex 1 (b)
Expanded definition of Aid to Agriculture, Rural Development and Food Security
The data used are taken from the purpose codes from the OECD/DAC Creditor Reporting System (CRS). The purpose codes are indicated in parenthesis. Agricultural Production, Processing and Marketing Agriculture, Forestry and Fishing (codes 311, 312 and 313). Agro-industrial and export crops (31162) Industry codes that include forest and livestock products (32161, 32162 and 32163). Land and water resources management (31130 and 31140). Research, plant and animal health and regulatory services (31182, 31192 and 31195). Extension and education services (31166 and 31181). Agricultural inputs, animal husbandry and animal feed aid and fertilizer plants (31150, 31163 and 32165). Banking and Financial Services (240) 10% approximating the share of agricultural GDP in national GDP, for low and middle income countries Business Support Services (25010) - 10% Trade Policy (331120) and Facilitation (33120) - 20% General Budget Support (51010) this is sector unallocable so assume the average proportion of public agricultural spending in total spending (10%). Support to NGOs (920) 10% Rural Socio-Economic Development Rural Development (43040), Non-Agricultural Alternative Development (43050), Women's equality organisations and institutions (15170) Food Aid/Food Security (52010) Emergency Relief and Welfare Emergency Food Aid (71010) Material Relief Assistance and Services (72010), Basic Nutrition (12240) Social Mitigation of HIV/AIDS related to food security and rural employment.

4th High Level Forum Annexes Evidence Paper on Agriculture and Rural Development for HLF-4 Busan

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Annex 2
CAADP: Countries with compacts / Investment Plans March 2011

REC

Countires that have signed Compacts 1. Burundi 2. Ethiopia 3. Malawi 4. Rwanda 5. Uganda 6. Kenya 7. Zambia 8. DRC 9. Burkina Faso 10. Gambia 11. Ghana 12. Benin 13. Cape Verde 14. Guinea

Dates when Compacts signed 24-25 August 2009 27-28 September 2009 19 April 2010 30-31 March 2007 30-31 March 2010 23-24 July 2010 18 Jan 2011 17 March 2011 22 July 2010 27-28 October 2009 27-28 October 2009 15-16 October 2009 10-11 December 2009 6-7 April 2010 5-6 October 2009 12-13 October 2009 29-30 September 2009 12-13 October 2009 29-30 July 2009 17-18 September 2009 9-10 February 2010 26-27 July 2010 17-18 January 2011 3-4 March 2010 6-8 July 2010

IP Ready

IP reviewed

Business Meeting held Not yet 6th -7th Dec 2010 Not yet Yes [8-9 Dec 09] Yes [16-17 Sept 10] Yes 27th Sept 10] Not yet Not yet Not yet Yes [4-5 Nov 10] Yes [14-17 June 10] Not yet 16-17 Nov 2010 Not yet Yes [14-17 June 10] Yes [4-5 Nov 10] 14-15 Dec 2010 Yes [14-17 June 10] Yes [14-17 June 10] Yes [14-17 June 10] Yes [14-17 June 10] Not yet Not yet No

In process Yes Yes Yes Yes Yes No No Yes In process Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes In process In process In process In process

No Yes [Sept 10] Yes [10-16 Sept 10] Yes [Dec 2009] Yes [2-10 Sept 10] Yes [6-14 Sept 10] No No No Yes [19-25 Sept 10] Yes [June 10] Yes [19-25 Sept 10] Yes [19-25 Sept 10] Yes [19-25 Sept 10] Yes [4-9 June 10] Yes [19-25 Sept 10] Yes [19-25 Sept 10] Yes [4-9 June 10] Yes [4-9 June 10] Yes [4-9 June 10] Yes [4-9 June 10] No No No

COMESA

ECOWAS

15. Liberia 16. Mali 17. Niger 18. Nigeria 19. Togo 20. Sierra Leone 21. Senegal 22. Ivory Coast 23. Guinea Bissau 24. Swaziland 25. Tanzania

SADC

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4th High Level Forum Evidence Paper on Agriculture and Rural Development for HLF-4 Busan Annexes

and Rural Development for HLF-4 Busan

Annex 3
CAADP Post Compact Process: Review of Investment Plans for Ghana, The Gambia, Nigeria, Sierra Leone and Liberia

Country

Unclear role of private sector & civil society organizations The roles of major players in implementation should be well defined. One of the key strategies is to shift to more inclusive partnering with the private sector and civil society (III). Government involvement in input, services and commercial agriculture are still extensive, while the expectations for private sector partnerships are not spelt out (V).

Coordination and consultation mechanisms needed There is lack of clarity on the level of inter-ministerial coordination and a plan for coordination with other on-going programs supporting poverty reduction and food security which is critical to effective implementation (V).

Institutional reforms needed

Ghana

The plan should articulate how Ghana will strengthen policy to attract private investments as private sector participation remain pivotal to its agricultural development strategy; The plan also is weak on the description of steps to be taken to continue on a path of policy reform to enable private sector growth in agriculture, especially policy issues related to expanding regional trade (V).

The Gambia

The plan should include an approach to stimulate and provide for private sector engagement and responsibilities in implementation of the plan (III);

The role of the two lead ministries and other unmentioned ministries, departments and sectors such as roads, public works, rural development, cooperatives, water and irrigation, finance and health have not been defined. There is also no conceptual framework to realize collaborative within and across state and non-state institutions (III). The plan requires more clearly defined implementation modalities, particularly coordination of programmes at the Federal and State, inter-sectoral and inter-ministerial levels to ensure the attainment of the anticipated programme outcomes (III); For effective coordination among government, donors, civil society and private sector, structures to harmonize donor efforts are required to guarantee responsiveness and mutual accountability III).

The reform agenda (e.g. policy alignment, institutional development, transparency and accountability systems, etc.) has not been clearly addressed in the plan (III).

Nigeria

The investment plan has not given sufficient consideration to other important aspects of pursuing the agriculture development agenda within the CADDP principles and values context. This includes aspects such as modalities for inclusiveness (especially private sector and civil society engagement, enhancing transparency and accountability) (III); The role and level of engagement with the private sector needs to be clarified and strengthened with practical actions of how to incorporate private sector investment and service provision into the investment programme (III).

Attention to provision of the necessary institutional reform necessary for the efficient use of resources, service provision and value chain development is required (IV). Significant institutional reform is required to ensure the efficiency of the programmes. This needs to include reform related to land tenure, trade, water etc. and take conscience of spill over effects on neighbouring countries (V).

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Country

Unclear role of private sector & civil society organizations The plan should include a description of how future engagement with donors, private sector and civil society will be carried out by the government to effectively align stakeholders with the objectives of the SCP (IV);

Coordination and consultation mechanisms needed There is need for specific information about how the plan will set up inter-ministerial collaboration and alignment of programs and services with the SCP (III). (Note: SCP Smallholder Commercialisation Programme) The plan does not clearly describe how it intends to coordinate inter-agency cooperation and alignment with plan objectives (V).

Institutional reforms needed

Sierra Leone

A serious review of the policy environment is necessary to ensure that an enabling policy environment will promote market access and regional trade, attract foreign direct investment and private sector participation III).

Liberia

However, the LASIP does not clarify how government will engage the private sector of investment in and provision of agricultural services (p. III). The plan should elaborate on cross-sectoral collaboration, dialogue and planning to ensure that linkages among sectors are enhanced, especially among the private sector (III).

However, the programs, do not adequately deal with the crosssectoral concerns of inter-ministerial coordination and collaboration to address concerns such as rural energy for agro-processing and value addition (p.iii). No regular sector and crosssectoral mechanisms for dialogue and consultations and joint review and planning are proposed (P.III). However, it is not clear in the LASIP what coordination mechanisms are in place which will allow Liberia to maximize benefits from regional integration (V).

The plan should consider expanding the section on investing in policy review and improvement to strengthen implementation, including policy considerations to best enable foreign indirect investments; III).

Yet, the plan also overlooks an important element of institutional reform required to assure the effectiveness of the countrys agricultural system, which is necessary in enabling innovation in the sector (IV).

Prepared by: Platform Secretariat Published by: Global Donor Platform for Rural Development c/o Federal Ministry for Economic Cooperation and Development (BMZ) Dahlmannstrae 4, 53113 Bonn, Germany Study conducted by: Overseas Development Institute, London Author: Michael Wales Photo credits: www.fotolia.com/africa/Ivan Gulei/Jean-Yves Foy; www,pixelio.de/hjrdis Kozel June 2011

donorplatform.org
Contact: Secretariat of the Global Donor Platform for Rural Development, c/o Federal Ministry for Economic Cooperation and Development (BMZ) Dahlmannstrae 4, 53113 Bonn, Germany Phone: +49 228 24934 166 secretariat@donorplatform.org donorplatform.org Publication date: June 2010