I attended the session yesterday and I'd like to thank all involved in setting it up (Zahid, CitiBank and ANDE), presenting the 'well-rehearsed' report especially Dan's heroic discipline for the first 15 mins and for the insights provided by most panel members, notably Willy from Root Capital.
I wanted to raise two points:
1) The need to learn from the past performance of donor investments in agricultural growth
I asked a question "what lessons have members of the panel learnt - for good or bad - about the long history of donor investments in the agricultural sector?" The only answer came from Dougie Brew: "the lessons of the past are not relevant for the future". Really? I am not saying the dogmas of tackling past problems and opportunities should be enthralled in pursuing those of the present and those envisaged for the future (to paraphrase President Lincoln). We all agree things have moved on as Willy made really clear. However, to dismiss lessons from the past as obsolete is sloppy. A more thoughtful and intelligent response was put together by the World Bank Group: EVALUATIVE LESSONS in Growth and Productivity in Agriculture and Agribusiness (2011) that can be found at:
Suffice it to say the World Bank contradicted the one answer offered by the panel:This evaluation introduced itself in the following way:
"The cost of inadequate attention to agriculture, especially in agriculture-based economies, came into focus with the food crisis of 2007–08. The crisis added momentum to an emerging renewal of attention and stepped-up financing to agriculture and agribusiness at the World Bank and International Finance Corporation (IFC), as well as at several multilateral and bilateral agencies. World Bank financing rose two and a half times from 2008 to 2009, although this increased lending seems to have been accompanied by a decline in analytical work, which this review finds valuable in achieving results. This evaluation seeks to provide lessons from successes and failures in the Bank Group’s activities in the sector to help improve the development impact of the renewed attention."
2) The nature of change sought through social lenders and impact investors
I understand the motivation behind social lenders and impact investors as seeking to induce transformative change through 'filling' the void in the missing middle. Doing this involves empowering perhaps only a small number of the 90% in coming to the market - and the service providers to? - so as to bolster more resilient agricultural economies that will drive growth. As agreed, a lack of access to finance is only one reason that explains the current situation: 90% of small holder farmers work in unorganised staple food markets that have little or no points of aggregation. Why?
Lack of surety of tenure (ie, land markets) for farmers and her families and especially those who are good farmers so they can rent or buy in more land?
No or limited incentives to invest more labour and inputs and/or expand farm sizes due to risk (price and others) and significant opportunity costs associated witn non-farm income given poor/marginal incremental returns to agricultural investments ? and
A belief that the more money, government (incl public sector donors) has is proportionate to the difference or impact is can have in productive sectors like agriculture - this may be true of education and health , but the most dramatic and lasting difference governments and donors can have, albeit indirectly, lie in reforming regulations (as 'measured' by the IFCs Doing Business Indicators).
All three (and others) most probably. In this context and for these reasons, I think collectively that the vision and associated strategies that drives the motivation among social lenders and impact investors needs to focus on other changes that precede current M&E effort: measuring movements in the relative values of phyical and financial crop yields and the consequences of these on net household incomes. These 'end-game' targets are no more no less than what drive public investments. Even assuming that more than the 400,000 known by Technoserve adopt - and continue to adopt - and realise a $200 annual increment after 3 years, is this it? Aside from who appropriates these gains measuring even such seemongly straightforward metrics is not trouble free. On a boring (?) technical note such M&E practice was found out by the World Bank's then Operation and Evaluation Department in 1994. An internal overview of M&E practice in the agriculture sector concldued that it was analytically impossible to establish significant causal relationships between the provision of services and movements in the relative values of crop yields by the end of five year implementation periods. This problem was aggravated by the positioning and strategies of these interventions: they worked around rather than with local systems and treated them and their behaviours as risks and assumptions to their 'results'. Since then, however, this analysis has been reversed: these systems are not so much treated as factors affecting interventions, rather about how the they are influencing them and bringing about systemic change.
I am not belittling the results of outfits like technoserve. Every bit helps. Rather, I understand the necessary changes required are more fundamental and need to take place in and among invariably complex systems (household, farming , markets and institutions that make and govern regulations). After all it the behaviours and values of these that invariablt explain why 90% of smallholders operate in highly fractured and remote staple food markets. As mentioned, this will take time and the duration of which will test the convention of impatience often shown by some donors' standard investment periods.
As mentioned we need to support agriculture and those who think it is cool and profitable to farm in more sophisticated and coherent ways if we are to partner each other in putting agriculture in its right and proper place as the driver of growth. Constraints that farmers face in becoming the ‘drivers’ of this support are well documented: small scale farmers lack capacity and mechanisms to articulate their demands and in many cases the effectiveness and financial viability of services are simply obstructed by lack of enabling regulations and policies to ensure access to information and markets.
Monitoring all this should help improve, not just comment on and report 'results', our performance in doing all this. How? By being able to learn about how and to what extent:
If we get to this point, then, we can expect increased productivity, interesting changes in land distiribution patterns, outputs and personal gains / opportunities to emerge – which we’d be confident are likely to be sustainable, and are tangible enough to measure with confidence. All factors that contribute to helping transform the rural space.
The political climate in many donor countries is, I believe, negatively influencing each of these above mentioned factors. The snag, as I see it, is that some donors do not make technical choices based on evidence and careful reasoning, but respond to the way aid is politically driven. In this context, there are deliberate ambiguities in the framing of objectives among some donors. Some espouse, intellectually, anyway the primacy of systemic changes as it acknowledges the role of aid is to stimulate changes that outlast the aid programmes it funds. And this takes time and changes in their behaviours to effect and thus patience. At the same time there is branding and making noise about people level 'impacts'. In crude terms, they cut corners and make premature reference to developmental impacts even backed up with randomised and pseudo experimental designs. This is often a knee jerk response to justifying ring fenced aid budgets (that are set to dramatically increase to boot). We want externally and statistically valid “proof” of improvements in peoples lives before we believe anything. Oh and we want these to outlast the programmes we fund. By referring to higher level improvements in people as “impacts”, this suggests that anything less than this isn’t really impact, is of secondary relevance and importance, and isn’t really of interest. It would, therefore, be really encouraging for investors in impact to recognise that if the contributions they seek to developmental impact really will make for lasting and believable narratvies of change they also need to work more with each other in partnership with local institutions. And 'report' on the consequences of these partnerships - dare I say it the impacts as defined by reforming behaviours of government, improved negotating positions of cooperatives on product price and quality of service etc...