The fictional country described here, "Southland", is a lower middle-income country, with a record of uneven economic and social progress. From Independence until the early 1990s, public ownership was a central feature of the economy. However, from 1980s, the rate of economic growth declined while macroeconomic conditions became less stable, manifested in a widening balance of payments deficit, increasing inflation, devaluation of the exchange rate and fall in real government spending, particularly investment spending. From the 1980s through to the early 1990s, there was a widespread sense that the quality of government services to the rural and urban populations was deteriorating, and that there was a failure to adequately maintain public infrastructure (roads, railways, irrigation networks and the physical assets of the health and education systems). Worryingly, the gains in poverty reduction achieved in the earlier decades appeared to be in jeopardy, with adverse trends in national per caput food consumption. Rural livelihoods were adversely affected by stagnation in smallholder agriculture and the absence of an alternative driver of rural development. Finally of great concern was the fact that HIV/AIDS gained a foothold in the population, with HIV seroprevalence estimated at about 9.5 percent in 2000, and about 15 to 20 percent of current deaths being attributed to AIDS.
In the early 1990s, a debate was initiated on the structural causes of disappointing performance in development and poverty reduction. One critical point of view came to be known as pro-globalization (PG). PG was strongly advocated by external agencies such as the IMF and the World Bank, on which Southland had become dependent for financial support on concessional terms. PG also had sympathizers among a growing but still minority tendency within the national elite. The essence of the package promoted by the PG camp was: liberalization in external trade and the internal economy; privatization and a reduced role for the government in productive enterprises and service provision; a welcome to foreign direct investment (FDI); and macroeconomic orthodoxy to conquer inflation and thereby boost investor confidence and the efficiency of resource allocation. A cross-cutting theme in PG advocacy was institutional reform: this was not simply reducing the role of government, but making it better at responding to societal needs (e.g. by decentralization, the strengthening of democracy and working more with civil society organizations); managing new challenges such as regulating private industry and service providers; and improving the quality of services remaining with the government.
From 1990 onwards, the government started to implement PG-type reforms, but initially at least, this was without strong enthusiasm or commitment, leaving observers to comment that there was insufficient ownership of reforms, and that these appeared to be driven mainly by a need to access IMF and World Bank funding. The response of the economy to this first round of reforms was mixed: some export agriculture (mainly larger farms) grew, but smallholder production of food crops declined; industry was initially stimulated by improved access to foreign exchange, but then failed to grow strongly or attract much FDI, while some subsectors contracted sharply in the face of trade liberalization. Foreign debt continued to climb. PG advocates argued that this unsatisfactory outcome was because the reforms had been delayed and partially or badly implemented. Critics of the PG tendency instead argued that the reforms were badly conceived.
In November 2001, Southland was designated as a Highly Indebted Poor County (HIPC) following a debt sustainability analysis carried out jointly by the World Bank and IMF. At this point, it was agreed that the World Bank and IMF would make interim assistance available, while the government, together with Southlands civil society and private sector, developed a Poverty Reduction Strategy Paper (PRSP). It is anticipated that a full PRSP will be completed early 2004, at which point it will be presented for approval by the Southland legislature and for practical support from internal and external stakeholders. Among the external stakeholders are the IMF and World Bank, whose approval will be necessary to trigger debt relief from a range of creditors, at what is known as the HIPC Completion Point.
While awaiting the full PRSP, interim assistance from the IMF has been extended in the form of a loan under its Poverty Reduction and Growth Facility and in addition there has been support in the form of credits and grants from the World Bank and bilateral donors. All these facilities were conditional on the government producing an Interim Poverty Reduction Strategy Paper (I-PRSP). The first draft of the I-PRSP was produced in a hurry, in early 2002, in order to access these desperately needed external finance facilities. However, the first draft I-PRSP contained a chapter heading entitled Rural Poverty Reduction and Agriculture which, with the agreement of the World Bank, was left blank, pending a stakeholder consultation, scheduled for early 2003 which was to feed, inter alia, into the process of review and updating of national strategies and policies for agriculture and food security the government has decided to undertake as a follow-up to the 2002 World Food Summit: five years later.
This case study is intended for use in familiarizing professionals in agricultural, food and rural development with:
Policy and institutional issues at the macro, sectoral and subsectoral level which may arize during periods of policy and institutional reform aimed at supporting pro-poor economic growth and poverty reduction;
The interconnectedness of these issues and the need for systems thinking;
Key institutional players, e.g. international organizations playing roles in trade, financial flows and aid, and national governments;
Concepts and programmes used by the institutional players at present and in the recent past; and
Challenges which policy-makers and policy advisers face in working out how to ensure that the agricultural, food and rural sectors can be influenced to maximize their contribution economic growth and poverty reduction.
This case study is not focussed on learning analytical methods, e.g., estimating protection, modelling markets or the impact of policy changes. Nevertheless the data and the institutional and political context could be used for this purpose, if desired, but the case study does not seek to teach these methods. The information presented in the Background Note, the ten documents and the statistical files give a willingly non-structured non-comprehensive picture of the country. They contain repetitions, contradictions and gaps, just as would documents available to a policy practitioner working in a particular country. An attempt has therefore been made to put participants in a realistic working situation and no effort has been made to organize the material as a well structured and well thought presentation of Southland, but rather to provide a variety of elements to support the policy thinking to which participants are invited.
In recent years, the policy environment has received increased emphasis as a critical factor determining the benefits of public and private investment and of technical assistance. Also, as is recognized, for example, in the World Banks Comprehensive Development Framework, there is now a consensus that anti-poverty strategies must be fully owned by actors within the country, with broad participation by civil society and elected institutions. Nevertheless, external support also remains necessary, notably of key donor agencies and international financial institutions.
A key challenge facing professionals in agricultural development is to deepen their understanding of the interaction between the macro, sectoral, micro, institutional and technological aspects of reform. For example, many reforms affecting institutions and/or technology are driven by macro-imperatives, such as the necessity to cut expenditure, devalue the national currency or change the level and structure of economic protection. An understanding of these imperatives, and of their likely magnitude, timing, sequencing and effects on the economic environment is critical to the design of effective aid programmes (whether capital aid or technical assistance). On the other hand, "macro problems" can have their origins at the level of sector, subsectoral or institutional policy. Examples of this within the agriculture sector include subsidies to food, inputs and water (the costs of which can grow to macroeconomic significance), monopolistic agricultural service organizations, price controls, and measures of trade protection such as import bans, quota and tariffs.
Likewise, institutional reforms, unless very carefully planned on the basis of relevant theory and international experience, can have unintended consequences. Examples in the agriculture sector include liberalization of markets for inputs, outputs and credit; elimination of subsidies; and introduction of markets for services previously provided by the government, such as water and extension.
This case study aims to explore these issues by "learning to swim by jumping into the swimming pool at the deep end". The exercise is designed around the notion of "discovery learning". Clues as to the connections between the issues of concern are scattered liberally in the material which follows, some being obvious, while others are well hidden. Participants should benefit from reading the material, analysing and discussing it with colleagues, producing a joint written report, and discussing the results and issues arising with the facilitators.
This material can be used in a number of ways, depending on: the objectives of the training programme within which it is being used; time available; and the experience of the participants. Furthermore, where the exercise is being used in a specific country or region, it may be possible to eliminate some material which is inappropriate for the context. Trainers are encouraged to develop an approach which fits their own needs, and the notes provided here are suggestions for that purpose.
As said earlier, the overall philosophy of this exercise is free-flowing: "learning to swim by jumping into the swimming pool at the deep end". This is an accurate portrayal of the reality of many of the challenges that professionals face. Professionals have to deal with issues for which they do not have a profound theoretical and methodological training, and have neither time nor resources to acquire this expertise. An important skill for senior and middle-ranking professionals is to be able to get to grips with the essence of an emerging set of policy challenges without the benefit of deep re-training. Indeed, it is only when they have acquired a sound overview of the problem area that they are best placed to understand where expertise gaps exist for themselves and colleagues and how these gaps may be remedied cost-effectively.
The basic framework of the exercise is that participants are cast in a role-playing exercise as Members of a Secretariat tasked to facilitate the national discussion and consensus-building about the Rural Poverty Reduction and Agriculture Strategy. As is explained below (under the Terms of Reference for Participants) the Members are drawn from a range of professional and interest group backgrounds. The idea is that participants will collectively analyse and debate issues, but that each Member will bear in mind a particular set of interests and professional concerns.
The exercise is designed for groups of about seven to ten Members. If the group size exceeds ten, then the trainer may wish to consider splitting the group. Also if the group size is six or less, then the trainer will have to undertake some re-thinking and combining of Members roles. Trainers are encouraged to be flexible and creative and to depart from the advised pattern where this is appropriate.
Possible roles which may be assigned are: (1) senior member of National Ministry of Finance with responsibility for oversight of rural and agricultural expenditure; (2) senior policy analyst with the Ministry of Agriculture, Food and Natural Resources (to include irrigation); (3) senior policy analyst with the Ministry of Planning, with responsibility for dialogue with international organizations concerning economic development and poverty reduction; (4) a representative of a farmers organization (Southland Commercial Farmers Association or National Small Farmers Union); (5) a representative of national rural service-providing NGOs; (6) a representative of a consumer association; (7) a representative of the Chamber of Commerce, Industry and Agriculture; (8) a representative of one local government authority; and (9) the chair of a policy studies institute which is known to be broadly sympathetic to the political opposition.
The time allowance for this exercise should ideally be four days on a full time basis, to include briefing and reporting. Possibly the work could be compressed to as little as two days if the trainees are already experienced, or the tasks are reduced.
Obviously, group work needs to be managed: tasks have to be assigned, discussions undertaken, consensus and points of disagreement recorded. Subgroups may be formed to study particular issues, tasked to report back to a larger group. A final report has to be compiled, edited and made internally consistent. Trainers will have to take a view as to how interventionist they wish to be in managing this process. In some cases, trainers may take the view that experience with the internal management of this kind of exercise is a useful additional training objective, in which case a light approach would be taken. At one extreme, a light approach would leave groups complete discretion to assign leadership roles, determine tasks and schedules. At the other end of the spectrum, trainers may sometimes judge it appropriate to take a directive approach, for example, by assigning roles and leadership responsibilities, and setting out a schedule of tasks to be completed.
Written material should be required, supplemented by oral presentation and discussion, which should take an hour or more. Both written and oral presentations should be to a high professional standard, and where possible the latter should involve use of presentation software (PowerPoint or similar). It is very important that participants receive immediate feedback and discussion of their proposals. The context of the presentation will have to be adapted to the human resources available. Ideally, the presentation should be to a group of three very senior experts: say, the national official responsible for the PRSP, the top civil servant in the Ministry of Agriculture, Food and Natural Resources, and a representative of the Office of the President.
In a typical four-day session, work could be divided as follows:
Half a day for:
(i) An introduction session, making a presentation of the mode of operation (objective, terms of reference, group work);
(ii) Group formation, reading of the terms of reference and of the background note, and internal organization of the group (chair, raporteur).
Half a day for:
(i) Identification of main challenges and issues faced by the country;
(ii) Determine individually the objectives, interests and issues of each individual member as well as their position and identify possible alliances among members;
(iii) Assess likely position of those stakeholders that are not part of the group but will be part of the stakeholder consultation during which the report prepared by the group will be discussed; and
(iv) Assign responsibilities for the analysis of specific issues identified and formulation of proposals.
One and a half day for:
(i) Reading the material;
(ii) Conducting analyses;
(iii) Proposing alternative ways to address issues and challenges identified;
(iv) Negotiating in the group in order to reach a consensus on the content of the paper;
(v) Assign drafting responsibilities.
Half a day (optional) for the trainers to organize short briefing sessions provide clarifications or inputs on some technical issues, if required by participants. These sessions can take place any time during the first three days;
One (or one and a half day) for:
(i) Drafting the report; and
(ii) Presenting and discussing it in plenary;
(iii) A concluding session.
Finally, the Glossary is an important part of the training exercise, and represents a useful resource that participants can take away and refer to in subsequent professional work. In introducing the exercise, trainers should emphasize that the Glossary is a tool which participants will be expected to use frequently. In the final discussions, they should strive to be familiar with all the material covered in the Glossary.