TRANSFORMING

RURAL INSTITUTIONS
in Order to Reach the Millennium
Development Goals

D I S C U S S I O N P A P E R
IFAD 1978–2003
Origins
The agreement to establish IFAD in 1976
resulted from the 1974 World Food
Conference organized by the international
community in response to the persistence of
widespread hunger and malnutrition in the
world. The conference recognized that hunger
and food insecurity should not be associated
solely with shortfalls in food production and
supply at national or international levels.
Rather, they should be understood as products
of deep-seated structural problems associated
with underdevelopment and poverty, espe-
cially as these affect rural poor people. IFAD
approved its first loan for a project in 1978.
Mandate
Thus the Fund’s mandate – to combat hunger
and rural poverty in developing countries, espe-
cially low-income, food-deficit countries, and to
improve the livelihoods of rural poor people on a
sustainable basis – defines hunger not just as a
food production and supply issue, but also as a
livelihood issue.
Emergence of a Specific Role
In responding to this mandate, IFAD has real-
ized that rural poor people can enhance their
food security and increase their incomes only
if project designs and activities are built upon
their production systems and livelihood strate-
gies, and resources allocated accordingly. To be
effective, therefore, investments to reduce
HISTORICAL AREAS OF INTERVENTION
■ access to productive resources (especially land and water)
■ sustainable agricultural production, including fisheries and livestock
■ water management and irrigation (mainly small-scale)
■ rural financial services, including microfinance
■ rural microenterprises
■ storage/processing of agricultural produce
■ marketing and access to markets
■ research/extension/training
■ small-scale rural infrastructure (feeder roads, etc.)
■ capacity-building for small producer groups and organizations
poverty must be linked to a proper under-
standing of poverty processes and how they
affect different groups of poor people, and
women as compared with men.
To this end, IFAD has increasingly collabo-
rated with local stakeholders in developing its
operations. It has designed and implemented
projects and programmes in a wide range of
natural, socio-economic and cultural environ-
ments, in remote regions and with the poorest
and most marginalized sectors of rural popula-
tions. Through its experience, the Fund has
acquired a wealth of knowledge of the
processes that contribute to the generation and
perpetuation of poverty. It has also gained
valuable insights about what works or does not
work to foster the conditions in which the
rural poor can enhance their productivity, out-
put and incomes.
IFAD’s Contribution
IFAD’s contribution to rural poverty reduction
has long been based on its recognition that the
economic empowerment of rural poor people
will not happen simply as a result of the
‘trickle-down’ effect of macro or sectoral
investments. Action must address the obstacles
faced by rural poor men and women and facil-
itate their opportunities, in their different and
specific circumstances and activities. In addi-
tion, since in many low-income countries the
majority of the poor and extremely poor (those
with incomes below one dollar a day) live in
VOLUME OF OPERATIONS
■ Number of projects: 628 in 115 countries and territories
■ Total IFAD investment: USD 7.7 billion
■ Domestic resources mobilized: USD 7.9 billion
■ Cofinancing mobilized: USD 6.6 billion
■ Total value of projects: USD 22.2 billion
■ Beneficiaries: an estimated 250 million
rural areas, helping poor producers to increase
their output is often the most effective, and in
some cases the only, way to bring about more
rapid overall growth. IFAD has therefore advo-
cated for broad-based economic growth, built
upon an explicit focus on the initiative and
capacity of poor rural producers. Such an
approach acknowledges the consumption
needs of the poor, but it also emphasizes to
their social capital and their economic poten-
tial as producers and working people. This, in
turn, has necessitated an in-depth understand-
ing of the complexities of rural livelihoods and
the different roles of women and men within
these livelihoods. It has also required careful
targeting of interventions at people and their
activities – as farmers, agricultural labourers,
fisherfolk, hunters and gatherers, pastoralists
and small rural entrepreneurs.
IFAD’s experience over the last 25 years
unequivocally shows that rural poor people are
fully capable both of integrating themselves
into the mainstream of social and economic
development, and of actively contributing to
improved economic performance at the
national level – provided that the causes of
their poverty are understood and conditions
are created that are conducive to their efforts.
No amount of national or international assis-
tance will radically improve the rural situation
unless such transformation is based on the
aspirations, assets and activities of rural people
– and unless poor people own the change
process. Major efforts need to be made to
remove the critical material, institutional and
policy obstacles that prevent the rural poor
from seizing opportunities for improved liveli-
hoods. Development cannot be done for
them. What can be done is to create the con-
ditions that empower the poor to become
agents of change.
IFAD’s New Strategic Directions
The Millennium Development Goals repre-
sent a commitment by the entire international
community to take all necessary action, first
and foremost, to reduce by half the proportion
of people who live in extreme poverty by 2015.
The Strategic Framework for IFAD 2002-2006
is the Fund’s response – a statement both of
the crucial issues to be addressed and of the
areas that IFAD will focus on as part of that
broader international effort.
The strategic framework draws on the Fund’s
years of experience and reflection, and recasts
IFAD’s mission in a very simple statement:
enabling the rural poor to overcome their poverty.
Concretely, this mission translates into three
strategic objectives upon which IFAD is con-
centrating its investments, research and knowl-
edge management efforts, policy dialogue and
advocacy:
• strengthening the capacity of the rural poor
and their organizations;
• improving equitable access to productive
natural resources and technology; and
• increasing access to financial assets and markets.
The strategic framework also recognizes that
IFAD must expand its engagement beyond the
immediate impact of ‘its’ projects and pro-
grammes to influence the direction and con-
tent of national and international poverty-
reduction processes. Thus it emphasizes build-
ing complementary partnerships and broad
alliances to maximize IFAD’s contribution to
the international community’s larger poverty-
reduction effort.
TRANSFORMING
RURAL INSTITUTIONS
in Order to Reach the Millennium
Development Goals

Roundtable Discussion Paper for the

Twenty-Fifth Anniversary Session of IFAD’s Governing Council

February 2003
 TABLE OF CONTENTS

3 RURAL POVERTY AND INSTITUTIONS

5 THE STRATEGIC FRAMEWORK FOR IFAD 2002-2006

6 STRENGTHENING THE CAPACITY OF THE RURAL POOR

AND THEIR ORGANIZATIONS
Organizations of the Poor
Government

10 IMPROVING EQUITABLE ACCESS TO PRODUCTIVE NATURAL

RESOURCES AND TECHNOLOGY
Access to Land
Access to Water
Access to Technology

16 INCREASING ACCESS TO FINANCIAL SERVICES AND MARKETS

Access to Financial Services

20 CONCLUSION

23 Endnotes

25 References
RURAL POVERTY AND INSTITUTIONS

Poverty is a condition of hunger, low income and lack of services. It is also a condi-
tion of vulnerability, exclusion and powerlessness – the erosion of people’s capability
to have their voices heard. Voicelessness is particularly acute for the rural poor, who
account for a majority, some three quarters, of the 1.2 billion people living on less
than one dollar per day. Among the poor, women are particularly disadvantaged,
having significantly less access than men do to knowledge, assets and services. These
inequalities affect the ability of women not only in their social role, but also in their
economic role, which is crucial in the rural economy. More generally, the rural poor,
and women in particular, rarely control the conditions that determine their liveli-
hoods. For many rural people – smallholders, landless wage labourers and share-
croppers, small entrepreneurs, nomadic pastoralists, artisanal fishermen and women,
indigenous peoples, ethnic minorities and members of scheduled castes – powerless-
ness is experienced as an inability to influence decisions affecting their lives, negoti-
ate better terms of trade, and make governmental and non-governmental organiza-
tions (NGOs) accountable to them. It is intimately linked to weak local governance.
Powerlessness is an effect of poverty. It is also one of its most important causes.
Global interdependence, decentralization and the rapid development of civil-soci-
ety organizations present opportunities, provided the rural poor can influence the
institutions, policies and decisions that affect their lives and that determine the ben-
efits they draw from economic activity. Modifying such unequal power relations
would contribute significantly to reducing poverty. And by enabling poor produc-
ers, especially in rural areas, to develop their full potential, they could become the
driving force of development. Poverty reduction is about enabling poor women and
men to transform their lives and livelihoods, and supporting governments and civil
society in creating and maintaining conditions that ensure that the rural poor are not
left behind. The challenge is to enable the rural poor to overcome the material, insti-
tutional and policy obstacles that prevent them from seizing opportunities.
Over the last two decades, many developing countries have introduced major
changes in their economic policy frameworks. Central economic planning has been
largely abandoned and commodity boards and other government price and produc-
tion controls have been dismantled. Economic services previously provided by state
agencies have been reduced or even halted. Increasingly production, services and
investment are being driven by market forces. These changes have opened up enor-
mous opportunities for enhancing efficiency and raising the level of productivity and
incomes. At the same time, weak markets are not necessarily supportive of poverty
reduction. Smallholder farmers and other poor producers are numerous and
scattered, each with a low level of production. Moreover, rural roads and other
infrastructure are usually inadequate, sharply increasing transaction costs for the
rural poor. Poor rural producers often do not have up-to-date and reliable market

3
 information. They are thus at serious disadvantage, both in selling their produce and
purchasing the goods and services they need, when they deal with traders and other
market intermediaries who are few in number and with far greater economic power.
There is therefore a serious risk that unless market and other institutions are effec-
tively developed, and made more responsive to the needs of poor rural producers and
consumers, the poor will draw little benefit from the reforms and could even be fur-
ther impoverished.
Developing such responsive institutions, those located in rural areas and those that affect
the rural poor, is a crucial question for economic policy-making as governments try to
accelerate rural development and poverty reduction in economies that are increasingly
market-based.
Institutions in this context mean economic, social and political organizations,
together with the rules that govern their interaction.1 The institutional framework
mediates the access of the poor to assets, financial and other services, technologies
and markets, and it determines the extent to which poor groups benefit from the pro-
duction generated by these assets and services. Public institutions and their rules of
the game also determine resource allocation and impose regulatory frameworks that
have great impact on the lives of the poor.
The development of organizations that empower the poor, and the rules and poli-
cies that secure sustainable access for the poor to assets such as land and water, to
technology, finance and other services and to efficient markets, and allow the poor to
participate in decision-making is central to more rapid rural development and
poverty reduction. Subsequent sections of this paper discuss the major lessons that
have been learned through IFAD’s own experience over the last quarter of century on
institutional transformation in these areas.

4
THE STRATEGIC FRAMEWORK
FOR IFAD 2002–20062

At the Millennium Summit (2000), governments committed themselves to reducing

the proportion of people living in extreme poverty by half, the first of the Millennium
Development Goals (MDGs). IFAD’s strategic framework defines how the Fund will
contribute to achieving the MDGs by 2015, by reducing rural poverty, as defined
above.
In order to help reduce extreme poverty by half, IFAD works towards enabling the
rural poor to overcome their poverty – as perceived by the poor themselves. It concen-
trates its country programmes, policy dialogue and advocacy on the attainment of three
strategic objectives: strengthening the capacity of the rural poor and their organizations;
improving equitable access to productive natural resources and technology; and increasing
access to financial services and markets. Attention to the differing opportunities and con-
straints of women and men, and to sources of vulnerability and ways of increasing
resilience are overarching concerns. Furthermore, from the perspective of poverty as
powerlessness, IFAD’s corollary goal is to enable the rural poor and their organizations to
influence policies of relevance to rural poverty reduction. As progress is made, IFAD’s
advocacy work will become less a matter of direct dialogue between IFAD and gov-
ernments than an outcome of its support to the capacity-building of poor people’s
organizations. However, IFAD has a role to play in serving as an advocate for the rural
poor in national policy forums until such time as their capacity is sufficiently increased
to be able to promote their own interests.

5
 STRENGTHENING THE CAPACITY OF THE RURAL POOR
AND THEIR ORGANIZATIONS

Enabling the rural poor and their organizations to influence institutions (including
rules, laws, regulations) and policies of relevance to rural poverty reduction requires
strengthening the capacity of the rural poor and their organizations. Concretely this
implies institutional transformation: developing and strengthening the organizations
of the poor to confront the issues they define as critical; increasing access to knowl-
edge so that poor people can grasp opportunities and overcome obstacles; expanding
the influence that the poor exert over public policy and institutions, including local
and national governments; and enhancing their bargaining power in the marketplace.

ORGANIZATIONS OF THE POOR

Organized groups and communities are more likely to have their voices heard and
their demands met. When membership-based groups federate at higher levels, they
can gain voice and representation in policy dialogue and decisions that affect their
well-being. Therefore, the poor need, first and foremost, to be provided the chance
to build individual and collective capabilities to gain access to economic opportuni-
ties and basic social services and infrastructure. Enhancing the human and social cap-
ital base of the rural poor will enable them to interact with those wielding power on
a more equitable and informed basis, and thus negotiate more effectively on issues
that affect their well-being.
Types of organizations. IFAD works with many different types of poor people’s
organizations (e.g. traditional village and sub-village work groups, small self-help
groups, savings and credit associations, water users’ associations and farmer cooper-
atives). Organizations that influence policies, and that secure access to assets and
services (land, water, technology, financial services) for the rural poor as
producers/users, are discussed in more detail below. IFAD also supports organizations
that give rural poor people a voice as citizens. It develops human and social capital at
the local level to ensure active participation of the rural poor in local decision-mak-
ing, the demand side of inclusive local governance.
Organizational transformation challenges. IFAD’s experience shows that organi-
zational capacity-building is time-consuming, but critical for effective poverty reduc-
tion. Also, as illustrated by IFAD’s experience in Viet Nam (box), because women are
dynamic organizers and participants in grass-roots organizations and are effective at
initiating and sustaining local self-help initiatives, they must be at the centre of the
agenda transforming organizations, rules and policies. To this end, the participation
of poor women, together with the other stakeholders, in organizations that aim at
policy planning, implementation and monitoring of activities needs to be maxi-
mized. This will ensure that policy design and implementation decisions are based
on the needs and perceptions of the poor themselves. It will also enable the poor to
develop the tools they need to bring about change and to sustain that change.

6
 ■ Lessons Learned from IFAD’s Country Programme with Viet Nam

Poor people in rural areas cannot express their views or get involved in decision-making processes. Real decentralization
cannot be achieved without participation from the bottom up. Self-management boards, set up in communes to pro-
mote sustainable conservation of forests, are ways to institutionalize bottom-up participation. Women’s representation
ranges from a mere 18% in Ha Giang to 26% in Quang Binh. Women must be represented at all levels in decision-making
positions in rural development public institutions. Giving women a voice at village level, for example in participatory
rural appraisals, savings and credit groups, and village development boards, has proved to be an important first step.
Further strategies to encourage women to be more vocal might include positive discrimination in community-based
organizations and women-only self-help groups.

Source: IFAD 2002b

GOVERNMENT 3
To match the emergence of effective demand for inclusive rural governance, the gov-
ernment also requires transformation for rural inclusiveness. The goal should be to
strengthen the capacity of governments (national and local) to be more effective in
responding to the needs of the rural poor, as represented by their organizations. This
involves democratization, institutionalization of participation, the development of
processes that increase the accountability and transparency of rural service delivery
within a decentralized decision-making framework. Well-designed and -managed
decentralized systems enhance responsiveness and accountability, and contribute to
poverty reduction.
Investing in the transformation of government systems. Since its creation, IFAD,
working with national partners, has tried to enhance the quality and rural focus of
government, and especially of the organizations involved in development activities,
helping them to enhance structural abilities and skills to support the poor and their
organizations combating rural poverty. Important in this regard is supporting decen-
tralization processes of central bodies involved in rural development processes to a
local level. Decentralization is a ‘process’ of transferring central powers, functions and
fiscal authority4 to public institutions working at the local level. It encompasses:
upgrading administrative capacity; transferring responsibility and power; enhancing
accountability; and retaining economies of scale in certain government functions. As
illustrated by the country programme in Uruguay (box), such IFAD support takes
four mutually reinforcing forms:
(i) strengthening the organizations of the poor and helping them exercise influence
over public organizations, investments and services – both formally (under the
right to consultation/participation) and informally (through increasing signifi-
cance in the general political constituency);
(ii) supporting the central bodies in decentralizing structures, personnel and budg-
ets. Decentralized institutions should have appropriate decision-making power
with respect to rural development policies, investment in services and imple-
mentation of rural development programmes and projects;
(iii) supporting local-level public planning and the development of implementation
capacity; and
(iv) allocating programme resources for creating or strengthening local (usually
district and sub-district) public budgeting and auditing systems for rural devel-
opment activities, with an emphasis on transparency.

7
■ Decentralization in Uruguay

In the IFAD-supported National Smallholder Support Project – Phase II, the Ministry of Agriculture has created an office
for rural development at the central level and secretariats for rural development in those municipal departments where
rural poverty is concentrated. At the secretariats, round tables for rural development are held, and the participation of
the organizations of the rural poor is mandatory. The Ministry retains its role as policy formulator and provider of gen-
eral guidance for development processes. However, these policies, as well as actions for combating poverty, are being
transferred to the local level without abolishing the responsibilities of the ministries. Municipalities have an important
role in matters of social and rural infrastructure. They are only one of the actors in the development process because
smallholder organizations will be the main actors. They ‘control’ or demand services. The private sector also participates
in the round tables for rural development, where the demand for and supply of services meet. The central government
(i.e. the borrower of IFAD funds) and local governmental institutions partially control the supply of services provided to
the private sector.

From its wide range of programmes, IFAD has learned a number of generic insti-
tutional transformation lessons.
Revisiting the role of central government. Experience highlights the importance
of revisiting the role of central institutions in relation to rural development policies,
investment and interventions. Central government institutions play a critical role in
the development and implementation of effective poverty-reduction policies and
investments – not least because so many of the factors that shape the opportunities
of the poor are not determined at the local level. Central bodies are often too far away
from the rural poor and are committed to a variety of sectors of the population – and
have neither a specific mandate for combating rural poverty nor the appropriate tech-
nical level or expertise for delivering corresponding interventions. But experience
suggests that given the political will, central institutions can deal directly with
rural development issues and become closer to the rural poor and more open to their
influence.
Context specificity of transformation. Transferring decision-making powers from
the central to the local authorities can imply a real transformation of the institutional
arrangements that deal with rural development and agriculture. There is no one-fits-
all model for such transformation. The nature of the change depends on the type of
political structure and administrative constitution of the country, and the degree of
political importance that the government attaches to both decentralization and rural
development. The development model also depends on the degree of organization of
the rural poor population and the presence and strength of NGOs and community-
based organizations that work with them. Consequently, change processes should be
flexible, based on client demand and tailor-made to adapt to the context.
Clarifying the role of local government. The role of local governments should be
clarified. They provide a wealth of essential services, including health and education
programmes and infrastructure, and participate in several countries in shaping
national budgets and investment plans. However, local governments have the voca-
tion to represent all citizens and thus cannot single out one population group – e.g.
the rural poor – and develop exclusive programmes and activities for that group
alone, even if it constitutes the majority of the population. As indicated by IFAD’s
experience in Ghana and Guinea, local governments also find it difficult to create
income-generating opportunities. In short, it would be very difficult for local

8
governments to be the main agent of rural development policies and to combat
poverty. Local governments can also be ‘captured’ by local elites, and it is important
to seek appropriate safeguards against this.
The importance of investment in citizens’ capacities. Improved local governance
is critical for better service delivery and greater responsiveness to poor people’s prior-
ity problems. Decentralization and local government reform have so far focused pri-
marily on the supply side of formal systems and not on strengthening the demand
side through actions that enable citizens to effectively utilize the space created by new
rules and regulations. Empowered local governments (with authority and resources)
need to empower local communities through mechanisms that increase citizens’
access to information, enable inclusion and participation, augment accountability of
governments to citizens, and invest in local organizational capacity. In general, there
has been insufficient attention to the relationship between citizens and local govern-
ments, and very few cases of investment in strengthening poor people’s organizations
or other local civil-society intermediaries to enable them to play new roles effectively.
Project interventions are useful processes for improving local governance, because
they can be effective for eliciting local participation, not least because they tend to
bring resources.

9
 IMPROVING EQUITABLE ACCESS TO PRODUCTIVE
NATURAL RESOURCES AND TECHNOLOGY

ACCESS TO LAND5
One of the most important factors leading to entrenched poverty is lack of secure
access to natural resources such as land, forests, other common property resources
and water.
Land plays an indispensable role in agricultural production directly and by provid-
ing collateral for credit markets, accumulating wealth and transferring it across gen-
erations. Land also confers social status and identity. Some countries have a highly
unequal pattern of land ownership. A notable feature of hard-core rural poverty is
landlessness, and according to recent United Nations estimates, women own barely
1% of the world’s land property today. Moreover, the rural poor lack decision-mak-
ing power over land use. Farmers lack the incentive to invest in land management
without secure property rights. Uncertain land tenure and land rights are serious
obstacles to adoption of better technologies, rational land use and land-improving
investments. Increasingly, land rights and tenure systems, water rights and access by
rural communities to forests and other common property resources can generate
social tensions and even conflict. Reducing such tensions and improving planning
for sustainable and equitable resource use are key challenges throughout the devel-
oping world. A more equal distribution of (access to) land can enhance social har-
mony, productivity and poverty reduction.
Ownership of land, access to it, its transfer and its use are governed by the institu-
tional framework, including customary and codified land-use rights, and the power
of vested elites. Inequitable distribution is largely derived from long-standing histor-
ical and cultural practices. Recently land reform has re-emerged as an important issue
in many countries where governments are looking for cost-effective models for deal-
ing with it in ways that do not undermine the security of property rights.
Investing in access to land. IFAD has supported a wide range of land tenure/use-
related programmes, enhancing tenure security, regularizing land ownership, facili-
tating land titling linked to land improvement, and improving access to common
property resources (see box for examples in Bangladesh and Mauritania). IFAD also
sponsored, with the Belgian Survival Fund, the 1995 Conference on Hunger and
Poverty, which resulted in the formation of the Popular Coalition to Eradicate
Hunger and Poverty – the global consortium of governmental, intergovernmental,
civil-society and bilateral organizations that works towards increasing the access of
the rural poor to productive assets, especially land and water and common property
resources, through a wide range of measures complementary to IFAD’s programme
support and that of the Global Mechanism of the United Nations Convention to
Combat Desertification. These IFAD-supported activities have highlighted a num-
ber of institutional transformation challenges.

10
 ■ Examples from IFAD Programmes

Enhancing Access to Common Property Resources in Bangladesh

In the Oxbow Lakes Small-Scale Fishermen Project in Bangladesh, lakes were leased to the poorest people in surround-
ing villages. The project demonstrated that ‘social fencing’ is effective in safeguarding the benefits of investments and
that the sharing of income on the basis of labour contributions can preserve the principle of equity. Investment support
from IFAD allowed formerly landless labourers and poor fishermen to raise their incomes to the level of small farmers
in the community. Smaller fish ponds leased to groups of women increased their income and enhanced their overall sta-
tus within the family and society.

Securing Land Titles in Mauritania

Under the Maghama Improved Flood Recession Farming Project, the possibility of increasing flood recession farmland in
an area dominated by traditional land-use arrangements presented an opportunity for a change of policy, involving devo-
lution of local land tenure arrangements to the village populations concerned. A decree promulgated beneficiary
involvement in resolving land tenure issues. An overall framework agreement and individual arrangements guarantee
secure access for at least 15 years to land upon which improvements are made. Community organizations play a central
role in establishing and enforcing land tenure arrangements. A cooperative grouping of all village organizations has been
created to manage the flood recession scheme.

Context specificity of land reform. The record of classic land reforms has been
poor. It is important to understand the systems of land rights and to identify where
and how these systems have been changing in recent years. Factors such as popula-
tion pressure (Burundi, Rwanda), history (Lesotho, Malawi, South Africa,
Zimbabwe) or topography need to be considered when designing interventions to
improve access to land.
Organizations. Social and economic returns to investment in building the institu-
tional capacities of organizations that manage land under customary tenure are high.
Transforming the rules of access to land resources. Other than politically complex
land redistribution, in the form of negotiated or compulsory land reform, successful
transformation of rules of access to natural resources for the rural poor include:
• providing access of the poor to common-property resources;
• establishing poor families on newly developed and/or government-owned land;
• enhancing tenure security; regularizing land ownership and facilitating land
titling, combined with (various forms of ) land improvement interventions; devel-
opment of computerized land-title records readily accessible to poor farmers;
• promoting active and diverse land markets with measures such as the enforcement
of landholding ceilings; promotion of land reform initiatives whereby large
landowners sell small parcels to qualified beneficiaries;6 introduction of a land tax
to induce land owners to sell or rent out areas of land; measures to ensure the exis-
tence of a diverse set of land rental markets to accommodate a variety of differ-
ent contracts and to improve access to land by the poor; introduction of a land-
titling programme to stimulate the rental market indirectly; lifting of prohibitions
on the subdivision of land; and introduction of measures to reduce the transac-
tions costs of renting and buying land.

11
 Market-assisted access. At the national level,7 the extent of reform varies from
country to country. There is a shift from redistribution of private lands to settlement
schemes, market-assisted reforms and in several transitional economies conversion of
state farms/lands into smallholder farms.
The importance of supportive rural services. Effective agrarian reform includes
improvements in both land tenure and other rural development measures.
Experience shows that access to land must be accompanied by more effective access
to training, finance, technology and markets. Otherwise land reforms are likely to fail
since beneficiaries will not realize productivity gains and either sell the land to meet
household food needs or become indebted for the same reason and eventually lose
their land. It is important to improve farm credit, input supply and marketing, and
to extend services to facilitate the productive use of (re)allocated land. Where gov-
ernments are pursuing market-assisted land reform and there are difficulties in defin-
ing and enforcing property rights on land, credit to poor farmers with group guar-
antee and without collateral has become a regular feature of agrarian reform
programmes. Credit and savings facilities for the landless and tenants are especially
important.

ACCESS TO WATER8
Water is often a serious constraint on agricultural productivity, and access to water
determines the value of the land; they are complementary assets. Also, if property
rights in land are well defined and difficult to change for political reasons, but sub-
surface water rights are less clearly specified, then initiatives in the water market may
be a partial substitute for land reform. Therefore, institutions that increase poor peo-
ple’s control over water-yielding assets9 contribute to sustainable poverty reduction.
Investing in access to water. IFAD has supported a wide range of irrigation and
water development programmes in all the regions where it operates. IFAD has
invested in (public) programmes designed after consultation with, and implemented
by local communities to establish and maintain surface and sub-surface irrigation sys-
tems, and to supply safe drinking water. In many countries, large-scale irrigation
investments have generally underperformed10 and have represented a drain on gov-
ernment capital and recurrent budgets. As donors have progressively withdrawn
funding, many irrigation schemes have been abandoned or radically downsized.11 An
IFAD-sponsored evaluation of experience with small-scale irrigation in sub-Saharan
Africa12 identified a number of lessons related to institutional transformation.
Importance of organizations and participation. A serious shortcoming is the near-
total lack of meaningful farmer participation in perimeter planning, crop and tech-
nology choice, organization of water and pump use, and settling of land tenure dis-
putes. Participation in irrigation projects has often been little more than rhetoric.
Agreement on the concept, meaning and content of a participatory process has gen-
erally been lacking, as have been ways to introduce such a process. Where technol-
ogy choice has been successful, effective technologies proved to be those that improve
existing methods and that remain under the control of the communities or individ-
uals such as flood recession improvement, use and diversion of water from rivers, and
individual low-lift pumping systems. In such cases, innovative technologies were
designed on the basis of in-depth analysis of local practices and an assessment of
farmers’ knowledge and skills. To improve upon these, planners and engineers

12
matched this information with other technical analysis (soil, water, topography,
agronomy) to propose modifications. Institutional mechanisms for mediating con-
flicts among water users are also essential.
The need for organizational capacity-building. The need for long lead times and
the generally slow rates of implementation for irrigation projects should be antici-
pated and recognized in the light of the time required to implement demand-driven
approaches. This allows for training and establishment of viable water users’ groups
and more fully ensures their participation in all implementation activities, while tak-
ing into account the capacity constraints of implementing agencies. Flexibility, in
terms of implementation scope, sequence and arrangements, should be the norm. In
addition, the careful definition of site selection criteria and targeting procedures are
the most suitable defence against discretionary and external political interference in
project interventions. Socio-economic criteria are especially important, and must be
defined in the light of the political context and the existing legal framework (includ-
ing the capacity to enforce it).
Transforming the rules of operation and maintenance. Building infrastructure is
not enough. For effects to be lasting and sustainable, community and group organi-
zation around the water point is critical. This ‘software’ side of infrastructure provi-
sion has too often been ignored, leading to a great waste of resources and a lack of
results. Sustainability of water infrastructure depends largely on people’s motivation
and organizational capacity to provide the necessary operation and maintenance. In
some contexts, appropriate cost-recovery mechanisms can be useful and should be
designed on the basis of the technologies to be adopted (with or without pumps and
equipment), the cropping system (high-value crops or staple crops) to be introduced
and the organizational features of farmers (individual or collective). For instance, in
Ghana under IFAD’s Smallholder Rehabilitation and Development Programme,
maintenance of wells is the responsibility of the water and sanitation committees cre-
ated by the programme in the beneficiary villages. Residents willingly pay user fees
to assure proper maintenance. Participation and self-management, in the context of
water users’ organizations, tend to ensure effective services and efficient operation
and maintenance, and enhance the acceptability of cost-recovery mechanisms, such
as user fees.

ACCESS TO TECHNOLOGY13
Where pressure on land and water is great, natural resource degradation has reached
alarming levels. This is a major problem for the rural poor, who often live in envi-
ronmentally fragile zones. Many poor farmers face a choice between restoring the fer-
tility of their small family plots and common property resources or migrating to the
cities. Appropriate technologies and research to improve farm productivity by boost-
ing returns to land and labour are essential if the former choice is to be a viable
option. As solutions are often context-specific, technologies need to be developed
through appropriate research and validated working together with the rural poor –
something that is still quite rare. Full appreciation needs to be given to the existing
risk-management strategies of small farmers. These often differ for men and women
farmers, requiring gender-differentiated approaches.

13
 Investing in access to technology. To promote access to technology, IFAD sup-
ports technology development and dissemination to smallholder farmers, especially
women farmers, through investment programmes that are increasingly located in
marginal, resource-poor agro-ecologies, in environments for which sustainable agri-
cultural technologies are not easily available. The approach followed is pluralistic,
with different models adjusted to the local institutional framework. IFAD also pro-
vided leadership in establishing the Global Forum on Agricultural Research, which
constitutes a strategic alliance of key stakeholders in global agricultural research:
developing-country national agricultural research systems; universities; NGOs and
farmers’ organizations, bringing in their indigenous knowledge systems; the private
sector; international agricultural research centres; and the donor community. Fund-
supported programmes aim at addressing the technology access problems of poor dis-
advantaged farming communities, in order to reduce poverty, achieve food security,
and conserve and manage biodiversity and natural resources. Moreover, IFAD par-
ticipates in the Consultative Group on International Agricultural Research (CGIAR)
(with the World Bank, the United Nations Development Programme, and the Food
and Agriculture Organization of the United Nations), and provides resources for
research by CGIAR organizations in technologies relevant to smallholder farmers. In
supporting these technology development and dissemination programmes, IFAD has
learned a number of lessons regarding pro-poor organizational and policy transfor-
mation.
Organizational development. Access to technology for the wide diversity of rural
producers is enhanced by the adoption of pluralistic approaches (diversity and choice
of organizations and rules of access). In some cases, publicly sponsored research and
extension (R&E) approaches are being pursued. In other cases, IFAD pursues a mar-
ket approach, promoting the growth of private suppliers of technology services, or
combinations of the two approaches. It is correspondingly useful to explore appro-
priate mixes of public- and private-sector funding of R&E. Organizing local exten-
sion systems for effectiveness in delivering new technologies to poor farmers and in
conveying feedback from farmers on the profitability and environmental sustainabil-
ity of new technologies is suitably complemented by identifying new ways of deliv-
ering extension services, such as farmer field schools and vouchers. Efforts in
strengthening the organizational capacities of the national agricultural research sys-
tems/centres (NARS/Cs) themselves14 and the linkages between CGIAR and
NARS/Cs have high benefits.
Transforming access rules. Successful development and dissemination of technol-
ogy requires the involvement of key stakeholders in developing R&E systems; the
empowerment of rural civil-society entities, farmer associations and related social
organizational structures, and their inclusion in the technology-generation process. It
is also crucial to allocate adequate public investments for agricultural R&E related to
crops and livestock produced or consumed by the poor. Further, it is a challenge to
identify new ways of financing agricultural R&E, including the establishment of
internal markets for R&E, based on customer/contractor relationships, fostering
strategic partnerships with national and international private firms to access modern
technologies. This needs to take into account the fact that the supply response is
inhibited due to the limited purchasing power of poor rural producers (see box, for
Honduras example).

14
 ■ Honduras: Agricultural Development Programme for the Western Region

The western region of Honduras is a depressed area. The rural population is diverse, ranging from very poor farmers with
very little land and no tenure, to those with larger holdings and possessing title deeds. Such diverse situations require
differentiated solutions in relation to technical assistance and the type of production and technology to be promoted.
IFAD set out to foster a market for technical assistance services. The Agricultural Development Programme for the
Western Region (PLANDERO) contributed to increasing the supply of technical assistance services, promoting the for-
mation of 15 private suppliers. The programme has fostered the development of a market for technical assistance serv-
ices. However, it is not easy for producers who work poor land to develop the capacity to pay for such services: they
cannot gain access to them through market mechanisms. Producer cooperatives offering multiple services to their mem-
bers can, however, facilitate access to technical assistance for the poorest producers. PLANDERO has shown that these
cooperatives can generate earnings by managing credit and marketing inputs and products; the cooperatives can then
use these resources to finance technical assistance for their members. In this way, technical assistance can be provided
at little or no cost to producers.

Source: IFAD 2002b

Complementary rural services. It is crucial to support improved technology with

adequate and sustainable seed distribution channels, rural finance services, marketing
channels and output marketing channels, in an enabling policy environment.

15
 INCREASING ACCESS TO FINANCIAL SERVICES
AND MARKETS

In their efforts to raise agricultural productivity or to diversify incomes, the poor

often need investment and working capital. Yet rural financial markets remain under-
developed. Because the amounts involved are small and the poor lack collateral,
banks are usually not interested in dealing with them. Assistance needs to focus on
developing professional and responsive rural finance organizations, with a strong
emphasis not just on providing credit but also on encouraging savings.
Efforts to increase agricultural productivity can only be effective if they are linked
to an appreciation of market potential. Too many agricultural investments have failed
because they only concentrated on increasing production while neglecting develop-
ment of market links. Integrated approaches along the full continuum of production,
processing and marketing are needed to raise rural incomes and significantly con-
tribute to economic growth and poverty reduction. Transport infrastructure is also
critical for developing links to the outside world. Diversifying income sources, either
by producing and marketing non-traditional crops or by exploiting off-farm oppor-
tunities more fully, is also necessary. Income diversification reduces the risks posed by
rapidly changing market conditions and can help even out seasonal fluctuations in
income and consumption. The issue of access to markets is addressed in the specific
roundtable paper Promoting Market Access for the Rural Poor in Order to Achieve the
Millennium Development Goals.

ACCESS TO FINANCIAL SERVICES15

Rural finance should not be seen as a panacea for poverty reduction. But effective
access to financial services, together with technology and other services, can have a
major impact on expanding poor people’s choices and opportunities, help them
increase their asset base, and diminish their vulnerability to external shocks and cri-
sis. Moreover, most microfinance clients are women, more likely to invest the addi-
tional income generated from using financial services for the education, health and
nutrition of their children and of the whole household. In that respect, the socio-eco-
nomic impact of rural finance goes much beyond an increase in revenues, and trans-
lates into a transformation of living standards at the household level. Finally, suc-
cessful innovations have helped move rural finance closer to the very poor, providing
services and outreach mechanisms adapted to their specific constraints and needs.16
Investing in rural financial services. IFAD has supported a vast programme of
rural financial service development. The approaches and institutional frameworks
that IFAD has encouraged in pursuit of this goal have considerably varied across
regions, due to widely different contexts, environments and opportunities. IFAD has
thus supported a great range of rural finance institutions across regions and even
within countries (e.g. Ghana, see box). In Asia, IFAD has worked with very large and
well-established rural finance networks, such as that of the rural credit cooperatives

16
in China; it has promoted the self-help group/bank linkage model in India and
Nepal, and funded the emergence of Grameen Bank replications in The Philippines.
In Eastern and Western Africa, IFAD has worked with large savings and credit coop-
eratives (Benin, Kenya and the United Republic of Tanzania), large-scale financial
NGOs (Ethiopia), and decentralized financial services associations (Benin, Guinea,
Mauritania). A similar diversity of institutional models and approaches can be found
with IFAD’s programmes in the Commonwealth of Independent States, Eastern
Europe, Latin America and North Africa. Such diversity is not surprising: it reflects
each region’s own culture, environment, constraints and historical experience with
rural finance. This creates a formidable challenge and opportunity. The challenge is
to pursue the goals of institutional viability, deep outreach and financial sustainabil-
ity through all those models. This will require flexibility and pragmatism, but also a
clear abiding to the core objective of building sustainable financial institutions. It
also offers the unique opportunity to make so many different approaches and insti-
tutional models work for the rural poor. Here, IFAD has a strong comparative advan-
tage to promote exchanges and cross-fertilization among those different models and
experiences, and actively contribute to the ongoing debate among donors on how to
build strong and pro-poor rural finance institutions. From this wide-ranging pro-
gramme, the institutional transformation lessons below have been learned.
Rural finance paradigm shift. The ‘old’ rural finance paradigm put emphasis on
the provision of subsidized and targeted credit to farmers, usually by state-owned
agriculture development banks. IFAD’s assessment of this approach highlighted its
limits and shortcomings: subsidized credit usually went to the better-off farmers;
borrowing conditions and collateral requirements excluded the poor; and the types
of services offered were frequently inappropriate to their needs. IFAD, over the past
ten years, has focussed on building viable rural finance institutions that meet the
twofold objectives of (i) providing services that are appropriate to the needs of the

■ A Holistic Approach to Rural Finance in Ghana

In Ghana, commercial banks were unable until recently to serve rural areas and the rural poor. Transaction costs associ-
ated with banking were high, and the rural banks often unable to offer services adapted to the needs of the poor. Many
development initiatives reached only a minority of the rural population and often favoured larger borrowers. Many rural
banks were weak, constrained by poor operational procedures and insufficient internal controls, compounded by poli-
cies impeding efficiency. These constraints kept the rural poor from participating in new opportunities for income and
employment generation.

The holistic approach to strengthening rural and microfinance institutions includes targeting different tiers of the rural
finance system. The Rural Financial Services Project supports the Government’s efforts to deepen and broaden rural
financial services. IFAD is leading the effort in close collaboration with a number of international development organi-
zations. The project focuses on the continuum of rural finance institutions to maximize synergy and complements ongo-
ing activities. It includes measures targeted at the poorest segments of the rural population and providing group train-
ing; testing of pilot initiatives leading to the development of new and innovative instruments, and dissemination of best
practices. The project also addresses policy issues, including: rationalizing agency banking within a regulatory framework
that links rural bank agencies to performance indicators; removing geographical restrictions limiting competition and sti-
fling growth of more innovative rural banks; and modifying the 55% secondary reserve requirement, which ties up a sub-
stantial portion of loanable funds.

17
 rural poor (outreach challenge) and (ii) moving towards self-sufficiency (sustainabil-
ity challenge). Rural finance institutions now offer loans that can be used for
purposes deemed the most beneficial by the borrower. Lending is based on the assess-
ment of the household’s repayment capacity, and not on the commitment to invest
in a specific activity or technology. Financial services have thus been used by the rural
poor for a variety or purposes: for income-generating activities, but also for con-
sumption smoothing and to face shocks or crises.
Conducive policy environment. Beyond institution-building support to the rural
finance organizations themselves, attention needs to be paid to the environment in
which these institutions operate. The broader prerequisites for rural finance are sim-
ilar to the conditions for any financial system to work. There should not be high or
hyperinflation, there should be a minimum level of security for people and property,
and opportunities for economic activity and trade, including the monetization of
economic exchanges. Beyond those prerequisites, experience has shown that very
dynamic micro/rural finance institutions have emerged in countries with no or lim-
ited legislative and regulatory frameworks to structure their activities. However, reg-
ulation by the central bank becomes a necessity when a critical mass of institutions
has reached a scale where they are ready to develop voluntary savings mobilization.
Moreover, in contexts where very active micro/rural finance institutions have
emerged, a national policy framework can become very useful for providing some
coherence and direction to their development (for example, to avoid dumping prac-
tices, to set up a risk assessment bureau that will help identify multiple lending prac-
tices, etc.). In several countries, IFAD is working in coordination with national and
other stakeholders to help foster the right enabling environment in which rural
finance institutions can develop and be viable.
Stakes of institutional transformation. Institutional transformation lies at the
heart of IFAD’s rural finance strategy. IFAD’s rural finance policy paper17 underlines
the importance of building sustainable rural finance institutions that provide appro-
priate financial services to the rural poor. Institutional transformation in rural finance
is crucial for the rural poor for two reasons:
(i) Anchoring the provision of financial services in strong and stable institutions is
the only way to ensure permanent access to those services. Surveys have shown
that access is a key priority for the rural poor. Their only other alternative is
resorting to money lenders and the like, who are usually far more costly and may
lead them into chronic debt traps, and even bonded labour.
(ii) The rural poor value access to safe and flexible savings facilities as much as they
value credit facilities. Mobilizing and keeping deposits securely and having funds
available when necessary require a certain level of institutional capacity. This
usually implies an appropriate regulatory framework under the supervision of
the central bank. To respond to these requirements, viable, well-structured and
-managed institutions are necessary.

Transforming governance. A key concept in rural finance, governance has been

receiving more and more attention. It has in the past often been limited to the analy-
sis of the relation between a board (or other type of supervisory body) and the
organization’s management. Recent studies have, however, expanded the concept of
governance to include a broader set of issues. Under this approach, the framework for

18
governance analysis considers who has the decision-making power within an organi-
zation and how this power is exercised. The first question differentiates between legal
and actual ownership, whereas the second brings up the larger issues of strategic
planning, information flows, decision-making and control (internal and external).
Common prerequisites include: shared vision and strategic plan; clear internal
organization and related responsibilities; a reliable management information system;
effective internal and external control; and adaptation to local environment.
Empowerment. The impact of rural finance goes beyond the economic benefits
derived from the financial services themselves. Rural finance interventions in many
cases have led to the empowerment of the rural poor. This empowerment is first
reflected in the voice that the rural poor are given vis-à-vis the management of their
rural finance institutions. Here many options exist, ranging from their active partic-
ipation in management of decentralized systems (such as the credit and savings vil-
lage associations in Mali), to their representation in the board of the institution (for
example, the Center for Agriculture and Rural Development in The Philippines).
The key factor for successful participation of the poor in the management of a rural
finance institution is not to apply uniform recipes, but rather to help set up man-
agement and governance structures that are suited to the local culture, needs, prefer-
ences and capacity of the rural poor. Whatever the management and governance
structures, the needs and constraints of the rural poor should always be reflected in
the design of the financial services offered to them: this should be done through care-
fully designed market surveys, pilot-testing of new services, and innovative outreach
mechanisms. Finally, empowerment through rural finance occurs when local com-
munities that have organized around the objective of accessing financial services start
to focus on social and economic issues as well. This has happened in a wide variety
of contexts, and highlights how rural finance can be an effective springboard for
empowering the rural poor.

19
 CONCLUSION

Reducing poverty by half by 2015 requires the poor to gain access to assets, services
and markets and be able to make productive and profitable use of such access. This
is greatly influenced by the institutional framework – the social, economic and polit-
ical organizations and the rules that govern their functioning. Such organizations are
often biased against the poor, especially the rural poor and women. The rural poor
lack the voice or the power to influence adequately these institutions or to ensure that
their interests are taken into account. Empowering the poor means changing this.
The development of institutions responsive to the needs of the poor must be a
major priority in poverty-reduction strategies, and indeed in overall strategies to
promote more rapid, broadbased and sustainable growth.

To this end, the strategy should aim at:

(i) investing in capacity-building for a diverse range of organizations of the poor to
ensure choice, especially organizations at the grass-roots and local levels. It
encompasses organizations that empower people to fulfil their citizens’ roles and
that enable the rural poor to gain access to assets and services. Organizational
development is context-specific, matching individual rural poverty challenges
with appropriate organizational designs;
(ii) supporting the development of rules, norms and policies that empower the poor,
especially women, and their organizations, and that provide the rural poor with
secure access to productive resources, markets, technology, financial and other
services. While at a later stage the organizations of the poor themselves will
address this need, there is a transition period during which advocacy rests with
governments, civil-society organizations and the donor community;
(iii) creating forums for dialogue among people, with their organizations, govern-
ments, other service providers (NGOs, private sector, etc.) and donors.
Participation of the rural poor is the only guarantee for relevance and effective-
ness of the transformation of organizations and policies; such participation is
likely to be stronger and more effective where underpinned by a democratic
process; and
(iv) coordinate donor support in the context of participatory country-owned poverty-
reduction strategies to ensure comprehensiveness and full complementarity in the
coverage of pro-poor institutional transformation needs.

Developing countries over the last decade have adopted far-reaching and coura-
geous reforms. Their ultimate impact on development and poverty reduction, how-
ever, will depend on whether the institutional framework can be made more
favourable for the economic activities and social needs of the poor. In this context, it
is not enough to establish organizations that are supposed to be supportive of the

20
poor. It is equally important to change the rules, norms and even the mind-set in
which such organizations function in order for them to have the intended impact.
Many countries, for example, established agricultural development banks with the
hope of stimulating rural development and accelerating poverty reduction. Often
these had disappointing results since the agricultural banks worked with a mind-set
and norms that ignored the potential of the large number of smallholder farmers and
concentrated mainly on better-off farmers. Moreover, the institutions, due to the pre-
vailing ‘norms’, frequently suffered from low repayment rates from their non-poor
borrowers and in consequence saw their capital base being sharply eroded. Or take
the case of land reforms/resettlement. Unless the rules of the game are changed to
give poor farmers access to financial, technical and other services, these rural poor
people will not be able to make productive use of their newly acquired landholdings.
In some such cases, they have even had to sell or abandon their new farms.
In institutional transformation, the organizations and the rules have to be
addressed together or the results will be disappointing.
In this paper it has been argued that strong and widely accepted institutions –
organizations and rules – that respond to the needs and priorities of poor groups,
especially the rural poor and women, are essential for rapid poverty reduction. But
the reverse is perhaps even truer. Weak, ineffective, corrupt or narrowly based insti-
tutions create uncertainty and unfairness, discourage saving and investment, and
lower growth rates. If the rules of law and judicial institutions are seen as ineffective
or biased and property rights are insecure, they discourage investment for land
improvements. Where markets and systems of exchange and finance are inefficient
and unreliable or captured by narrow groups, they engender distrust and raise the
transaction costs of economic activities, which naturally affects poor producers par-
ticularly harshly. Not only does this entrench poverty, but it also reduces economic
opportunities for all, the better-off as much as the poor.
In many low-income countries, the poor account for a majority of the population
or at least a large minority. They suffer from low productivity and poverty, not
because they are without skills but because they do not have available opportunities
to raise their productivity and incomes. In such countries, the best, and perhaps the
only, way to accelerate the overall pace of growth and development is to harness their
underutilized capacity by creating an institutional framework that offers them a
greater voice in decision-making, and improved access to assets and to the services
that can raise the productivity of these assets.
Institutions that are inclusive and responsive to the needs of the poor will encour-
age them to save and invest their savings to increase productivity and incomes. The
greater output and buying power this generates will further stimulate output, growth
and savings in a positive interaction – a virtuous circle – among strong institutions,
good policies and rapid growth and development.
Institutional transformation that opens up institutions to the influence and priori-
ties of poor groups is sometimes seen as threatening by other groups. In fact, it offers
the best hopes for raising the growth path of the economy for realizing the aspira-
tions of all groups – for society as a whole.

21
ENDNOTES

1 This definition conforms to widely accepted usage. For example, in the World Bank’s World
Development Report 2003, "Institutions are the rules, organizations and social norms that facilitate the
coordination of human action" (page 38). Professor Douglass North (1993) and other academics are
using an alternative definition: institutions are the rules of the game, organizations are the players.
2 IFAD, 2002a.
3 Glikman, 2002.
4 Balanced with retention of redistributional authority at the central level.
5 Thapa, 2002.
6 Several countries have been experimenting with community-managed agrarian reform programmes
that are often referred to as ‘market-assisted’. Under such programmes, groups of landless people
negotiate directly with willing would-be sellers of land, and then, with credit support and follow-up
infrastructure investment by the state, proceed to establish a smallholder farming structure backed by
strong community organizations.
7 Land reform also constitutes a priority in international policy agendas. At the international level, land
reform is a central pillar of the United Nations Commission on Sustainable Development, the World
Food Summit, the Convention to Combat Desertification and the Convention on Biological Diversity,
all of which have identified the major challenges and difficulties experienced in the past.
8 IFAD, 1999.
9 Increasing returns from land, through, for example, treadle pumps, or creating water-selling microen-
terprises such as the water companies of the Grameen Bank in Bangladesh.
10 The overwhelming emphasis placed by governments on large and expensive schemes to produce a low-
value and often uncompetitive crop such as rice to substitute for imports is one explanatory factor of
programme underperformance.
11 For example, in Côte d’Ivoire, it is estimated that the 120 small dams existing in the country are only
being used at 10% of their capacity, and at least 5 000 hectares of valley bottoms previously developed
have been abandoned.
12 As part of the comprehensive evaluation of IFAD’s Special Programme for Sub-Saharan African
Countries Affected by Drought and Desertification, a thematic study was carried out in 1998 on small
irrigation and water control activities. A particularly rich source of knowledge, this study provides
recommendations related to farmer participation in the design and use of irrigation infrastructure,
organizational and institutional issues, flexible project design, targeting and site selection, and technol-
ogy choice.
13 Mathur, 2002.
14 This consists in calibrated research and extension priorities from the viewpoint of rural poverty reduc-
tion; responsive to feedback from local extension systems about the needs and priorities of poor farm-
ers and women; equipped to address the ‘biotechnology revolution’; staffed by local scientists with the
skills required for biotechnology research and for participatory research; having financial resources to
conduct local biotechnology research; with stronger scientific and managerial capacity to transfer
technology efficiently from other countries and the global research system; able to address difficulties
in partnerships between international biotechnology firms and local public/private actors owing to the
absence of assigned intellectual property rights, or to weak enforcement of such rights; with improved
organizational and governance structures of local NARS/Cs, e.g. by introducing more transparent
decision-making processes; and with institutional linkages with the private sector.
15 IFAD, 2003.
16 Dommel, 2002 and Hopkins, 2002.
17 IFAD, 2000.

23
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Hopkins, R. (2002). "Rural Financial Services: Why Institutional Analysis and Policy Dialogue Are
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International Fund for Agricultural Development (IFAD) (1999). "Evaluation of the IFAD Special
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––– (2000). "IFAD Policy on Rural Finance". Rome: IFAD.

––– (2002a). Strategic Framework for IFAD 2002-2006: Enabling the Rural Poor to Overcome Their Poverty.
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25
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