2.1 The Mandate of ILRI
2.2 Legal Status
2.3 Origin and Evolution
2.4 Financial Status
2.5 Resource Mobilisation
2.6 Conduct of the First Review
The studies that led to the establishment of the International Livestock Research Institute (ILRI) recommended an expansion of CGIAR livestock research from the focus on sub-Saharan Africa that had characterised the research of ILCA and ILRAD to a broader. portfolio that would address the priorities on a global scale. Two kinds of systemwide-responsibilities were prescribed for the new Institute: 1) a global mandate with respect to its own livestock research and 2) a convenor role with respect to livestock-related research across the sixteen CGIAR centres. See Box 2.1 for ILRI's current mandate, mission, and objectives.
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The International Livestock Research Institute (ILRI) Mandate ILRI has a global mandate for livestock research in developing countries through which it contributes to food security, poverty alleviation and environmentally sound management of natural resources. Mission ILRI's mission is to: Enhance the well-being of present and future generations in developing countries through research that improves sustainable livestock production Objectives To improve the productivity of smallholder livestock systems and protect the natural resources that support them. |
ILRI's first strategic plan asserted that the Institute's aim is to contribute to sustainable improvements in the productivity of animal agriculture in developing countries in ways that enhance nutrition and wellbeing, especially of low-income people. It laid down the following operational goals:
· to serve within the CGIAR as a world centre for research on major problems of animal production and health;· to provide ways and means of controlling major animal diseases which seriously limit livestock production;
· to strengthen the ability of NARS to conduct technical and policy research on sustainable livestock systems and thus to develop their own technical solutions to production problems and to promote environmentally sound animal agriculture and rural development;
· to develop, through its own research and in pro-active collaboration with other organizations, technical solutions for increasing livestock production and enhancing the contribution of livestock to sustainable agricultural production and equitable income distribution;
· to contribute to scientific knowledge in a way conducive to solving livestock production problems; such knowledge should relate to the understanding of production and natural resource management constraints and opportunities or to research methods and techniques; and
· to act as lead organization and also as catalyst for CGIAR livestock research.
Further discussion of ILRI's strategy and priorities is provided in Chapter 3.
ILRI is an autonomous, non-profit international organization with independent juridical personality. It was officially established with the accession to the Agreement on the Establishment of the International Livestock Research Institute on 21 September 1994 by five signatory governments and the United Nations Environment Programme. The Government of Switzerland, which sponsored ILRI as an international organization, hosted the formal establishment ceremony and acted as the depository for the Agreement and the Constitution of the new Institute.
Subsequently, two host country agreements were negotiated. An agreement was concluded with the Government of Kenya on 29 December 1994; a second was signed with the Transitional Government of Ethiopia on 8 June 1995. In both documents, the respective governments agreed to apply to ILRI, its staff, properties and assets the provisions of the Convention on the Privileges and Immunities of the Specialised Agencies adopted by the United Nations General Assembly on 21 November 1947.
ILCA and ILRAD were both formed in the early 1970s with mandates focussing principally on Africa. They evolved in parallel, co-operating in selected areas such as research on various aspects of trypanosomosis. From the start, ILRAD's programmes were more strategic, while those of ILCA were more applied and more closely linked to NARS and their networks. Substantial infrastructure was established for the two centres: modem laboratories in molecular immunology and biology were developed for ILRAD in Nairobi; ILCA established a central laboratory complex and experiment stations in Ethiopia, plus operating locations in Kenya, Mali, Niger, Nigeria, and Zimbabwe. Funds for both institutions were generally adequate in the early years and through the decade of the 1980s. With the concurrent establishment of new CGIAR centres and funding pressures on most donors in the early 1990s, however, both suffered substantial losses in research capacity.
From the time of the initial creation of ILCA and ILRAD, donors had considered establishment of a single institution to conduct research on animal health and production. Although the perspective of disciplinary differences had prevailed to form two, subsequent EPMRs reflected the belief that synergies were possible and that some economies could be achieved if the programmes were integrated. Both the decline in funding (see Table 2.1) and some questioning of the potential pay-off of the separate programmes, and even of the general area of livestock research, brought the issue again to the fore in 1993.
Table 2.1 Funding for livestock research at ILRAD, ILCA and ILRI (in US$ millions)
|
Year |
ILRAD |
ILCA |
ILRI |
Total |
|
1990 |
13.1 |
20.9 |
- |
34.0 |
|
1991 |
13.4 |
19.8 |
- |
33.2 |
|
1992 |
12.7 |
16.2 |
- |
28.0 |
|
1993 |
10.3 |
11.8 |
- |
22.1 |
|
1994 |
10.6 |
14.0 |
- |
24.6 |
|
1995 |
- |
- |
23.8 |
23.8 |
|
1996 |
- |
- |
24.8 |
24.8 |
|
1997 |
- |
- |
24.9 |
24.9 |
|
1998 |
- |
- |
25.1 |
25.1 |
Source: ILRI Funding: Consequences of TAC Recommendations and Changes in CGIAR Financing, ILRI 1999
Two studies1 in that year, assessing and defining the need for livestock research, led to the recommendation that a single centre with a broadened mandate for future research in this area be established. Although the effort is still referred to as the "merger of ILCA and ILRAD," the intent of the CGIAR was rather to form a new centre with a global mandate broader than the combination of the existing programmes of those two entities. It was recognised at the outset that differences in the organizational culture and research orientation of the two institutes would need to be harmonised, specifically 1) differences in disciplinary approaches to animal health and production and 2) differences in upstream vs. downstream research.
1 International Livestock in the CGIAR: Report of the Steering Committee. ICW/93/09, 1993; and Progress Report by the Working Group on Livestock Research. MT/93/16, 1993.
In parallel with these studies, TAC developed a recommendation that livestock research in the new Institute be related to forage and cropping systems research in the other CGIAR centres. This set the stage for the establishment of the Systemwide Livestock Initiative, later to become the Systemwide Livestock Programme.
The CGIAR took the decision in 1994 to establish an institute for livestock research that would selectively integrate existing programmes of ILCA and ILRAD, operate with a global rather than African mandate for its own research and have a convenor role with respect to the co-ordination of livestock research across the System. The Rockefeller Foundation was commissioned to implement the decision, including development of an institutional strategy, medium-term plan, constitution, rules of governance, status as an international organization and founding Board of Trustees. The task was accomplished in September of that year with the signing of the Establishment Agreement and the first meeting of the founding Board. Shortly thereafter, the Board appointed ILRI's first Director General and established Nairobi as its formal headquarters, with a continuing principal office in Addis Ababa. As noted, host country agreements were subsequently concluded with both the Kenyan and Ethiopian Governments. The formal dissolution of ILCA and ILRAD and the commencement of operational status for ILRI occurred on 1 January 1995.
The Institute's initial Medium-term Plan (1995-1998), based on TAC's recommendation and CGIAR endorsement, anticipated an increase from the first year's budgetary level of US$-25 million to US$ 32 million in 1998. It included establishment of the Systemwide Livestock Programme with annual funding of US$-4 million. Intervening changes in the financial environment, leading to both an overall reduction of expected funding and in the percentage of unrestricted core, however, have necessitated considerable adjustment to operating plans each year. These changes have had the greatest impact on support for ILRI's more strategic biotechnology research that, in the view of its Management and Board, offers the largest potential for future benefit.
Despite the TAC guideline suggesting that ILRI receive 9.0% of CGIAR donor funds or approximately US$-29.7 million in 1998, donor income last year amounted to US$-23.8-million,1 representing only about 7.2% of the total. Centre-generated income of US$-1.3-million brought the overall funding available in 1998 to US$ 25.1, while a Board-approved draw on reserves and the disposal of some fixed assets enabled the Institute to reach an operating expenditure level of US$ 27.4.
1 1998 figures are provisional, as the accounts for this year had not been audited at the time of this report.
In point of fact, ILRI's new Management and Board have been forced to contend with a difficult and uncertain financial picture since the Institute was established following the dissolution of ILCA and ILRAD. In 1990, for example, the two former Centres enjoyed a joint income of US$ 34 million. During ILRI's first fiscal year, as noted, contributions and centre-earned income totalled only US$ 23.8 million, and revenue has remained essentially flat in purchasing power since that time.
In 1996, under pressure from those Centres that had been particularly successful in attracting project funds and who argued that they were being penalised for their success, the CGIAR Finance Committee (FC) recommended a change in the World Bank allocation process from "donor of last resort" to a matching formula. As a result, the Bank's contribution to ILRI in 1995 of US$ 6.2 million dropped to US$ 4.2 million in 1998 and would have been lower still without a special grant of funds by the FC from the World Bank's allocation to the CGIAR. In 1999, the World Bank matching funds for ILRI are expected to be just US$ 2.8 million. The 1996 adjustment of World Bank allocations was accompanied by a reduction in USAID funds to the Institute.
Management has responded to these changes with a concerted effort to solicit restricted funds, successfully increasing funds from this source from US$ 4.5 million in 1995 to US$ 12.0 million in 1998, a remarkable 267% increase. In addition, the Board authorised a draw on ILRI's substantial reserves for 1997 of US$ 2.1 million, of which only US$ 0.8-million was needed, and US$ 2.3 million for 1998, of which just US$ 1.4 million was drawn.
For fiscal 1999, the Board requested preparation of operating budget scenarios at three levels and approved in September 1998 the midpoint budget of US$ 27.5 million. This approval was based on a careful analysis of funding prospects ranging from 50% to 100% probability and with all fixed and core staff costs covered at the higher percentage. It is not expected to require a draw on reserves, although the Board authorised the Director General to use up to US$ 0.3 million if, in his judgement, the expenditure would represent a productive investment in the continuing effort to attract project funds. Revisions in revenue expectations have since led to preparation of a 1999 budget of US$ 28.1 million for presentation to the Board in March of this year. Were TAC's recommended allocation of 9.1% of the 1999 CGIAR contribution total to be followed by donors, however, ILRI could expect total revenue and a balanced budget in the neighbourhood of US$ 31 million.
As is the case with all CGIAR Centres, ILRI has experienced a reduction in the percentage of fungible unrestricted core. Again, 1991-92 funding of the two former Centres was 79% unrestricted; ILRI's unrestricted core in 1999 is expected to be just 48% of the total, although one third of the remainder is restricted only by programme rather than by project. This compares to a CGIAR Centre average of 63% unrestricted. This change in funding type has important implications for the research plans of all centres. ILRI Management argues that restricted funds tend to support the more downstream areas of research, while those more strategic in nature, principally the research carried out by ILRI's Biosciences Programme, has more difficulty in attracting project funding and is, accordingly, dependent on the decreasing unrestricted core. The reduction in unrestricted funding has affected ILRI's ability to provide partial matching funds to attract new donors and additional project funds. The problem is further exacerbated by the fact that many donors support only operating costs in project budgets, while international staff costs must be covered by unrestricted core.
Unlike some other Centres, however, ILRI has protected its unrestricted funds by relatively firm adherence to its policy of full funding of its restricted grant projects. Its established overhead rate is an unusually low 18% and is comprised of the offices of the Director General, Director of Administration, External Relations, Finance, Human Resources, Administrative Services and General Operating Costs. About 11.5% is collected as some restricted project donors who also provide unrestricted core do not - unfortunately, in the Panel's view - provide overhead. Other cost elements, such as utilities, communications, information technology and library service, often included in overhead allocations at other Centres, are appropriately charged directly to the benefiting project wherever possible.
While dealing with the difficult financial picture. Board and Management have been cautious in preserving the Institute's reserves, and they remain at a high level. (There is a sense among some that ILRI has been penalised for this caution, as other Centres have been allocated special crisis funding rather than drawing on reserves.) At the end of 1998, reserves totalled US$ 9.7 million, including US$ 5.7 million in the capital fund and US$ 4.0 million in the operating fund. The latter represents 52 days operating costs and compares favourably to the CGIAR Centre average of 45 days in 1997. In addition, provision has been made to cover the full cost of leave entitlements and international staff repatriation.
From another perspective, the current ratio (current assets divided by current liabilities - an important measure of liquidity) at the end of 1998 was 2.0 compared to a CGIAR 1997 average of 1.71. The acid ratio, a more stringent test of liquidity in that it excludes inventory, was 1.9.
ILRI invests its reserves and other temporarily surplus funds in US dollar-denominated short-term fixed time deposits with either Citibank in New York or Deutsche Bank in Bonn.
As noted above, ILRI staff have mobilised over the last four years to increase project funding close to threefold in response to the declining base of unrestricted core funds experienced by most CGIAR Centres. The number of donors has grown from 25 in 1995 to 36 in 1998. The effort has been lead by a director-level staff member who heads the External Relations Office (ERO), assisted by two internationally-recruited and three local staff. The office is responsible for backstopping fundraising work of Management and Project Coordinators by providing up-to-date information on donor priorities, co-ordination of submissions and assistance in developing proposals. For example, staff have produced a useful intranet site and CD-ROM that offer examples of successful project proposals as well as templates for the development of project concept notes, reports, business plans and budgets. They manage a proposal database that enables all staff to track proposals from concept note through submission to final determination and to forecast project funding three years in advance. The database also helps keep track of reporting deadlines and other commitments to donors, with specific contract information open to donors via the Internet.
ERO staff are particularly concerned, however, with identifying new investors, and are giving increased attention to private foundations and non-traditional CGIAR funding agencies, particularly in the field of medicine, with cautious consideration to the prospect of contracts with the private sector. A Board/Management Ad Hoc Committee on Core Resources was instrumental in thinking through strategies in this regard during the past year.
In support of their overall objectives, ERO staff lead the effort, given high priority at ILRI, to raise awareness of the importance of the Institute's mission. They produce both generic and donor-specific public information material, in printed and electronic forms, targeted at donor agency staff, the public in donor countries and research managers and policy makers in developing countries.
The members of the Panel charged with conducting ILRI's first External Programme and Management Review met in Addis Ababa for a week-long introduction to the Institute in September 1998. They were accompanied by a Resource Person from the CGIAR Secretariat and a Panel Secretary appointed by TAC. (See the list of members and biographical data in Appendix II). In addition to group and individual meetings with staff and Management, Panel members had the opportunity at this time to attend the Institute's Annual Programme Meeting and at least a portion of the meeting of the Board of Trustees. One member remained in Addis through the remainder of the Board meeting, while others travelled to Ibadan and ICRISAT's Sahelian Centre in Niger to visit ILRI's outposted staff and their collaborators. In both Addis and Nairobi, members of the Panel called upon representative of the local NARS. Shortly after completion of the first phase, one member of the Panel resigned for personal reasons; he was replaced before the start of the second phase.
During the period prior to the Panel's return to ILRI, specifically to the Nairobi headquarters in February 1999, the Chair and one other member visited CIAT in Colombia, while others met with Institute staff at CIP in Peru and at research sites in Ecuador. In addition, a questionnaire was sent to 84 selected collaborators to solicit their evaluation of the partnership; approximately 40% of those solicited responded.
The Panel Chair and one member attended ICW'98 and met there with ILRI staff, Board members, and collaborators.
Although this is the First Review of ILRI, Panel members reviewed and considered the recommendations of the final reviews of both ILRAD and ILCA. Comments with respect to these recommendations are included in Appendix V and, occasionally, in the chapters of this report.
Following a final three weeks of consultation and evaluation, during which time chapter drafts were shared with Management to ensure factual accuracy, the Panel presented its report to Management and Board on 8 March 1999.
