China Crisis? Business Monitor International warns of China's economic slowdown

Business Monitor International (BMI) has released the latest special report, "China 2012: From Miracle To Meltdown" outlining a case for a severe growth collapse in China driven by declining money supply growth rate, accelerating inflation and external slowdown with a threat of a double dip recession in the US.

According to

Weather index insurance: Building smallholder producers resilience, and experience in China (76)

Written by Emily Coleman

Through two photos, Weijing Wang - Country Programme Officer for China, illustrated two important reasons why weather index-based insurance is being used as a viable alternative to traditional multi-peril crop insurance in China. The insurance agent in the field, who after every perceived yield loss, has to travel 24-7 to visit every smallholder farm and assess the actual damage caused. The farmer looking at his crops, who faces the dilemma of whether or not to invest extra money to improve production, for fear of losing his investment and more if bad weather strikes.

Weather index-insurance eliminates these two risks. It responds to an objective parameter, such as rainfall or temperature, at a defined weather station during an agreed period of time. The parameters of the insurance contract are set to correlate as closely as possible with the damages suffered by the farmer.

The insurance agent from the photo we saw doesn’t have to go around to each farm and assess the loss, as all farmers within a defined area receive pay-outs based on the same contract and measurement at the same station. This can reduce the transaction costs for the insurers and importantly the time it takes for the farmer to be compensated for their loss.

The Weather Risk Management Facility – a joint initiative of IFAD and WFP - carried out the first weather index-based insurance pilot in China from 2008 to 2010. A large element of this pilot was building the technical capacities of the local stakeholders in weather index-based insurance, particularly Guoyuan Insurance Company who learnt how to calculate indexes and design contracts for this new product.

A follow-up pilot was initiated by the Chinese government and Guoyuan Insurance Company. This time, building on what they had learnt from IFAD and WFP, they greatly expanded coverage – both in terms of number of people insured, and the geographical area.

During 2011, there was low temperature and drought, enough to trigger a payout. The payout was fast, and whilst farmers could tap into this amount to recover their production, they were still waiting for the compensation from the additional multi-peril crop insurance which relies on in-field assessments.

Responding to questions from the floor, Weijing explained that since that very first IFAD-WFP pilot, interest in weather index-based insurance in the country is growing. The government, insurance companies, and other donors are all seeing a future in weather index-based insurance for China. Most importantly, farmers are beginning to change their attitude too. They are now beginning to trust in this type of financial product more than we saw in the initial pilot, and interestingly, they are becoming more aware of the weather risk facing them and seeking out new online information channels on how to manage it.

Whilst not every area, country, or weather pattern may be suited to weather index-based insurance, the benefits are already evident in China, and the future looks sunny!

More information found here.

South South: China’s experience as a development model

By Thomas Elhaut

The benefits of South-South cooperation have started to see new light as emerging economies - notably China and India – are grabbing headlines as growing economic powers investing substantially larger amounts in Africa and Asia. Justifiably so, as together, the two countries account for one-fifth of the global economy and are projected to represent a full third of the world’s income by 2025.

While the financial crisis still casts a shadow over many countries, India's trade with Africa has jumped to US$40 billion in the past few years. In addition, the United Nations Conference on Trade and Development estimated that, between 1996 and 2006, developing economies provided more than US$17 billion of foreign investment in Africa and $27 billion of investment in Asia.

Combine this with the rise in South-South trade and investment flows and the shift from the G8 to the G20 as the primary forum to tackle global economic issues, and it is clear that there is more to South-South cooperation than just as a driver for developing countries to share and learn from the practical experience of others.

Some have argued that the emerging economies can put the global economy on a higher growth trajectory. But this is overoptimistic, as the former have their own domestic challenges and their economic cycles remain vulnerable to and synchronised with the North. For example, while China’s performance in tackling food insecurity and malnutrition is laudable and sets a good example for other developing countries to emulate, there remain 150 million people living below the poverty line in the country.

A key concern for development agencies and policy makers is how to extend and sustain rapid expansion of South-South trade and investment flows in pursuit of lasting development gains. Tapping the potential of South-South economic relations requires more than passive reliance on market forces and private initiative. Creating policy space for government action and regional policy coordination is crucial.

There is a great need for investments to move food from countries rich in arable lands to those with growing numbers of consumers and little food production capacity. For this to happen agricultural markets and trade policies at the global, regional and sub-regional levels need urgent improvement and reform.

Investment and trade among developing countries should set a good example of how to create win-win solutions. But we must take it to the next level by discussing how policies, institutional conditions and the right kinds of environments can further promote successful South-South cooperation. Specifically, as incomes and demand for food have grown, agriculture has begun attracting substantially larger investment flows but the benefits to smallholders and others in some of the poorest recipient countries in the region (e.g. Laos and Cambodia) remain uncertain. It is imperative that these investments are geared better to serve local needs and strengthen production capacity.

Above all, competitive rivalry for scarce resources must turn into cooperative ventures with larger pay-offs to both emerging economic powers and those lagging behind. An over emphasis on short-term macro-economic balances must yield to a longer-term vision for shared growth and prosperity. A key lesson learnt from China and India’s success in poverty reduction is that domestic factors played a crucial role while market integration created new opportunities for growth. Fiscal decentralisation in China, for example, accelerated growth and poverty reduction.

In promoting South-South cooperation between China and other developing member countries of the International Fund for Agricultural Development (IFAD), China's Ministry of Foreign Affairs and IFAD have so far organized two South-South events in September 2009 and November 2010 respectively. The forthcoming third event this month will offer a platform for policy exchange among senior officials from China and 15 developing countries in Asia and Africa.

South-South cooperation must be grounded in the questions of why and how policymakers can come together and share their successes and failures with each other and most importantly set guidelines that allow for investments to directly feed into development assistance so that those living on less than US$1.25 day don’t get left behind.

Partnership has always been central to IFAD’s business model. Our interest in South-South cooperation goes to the heart of strengthening our collaboration with the most important partners of all – namely poor rural people themselves.


Published on Poverty Matters Blog

China (re)Discovers the Business Wisdom of the Talmud

The Chinese should, but apparently don't, recall the Talmudic business wisdom of the pious, Sephardic Orthodox Judaic opium dealer, David Sassoon, who brought their nation to ruin while profiting handsomely from it not too long ago.

"Han Bing, the (pseudonymous) author of Crack the Talmud, says a series on the 'Jewish Bible' by a prominent publisher made him realize that 'ancient Jews and today’s Chinese face a lot of the same problems"

This message sounds familiar. Could it mean that our "special relationship" with "The Jews" isn't as special as we've been led to believe? Keep an eye on the East and you'll find out.

Selling the Talmud as a Business Guide

P Deliss / Godong-Corbis - Newsweek

December 29, 2010

A page from the Talmud, the book consisting of early rabbinical writings that inform the Judaic tradition.

Jewish visitors to China often receive a snap greeting when they reveal their religion: “Very smart, very clever, and very good at business,” the Chinese person says. Last year’s Google Zeitgeist China rankings listed “why are Jews excellent?” in fourth place in the “why” questions category, just behind “why should I enter the party” and above “why should I get married?” (Google didn’t publish a "why" category in Mandarin this year.) And the apparent affection for Jewishness has led to a surprising trend in publishing over the last few years: books purporting to reveal the business secrets of the Talmud that capitalize on the widespread impression among Chinese that attributes of Judaism lead to success in the financial arts.

Titles such as Crack the Talmud: 101 Jewish Business Rules, The Illustrated Jewish Wisdom Book, and Know All of the Money-Making Stories of the Talmud share the shelves with stories of Warren Buffet and Bill Gates. There’s even a Talmud hotel in Taiwan inspired by “the Talmud’s concept of success” that features a copy of the book Talmud Business Success Bible in every room. With the increasing interest in business education in China, and a rise in sales of self-help literature, the production of business guides to the Talmud has exploded. The guides are like the Chinese equivalents of books such as Sun Tzu and the Art of Business.

Han Bing, the (pseudonymous) author of Crack the Talmud, says a series on the “Jewish Bible” by a prominent publisher made him realize that “ancient Jews and today’s Chinese face a lot of the same problems,” ... No statistics are available on the sales of this sliver of the book market. But while the guides haven’t reached the heights of books such as Jewish Family Education, which claims to have sold more than 1 million copies, they currently are “very popular” and a “hot topic,” says Wang Jian, associate dean of the Center of Jewish Studies in Shanghai, a research institution that focuses on Jewish culture and history, and Israel. The Talmud “has become a handbook for doing business and seeking fortunes,” Wang says.

full article:

http://www.newsweek.com/2010/12/29/in-china-pushing-the-talmud-as-a-business-guide.html

Also see:

New Knucklehead Billionaires, Same Old Judaism

"In the East, all our 'anti-Semites' sit in prison”

Get to Know Alexander Mashkevich

Rabbi Pulls Back the Veil on Judaism's Paganism

Research to Impact

We all strive for sustainable impact that improves livelihoods and reduces poverty. But, how do we improve the capacity of new knowledge, new innovations and new approaches, developed through research, to have a long term sustainable impact and be integrated into smallholder farming systems.

Research, and in my definition of research I include technical, economic and policy, has the capacity to generate new knowledge that has been adapted to smallholder based farming systems, but it is often limited in its ability to generate sustainable practice change and impact on development goals.

A group from Sri Lanka, India, Mongolia, IFAD HQ, China, Vietnam and Australia discussed some of the constraints related to the ability of research to have sustainable impact at the smallholder level. The group agreed that research has the capacity to:

1. Generate valued new information that can be delivered to smallholders to empower better decision making;
2. Improve institutional decision making by substantiating the decision making process; and,
3. Allows stakeholders to engage in new areas of development.

However, the group also recognised a range of constraints that impede the ability for the research to sustainably impact in the development continuum. These constraints could be defined as:

1. Geographical separation that limits information exchange;
2. Business to business competitiveness that prevents knowledge exchange;
3. Ineffective timeframe alignment that reduces relevance of information; and,
4. Resource limitations which diminishes the required commitment.

Improved communication and coordination, that integrates better knowledge management and institutional working arrangements has the potential to improve the impact of research but requires a commitment by the range of stakeholders engaged in the development continuum.

More to come. More ideas wanted.

Value Chain Hard Talk

There were more than 35 participants in the session. Mr. Ron Hartman, CPM was the facilitator and the format used to facilitate was a "Hard Talk". Mr. Hartman invited three speakers to talk: David Shearer, Research Program Manager Agribusiness, from the Australian Center for International Agricultural Research (ACIAR), Frank Hartwich, Industrial Development Officer at UNIDO and Rolf Schinkel, Sustainable Agribusiness Advisor from SNV team for HVAP Nepal.

The talk centered around seven questions in the areas of defining value chains, common practices applied in the development projects, importance of selection of value chain for poverty reduction, importance of value chain analysis, key factors in designing value chain development projects, key issues with implementing value chain projects and issue of M&E in value chain projects. Key points from the discussion include:

• Value chain is the mechanism that allow producers, processors, buyers, and sellers — separated by time and space — to gradually add value to products and services as they pass from one link in the chain to the next till reaching the final consumer
• It has two dimensions: theoretical (Supply chain development, Cluster development, Global value chains, Networking for innovation) and practical (Increasing value addition, Knowledge and technology, Joint innovation development)
• Project design need to be flexible because chains are prone to continuous changes, various chain actors need to participate in design.
• Chain extends across segments, PMU's only able to deal with parts (expertise) hence the need to partner.
• Projects can help in organizing / building capacities among farmers, they need partnership with firms regarding production technology and product specification
• Good value chain analysis helps PMUs to see the "public value" of the project and its development.
• Value chain 'thinking' should be part of the toolkit in livelihood improvement
• It allows an analytical methodology to assess constrains and opportunities and approaches to resolve, in the context of the whole chain
• It allows public and private engagement from a planning stage and a means to engage stakeholders from the beginning
• Specialists need to 'value' a multi-disciplinary approaches in improving the chains function
• Poor farmers and private sector together have great business potential
• Without private sector NO value chain development
• Value chain development needs PPP; government and private sector go hand in hand
• The role of government in value chains is the enabling environment

Participants in the session not included only from Asia-Pacific but were also from Africa and Latin America. The facilitator provided opportunities for them to share their experiences. Video clip available soon.

Audiences were provided with opportunities to ask questions towards the end of session which were responded by the speakers. Video clip available soon.

Thomas Elhaut, Director, Asia-Pacific Division shared his views throughout the session. Video clip available soon.

Reported by Bashu Aryal

Integrating Rural Development, Climate Change and Sustainable Natural Resource Management

Session leads: Sheila Mwanundu and Dhrupad Chowdhury
Facilitator: Edgar Tan
Social Reporter: Meng Sakphouseth

"Agriculture provides livelihoods for many poor rural people and is fundamental to food security, nutrition and employment generation. The poor are highly vulnerable to adverse climate events and degradation of ecosystems and deal with these interlinked challenges in a day to day basis. In order to better support countries to achieve Millennium Development Goal targets and global food security, business as usual is not an option. A shift in paradigm to an integrated response to climate change, natural resource degradation and rural underdevelopment at all levels is critical"

- Opening remarked by Ms. Sheila Mwanundu, Senior Technical Advisor, Environment and Climate Change Division, Programme Management Department of IFAD.

Given that the issue of Climate Change is relatively new for IFAD supported programmes and projects, the session on integrating Rural Development, Climate Change and Sustainable Natural Resource Management gave the opportunity for many project management staff from different countries in Asia and the Pacific region to learn about IFAD’s new strategy on climate change and provide inputs on how to operationalise it.

The session was structured around two short presentations followed by speed sharing. In three discussion groups, experiences were shared and specific actions identified around the following key thematic areas:

• IFAD's strategy for supporting Climate Change interventions to reduce small holder and poorest farmer vulnerability
• Integration of the Climate Change intervention into project and COSOP
• Coping strategy for rural poor people

Active participation and responses from the participants reflected a diversity of experiences and issues faced by Project Directors across the sectors. The immediate needs can be summarized as following:

• Clarify IFAD's role with other development partners and private business entities based on IFAD's comparative advantage to support rural poor people
• Build the capacity at all levels and engage with research partners to come up with the tools and technologies which can benefit the rural poor, in terms of mitigation and adaption to climate change
• Provide institutional support to database management on climate change
• Harmonize the application of tools developed by IFAD and other development partners to minimize transaction costs at the project level
• Institutionalize and localize farmer groups affected by climate change
• Promote bottom up planning process response to climate change
• Improve information flow through knowledge management and sharing
• Conduct comprehensive research on cropping pattern response to the climate change
• Promote diversification of farming practices

The comments and concerns generated during the session will be addressed through the IFAD Environment and Natural Resource Management Policy to be submitted to the board for approval in May 2011.

Session presentations can be downloaded from the following links.

http://cid-37b097190b8465b3.office.live.com/self.aspx/.Public/IFAD%20APR%20Nanning%20Dhrupad.zip

http://cid-37b097190b8465b3.office.live.com/self.aspx/.Public/Why%20integrate%20RD%5EJ%20CC%20and%20NRM%5EJ%20APR%5EJ%202%20November%202010.zip

Risks, Vulnerabilities, Other Emerging Challenges

"Risk, vulnerability and shock limit poor people's participation in the growth process and cause a huge number of people to fall back into poverty", Sun Yinhong of China opens the session on Dealing with Risk and Vulnerability at the Project Level.

Risks can be natural/environmental, health related, social, economic and political that affect households, communities and nations in different and varied proportions, Ganesh Thapa of IFAD proceeds as he introduced the topic to more than 30 participants in the session. Ganesh showed that individuals, groups, markets and the public sector either informally or formally help the poor reduce, mitigate or just cope with risks.

Over the years, IFAD has shown its support for risk management in projects that reduced risks like watershed development and promotion of savings; risks mitigation through diversification such as projects that provided micro finance and formed producers groups; risks mitigation through insurance e.g. weather-based insurance; and, by providing loans to projects that respond to disasters e.g. Tsunami response projects in Sri Lanka, Maldives, and India.

The China's Pilot of Weather Index Insurance (WII): Drought and Heatwave Index Insurance for Rice is an example of a risk mitigating project supported by IFAD. This project, as Weijing Wang of China shared, is favorable to small farmers in Changfeng, Anhui Province. The WII has less adverse selection process and has potential for reinsurance arrangement.

Anura Herath of Sri Lanka showed the risks in adopting new technologies in the Dry Zone Livelihood Support & Partnership Programme of Sri Lanka and suggested that in future project designs to:

1. Identify a menu of technologies;
2. Include strategies using knowledge management (KM) tools to update projects with new technologies;
3. Include a clear implementation strategy, e.g. mechanism for financing technology adoption; and,
4. Propose crop/animal insurance.

The cotton, wheat and vegetable produced in Tajikistan are prone to risks related to weather and pests. Hafij Muninjanov disclosed that his government is working on a crop insurance as part of the Tajikistan Agriculture Reform Programme.

There are also institutional related risks involved in implementing IFAD supported projects, Lamkoise Baite of India added. The risks are related to design and actual implementation which affect the IFAD headquarters in Rome, the IFAD country offices, the project offices and the community themselves.

Further, to deal with risks and vulnerabilities at the Project level, the participants of the session proposed to:

1. Learn from initiatives of other projects; e.g. alternating crops, utilisation of communal labour, investing on small livestock;
2. Explore on insurances that put premium to farmers that better manage their land and other resources;
3. Do better risk/vulnerability analysis in project design processes (IFAD Climate Screening Tool can be used); and,
4. Have a study on prioritizing risks/vulnerabilities where IFAD shall focus on its interventions.

Risk and vulnerability are dynamic. New risks and vulnerabilities emerge over time. There is no project that is foolproof to risks and vulnerabilities. However, IFAD projects have to help poor people respond to risks, vulnerabilities and other emerging challenges.

Thomas Elhaut, IFAD APR Director, remarked that IFAD projects should exercise flexibility to capture and respond to emerging risk and vulnerability issues while at the same time strike a balance in ensuring quality in project implementation to help poor people overcome poverty.

This blog entry was submitted by Yolando C. Arban, CPO- IFAD Philippines Country Office.

ICTs for Livelihoods

There were 31 participants who joined the session on ICTs for Livelihoods at the Asia and the Pacific Division's APR. The session was facilitated by Ms. Shalini Kala from IDRC. Following brief presentations by Mr. B. Batpurev (Mangolia) and Mr. Sean Siochru (Cambodia) on the use of ICTs for livelihoods in their contexts, session participants were divided into three groups to exchange their views on the question:

What should IFAD be doing to support the use of ICTs for livelihoods?

Group discussions were very lively and resulted in the following major recommendations:

• Do not forget about other direction e.g., Ekgaon's experiment with remote sensing
• Upscale current pilots initiatives: Wider connectivity - better productivity
• Include ICTs as one component and/or sub-component in all future projects, facilitate linkage between media and community
• Subsidize the cost of mobile phone sets for the use of community
• Use ICTs for disseminating weather/market information
• Provide more training to the community members on the use of technologies including mobile phones, computers etc.
• Identify how to use ICTs to increase the impact of IFAD funded projects
• Use ICTs for extension services; market related activities at local level
• Work with private sector and maintain international standards e.g., UNICODE
• Carry out social science research beyond technology determination, localize/customize according to the local context
• Promote appropriate and feasible/sustainable technologies, do not forget the traditional media such as radio, television etc

Reported by Bashu Aryal

Monitoring and Evaluation for All

A total 40 members from Peru, Philippines, Maldives, Bangladesh, Laos, Pakistan, China, Cambodia, Vietnam, Mongolia and India participated the APR's session "Monitoring and Evaluation for All" facilitated by Maria Donnat which consisted of a presentation followed by a Q&A.

After a round of participant introductions, Ms. Maria highlighted on the following topics in her presentation:

• An overview of M&E
• Challenges which projects face in M&E
• Summary of the M&E journey
• Moving from a focus on Monitoring to a focus on Evaluation
• Evaluation challenges
• Quality verses Quantity
• Monitoring Challenges

The following are some of the questions asked by the participants during the session:

• In the Rims, is there indicators which can analyze data on the quality of the outcome of the project?
• Should the baseline actually be done during the design of the project?
• When there is a very complex project with several components and several objectives, how can the indicators be identified while conducting the baseline survey in order to achieve a qualitative outcome?
• The same indicators cannot be used to measure output, outcome or social and economical impact; therefore does this means that there should be different indicators in each level?

Some of the participants also highlighted problems and issues as well as the strengths in their projects and the techniques they use to overcome different types of issues they face in Monitoring and Evaluating.

The participants found the session to be very beneficial and there was excellent feedback on the information being shared. Mr. Jose Roi Avena, M&E Specialist for Rural Micro Enterprise Promotion Programme in the Philippines said that the session helped him in a way that it added to his confidence that difficulties may abound in terms of M&E for projects but the confidence is to see that he is not alone when it comes to these projects. There are other people that he could depend on or maybe ask for help from, to be able to help him surmount these difficulties.

Challenges in Value Chains

This afternoon's peer assist on value chains session gathered about 35 people in total. Three "peer assitees" shared their challenges with us, one from China, one from Vietnam and the third from the Maldives.

Azma Ahmed Didi of the Ministry of Fisheries, Agriculture and Marine Resources of the Maldives introduced challenges related to the Fisheries and Agriculture Diversification Project (FADIP). Those challenges include linking small farmers to big buyers, basically organizing the small farmers and fishermen, increasing their bargaining power, have better quality control and get the private sector interested.

Here are the suggestions provided by the participants:

• use the culture barrier as an advantage, an opportunity in collective marketing
• find advantages of buying directly products from Maldives for the resorts buyers
• bring project design limitations to IFAD's attention - start small
• focus on fisheries that already exist, products that are developed
• learn from existing products (like watermelons and papayas) that worked out - documenting
• promote technology to increase production
• contract farming with the"private sector"
• look at the competitive advantage of the identified products
• tap existing companies look for consolidators to provide management services, who should be local
• ensure quality/quantity
  

Tran Thi Vien, Project Director for the Programme for Improving Market Participation of the Poor in Tra Vinh, presented a challenge related to how to promote the participation of the poor in pro-poor value links.

Participants contributed the following:

• don't introduce new products, farmers are not happy, help them choose VLs/products by themselves
• project should help farmers find buyers (specific enterprises)
• buyers should be provided with capacity building training
• learn from other projects who have been doing well in this area
• engage the private sector to come to the farmers directly
• the role of the government should be considered - need to improve the legal framework
  

Lastly, from the MRDP project in China, Mr. Zhang Mengtang's challenge related to an organic farming value chain. Specifically, his challenge relates to the design of the project and the difficulty in its modular approach. He faces challenges in all aspects, from engaging farmers to organic farming, to promoting organic farming and influencing people to buy organic and bring to value chain.

Some of the suggestions he received include:

• focus on market-driven products
• use a market path approach
• start small and expand
• create market-demand advocacy
• focus on push and pull (government to farmers, farmers to government)
• develop incentives for farmers to grow organic products
• explore other organic inputs or methodologies that can increase production (not related to marketing)
• link with those who have the market -> export
• marketing done by the companies
• aggregate the volume of production - to lessen costs - to increase margin
  

Successful Results Achieved in Community-based Development

Community-based development has become an innovative approach in IFAD funded programs. In some cases, the approach has maximized the benefits that programs expect to bring to target groups.

Three success stories from IFAD funded programs in Nepal, Pakistan and India highlight why a community-based development approach is useful. The most outstanding reason is that the approach is demand-driven. That means the community participates in making decisions on what they need and where the programs can help. The approach is also very open as it allows plans to be revised in accordance with villagers’ needs. Moreover, demand-driven development helps to mobilize and link different resources and contributions from donors, the Government and the community.

The success story in India is the Songkal Pool Fish Sanctuary on the Simsang River at Rombagre Village. Though Songkal Pool was one of the famous spots for community fishing for over 30 years, it was selected to be the fish breeding pool. The decision badly influenced those who made their living by fishing. The program had made effort to engage the community to maintain this innovation. After 8 years, the villagers finally saw how good the innovation was – the fish population blooming, the increase of income that they got from selling big fish, and the development of eco-tourism as well. The innovation has been replicated in many project villages.

Mr. Abdul Karim shares his lesson learnt from how to involve women in decision making in mountainous area in Pakistan where most villagers are Muslim. The project design required high ratio of women participation in the implementation of project activities. This was very challenging for the project as the Muslim women are not allowed to socialize much - even when outsiders were not welcomed in this area. The decision to involve women led to the formation of women groups with 10 to 25 members in each. Groups held meetings on a monthly basis to discuss their demands and create "demand lists" which were sent to the project. Project funding was then allocated to groups and used in the most effective way.

The story shared by Mr. Raj Babu Shrestha is about the participatory planning process. Many different tools were used to capture the needs from the community level. In other words, the planning process allowed the villagers decide what they wanted to produce and how much capital was needed. The project supported their efforts by standing beside them to establish common interest groups, provide micro-finance and mobilize outside resources and contributions.

Hard Talk on Value Chains

"It's easy to grow tomatoes, it's more difficult to get them to market," says Rolf Schinkel, Inclusive Agribusiness Advisor for the SNV Netherlands Development Organization. "We have to ask ourselves, why isn't this market working for small producers?"

The value chain is a mechanism that links producers, buyers and sellers, ultimately delivering a higher value and targeted product to the consumer. To use tomatoes as an example, the value chain might be to teach farmers to grow organic tomatoes, set up a canning factory, build a few roads, create a 'chic' brand and export the high-priced canned tomatoes to a supermarket chain in another country.

David Shearer, Research Program Manager, Australian Centre for International Agricultural Research (ACIAR) says, " 'value chain' is a trendy term that we are throwing around too much, it is basically the intersection of a consumer demand driven approach, global market demand and the socio-economic constraints of the producer."

To put the value chain approach into practice, agricultural development projects are working more and more to link small producers with the private sector in contractual agreements. "There is no other party that knows the market better than the private sector," says Rolf. He goes on to explain that this is often the most sustainable way to invest. "You can't constantly pump money into parallel structures. Once the tap is turned off, the parallel structure disappears," referring to the end of a project if private partnerships are not in place. "Fairtrade risks becoming one of these parallel structures."

"When you have to work with people you don't like working with, but you have to, that can get nasty," says Frank Hartwich, Industrial Development Officer, United Nations Industrial Development Organization. He goes on to specify that he is talking about "some filthy rich international global players."

During a chat show called "Hard talk on value chains", day two of the IFAD Asia and Pacific annual performance review event, the room heated up as panelists David, Rolf and Frank (from left) did not always agree to each others points of view. Host Ron Hartman (far right), Country Programme Manager, Nepal and the Pacific, tried to keep it light.

"It is important for the company itself to invest in the value chain," says Rolf, using the example of Mars Incorporated, the chocolate, confectionary and beverage conglomerate. Mars has invested a large amount of money in cocoa research and are 'committed to using sustainably grown cocoa' in Indonesia. The value chain concept is ultimately to build capacity in local economies, not to focus on any particular industry. "The idea is to make the chain work, not to support a particular company," Rolf adds.

Roy Ayariga, Coordinator, Northern Rural Growth Programme, Ghana, talks about his experience applying the value chain approach. "We start with the market, the market will dictate the quality and items in demand," though he goes on to explain risks, "world market prices can distort everything. If local prices are high, companies start importing and local producers are left stranded." This is why the value chain needs to be formalized with contractual arrangements between producers and the private sector.

"Farmers can get cheated on the markets unless you help them to organize for themselves," concludes Thomas Elhaut, Director, Asia and Pacific, IFAD.

Scales Fall on Scaling Up

Scales fell from the eyes of project directors, IFAD staff, and development partners listening in as Yasir Asfaq, Sheik Mohsin, Lamkhosei Baite and Nigel Brett examined their experiences in scaling-up investements to reduce rural poverty.

Participants at the Annual Performance Review of the IFAD Asia and the Pacific Division meeting today in Nanning considered cases of when scaling up succeeds, when it fails and how to know when to even try it.

But what does scaling up mean anyway? Well, it can mean many things, according to the big fish swimming in the waters of development jargon in our knowledge sharing fish bowl session. If you are upscaling a project you might simply increase the size of the project, going say from coverage of a single district to a province, or from provincial to nationwide coverage.

If you are upscaling a project you might expand horizontally going, say, from one province to ten.

Or, you might even upscale by digging down working more intensely or deeper in the same area. This was called deepening, otherwise referred to as saturation.

Whether you upscale by going vertical, horizontal or deeper, it seems that several factors need to come into consideration. One is convincing evidence. Once again, M&E plays an important role. Discussants came back more than once to the fact that people who are seeking to scale up would be well advised to arm themselves with evidence-based proof that what they have to recommend really works.

Having friends in high places helps too. Taking responsible government officials on field trips to look, see and hear for themselves was one recommended way of winning their support. Appealing to local politicians by demonstrating to them how well your investments meet the needs of their constituents was another. Giving credit to political leaders for successful approaches tried on their watch was also considered a winning approach to finding and keeping a champion to support up-scaling.

In any case, most seemed to agree, the process takes time and even knowing whether it is appropriate to upscale a specific type of investment is likely to take at least 6-10 years.

An interesting point from NERCORP was that insufficient project funds led to up-scaling of their investments. The project was able to expand outreach and sustainability as villages increasingly agreed to contribute significant amounts of resources to infrastructure and other investments they needed. The project became a catalyst more than anything.

Impartial independent evaluation of an investment to be up-scaled proved to be very useful in convincing donors and government when one project wanted to scale up. But in another, when an innovation or investment made sense, it was up-scaled without special support financing. For example, just loosening up policies in Bangladesh resulted in widespread adoption of shallow tube wells improving water supply at village level across the country.

These and other tips on upscaling seemed to encourage listeners at the fish bowl. But cautionary tales were also shared. Seemingly successful donor approaches like the IFAD P4K model in Indonesia can go wrong when key qualitative steps – like the grassroots level institution building - are left out of the equation. Exporting what is successful from one country to another is another common mistake. Enthusiasm for the Aga Khan Rural Support Programme model in Pakistan prompted some to upscale, only to fail, elsewhere.

APR Session: Improving Financial Management

Fourteen participants attended this mini-workshop session led by Mr. Shankar Kutty, IFAD. Participants included one CPM (Ms. Atsuko Toda), one CPO (Seth, Cambodia). The remaining were project staff. The mini-workshop was divided into two parts: (1) Improving financial management; and, (2) Coping with procurement challenges. Participants from four tables were brought into table to ensure high level of interaction and discussion. Atsuko Toda facilitated the discussion and also worked as a note-taker for the group.

Part I: Improving financial management
The presentation and the discussion revolved around the four main areas: AWPB credibility, predictability and control; comprehensiveness and transparency in procurement; adherence to provisions of financing agreement, guidelines and policies of IFAD; accounting recording and reporting and scrutiny; and, external control.

While participants were expressing their views on any specific issues, the influence of their country rules and regulations was very visible. The discussion was centered on the following questions:

AWPB: Is the AWPB realistic, and implemented as intended? Are the control and stewardship exercised in the use of public/project funds?

Procurement: Do the PIM and Procurement Guidelines provide adequate guidance to all implementing partners clarifying the roles of each actor? Is there effective monitoring of the contract/agreements and the implementation of the contract/agreements. How are these partnerships managed? Does the Project have adequate mechanisms to assess risks?

Financing Agreement, Guidelines and Policies of IFAD: Do Project staff and implementing partners understand the provision of the Financing Agreements, Subsidiary Agreement, Guidelines and Policies of the IFAD? How the Project ensures effective compliances? Are there any grey areas? If yes, what are the mechanisms in place to address?

Accounting, Recording and Reporting: Are adequate records and information produced, maintained and disseminated to facilitate decision-making, control, management and reporting? What type of information is helpful for the management for decision-making? What type of action is required to update and establish controls with the information?

External Scrutiny and Audit: Does the Project Audits adequately cover relevant area as outlined in the scope of work? Should management audit be started in IFAD funded projects? Should auditor scope of work be tailored to specifically address relevant areas of concerns?

Part II: Coping with procurement challenges

The following basic procurement cycle was presented and discussed in the group.

• Originating a purchase
• Selecting a supplier
• Ordering, Receiving and accepting goods and services
• Receiving the invoice and making payment
• Post Contract Control

A discussion on Risk Management concluded that there exist three types of risks under each project. They include:

1. Strategic Risk – long-term adverse impacts from poor decision-making or poor implementation.
2. Programme Risk – failure to comply with procurement legislation, or internal procedures (the procurement code of practice or contract procedure rules) or the lack of documentation to prove compliance (i.e. a clear audit trail).
3. Project or Operational Risk – poor contract management, inadequate terms and conditions, failure to deliver services effectively & on time, malfunctioning equipment, hazards to service users, the general public or staff, or damage to property.

In the Lion’s Mouth

Thomas Elhaut, Director, does not mince words when talking about 'scaling up' investment in rural development at the IFAD Asia-Pacific annual performance review event in Nanning, China. "I think that we need to believe in what we do and have the courage to speak about it."

Scaling up a project can mean a variety of things with an even larger variety of results. It can mean injecting an innovative development project with more money to reach a larger basin of participants. It can mean widening the geographical reach of the project or even using it as a model to be replicated in another country. It can also mean designing a second phase of the project that includes high profile investors from other development funds and from the private sector.

"One has to accept that things will take time," says Nigel Brett, Country Portfolio Manager for Bangladesh. "Not all innovations succeed, and not all innovations are 'upscaled'. Maybe after 5 years you realize that it is a 'boutique project' and it is not practical to upscale. One has to be aware when something is not working, it is important to have that learning approach."

Some IFAD-funded projects that were immensely successful in the first phase turned out to be less than successful when taken out of context. It is important to keep in mind cultural differences even within a country's borders.

"In the design phase, a project has to be matched to the local culture and tradition," says Qaim Shah, Country Programme Officer for Pakistan.

Also, social capital can be the driving force behind a project and this may get lost when a project is expanded and some of the original players are no longer involved.

None advocate for acting recklessly. "Keep it small, go undetected, test it out and when it proves successful, use the results to influence policy," says Thomas Elhaut.

Just in.... on Direct Supervision from Nigel Brett

Nigel Brett, CPM, and sometime social reporter, just submitted the following record from a session he attended at the APR...

A speed sharing on direct supervision took place in the Rome Hall at APR event in Nanning from 14.00-15.30 on 1 November. The event was attended by Nigel Brett (CPM Bangladesh), Qaim Shah (CPO Pakistan); Mattia Prayer-Galletti (CPM India), Yasir Ashfaq (MIOP and PRISM Pakistan); Mushtaq Hussain Aura (Programme Director, AJKCDP Pakistan), Muhammad Hussain Bhatti (FAO UTF AJKCDP Pakistan), Nguyen Thanh Tung (CPO Viet Nam), Anura Herath (CPO, Sri Lanka), Jhao Dongqing (Deputy Director, Gansu, China), Feng YaoBin (Deputy Director, Shanxi, China), Duan Qibin (Director, Gansu, China), Li Bincheng (Director, Inner Mongolia, China), Arcie A Teng (Project Coordinator, Philippines), Sozig Yue Jia (Guangxi, China), Mohammed Tounessi (CPM IFAD), Zhang Meng Tang (China).

The following best practices were shared with respect to supervision and implementation support:

• Agreeing the text of the Aide Memo with the PMU before submitting it to Govt for the wrap-up meeting, ensuring consensus and ownership of recommendations;
• Frequent follow-up of supervision recommendations by IFAD and in particular by the CPO during the year;
• Ensuring supervision is a “joint” exercise including Govt, IFAD, local Govt, NGOs, and other project stakeholders (“joint review”);
• Ensuring a flexible interpretation of the project design as described in the appraisal report;
• Supervision missions should be efficient and make decisions quickly;
• Ensuring project supervision mission members have good understanding of the country and the project in question;
• Reducing inefficiency by undertaking joint donor supervision missions in situations where there are multiple donor funders;
• IFAD/supervision missions should ensure quick validation and approval of the AWPB/procurement plan so that implementation can happen without delays;
• IFAD/supervision missions should make sure that the AWPB is realistic;
• Direct supervision has enabled direct access to IFAD, timely capacity building of key PMU staff when needed, quick resolution of implementation problems.
• CPOs have enabled good communication and sharing of information between projects in a country on key implementation issues;
• Ensuring regular and continuous support by a team of expert IFAD consultants during implementation (particularly in areas such as M&E and financial mgt);
• Holding stakeholder workshops before the finalization of the Aide Memo so that diverse views can be adequately taken into account;
• Ensuring project designs are able to evolve to cope with rapidly changing development contexts (in particular in rapidly growing economies such as Viet Nam;
• Ensuring that projects have efficient M&E systems that generate powerful decision making information that is useful for supervision missions;
• Ensure that the list of recommendations is focused and short;
• Holding a higher level portfolio review meeting with central Govt once every six months to resolve higher level policy issues that effect project implementation;
• Ensuring that missions maintain a low profile during field visits so that they provide a conducive environment for local communities to open up;
• Ensure that financial management training for the PMU is provided by IFAD as early as possible in the start-up of a project.

Sharing Success in Knowledge Management

Flying KLM in Philippines, Biking in China & Catching the Auto Rickshaw in India: Sharing Success in Knowledge Management

IFAD country programmes are taking strides in Knowledge management and three stories were shared by Yolando Arban of Philippines, Su Juan of China and Ankita Handoo of India. They give us a sneak peek into how knowledge management is changing project implementation and how this change came about.

The Knowledge and Learning Market (KLM) has now become an annual event in Philippines, where over a 1000 people gathered for the 4^th KLM this year to learn and share in the market place. Yolando has been the chief pilot of this, with a network of co-pilots ensuring take off! The event is the end result of an ongoing focus on knowledge exchange.

Projects and rural communities demonstrated their know-how, showcased their products. While a simultaneous policy and investment forum brought together researchers; practitioners and policy makers to discuss relevant concerns which can enhance poverty alleviation efforts. Now the KLM has become integrated within the government with the NEDA (co-ordinating agency) taking the lead which is linked to the Medium-term Development plan. This has been possible due to the continuous support and planning of a network of people working within the IFAD family, both active and closed projects. A Technical working group coordinates the organization of this event. While communities market their products and attract the public within their stalls, Champions have been a 'driving force' in the promotion of the event.

In China, changes have been slower but significant on the Knowledge management front according to Su Juan, who narrated how getting round tables in the spirit of participation was looked upon as an invitation for dinner rather than a serious workshop setting. She shared the small things which make implementing knowledge management training with senior staff a "unique" experience. Bosses were not used to sitting around small tables and posting material on flipcharts around the room. At first there was resistant to this type of shift in methods of sharing information and knowledge. However, the China country office then demonstrated the end results and benefits that accrue: when you manage knowledge better, you manage projects better. Senior staff have begun to realize that actually they discuss relevant issues and that they have 'wisdom' to share and knowledge is not something only discussed in the lecture halls of universities but resides in the everyday implementation context that project staff work in.

Ankita understood Su's context and struggles for change as she herself faced similar challenges when she was hired. It was a challenge to overcome mind sets and bureaucratic processes, first two years there were no significant results to report. After having gained training in Knowledge sharing tools, she began to introduce this in the India Portfolio Reviews. The greatest opportunity for change came when Ankita participated in the Mid-term review missions of ongoing projects. She was able to suggest specific changes in budget allocations since many projects were sharing knowledge informally but they did not have any budget for KM. She advised on the number and type of activities projects could consider which first needs to be based on their specific knowledge needs. Three years on, with formal budgetary allocations, specific Terms of reference for hiring qualified KM staff, she now looks forward to the continued growth of knowledge sharing and exchange amongst IFAD projects in a more systematic way.

Key recommendations coming from this sharing session with participants focused on the relevance and need for knowledge sharing at ALL levels. From farmers exchanging her expertise that result in food on our plate, to government cross-ministry and cross donor sharing as well as sharing of knowledge between closed IFAD projects with new and ongoing IFAD projects are required to help determine with what ease the food we eat comes to us, whether it is equitably distributed and whether the hands that work to feed the world are strong and able and no longer impoverished.

Welcome to China

I found myself on a Sunday afternoon taking pictures of registered participants in the Wharton International Hotel lobby, Nanning, China. These project managers and development experts came from all over Asia and beyond to attend the IFAD Asia-Pacific annual 'performance enhancement jamboree' and many had just stepped off an airplane. They wondered if they couldn't first go up to their rooms and freshen up.

Some were worried about taking their eyes off their luggage to pose for the photograph. "Are you happy to be here?" I frequently asked my subjects and received the smile that I was looking for.

The participants of the event take their jobs seriously and rightfully so. They are gathering for the next three days to talk about project achievements, challenges and performance in the region over the last performance year. The division can boast a record disbursement amount of USD 177 million according to it's 2009/2010 portfolio review. That's big bucks for agricultural development in Asia and the Pacific.

We are not talking about women and men that sit behind a desk all day. The participants are our modern day development champions. They manage IFAD funded projects in the field. They work with farmers, trainers, agricultural experts and local governments to name a few. These are the people that get their hands dirty, who work in challenging conditions and who believe in what they do. Their knowledge and experience is precious and they want to share it with each other.

Asia and Pacific Division Director, Thomas Elhaut, welcomed participants and told them "the event has moved from a portfolio performance workshop to a knowledge sharing event. Our annual event has become your event. You have taken charge, and we are happy facilitators".

Going back through the photographs I took, I can see the passion and determination in the participant's faces. The event is about them and I can't wait to hear more about what they have to share.

Exciting news from the APR!

Tonight the IFAD Asia-Pacific Annual Performance Review (APR) got underway in Nanning, China with an official opening. Asia and Pacific Division Director Thomas Elhaut broke exciting news: "the performance of the portfolio has improved greatly" ("yea!" he added, enthusiastically).

He stressed how the APR has evolved and grown not only in numbers but in content and structure. He said, "you told us that the APR was too much focused on IFAD concerns and not enough on thematic issues, and we listened". This APR will be giving people more time to share on substantive issues, through a variety of formats such as chat show, peer assist, fishbowl, speed sharing, mini-workshops and one-on-one sessions. "Of course", Thomas added, "also through corridor chats and coffee breaks".

Have a great APR everyone. We are looking forward to the next three days of discussions and learning.