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Chapter One

Review of Programme 2.1.4: Agricultural Support Systems 2

I. OVERVIEW OF PROGRAMME FEATURES

A. The Development Issues Addressed

45. The programme is based in the Agricultural Support Systems Division (AGS) and addresses several of the most important aspects of services to agriculture and the development of agri-business, i.e. sustainable optimization of farm productivity for the benefit of the farm-household (farming systems and farm management); appropriate mechanization of agriculture; post-harvest management of food crops; agricultural processing and food industry; marketing of crops and farm inputs; and rural finance. Other agricultural support services, including: extension, training and education; veterinary services; and agricultural research are handled under other FAO programmes, as is also largely the case for the forestry and fishery sectors.

46. With the change in development climate towards market economies, there has been a major withdrawal of both the state and state-supported entities from the provision of agricultural services and processing and marketing of agricultural products. There has been a parallel improvement in the perceived respectability of the private sector and belief in that sector as an engine for growth. The reduction in import and export controls and greater freedom given for foreign exchange transactions have made it much easier for private entrepreneurs to import essential equipment and to seize domestic and international market opportunities. The removal of export taxes has made production and processing of export crops in some cases more attractive but the recent movement in the terms of trade for primary commodities has generally worked in the opposite direction. The opening up of economies to multinationals has provided both opportunities for local business as partners and the threat of competition. At the same time, the weakness of the private sector in much of the developing world and in countries in transition, where the state had maintained a dominant role, has become apparent.

47. Rural economy grows as an increasing proportion of value added occurs through agricultural intensification and off-farm through processing and timely marketing of agro-based products and more sophisticated support services. If rural areas are to develop with the creation of opportunities for employment and income, there can be little dispute that agriculture as a business and related industries have an important role to play. However, in many developing countries, the significant changes in the macro-economic climate have not yet been translated into changes at the more micro-level which will support the growth of small/medium-scale enterprises in rural areas and encourage farming as a business. Similarly, few countries have put in place appropriate standards for agricultural and rural processing equipment. Standards simply transferred from developed countries were often inappropriate and failed to be applied in practice.

48. Other important aspects of the external context and objectives of global community to which the programme has needed to respond include the concerns for sustainable development and conservation of the environment; overcoming food insecurity and addressing poverty; and involvement of people, including women in development.

49. Farming Systems Development: Farm management has become a recognized discipline in developing countries both in the training of agriculturists and the structure of agriculture departments. Nevertheless, in developing countries recommendations to farmers often continue to be based on technical possibilities, with only the most simple arithmetic having been carried out on costs and returns and very little overall systems' thinking in the packages of recommendations offered. Approaches have also frequently failed to recognize that farmers are the decision makers adapting recommendations to their situation. Many research institutions do not have an effective farming systems unit, and in many more farming systems research has not been mainstreamed but remains as a separate activity. Similarly, there is an absence of suitable or strongly presented socio-economic micro-level information on the potential effects of policy changes, and for the planning of individual projects. At the conceptual level there has been a realization that western farm management analytical frameworks have not been comprehensive enough in their approach to apply in their entirety to small-farm households in developing countries, but text books and teaching still reflect this historical context.

50. Agricultural Engineering: If agriculture is to feed a growing non-agricultural population, agricultural labour has to be more productive. Increased returns to labour are also a condition for improved rural income and for a decrease in drudgery. Countries have thus sought to favour mechanization but often without a coherent strategy, some placing greater barriers in the way of imports, others favouring imports of large machines or making import of components or spares difficult. Some emphasized the role of government services. Virtually none have had policies to consciously favour appropriate private sector mechanization development and virtually all carry out government research on mechanization with little success.

51. Post-harvest Management/Prevention of Food Losses: Prior to the period under review the programme contributed substantially to the better understanding of post-harvest losses. Work during the early 1980s established that losses in grains were substantial but not always as large as had been originally postulated. The basis for assessment of returns to investment in loss prevention were substantially improved. The importance of prevention of food losses in increasing available production became widely recognized and by the start of the period under review post-harvest issues had been mainstreamed, alongside production issues.

52. Food and Agricultural Industries: The economies of most developing countries are agriculturally based and agro-industries can make an important contribution to value added and employment as well as contributing significantly to export trade. Agro-industrial development has suffered from most of the factors discussed in the context for the programme as a whole. National institutional support to the sector has also often been weakened by fragmentation and a lack of coherent strategy.

53. Marketing: During the period under review, the liberalization of agricultural marketing in many countries undergoing structural adjustment has moved from a policy goal to reality. Feeding increasingly concentrated populations in urban areas has been a concern, while ensuring market access for rural populations (remote from cities) has remained important. The foremost imperative of securing food for all has also necessitated that food trade cannot be left entirely to the play of market forces. Although these developments have been taking place, a matching body of analysis has not emerged to assist policy makers in responding, other than pragmatically.

54. Rural Finance: The transition from subsistence to market integration in the rural areas necessitates finance. Since policy-makers and practitioners have become aware of the negative consequences of directed or supervised credit programmes, they shifted their attention to finance, comprising both credit and savings, and from agricultural to rural (encompassing both agricultural and non-agricultural activities). Although micro-credit has become important this is often urban-based and both donor and government funds for agricultural lending have experienced a sharp decline. The changing macro-economic climate is tending to level the playing field for commercial initiative, as politically-inspired interventions are reduced, but the challenge is in making the provision of rural services profitable when managing risk and overcoming high costs of very small transactions particularly where there is a relatively low volume of total business in any one locality. However, elements of a model for profitable rural banking have begun to emerge, including interlocutors between the financial institutions and the rural household and small business (such as self-help groups and NGOs, with rather less attention having focused on the trader/lender); distribution of fixed costs over a wider range of business, furthered by provision of a more complete financial service; and computerization and modern communications which facilitate many small transactions.

B. Programme Objectives and Thrusts

55. Stimulated by the Strategic Framework preparation for the Organization as a whole and the introduction of the new programme model, the Agricultural Support Systems Division (AGS) has recently conducted a strategic planning workshop and objectives have now been more comprehensively formulated:

II. COHERENCE OF PROGRAMME DESIGN

56. The programme had a de facto rather than conscious design and grew out of the organizational structure and the pattern of previous achievements. The result was not a coherent whole but a set of separate sub-programmes. The recent strategic planning work has been addressing this issue and greater integration is reflected in the 2000-2001 PWB proposals. All sub-programmes experienced a significant shift in the orientation of their work. There had been major emphasis on support to direct action through the Field Programme. In common with the rest of the Organization, emphasis on conceptual work and on other channels to deliver messages has increased. The most pronounced and conscious movements in this direction were evident for post-harvest management and agricultural engineering. A significant and deterministic change of thrust also occurred at the beginning of the review period when farm management and farm data were de-emphasized in favour of farming systems development.

57. Several aspects of the programme's approach built on previous success and experience, including the development of regional associations for agricultural marketing and for rural finance. In rural finance a lead position started to emerge in the development of a computerized application for rural banks, MicroBanker. There was also an emerging lead role in the conceptualization and application of farming systems development. In other cases, opportunities were seized to fill gaps. The Food and Agricultural Industries sub-programme has given its attention to selected niche areas of industry where technical assistance was limited from other sources which resulted in efforts being somewhat dispersed.

58. All the individual sub-programmes undertook relevant activities which addressed priorities. In recent biennia the planning of outputs has improved but there could have been greater strategic focus, i.e. sub-programmes have varied in the extent to which their work was both clearly directed and achieved critical mass around key areas of work.

III. PROGRAMME RESOURCES AND MANAGEMENT

A. Resources

59. Table 1 summarizes the budget and expenditure for the programme (there may be certain inaccuracies because there have been several changes in the basis on which the budget is constructed over the period. For example, Post-harvest Management was not always a separate sub-programme). In common with the Organization as a whole, the total decline in budget is evident. In particular, the difference in the size of the sub-programmes may be noted with Rural Finance and Post-harvest Management being almost half the size of Food and Agricultural Industries. The drop in resources for Agricultural Engineering and the increase of those for Farming Systems Development over the period are evident, with Agricultural Engineering now being one of the smaller sub-programmes. As for FAO in general, there has been a rise in the proportion of the budget allocated to the Regional and Sub-regional Office work which increased from 20 to 25 percent over the period. The under-expenditure on Farming Systems Development resulted from vacant posts.

Table 1: Programme 2.1.4 - Budget and Expenditure
  1992-93 1994-95 1996-97 1998-99
  Budget US$ 000 Expenditure as % Budget Budget US$ 000 Expenditure as % Budget Budget US$ 000 Expenditure as % Budget Budget US$ 000
Total for Programme 18 974 97% 18 945 89% 16 253 97% 16 185
Headquarters 15 157 98% 15 234 89% 12 333 98% 12 074
Regions 3 817 93% 3 711 90% 3 920 92% 4 111
Total Programme Percentage in Regions 20% 19% 20% 20% 24% 23% 25%

60. There has been an overall decline in the proportion of expenditure for non-staff from 33 percent in 1992-93 to 24 percent in 1996-97 (a trend which has been evident in the Organization as a whole, as budget cuts had to be absorbed). This decline was particularly steep in Post-harvest Management with a move towards more normative work, and in Marketing. Partly as a result of vacant posts, Farming Systems Development has utilized a higher proportion of its budget for non-staff than other sub-programmes. In the view of the evaluation, the present level of non-staff resources (averaging around 25 percent) is too low, limiting flexibility and ability to produce quality normative outputs. Correction of this can be achieved either by increasing non-staff allocations or reducing the number of professional staff.

61. FAO's Field Programme has been declining, especially as a result of the UNDP switch to national execution. Table 2 illustrates this, with a marked fall in Field Programme expenditures evident for all sub-programmes except Farming Systems Development, which is now also declining. The steepest reductions were experienced in Post-harvest Management and Food and Agricultural Industries.

Table 2: Programme 2.1.4 - Field Programme Expenditure and Numbers of Directly Related Projects Technically Supported by the Programme
Sub-programmes 1992-93 1994-95 1996-97
  US$ 000 Number of Projects US$ 000 Number of Projects US$ 000 Number of Projects
2.1.4.1 Farming Systems Development 4 844 20 4 480 23 5 765 17
2.1.4.2 Agricultural Engineering 5 880 42 3 806 26 3 721 17
2.1.4.3 Post-Harvest Management 7 013 33 3 917 21 2 827 14
2.1.4.4 Food and Agricultural Industries 9 892 69 5 179 51 3 804 29
2.1.4.5 Marketing 8 661 25 6 336 31 6 288 35
2.1.4.6 Rural Finance 2 677 15 2 149 15 1 130 9
  Total for Programme 38 967 204 25 867 167 23 535 121

B. Staffing and Organization

62. The Agricultural Support Systems Division (AGS) in the Agriculture Department is divided into three services and one separate branch with staffing as follows:

63. Farming Systems Development and Post-harvest Management suffered particularly from vacant posts in 1996-97. It was difficult to fill posts when they fell vacant at that time because of the budgetary shortfall in the Organization as a whole. Marketing and Rural Finance were the least affected by the problem. Although 1996-97 started to see an increase in regional posts, this was not reflected in a substantial increase in staff until the current biennium (1998-99). Agricultural Engineering is the only area to have received a substantial cut in posts and Farming Systems Development had a substantial increase, both in Headquarters and in the regions. There has been an overall increase in posts, largely accounted for by the regions.

C. Collaboration in Execution of the Programme

64. External Partnerships: Most of the sub-programmes have established external linkages for parts of their programme. The CGIAR system (one of the major partners for FAO) has less potential for interaction with the Agricultural Support Systems Programme than other technical programmes but there are possibilities in Agricultural Engineering, Post-harvest Management and Farming Systems which may be further developed. CIAT, CIP, IITA, IFPRI and IRRI are partners along with GTZ, CIRAD, IDRC and various universities in the International Network on Post-harvest Operations (INPhO). The networks and associations discussed below provided a strong link to developing country institutions for the Marketing and Rural Finance sub-programmes. Links with the German Agency for Technical Cooperation (GTZ) have also been strong for Rural Finance, where a GTZ staff member has been seconded, a joint series of publications is being issued and further development work on MicroBanker supported. GTZ is also increasing its staff input to INPhO. In Agricultural Engineering, dialogue with industry is now being fostered through collaboration with the International Commission of Agricultural Engineering (CIGR) 4.

65. Links with academic institutions have been particularly strong in Rural Finance where a bibliography is produced jointly with the Rural Finance Program at Ohio State University, which also hosts an ongoing email conference. Both Rural Finance and the Farming Systems Development sub-programmes have obtained inputs for publications from some of the most outstanding academics in the subject.

66. UN System Partnerships: In Agriculture and Food Industries, there has been some work on irradiated foods with WHO and IAEA through the FAO Joint Division. Interchange has also taken place with ITC on trade in processed products and with UNCTAD on agro-industrial policy. UNIDO's total work in agro-industry is somewhat smaller than that of FAO, but in the specific area of the food and agricultural industries, UNIDO has a 1998-99 PWB budget of US$ 2.7 million, of which about half is in areas covered by the FAO sub-programme. Recent efforts to collaborate more closely with UNIDO in food and agricultural industries have not met with success. In 1969 FAO and UNIDO reached an agreement on their respective roles in agricultural industries. A working group consisting of both organizations met regularly but UNIDO withdrew in 1989 and is now dealing with many areas of small-scale processing, originally in the FAO mandate. FAO has also dealt with some upstream activities and it is evident that the agreement has ceased to be both relevant and valid. Substantive overlap is limited to food industries and the very limited capacity of both organizations has meant that there has not been duplication of effort but there has been a lack of synergy (there is also overlap in other areas of FAO's work, notably wood processing and pulp and paper).

67. The other UN agency with potentially overlapping interest is ILO. Here the interface is smaller and limited to promotion of small-scale business with the emphasis on management and the enabling environment. There has been no joint work, except through the rural finance association in Asia and the Pacific (APRACA).

68. Thus, although there may be scope for greater external collaboration, cooperation with non-UN partners has been widespread and any discussion of external partnerships cannot ignore that there must be willingness on both sides and that such alliance building is often time-consuming.

69. Internal Partnerships: Within the programme itself, collaboration between the regional officers and their Headquarters counterparts has been mixed but relatively good. Collaboration with both operations units and other technical divisions for the execution of the Field Programme, including the Special Programme for Food Security and work with TCI on investment project development, has also been substantial. However, if external partnerships have been relatively extensive, this is less the case with internal collaboration for normative outputs 5 and officers note that attempts at joint work, even within the division, prove very time-consuming and eventual production of the product tends to fall back on one unit. Efforts to provide for more matrix programme development are continuing through the Strategic Framework process and the new programme model, within which AGS has identified a number of division-wide projects which are also intended to inter-link with those of other divisions.

IV. IMPLEMENTATION RESULTS (OUTPUTS)

A. Major Outputs - Summary

Table 3: Programme 2.1.4 Selected Output Indicators by Sub-programme 1992-97
 

Farming Systems Devpt

Agricultural
Engineering
Post-Harvest Mgt Food and Agric. Industries Marketing Rural Finance Total Programme
Publications Number 64 37 14 24 51 33 223
  Page Equivalents (000) 8.8 4.3 1.6 3.2 6.1 3.3 27.3
  Printed Copies (000) 68 36 11 25 44 23 206
  % of printed copies distributed 69 67 77 80 79 72 73
Meetings Number 21 8 4 7 2 2 44
  Participants 602 154 113 83 23 37 1 012
  Participant Days 1 501 594 369 318 115 161 3 058
Training Number 9 4 11 15 41 6 86
  Participants 169 187 139 221 853 92 1 661
  Trainee Days 644 1 446 595 1 895 4 589 346 9 515
Web Pages Number of hits July 1998 (one month) 2 441 1 404   899 7 321 580 14 875
Field Programme Average number of projects operational per biennium 18 28 23 50 31 13 163
Note: All figures provide only guides to the overall output. For example, training activity carried out largely through projects but with some Regular Staff input would not always appear and Field Programme figures apply only to projects for which AGS was the lead technical division. Many inputs are made into projects for which other divisions take the lead.

70. Table 3 summarizes some of the major outputs under the programme between 1992 and 1997 in quantitative terms and is supplemented with information on web pages available through Internet for July 1998. Other important outputs not reflected in the table included computerized tools and support to networks. Taken in total the indicators contributed to an overall picture of productivity (although they do not indicate either quality or impact). Assisted by continuity of both management and staffing, Marketing, followed by Farming Systems Development, may have had the highest overall level of output in proportion to resources deployed. AGSE has been very active in producing publications and Rural Finance has worked particularly with regional rural finance associations and in developing an important computerized assistance aid for rural banks, MicroBanker. Slow adjustment from supporting a large to relatively small Field Programme and the dispersed and wide range of activities may explain why other sub-programmes appear to have had a lower level of output in proportion to the resources deployed.

B. Publications

71. Output: Publications have been an important output of all sub-programmes. Most have been produced by Headquarters rather than the Regional Offices. There has been a concern to improve the effectiveness of publications and an independent study of this was undertaken for Agricultural Engineering in 1995. Recommendations are now being followed up. The quality of content has generally been good but some of the publications are unnecessarily detailed in terms of background and descriptive information for the intended users. There remains room for improvement in identification of target audiences and a useful distinction can be made between: a) policy makers who require very concise and generalized material concentrating on the lessons of experience; b) students, universities and senior practitioners who need good manuals and broader discussions of issues; c) field workers who require practical and clear illustrated guidelines, and who can often only be reached by national programmes.

Box 1. Major Publication Output

Farming Systems Development: Manuals on Farming Systems Development, Farm Management and Risk are among the leading documents in their field as is the field level guide on application of Farming Systems Development. Case studies of farming systems and initial works on the costs and benefits of conservation measures and of intensification opportunities such as aquaculture have also been produced.

Agricultural Engineering: Bulletins which provide guidance on various aspects of agricultural engineering such as machinery and equipment testing and evaluation, a set of training manuals for blacksmiths and comprehensive guidelines on various aspects of pesticide application.

Food and Agricultural Industries: Listing some of the publications gives an insight into the variety but also limited focus of work covered: Harvesting of Textile Animal Fibres; Hides and Skins; Prospects for Date Palm By-products and Residues Utilization; Microalgae Culture for the Production of Hydrocarbons for Liquid Fuel; Small-scale Processing of Fruits and Vegetables; Functional Properties of Starches; and Enzyme Applications for Agro-processing.

Marketing: For university level, a set of four comprehensive texts on marketing and agri-business. For the working level, a series of guides and training materials for technicians, managers, etc. addressing such topics as: market infrastructure; market information services; and establishment, management and operation of strategic grain reserves. For field level, a few guides in simple form which can be used by extension workers, traders, etc. on such topics as horticultural marketing extension and calculation of marketing costs and margins.

Rural Finance: At the time of writing, the first two volumes had been issued of a major series "Agricultural Finance Revisited". Other major publications included: for university and management level - the safeguarding of deposits, collateral in rural loans, interest rate policy and banking and the environment and crop insurance planning; at working level - a village training guide on managing income-generating activities with particular reference to women; and reference and information materials.

72. Potential Utility: The main manuals developed by the programme have the potential for extensive use in education and training and several, in particular those in Farm Management and Farming Systems Development and in Marketing, are regarded as the authoritative works in their fields, unique for university teaching. The classic work in marketing for developing countries was published by FAO and continues to be reprinted by the Organization so as to meet demand. The networks and associations with which the programme works are used to distribute publications to the target audiences. The series of publications to be produced under Agricultural Finance Revisited has the potential to provide the authoritative contribution to both policy and practical advice for rural finance.

73. Nevertheless, print run average is 1 000 copies (although the English language version of major publications would normally be produced in greater quantities). On average 70 percent of publications have been distributed (but some half of this is mandatory distribution to governments, FAORs, etc.), indicating numbers reaching the technical target audiences may be relatively small. The programme does not differ significantly from the rest of the Organization in this respect (See Chapter V, Programme Evaluation Report 1996-97).

C. Web Pages

74. Output: AGS has a well-developed set of webpages dealing with all aspects of the programme's work. Design of pages is generally of a good standard. Language coverage with the exception of marketing has been inadequate but is improving and several of the sites offer links to the sites of other organizations. Work is now proceeding to develop conferencing and build information systems which draw on other organizations as well as FAO. Areas for improvement on the websites, in addition to language coverage, include a short statement of the key points of policy for improvements in the sub-sectors covered by the programme occupying a prominent place on the pages; and indexing which tends often to take the form of a short contents page approach, rather than providing a search facility by subject matter. Developing country users could face difficulties with the extent of images used, which require better telecommunication capacity than they often have available (although it is possible to access all sites without images, some are not really built for this).

Box 2. Important Databases

Information Network on Post-harvest Operations (INPhO) is a developing reference centre on post-production technologies and systems, from harvesting to consumption. It will provide expert systems, information and networking (two open email conferences were held in 1998). FAO plays the role of facilitator and secretariat. Currently, a prototype version of INPhO is available as CD-ROM and on the internet through the FAO website. The network also produces a monthly newsletter with a distribution list that is growing fast (the September 1998 issue reached some 225 recipients).

Agricultural Engineering maintains a database of more than 640 agricultural engineering institutions and is supporting the development of a database of suppliers of agricultural machinery and equipment.

Food-into-Cities, a programme covered by Marketing, has a journal subscribed to over the Internet. Marketing webpages also cover training opportunities and textbooks and links to the agricultural marketing associations.

For Rural Finance, information is included on contacts for regional agricultural credit associations and for the Ohio State University led effort to develop an email network on rural finance which has 800 subscribers. Working through the network established by the rural finance associations and SACRED (see below), the programme is now setting up an FAO database on agricultural banks accessible through the Web.

75. Potential Utility: The AGS pages are the third most consulted divisional web pages in the Organization, behind only the Nutrition Division (ESN) and the Plant Production and Protection Division (AGP). Marketing has a particularly extensive set of information and almost half the enquiries by external users (hits) of AGS sites are to marketing pages. The web pages are undoubtedly contributing to information dissemination and starting to promote dialogue. The use of information in developing countries is likely to be limited but growing (see Chapter V, PER 1996-97). INPhO is still at an early stage of development but has the potential to provide a framework for much of the division's information. The commitment of GTZ to this system is demonstrated by its secondment of staff.

D. Computerized Tools

76. Output: For Market Information Services a computer-based guide, FAO - AgriMarket, was released in 1994 and a new Windows 95 version is now under test. In Farming Systems Development, a tool for storage and analysis of farm management data has been distributed (FAYSDB). MicroBanker, low-cost banking software, designed to automate banking operations and which can run on basic PC equipment has been a major output in Rural Finance (see Box 3). The system is not viewed solely as a computerization facility but as a way of introducing improved systems for banking operations.

77. Potential Utility: AgriMarket has been used in some 10 countries but its use is limited by the small number of government marketing information services. It is hoped that version 2 will see wider application by the private sector, but following the launch of a proven version, no further FAO involvement with program development is envisaged. FAYSDB has also been used by countries but FAO itself is not satisfied with the architecture of this product and it has been discontinued. MicroBanker, on the other hand, is a leading product in its field. In 1995 it was being used at 500 sites, mostly in Asia. By 1998 this had risen to over 1 000 sites in some 27 countries. Most copies were originally distributed through projects but some have now been sold resulting in cumulative sales totalling US$ 200 000 and annual turnover of US$ 100 000 in 1998. Users include commercial banks, for example in Sri Lanka where it is used at the branch level. There is anecdotal evidence of banks being able to substantially reduce their costs following introduction of the package (e.g. Uganda). Efforts to promote a regional commercial provider "MicroBanker Asia", which began with a UNDP-sponsored project, have not proved viable. It is argued that MicroBanker does not have a large enough market to interest a software house with international outreach and that larger software houses freed from any FAO involvement would move the product up market to use away from the primary target in rural areas.

Box 3. The MicroBanker Software

MicroBanker has been the biggest single output of the programme during the period under review, absorbing the equivalent of one staff member's time and about one third of non-staff resources. It was conceived through a field project in 1981. Several TCP projects developed the product in Asia, followed by a regional UNDP project. There was cooperation with the World Council of Credit Unions (WOCCU) to ensure the suitability of the package to credit unions. The first off-the-shelf complete package was released in 1994, with French and Spanish versions following in 1995 and there is now also a Russian version (other language versions have been customized, e.g. Thai and Latvian). A three-year Japanese-financed project ending in 1996 did much to enhance the system and introduce it to new countries. There was a heavy emphasis under the programme on training and a network of some 30 service providers has been built up. These install the software and maintain it, charging the users. The income from MicroBanker sales is used to maintain and further develop the package and provide warranty support. A final MS DOS version of MicroBanker will be released in 1999 and an agreement has been entered into with GTZ to produce a MS Windows version.

E. Meetings and Training

78. Output: All sub-programmes have some meeting and training activity and there is often an overlap between discussion and training. The Regional Offices have been very active and 52 percent of meetings were regional and 27 percent national (of the national meetings nearly all were for discussion of Onchocerciasis zone rehabilitation in west Africa). In the case of training, 84 percent of activity was regional and 15 percent national (much of the national training was in marketing extension). With increasing demands on the regional staff for technical support to the Field Programme and in provision of advice directly to countries, there may be a decline in regional meetings and training. The programme has had only two regular committees or commissions which have both now been discontinued. Of these, the Regional Commission on Farm Management for Asia and the Far East last met in 1997. It has laid the basis for ongoing contacts, including the publication of a regional journal twice per year. The FAO Panel of Experts on Agricultural Engineering was last convened in 1994 and the contacts with industry, practitioners and academics that the panel provided are now being pursued through the International Commission of Agricultural Engineering (CIGR). Regular meetings have also been supported of the Scheme for Agricultural Credit Development (SACRED) and the regional marketing and finance associations (see below).

79. Potential Utility: No independent assessment of the results of meeting or training activity is available. The most cost-effective appears to have been that facilitated through regional networks and associations. Participants generally rated sessions highly and there is little doubt that participants are public-sector leaders in the sub-sectors and do have some opportunity to apply the results of the information and exchange of experience in which they participate.

F. Field Programme

80. Output: All sub-programmes have seen a continuing decline in their Field Programme activity except for Farming Systems Development, where there was a slight increase up to 1997 which has since been reversed. For the programme as a whole, technical support to the Field Programme fell from over 40 percent of professional staff time in 1992-93 to 23 percent in 1996-97, reflecting both the decline in the size of the Field Programme and the increased emphasis on normative work. All units provided backstopping to projects in other sub-sectors 6 and this has been especially important for Farming Systems and for Rural Finance (with respect to project credit funds). Agricultural Engineering is required to clear specifications for all purchases of tools and machinery by projects and this is often important in emergency shipments. During the period under review the Regional Office input was slight but is now rising with the transfer to them of responsibility for the first line of field technical support.

Table 4: Programme 2.1.4 - Distribution of Projects by Major Thrust
  Farming Systems Devpt. Agric. Engineer-ing Post Harvest Mgt. Food & Agric. Industries Marketing Rural Finance Total Prog.
Policy   10%   2% 34% 7%  
Programme and Institutional Development 84% 40% 54%   52% 80%  
Technology Introduction     41% 55%      
Emergencies   41%          
Agri-Business Development 2%     10% 4%    
Farm Management 14%            
Blacksmiths Development   5%          
Infrastructure & Storage   4% 4%   10%    
Sericulture       19%      
Apiculture       14%      
Small-scale credit           13%  
Total Expenditure US$ (000) 1992-97 15 089 13 408 13 756 18 692 21 286 5 956 88 187

81. Relation to the Normative Programme: In all sub-programmes, the Field Programme was used to extend RP outputs and to develop products for RP dissemination. Policy work has been particularly dependent upon FAO-TCP projects:


Box 4. Examples of RP Normative Interaction in Field Projects

Farming Systems: The FARM Project began in 1993 and UNDP funding came to an end in 1998. It serves eight countries (China, India, Indonesia, Nepal, Philippines, Sri Lanka, Thailand and Vietnam). FARM is based upon 16 selected pilot sites in poor, rainfed areas (each with a minimum of 1 700 adults) supported by local inter-disciplinary teams. The local communities are facilitated to carry out Participatory Rural Appraisal (PRA), focusing on identifying and addressing their agricultural and natural resource management problems but not ignoring other aspects of development. Community revolving funds have also been established and more recently trials of Farmers' Field Schools were initiated for land management. Formal country coordinating networks have now been set up bringing together research and agricultural and rural development and exchange of experience both nationally and regionally. Participatory Assessment and Planning (PAP), the on-site method developed by FARM, consists of five steps: (i) assessment of the natural resources available to the community and constraints and potential for sustainable use; (ii) a similar analysis of the social situation; (iii) a collective vision of where people would like their community to be in the next 3-5 years; (iv) collectively develop a community plan; and (v) develop an implementation strategy with built-in monitoring and evaluation. This then progresses into a systematic cycle of enquiry, learning and doing.

Agricultural Engineering: A new approach in agricultural engineering projects was demonstrated in Albania. The project was formulated to provide farmers and contractors with an extended range of equipment suited to their individual requirements. The project approach differed from the previous standard methods of provision and then sale of machinery and implements which may or may not have been suitable to that which farmers and traders would have bought given the choice. Dealers defined the specific elements of the implements and equipment for the project to purchase and the equipment was supplied through the dealers, strengthening the local infrastructure.

Emergency Work in Ethiopia: The US$ 1.6 million Netherlands-funded project provided tools through local purchase from blacksmiths to displaced farmers and resource-poor farmers affected by drought or pest-induced crop damage in the 1993 season on a cultivated area of 87 000 hectares. The evaluation mission confirmed that the beneficiary selection procedures through the Peasant Associations ensured that the intended beneficiaries, including the poor and women-headed households, were in fact reached. The tools were provided on a cost-recovery basis to avoid aid-dependency by the beneficiaries and blacksmithing was also rehabilitated.

82. Findings of Independent Project Evaluations: Projects technically supported by the programme were evaluated by independent tripartite evaluation missions during the period as follows: Farming Systems Development - 2; Agricultural Engineering - 9; PFL - 4; Agro-industries - 2; Marketing - 2; Rural Finance - 1. Missions generally commented on over ambitious objectives and inadequate project designs but findings on results were generally positive as summarized below:

G. Policy Advice to Member Countries

83. Output: Policy advice is frequently provided through the Field Programme (especially FAO-TCP) and also disseminated through the networks and associations discussed below. Also:

84. Potential Utility: Cases of wholesale and immediate adoption of policy prescriptions are very seldom seen, rather the contribution is to a process. Where policy advice is having an impact it tends to result in dialogue between the countries concerned and FAO. Dialogue was at its most effective in the model initiated by Farming Systems Development for rehabilitation of Onchocerciasis-freed areas, where national discussions were undertaken to internalize a process which was not primarily based on expert reports. Dialogue was also evident for Marketing and Rural Finance in certain of their projects and through the associations. It was less evident for other sub-programmes where there was no information on follow-up to advice.

H. Networks and Associations

85. Output: All the sub-programmes support some network activity (e.g. INPhO above). The networks are designed to provide a low-cost framework for exchange of ideas and for FAO to gain feedback and disseminate approaches and lessons. The strategy has sometimes been to develop task-orientated short-term networks to look at particular issues, such as has been done to follow up on issues raised by the Regional Commission on Farm Management for Asia and the Pacific. There are interactions with a number of industry associations, such as the Institute of Food Technology7. The Regional Rural Finance 8 and the Regional Marketing 9 associations are among the most successful networking arrangements actually instituted by FAO and form an important aspect of the implementation strategy for the two sub-programmes (see Box 5).

86. Potential Utility: Networks and associations provide a low-cost method of convening meetings and training and offer an important opportunity for FAO to disseminate and gain information and initiate new normative work. Support to initiatives originating outside FAO can be very cost-effective where suitable mechanisms exist and are prepared to work closely with the Organization. This was the case for Farming Systems where FAO inputs provided an essential boost to African efforts. The regional finance and marketing associations represent a substantial impact of FAO activity over the years. They were originated in important subject matter areas for which alternative networks did not exist. The discussions in associations have made a substantive input into thinking on structural adjustment and liberalization issues. Private sector participation in the regional marketing and finance associations has, however, been poor. The Rural Finance Associations are financially independent, drawing additional grants from other agencies including GTZ, IFAD, USAID and the World Bank. This allows them to carry out substantial independent programmes of meeting, training and technical exchange activity. Although all the marketing associations charge dues, and in the case of AFMA continue a sizeable programme financed by themselves, they are, with the possible exception of AFMA, unlikely to be sustainable without continued FAO sponsorship. One rural finance sub-regional association was allowed to die and in other areas of the programme's work, efforts should not be devoted to reviving networks which have become dormant and have little scope for sustainability, such as those dealing with a limited technical area.


Box 5. Regional Associations, the Example of APRACA

APRACA in Asia and the Pacific is the most active of the regional rural finance associations and has 56 members in 21 countries, including new countries of Asia. Membership is predominantly by Agricultural Development Banks, but there are also cooperative banks, central banks and a few commercial banks. Membership fee income is US$ 120 000 per annum which covers the costs of a small secretariat hosted in the FAO Regional Office (RAP). There are three decentralized services hosted by member institutions:

  • a training programme CENTRAB with income of about US$ 60 000 per year of which US$ 40 000 is course fees. From 1989-97 some 1 670 persons were trained on two-week courses in various aspects of rural finance. An evaluation found that the training had been successful in skill transfer but had limited policy impact as the trainees were not at a sufficiently senior level;
  • a consultancy service ACS which has worked principally in the host country, Indonesia, and which had a turnover of US$ 600 000 in 1996;
  • a small publication programme hosted in India which brings out a quarterly journal.

APRACA has located funds for specific projects in recent years from GTZ for development of bank links with self-help organizations for credit and saving at the grass roots (1986-1997 - US$ 150 000 per year); from IFAD for development of links to micro-finance (1996-2001 - US$ 850 000); and from Switzerland through ILO for work on collateral substitutes in lending (1990-98).

I. Mainstreaming Gender and Environmental Issues

87. Sub-programmes have been actively involved in including the environmental and gender dimension in their work. The Panel of Experts on Agricultural Engineering discussed both environmental and gender issues. Eleven percent of those attending meetings were female and for training, where FAO has more control, the proportion rose to 23 percent. Training included gender issues in agricultural engineering; rural women and small-scale enterprise (agro-industry) and marketing training for rural women. Projects addressed finance for women's small-scale enterprises and the gender dimension was very important in Farming Systems Development (FSD) work. There has been some difficulty in moving from advocacy to practical mainstreaming and it was probably only in FSD and in the recognition that women often represent a better credit risk than men that this was really achieved.

88. Work has begun in assessing the costs and returns of conservation farming systems as there are doubts as to the economic viability, and thus sustainability, for some of the solutions proposed. Agricultural Engineering has worked on conservation tillage. Attention has also been given to sensitization on environmental issues in the provision of financial services, including a publication. It can be questioned, however, whether this really came to grips with how environmental issues would be practically addressed.

V. POTENTIAL FOR SUB-PROGRAMME EFFECTS AND IMPACT

89. Farming Systems: It is generally agreed that FAO has been instrumental in carrying forward the concept of Farming Systems Development (FSD) from those of Farming Systems Research (FSR). Work has also had a positive impact in the growing worldwide interest in, and application of, FSR and FSD. There has been a particularly strong push in the direction of more participatory and more qualitative approaches to assessment. The FSD approach has now converged with decentralized and participatory approaches originating from other disciplines and provides a different point of entry for participatory bottom-up development. It has helped to reinforce the point, sometimes forgotten by those starting from a more sociological point of departure, that solutions to people's problems must be technically and economically viable. However, it shares with those approaches a disregard for the demands which are made on NGO and government services, which frequently are not replicable in quantity or quality, and a tendency to feel community-based solutions will work in all situations.

90. A substantial set of basic publications on FSD and Farming Management has been produced. Other published material on the dynamics of specific farming systems was of wide interest (e.g. campesino agriculture in Latin America or agro-pastoral systems in the Sudano-Sahelian zone) but some material was more restricted in its audience and the cost-effectiveness of this particular work is questionable. Initial work on micro-information for policy formulation emphasized the importance of community input into policy but contributed rather little to bridging the conceptual gap, with publications tending to describe data gathering and analysis techniques from both the micro and macro side of the divide. More recent work has examined actual information needs for policy. Recent work on farm management has assisted in advancing ideas on how farm management analysis methods developed for western agriculture can approach the analysis of farm households. However, there is still opportunity for further development and application of appropriate methods for analysing, not individual farms, but small farm models for farm domains (homogeneous zones) and other rural systems such as irrigation command areas, particularly in a dynamic context. For both farm management and farming systems' approaches, an important gap has now been recognized: virtually no attention was given to the cost-effectiveness of applying different methods and approaches for problem solution, leaving the impression of "the more the better", rather than what is the minimum required.

91. Agricultural Engineering: The sub-programme has made particular progress in encouraging FAO-assisted emergency interventions to design the provision of agricultural equipment in such a way as to reinforce the indigenous supply chain (efforts to encourage local purchasing and the strengthening of local blacksmiths). Useful work is now being done in the integration of mechanization improvement into the FAO Special Programme. However, if the sub-programme is to further strengthen its impact it will need to increase synergistic action with other units, especially within the Agricultural Support Systems Programme. Impact will also be multiplied through the close interaction and information networking being fostered with the agricultural engineering industry.

92. Post-harvest Management/Prevention of Food Losses (PFL): Frequent reviews were commissioned of performance (1983, 1987, 1992, 1993 and 1997) demonstrating a desire for improved effectiveness. Previous field work had had substantive impact and FAO must take part of the credit for the mainstreaming of post-harvest concerns, but during the period under review, the programme has had limited effect. In addition to the decline in the Field Programme, an important contributory reason has been the lack of stability in direction (the unit had three institutional locations within AGS in the last five years). Future work now needs to be totally integrated with the work of the programme as a whole, with the International Network on Post-harvest Operations (INPhO) providing a promising route forward (post-harvest issues being those of farming systems, processing and marketing).

93. Food and Agricultural Industries: Prior to the period under review, the sub-programme was probably the first in FAO to attempt to highlight the importance of the private sector, with which it has worked directly in meetings with Chambers of Commerce. It has concentrated effort in a number of niche areas where there were believed to be opportunities for developing country industry. The emphasis was on responsiveness to demand. However, with the exception of sericulture and apiculture, the demand-driven nature of this work did not lead to examples of approaches or technologies which could have very widespread replication and thus effect. Now in the formulation of the Strategic Framework, a more comprehensive strategy is underway for agri-business development and as an information focal point, rather than a technical advisor on individual industries.

94. Marketing: The establishment of the regional agricultural marketing associations was an impact of the sub-programme and these continue to be major interlocutors with an important multiplier effect. The interest in the sub-programmes work is also evident from the interrogation of its website. A substantial set of training manuals has been produced with the potential for extensive use in education and the most authoritative text on marketing for developing countries, continues to be an FAO publication. On the practical aspects of the enabling environment there are concerns on the effectiveness of some of the approaches pursued. For example, inadequate weight appears to have been given to the negative experience with government-operated market information services (these have often proved unable to provide timely information for producers and traders). Similarly, marketing extension has been encouraged to assist producers in making farming decisions which relate to market opportunities. There can be little doubt that market considerations should be mainstreamed in extension training and extension programmes. However, the limitations in the calibre of extension agents and the declining coverage of traditional extension services also need to be borne in mind.

95. Rural Finance: The Rural Finance Group has accepted the limitations of its size and has not attempted to address all aspects of its mandate. The emphasis has been on policy issues and on the practical improvement of banking efficiency, both highly relevant to countries' needs. Effectiveness has been highly leveraged through partnerships with the regional rural finance associations and GTZ (which also demonstrated that organization's belief in the value of the normative work). Even more than in the case of the marketing associations, the regional rural finance associations are strong and independent and represent an important impact of the sub-programme. A useful input has been made into improvement of savings and credit in FAO's Field Programme, including the Special Programme. MicroBanker is a leading product in its field and its use is now spreading quite rapidly. There could have been greater initiative to both work with and influence the micro-credit movement but that movement is largely urban-based and lessons from it have been taken account of for application in the rural context.

VI. SUMMARY ASSESSMENT OF PROGRAMME PERFORMANCE

96. For most of the areas of its normative work the Agricultural Support Systems Programme has few competitors among international organizations. The International Agricultural Research Centers carry out some work in the development of mechanization, in post-harvest operations and in farming systems research. UNIDO has work in agro-industry. In Marketing and Rural Finance FAO stands alone, with the exception of the World Bank. These strengths have been recognized by the many other organizations which have chosen to work with FAO. The Organization also has the potential to relate these disciplines to the global agricultural context ranging from the natural resource base, to production and finally the global market, in a way which could not be achieved elsewhere. For these synergies and potential benefits to be fully realized, substantial change is now underway to achieve greater objective orientation and integration in the programme.

97. The evaluation concludes that the programme has provided a relevant and efficient response to developing country needs. This has been particularly true for the Farming Systems Development and Marketing sub-programmes. Strong alliances with external partners have been used to leverage additional resources and disseminate products.

Programme 2.1.4 Summary Assessment
Criteria Assessment
1) Programme relevance in terms of FAO corporate priorities and development needs Relevant to changing role of government and private sector in provision of agricultural services but faster adjustment needed in some sub-programmes to both normative role and changing needs .
2) Coherence of programme design Unsatisfactory - but definition of objectives and forward planning of outputs has been improving. The programme as a whole was not consistent but there was internal coherence within sub-programmes and in most, but not all cases, a valid vision of direction for the sub-programme.
3) Implementation and outputs Good - Overall productivity in output delivery compares well with AG Department, but has been quite variable between sub-programmes. Quality of outputs was reasonable to high. Relevance of output to users' needs was variable but many were applicable to a wide target audience.
4) Achievement of effects and impact Satisfactory to Good - Outputs were generally disseminated adequately. Although there is believed to have been impact this is not supported by adequate information except for the Field Programme where independent evaluations in general reported favourably.
5) Cost-effectiveness Satisfactory - Most of the sub-programmes leveraged effectiveness for production and dissemination of outputs through work with a wide range of external partners and for some sub-programmes networks and associations were important means of interaction. Cost-effectiveness was unsatisfactory where outputs were specific to only one or two national situations.

VII. ISSUES AND RECOMMENDATIONS

98. Effectiveness can now be further strengthened by greater integration within the programme. This should proceed in the context of the organizational policy increasing the responsibility of Regional Offices for support to countries, including networks and the Field Programme. Headquarters will need to move rapidly from the former Field Programme orientation, responding to individual needs, to one based on meeting common requirements for practical policy instruments, approaches and information.


Box 6. A Suggested Mission for AGS

Mission for AGS: AGS will advocate and support the development of entrepreneurship in agriculture, agri-business and other agricultural support services in order to improve rural job opportunities and livelihoods and produce and market sufficient food and other agricultural products.

The division will work to ensure enabling environments which actively encourage the growth of rural enterprise and an entrepreneurial spirit for the generation of incomes and employment, while ensuring full involvement of women and youth, an efficient and effective safety net for the poor and protection of the natural resource base. In particular, the division will promote and assist enabling frameworks which encourage a situation where:

  • good managers with ideas can obtain adequate funding, information and training to operate and expand their farm or related agri-business;
  • resource poor and unsuccessful farmers can find remunerative alternative employment in an expanding rural economy;
  • inefficient and rent seeking uses of resources are discouraged for labour, capital, water and land;
  • expanding rural trade and industry improves access to farm machinery, inputs and opportunities for value added in the marketing chain;
  • production is stimulated and marketing chains developed to meet the needs of the cities and other food deficit areas;
  • adequate standards are introduced to protect the health and safety of rural people working with machines and equipment;
  • the most efficient approaches, including the private sector, are used to provide agricultural inputs and food, including access by the rural poor;
  • sound economic incentives to ensure sustainable use of the natural resource base are in place;
  • public and private sector decision making for agriculture include sound microeconomic criteria.

A. Issues for the Agricultural Support Systems Programme as a Whole

i) Building synergy in AGS for development of agriculture and related industry as a business

99. A basic feature of the development process is that rural prosperity increases as a growing proportion of value added occurs off-farm through processing and marketing of agro-based products and through increasingly sophisticated support services for farm production. At the same time intensification of agricultural enterprises has a key role in transforming small farms into business enterprises. If rural areas are to develop, with creation of opportunities for employment and income, there can be little dispute that both off-farm and on-farm agri/agricultural-business orientation is needed. Member Nations and major development agencies, such as the World Bank, need systems analysis and advice on the macro-micro interface for an enabling environment which will encourage the climate for small and medium-sized rural business investment by local entrepreneurs.

100. Such an enabling environment brings together, in addition to the necessary basic infrastructure and fiscal framework:

a) knowledge by policy makers of what has worked and has not worked elsewhere and basic "do's and don'ts" of liberalization with food security;

b) a legal framework which engenders confidence to invest while protecting consumers, primary producers and the environment;

c) availability of appropriate and accessible financial services, including money transfers, credit and possibly insurance and venture capital;

d) information on markets, technologies and the conditions for different types of businesses to flourish;

e) training in basic business operations, including the important engineering considerations and such aspects as contracting with producers and consumer wholesalers; and

f) encouragement of entrepreneurs to group themselves to represent their interests, gain access to information and forge business links.

101. This overall theme can provide the most appropriate rationale and glue for the programme. Just as there are advocate units within FAO for mainstreaming gender, participation, community initiative and environmental concern, the division should emerge as the advocate of development driven by people's entrepreneurial desire to better their family welfare. The themes identified by AGS in its Strategic Framework process move in this direction. Working together, and as necessary with other programmes in FAO, the units of AGS have a strong capacity to carry the above agenda forward. Working alone the units have limited scope for policy impact in their sub-sectors and such policy will be less complete.

ii) Prioritization and concentration of resources for critical mass

102. The programme has suffered to some extent from lack of strategic focus. In the process of reorientation, including the consideration of recommendations from this review, the urge should be resisted to merely add in new areas of work and resources concentrated to achieve substantial impact on a limited number of priorities. To the extent that resources continue to be employed in addressing narrowly specialist technical areas, during a transition period, more careful selection of areas for attention would be aided by application of the following criteria: prospects for growth; potential interest to a substantial number of countries; other sources of assistance not already substantially active in the area; FAO point of entry (knowledge of the topic, several requests, etc.) and prospects for normative-operational inter-action. One-off projects, however valid, should be avoided.

iii) Dissemination of outputs

103. A feature of the culture in many organizations is that whereas as production of outputs such as publications and meetings gain recognition, time spent on dissemination and follow-up does not. With the decline in the Field Programme one channel for output dissemination has diminished. A conscious effort needs to be made both to examine how target audiences can be better reached and disseminate outputs. Associations, networks and partnerships will be important in this.

iv) Development of the information function

104. AGS does not have and cannot expect to have the capacity to provide technical advice in every aspect of its mandate. What is more, the greater the personnel resources devoted to narrowly specialized technical expertise, the less the input which can be devoted to the agenda summarized under i) above. Networking should continue to be developed to establish a combined global information resource, especially for agro-industry, prevention of post-harvest losses and agricultural engineering. Within INPhO particular priority should be given to provision of a comprehensive information and referral service utilizing traditional and electronic communication to provide rural agro-industrial entrepreneurs information on technical options available to them, sources of equipment, advice, etc.. Such a service would be targeted at medium-sized national enterprises, governmental and non-governmental advisory services and development agencies. It would not attempt to provide all information through FAO but to make the links with other information providers, both commercial and non-commercial. In addition, short punchy statements of key principles need to be prepared (even at the risk of over-generalization), kept updated and given wide dissemination, including occupying a prominent place on websites. This will help to overcome uninformed decision making by non-specialists.

v) Provision of authoritative sets of education and training materials

105. A comparative advantage has been established in manuals and training materials for developing and middle-income countries, especially in farm management and farming systems, agricultural marketing and agricultural engineering. In Rural Finance such materials are being developed. This strength should be built to provide developing countries with authoritative materials, especially for university level. Materials can be developed in modules and put together flexibly in different combinations for different purposes and target audiences and updated and expanded as needs, resources and opportunities permit.

vi) Carrying forward the conceptual base

106. FAO has gained a certain intellectual leadership in a number of areas (e.g. FSD, pesticide application, marketing and rural finance). Most countries have not yet reached the point of the application of the existing concepts and this suggests that much of the work should continue to strengthen application. However, tomorrow's applications will depend upon today's concept development and today's concepts may not be fully relevant to changing circumstances (as, for example, the role of the state continues to diminish). It is thus important for the programme to maintain concept development in those key areas where some leadership has been established.

vii) Cooperation with other agencies

107. Existing alliances with other organizations should be reinforced. In addition, the scope for cooperation with UNIDO should again be explored in view of the overlaps of mandate and interest in agro-industries. Together with ILO, which has a programme for small-enterprise development, it is possible that scope exists for joint work on a scheme for development of agriculture and related industry as a business, particularly as regards information aspects. IFAD, the World Bank and possibly IFPRI are also important potential partners, especially as regards work on rural finance and marketing.

B. Issues for FAO as a Whole

108. In addition to the many points concerning the role of the programme and areas such as information, which have implications beyond the programme, the evaluation has drawn attention to the difficulty the Organization has in handling semi-commercial products apart from publications such as MicroBanker or the FAO patented coconut water sterilization process. Examples of such semi-commercial products exist elsewhere in the Organization, and it has been suggested that some genetic resources and bio-technical processes might be patented by FAO to assure their continuing availability to all. While it may often be appropriate to turn over such activities to the private sector, there are circumstances where, in the interest of development, FAO needs to maintain the service. For such cases, the existing internal financial and administrative mechanisms are not appropriate and therefore, it is suggested that proposals should be made to the Conference for an appropriate FAO revolving financial facility to be established on a trial basis, enabling such products to be marketed and supported with funds ploughed back for their development and maintenance, with carry over of working capital.

109. The Agricultural Engineering Branch (AGSE) makes a substantial input into emergency projects, reducing resources available for normative work, a problem experienced by other units dealing with rehabilitation inputs such as seeds. The Special Relief Operations Service (TCOR) could be given the necessary guidance to apply the recommended approach while AGSE keeps a watching brief on the outcomes. Preferably, however, in a policy which has implications for the Organization as a whole, AGSE should be able to charge services to emergency projects, as for normal technical cooperation.

Box 7. Issues for Work in Individual Subject Matter Areas

Farming Systems Development: With a reduction in the effort devoted to Farming Systems Development, the service should provide the micro-economic input for the work of FAO as a whole, both at Headquarters and in the regions and in particular for the Major Programme on Agricultural Production and Support Systems. This will include analysis of the conditions for viability of frequently espoused solutions for development problems of both an environmental and economic nature (e.g. conservation tillage of sloping lands; improved income through export of high value perishables). With care not to over stretch very limited resources, technical work can also: a) develop farming systems analysis as a practical tool for holistic examination of potentials for the optimization of welfare and sustainable use of natural resources, as well as identifying key constraints within systems subject to amelioration through an improved policy and enabling environment; b) develop practical business planning and decision support tools (e.g. expert systems), approaches and methods.

Agricultural Engineering: Sound mechanization policies can benefit greatly from close inter-action with other AGS Units. The evaluation endorses the ongoing reorientation of work with emphasis placed on development of agreed standards for application in developing countries, information networking, and the policy context. Remaining work on particular technologies outside the context of standardization should be de-emphasised. Key principles for engineering inputs in disaster rehabilitation should be given wide distribution.

Food and Agricultural Industries and Post-harvest Management: Substantial re-orientation is underway to support the vision of agri-business development referred to above. In this context there may be a case for the service asserting a role as focal point for agro-industries in FAO. The information function through INPhO should receive priority. Development of standards for small-scale agro-industry appropriate to developing countries could also be important. Direct provision of specialized technical information on processing of particular commodities or processes (e.g. starches) and stand-alone projects should cease to be a priority. There also needs to be further integration of thinking on post-harvest loss prevention with other aspects of post harvest-systems.

Marketing: The present orientation of the work is generally supported and the recommended orientation for the programme as a whole will require a substantial input from the Marketing Group. Focus could now usefully move from the policy level to a systematic assessment of what exactly is required for an enabling environment which will allow the private sector to take up an efficient and equitable marketing role. The issues of market information and marketing extension have already received attention. Other needs of the enabling environment which could benefit from clearer definition include needs for: training; finance; licensing and inspection; support to activity in marginal areas; and for traders and processors to group themselves to ensure that their interests are adequately reflected in national policies.

Rural Finance: A substantial input will be required from the group into work on financing for agricultural and agri-business. It will also be important to further the important potential benefits of trader finance for small farmers, including the incentives and controls which need to be put in place to encourage an expansion in such services with fairness for the borrowers. Given the almost irresistible political pressure to support the poor through credit, there is a need to develop guidance on the circumstances under which credit can be usefully employed for the rural poor, its limits and the place of other types of finance, including grants and subsidies for marginal producers who cannot become immediately financially viable. MicroBanker is now a viable product and its operations needed to be placed on a more commercial footing. Currently no contractual relationship exists with service providers, who are free to follow their own practices in providing services to users. This should be rectified through some form of letter of understanding as well as improving training.



Annex 1

EXTERNAL PEER REVIEW 10

Comments on the Evaluation Report

110. The team concluded that the generally favourable tone of the evaluation was justified. It also concurred with most of the observations made regarding individual sub-programmes. The report contains a good discussion of changes in the development environment and the Organization's institutional focus - from support to field projects to more conceptual "normative" work. The importance of external partnerships is underlined, but the discussion of internal and external stakeholders should be expanded. This would be needed before any impact assessment can be carried out. The lack of impact assessment is an important weakness of the evaluation and it is urged that this omission be rectified in future exercises of this nature.

111. A major achievement of the evaluation has been to contribute to the development of a shared vision of the mission of AGS that gives it a distinct corporate identity and substantive personality within the Organization. On the basis of this shared vision, it should be possible to approach the ongoing programming exercise, with a common set of assumptions concerning the goals and strategies of AGS, thus making it more likely that a coherent and effective programme will be developed around a core of interdisciplinary projects which address key agricultural development issues while exploiting the comparative advantage inherent in the Organization and within the division itself.

Comments on Individual Sub-programmes

112. Farming Systems Development: The strong endorsement of the emphasis on Farming Systems Development (FSD) in the recent work within this sub-programme is supported by the team. The sub-programme is now, however, undergoing a change in emphasis and FSD advocacy has been de-emphasized in view of the fact that it has been widely internalized and methodologies developed. The new thrust of the service is more consonant with the commercial/agribusiness development goals of the division as a whole, and restores farm management and production economics firmly as its central focus after a period where process was, legitimately, given pride of place. Past initiatives concerning micro-data to strengthen sectoral policy analysis have now matured and this work should be de-emphasized. The team strongly supports the new overall programme thrust and notes that it positions the service extremely well to play an essential role in the new interdisciplinary programme objectives of the division as a whole.

113. Agricultural Engineering: The findings regarding Agricultural Engineering are generally valid. It is rightly praised for emphasizing the normative aspects of the work. The contribution of engineering inputs to most aspects of production and post-production processes is vital to increased labour productivity and hence per capita incomes. The current re-orientation towards the development of engineering input systems and its integration with general input supply is therefore important. The branch has a high potential for partnership and cooperation both within and outside the division.

114. Food and Agricultural Industry (including Post-harvest Management): The team concurs with the general thrust of the comments concerning the need for more concentration and coherence within the sub-programmes. While it is appreciated that a period of transition has been necessary for a service that once backstopped 400 field projects and still supports around 50, it should attempt to reduce its current level of technical support to individual industrial undertakings. The sub-programme has rightly been moving into the information area; new applications for the INPhO programme are being developed and can be expected to replace the past emphasis on technical bulletins and guides generated within the service. There should now be a further increase in efforts related to policy advice and advocacy activities that can lead to the creation of an enabling environment for increased institution building and private sector investment in agricultural industry - with a particular focus on opportunities to capture value-added by small farmers, as well as creating an enabling environment for small-scale entrepreneurs involved in agricultural processing. A field assessment of demand in this area would form a sound basis for programme development.

115. Marketing and Rural Finance: The team is substantially in agreement with the favourable observations and conclusions. It is felt that the work should continue to focus on contemporary problems arising as a direct result of the process of structural adjustment and economic liberalization. For example, field-level analysis of markets that are now in transition assists the Organization to develop approaches within the context of competitive and diverse markets following the withdrawal of many government services and the slow emergence of private sector alternatives. Market intelligence initiatives have so far met with limited success, probably because the function has depended on inefficient government services rather than the private or informal sector - including traders and moneylenders. Renewed efforts are important, however, with due consideration given to - and involvement of - the actors in this sector.

116. The work related to rural finance needs a sharper focus, perhaps by developing a more firm position on rural finance - not merely concentrating on general aspects of agricultural finance. The work should assist in developing the informal sector and in transferring experiences between informal, semi-formal and formal components of rural finance. It should engage itself more in the semi-formal sector - influencing the micro-finance movement, e.g. by underlining the need for savings initiatives as well as institutional capacity building. It should also assist the formal sector in extending its coverage to clientele presently served only by the informal sector.

The Agricultural Support Systems Programme

117. Despite steady progress to a more holistic approach in recent years, the report correctly pointed to the disparate nature and lack of programme coherence of a major part of past AGS work. It is agreed that this lack of corporate identity and failure to exploit the potential for inter-service synergies has been an important source of weakness and has doubtless been an important reason for AGS's currently poor level of budgetary support within the Organization. This weakness has now been fully recognized and the AGS strategic planning workshop, held during September 1998, defined common themes in the area of support to the private sector, commercialization and liberalization of agriculture, the problems raised by increased urbanization, intensification of resource use, marginalization of certain rural groups, and increasing differentiation of consumer demand.

118. It is felt that the mission statement in the report is an excellent vision for AGS as the advocate for small business on and off the farm - giving it a distinct personality within the Organization. Its mission, i.e. what can be measurably delivered, is clearly captured in the report of the AGS workshop in terms of the following key themes.

119. The newly-defined vision and mission of the division has recently been complemented by the drafting of well-conceived medium-term objectives and strategy elements. The planning of new budget entities is going ahead within this coherent framework.

Recommendations

120. The team feels that it is extremely important for AGS to continue strengthening the delivery of divisional programmes as distinct from a series of service programmes. Although the fact that accelerating progress has been made within the established institutional structure should not be overlooked, this structure should eventually be re-examined with a view to enhancing its productivity and its effectiveness in addressing interdisciplinary topics. Among possible options, the creation of a single divisional pool of expertise, with group leaders in the main disciplinary areas, has several attractions. Overall managerial responsibility should reside at divisional level and specific management of interdisciplinary projects could be assured by selected project leaders. Other options include different configurations for integrating the current disciplinary groups into two larger services.

121. The effect on the work programme of the following staffing issues should be addressed:

122. The question of ad hoc requests from member countries to solve specific technical issues is a problem area that impinges negatively on the normative activities of some units. Responses of this type are, however, an integral part of FAO's services to member countries and a strategy needs to be developed to minimize any disruption. The following changes are recommended to address the problem:



Annex 2

AGRICULTURE DEPARTMENT'S RESPONSE TO THE EVALUATION

General

123. The evaluation exercise followed fairly closely upon the divisional strategic planning workshop. In retrospect, this timing was particularly fortunate, since the proximity of the two exercises meant that each became more valuable than might otherwise have been the case. The department sees a lot of merit in the issues raised for the programme as a whole under Section VII. Of particular note is the new mission statement for the division, which puts AGS in a key position to drive development efforts in a modern, efficient direction, utilizing commercial principles and methods within its areas of competence and responsibility.

Sub-programme Specific Comments

124. The department accepts the generally positive findings of the Evaluation Service and external reviewers with respect to Farming Systems Development. We agree, in particular, that the sub-programme has been instrumental in carrying forward the farming systems approach, both externally and internally, and in doing so has provided relevant and efficient response to developing country needs. The department does not concur with remarks made in relation to excessive demands on NGO and government services and lack of attention to cost-effectiveness, unless these are intended as generalizations about the farming systems approach rather than specific evaluation findings. The department fully endorses the evaluation recommendation that the service should provide micro-economic input for the work of FAO as a whole and in particular for the Major Programme on Agricultural Production and Support Systems. In relation to this, the department notes and agrees with the external reviewers that the service should de-emphasise FSD advocacy and focus on the new interdisciplinary programme objectives of the division as a whole.

125. We fully concur with the findings relating to Agricultural Engineering.

126. We concur with the findings of the evaluation and the external review team regarding the progress made in recent years in Agricultural Marketing. The report recognized and appreciated the relevance of the changes made in the nature of the work, changes which have been prompted by two factors. First, the demands consequent upon structural adjustment, and shift in emphasis to creating conditions for effective and efficient private sector provision of input supply and marketing services. Second, the increasing importance of the normative role of the service, with a declining Field Programme. The dynamism in the resulting work directions, and range of products, means that the marketing aspects of the new divisional projects (for the 2000-2001 biennium and beyond) will benefit from starting on a sound basis.

127. The report also recognized the necessity for Rural Finance to have focused on a few high-priority areas of intervention in order for progress to be made. The report further states that the progress observed was impressive, but the external review panel felt that more attention should have been given to support for the semi-formal sector. The apparent lack of attention here is the result of the focus policy, and it is pertinent to observe that no two informed subject-matter specialists are likely to come up with an identical ranking of priorities. The department welcomes the favourable comment and recognition of highly-valued collaboration with GTZ, ranging across several areas of work.

128. The findings of the evaluation and the external panel on Food and Agro-industries and Post-harvest Management are generally endorsed. There is much that is positive, both for the sub-programmes and their efforts to come to terms with a changing mandate, and with the efforts made to take advantage of the potential for synergy within the division. While the service is not certain that they concur with the reference to "niche" opportunities, they support and embrace the concept of "networking" across a range of industrial sectors, and with a host of partners, in an effort to support our clients in FAO member countries. Information is currently a key resource and the service has been prompt to highlight the opportunities that exist, for example, with the promotion of INPhO. Agro-industries, more than the other commercial and/or technical sectors, has enormous potential for wealth creation; this has been recognized within the text of the report, within the divisional mission statement and in some of the recommendations that have arisen from the evaluation report. It has also become central to the planning effort that the division as a whole has made for the 2000-2005 period; and their selection of a few key programmes centred on poverty alleviation, employment creation, food security, information and wealth. Commercial viability is essential and, herein, the service will continue to have a major promotional and supporting role within the work of the Organization.

Concluding Remarks

129. In conclusion, the department is quite satisfied with the findings of the evaluation and welcomes the issues raised and recommendations made in the Programme Evaluation Report. The suggested mission for AGS is timely and effectively builds on the progress achieved by the division in its strategic planning.

COMMENTS OF SENIOR MANAGEMENT

130. With regard to semi-commercial products, the Director-General intends to review the policy and legal implications of the direct involvement of the Organization in such activities, the role of the Organization vis--vis the private sector in such cases, and the Organization's policy towards intellectual property protection of innovations developed within the Organization. For cases where the Organization's involvement, whether directly or indirectly through the taking of our intellectual property protection, is justified, this will require Conference authorization for the establishment of an appropriate financial facility whereby the proceeds of the marketing of any such products developed by FAO may be ploughed back for their development and maintenance. The Director-General intends to review feasible options for such a mechanism with a view to proposing such a facility to the Conference at an early date.

131. Regarding the second issue of reimbursing FAO technical units for their technical services to emergency operations under the Special Relief Operations Service (TCOR), the Director-General agrees that the technical units should, to the extent possible, be appropriately compensated for their service to TCOR operations as practised for technical services to operational activities under TCP and the Special Programme for Food Security.

2 The review covers the period 1992-98. Statistical data generally relates to the period 1992-97.

3 Prior to the period under review biennial Field Programme expenditures had been running at some US$ 12 million per biennium. In 1992-93, this figure had dropped to US$ 7 million and was US$ 2.8 million in 1996-97, with a continuing downward trend.

4 A global network system grouping national and regional societies of agricultural engineering as well as companies and individual scientists.

5 AGSP has provided the focal point within the Organization for the inter-agency work to rehabilitate areas cleared from Onchocerciasis (river blindness) in West Africa, but it has proved difficult to secure inputs from other divisions. There have been good examples of work between Agricultural Engineering and the Natural Resources Programme on conservation tillage. There is work between AGSI and the Crops and Commodities and Trade Divisions on the processing of industrial crops, particularly in the formulation of projects for the Common Fund for Commodities.

6 Not reflected in the figures.

7 Elsewhere existing networking arrangements are being supported or collaborated with as has been done with the central bodies and regional chapters of the Commission of Agricultural Engineering (CIGR) and the Association for Farming Systems Research and Extension (AFSRE), as well as the African Farm Management Association.

8 Africa (AFRACA), Asia and Pacific (APRACA) and Near East (NENARACA)

9 Asia and the Pacific (AFMA), Eastern and Southern Africa (AFMESA), Near East (AFMANENA) and Latin America (ALDMA)

10 The Peer Team met in Rome for 3 days (9-11 November 1998) and consisted of: Mr. M. Hall, Farming Systems and Farm Management; Mr. M. Ali, Agri-business; Prof. N. Hatibu, Agricultural Engineering; Mr. B. Genberg, Marketing and Rural Finance.

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