Zambia: Smallholder Enterprise and Marketing Programme (SHEMP)

Transcription

1 Zambia: Smallholder Enterprise and Marketing Programme (SHEMP) Loan Number 21-ZM Project Id Board Date December 1999 Effectiveness Date November 2000 Original Closing Date 1 December 2007 Final Closing Date June 2008 Total Project Cost USD(M) USD 19. million IFAD loan USD (M) USD 16.8 million or USD 1.9? Cofinanciers (if any) USD 0.8 million from?; USD 1.6 million from Government Implementing Agency Ministry of Agriculture and Cooperatives (MACO) Principal Components The goal of SHEMP was to reduce rural poverty among the resource poor smallholders through increased incomes and improved food security. Project's objectives were: i) economic operators trading with the smallholder sector would be stronger and more efficient; ii) smallholders would have adequate and sustainable access to trade in inputs and produce; iii) smallholders would operate farm and value-adding enterprises profitably in response to real market demands. Components of the original design at Appraisal were: i) Support for Smallholder Enterprise Group Development; ii) Market Linkage Development; iii) Policy/Legislative and Institutional Support. In the SHEMP Design and Delivery Strategy (200), the main components were modified to: i) Agribusiness Development; ii) Market Access Improvement; and iii) Smallholder Enterprise Development. Project Performance Design Implementation Relevance SHEMP was designed as a demand led programme, with flexible funding mechanisms. It facilitated the poor to identify business interests which they would undertake to improve their economic welfare. As a design failure, SHEMP did not seriously address smallholders farmers' need to access credit. In addition, little emphasis was placed on production as an important component of the value chain. This seriously constrained the marketing side, given inadequate quantities and poor quality of produce. SHEMP also was thin on the ground, as it had no household approach. The strategy of setting up FARGs and Sub-FARGs was inappropriate as SuB-FARGs were supply-driven, powerless and unsustainably structured. During its implementation, project design changed with the Agribusiness Development component becoming the driver of the programme, replacing the previous role of the Enterprise Development component. At the same time, a reformulated Logical Framework was adopted by MACO; a number of changes were also introduced with regards to the roads component. An M&E Officer was never appointed to the PCO (project coordination office) as originally planned. In addition, in 200 a revised SHEMP Design and Delivery Strategy document was produced together with the logical framework. Other modifications included the reviewing of contracts to bring business culture into play among Service Providers (SPs). After the TTR-1, a number of employees were laid off as a cost saving measure. TTR-2 that had been planned for the end of 200 was undertaken in During its implementation, SHEMP was adversely affected by several changes in the environment: appreciation of the ZMK against the USD that made the local currency cover inadequate to provide for some of the planned activities; the periodic lack of diesel and the drought of 200/0. In response to the strong appreciation of ZMK against the USD, IFAD's response was to reduce on some of the activities to ensure that key elements of the SHEMP were maintained. On the same occasion project's personnel was also made redundant. The achievements of the programme were also limited by some agricultural sector specific interventions, which slowed down the emergence of entrepreneurs in rural areas. Since 200, SHEMP was implemented without a Planning/Monitoring and Evaluation Officer. This was in violation of the supplementary assurances included in the negotiated Loan Agreement between IFAD and GoZ. Project's purpose and objectives were relevant to the priority needs of the smallholders and SHEMP strategy was also consistent with country's policies and PRSP (the Poverty Reduction Strategy Paper). In addition, relevance was enhanced, after the TTR-1 that reviewed and repackaged the implementation of programme components, especially with a stronger Agribusiness Development Component. Project's relevance was found higher for those smallholder groups that were formed before SHEMP and thus had time to consolidate their knowledge, skills 1

2 and income generation. In addition, relevance was higher where groups were formed for marketing purposes, i.e. to market their produce, than as producer groups. The outsourcing of SPs was regarded as inappropriate, as SHEMP should have had enough internal capacity to undertake a significant part of the programme activities. With regard to participatory methods used by CLUSA (Cooperative League of the United States of America) and Africare, relevance of the project was reduced as these methods were based on a preconstructed menu of activities that were not necessarily the priority concerns of the smallholders. This issue affected the ownership of the activities by the smallholders farmers. Effectiveness The programme could have achieved more had all or most of the activities been implemented and had the quality of service provided been much better. The more successful aspects of SHEMP has been Agribusiness Development that has contributed to the change in the small farmers' attitude. Among the factors that hindered project's effectiveness there are the lack of synchronization among project's components and the delayed and inadequate capacities in the implementation of enterprise development component by the SPs. In addition, the outsourcing of SPs introduced substantial delays in programme implementation. The SHEMP budget was also considered too thin to be substantially effective. Group formation per se was not a success, except where the groups were engaged in input and output marketing, rather than as producer groups. Finally, the management of SHEMP was weakened by the laying off of staff after the TTR-1 in 200. The failure to recruit a Planning M&E Officer, in addition to represent a violation of the Loan Agreement, was one of the main failures of the project and seriously hampered its effectiveness. Efficiency SHEMP efficiency was hindered by several factors, such as: i) the delay in the startup of the Agribusiness Development Component; ii) the weak supervision of the various service providers; iii) the fact that the contract system per se was not efficient in service, as it regularly involved tedious tender procedures with costly and time overruns. When making cost comparison with other programmes operating in the same area, on a cost/benefit analysis, the SHEMP model was expensive compared to the contemporary programme ASP. During the project's implementation, there was a significant reduction in the financing for Group Development Fund and the substantial increase in the Market Linkages Fund. The change is commendable as group development was a waste of resources. No analysis has been undertaken to evaluate the financial and economic impact of SHEMP. The main reason was linked to the nature of SHEMP, its flexible mechanism and its realistically unquantifiable total beneficiary base; for all these factors, according to the PCR, an economic analysis would not have been appropriate. At the end of the original closing date of SHEMP in 2007, 9% of the project funds had been expended. Partner Performance IFAD IFAD was the lead financier, providing 88% of the SHEMP budget. IFAD was well involved in the pre-implementation phase of the project. IFAD fielded two Review missions: TTR-1 (200) and TTR-2 (2006) and nine other supervisory missions to examine the deliverables and make the necessary recommendations for structural or process adjustments. The Review missions were significant in improving the thematic focus of the components of SHEMP. This simplified implementation and helped to improve the attainment of the objectives. In some cases, IFAD had a strong hand on SHEMP implementation, with the risk to stifle the role of local stakeholders, such as in relation to the suggestion of the SCC on the harmonization of feeder roads with productive areas. With regard to funding, there have been some delays on behalf of IFAD. This often led to road contractors having difficulties in making payment to their workforce. Cooperating Institution IFAD-directly supervised project. Government With regards to the budgetary contributions of GRZ, the availability of funding was inconsistent. In the end, however, 90% of the pledged funds had been provided. The PCO had been responsive to the recommendations of the various review missions and of the various implementation reports. However, the programme planning and reporting were not supported by a comprehensive M&E system and by a MIS that would help in following up programme activities. The PCO suffered from a reduction in personnel due to cost saving reasons; by 2006, SHEMP became a one man office. MACO and MLGH as both members of SCC, offered guidance to the implementation of SHEMP by facilitating linkages and harmonization with Government policies and other projects to ensure maximum synergy and avoid of duplication of effort. Apart from being a member of SCC, MACO was only partially involved in SHEMP implementation, neither at national nor at the provincial and district 2

3 levels. The MLGH had been expected to play an important role in policy guidance on feeder roads and in undertaking to oversee the internalization of feeder roads by the District Councils as a SHEMP exit strategy. It is doubtful if MLGH could have played that role. Since 200, SHEMP was implemented without a Planning/Monitoring and Evaluation Officer. This was in violation of the supplementary assurances included in the negotiated Loan Agreement between IFAD and GoZ. NGO/Other The performance of some SPs was not as adequate as it had been expected. In the case of the Agribusiness Development component, this had more to do with the change of the job description mid-stream arising from the need to include agribusiness development component activities, a field which had not been the strength on which they have been recruited. Cofinancier(s) CLUSA and Africare were both SPs as well funding partners with IFAD. By the end of 2007, CLUSA met its all financial contributions. On the other hand, Africare has been unable to comply with the requirements of the Loan Agreement. It has to be noted that CLUSA and Africare tended to operate according to their institutional objectives rather than those of SHEMP. The large market intermediaries such as Seed Companies had been expected to make financial contributions to the SHEMP budget in addition to their market intermediary role. While they may have been active as market intermediaries, they have not made financial contributions as understood in the SHEMP appraisal report. Combined Partner Performance Rural Poverty Impact Physical Assets As a result of project's intervention, there has been an increase in householders assets, such as better houses as well as increased investment in farm implements. Significant number of beneficiaries has acquired more capital assets that have led to the expansion of their businesses. Machinery, tool and equipment as well as livestock have been procured by many smallholders for the purpose of increasing agricultural production. Roads improvement have resulted in better accessibility, reduced transport costs, and greater access to social and economic services. In addition, road rehabilitation helped to inject cash into communities through wages paid out to local labour. Financial Assets SHEMP has brought about substantial changes in financial assets of the beneficiary smallholders. Its impact on the over 280,000 smallholder cotton farmers through their ability to negotiate for better prices has greatly contributed to wealth creation in the economy. In addition, a significant number of SHEMP beneficiaries have reduced their vulnerability, by combining agricultural as well as non-agricultural business activities. Jobs have been created in rural areas; numbers are low but it is a good indication that the commercialization of smallholder agriculture holds good prospects for rural employment. Food Security Food security of the rural poor beneficiaries has improved. This has resulted from better production, increase enterprise diversification, and generally increased income. In addition, the wages of the SHEMP-created employees were used to procure food, and this also improved food security. Environment By design, SHEMP activities were benign on the environment. However, in building roads, there were some negative impacts associated with quarry exploitation. These included damage to vegetation, water resources, landscape, wildlife and soils. Human Assets SHEMP made a great effort in building human asset. It undertake capacity building for market intermediaries, local NGOs, and District Councils. It also built the capacity of individual smallholders farmers in field such as entrepreneurship and other related skills. This enabled the smallholders to get economic benefits and also contributed to trigger a noticeable change in mind set of beneficiaries livelihoods. In addition, the capacities of the local institutions such as smallholder enterprises groups have been built and strengthened, benefitting from the leadership skills given by SHEMP to the various members, especially leaders of the groups. Moreover, project beneficiaries have improved their ability to send children to school. Social Capital and Empowerment Smallholder enterprise groups have been built and they have acquired leadership skills given by the programme to the various members, especially the leaders of the groups. The value of trust and transparency among the groups and leaders are now more appreciated. Producer groups/associations had been unsuccessful, while marketing groups/association were bonded by high relevance to the interest of the individual members. With linkages to market intermediaries, training in market research, and business approaches, the smallholders farmers' minds were opened up.

4 Ag. Productivity SHEMP did not intervene directly in agricultural production. However, as a result of project's intervention, the beneficiary smallholders now realize that farming is a business and they do treat it as such. SHEMP could have played a more important role by contributing to supporting research to increase productivity in some of the crops such as cassava, where current productivity is very low and limiting to the development of cassava markets. At this regard, SHEMP did not dwell much on the development of technical solutions. Its modality was to lease with other development agencies to utilize what already existed. Institutions and Services In this domain, project impact is weak. The manner in which SHEMP was implemented outside MACO managed to isolate and alienate MACO staff, especially those in the provinces and districts. SHEMP belonged to MACO, but its implementation ignored downstream functional structures. The non-institutionalization of SHEMP farmer groups into structures of MACO at the camp level, and indeed the creation of the Sub-FARGs as separate and distinct from mainstream MACO structures, meant that they had not been built on a firm foundation. In addition, many of smallholder farmer groups that were created disappeared soon after they were left by the SPs in 2006 and many more faded off at the end of SHEMP in Markets SHEMP increased the efficiency of the agricultural marketing system, opened up new market opportunities, thus stimulating increased and diversified production, and facilitated marketing of large volumes, leading to cheaper and timelier access to inputs. Beneficiaries operating in groups now use different ways to seek better markets for their produce. The group members make economies by bulking their produce for sell to the market, use the same transport, and are able to negotiate better price with good payment terms. In addition, the impact of accessing market information, through the Short Messaging System (SMS) has contributed to greater trade within and outside Zambia. SHEMP intervention has yielded positive results with the strengthening of the National Agriculture Information System to collect and disseminate agriculture price and market information. Finally, roads improvement have resulted in better accessibility and reduced transport costs. Rural Poverty Impact Overarching Factors Innovation SHEMP was an innovative pilot project containing important tools for developing and testing new concepts concerning the commercialization of smallholder agriculture. It had innovative implementation arrangements consisting of the linking of the smallholders with markets, the development of smallholders group enterprises along business lines; the outsourcing of SPs as the main avenue for programme implementation. These innovations were the defining principles of the SHEMP methodology. Replicability and Scaling-up According to the PCR, the successful features of SHEMP should be replicated and upscaled. However, so far there is nothing concrete. While SHEMP was a pilot Programme in Provinces of Zambia and Focal Areas, a SHEMP-type programme should be upscaled to all the 9 Provinces, but continuing to select focal areas that have higher concentrations of agriculture and business activities. The programme period should be reduced to years, but the budget be increased at least to USD 10 million per annum. The SHEMP-type programme would continue to be private sector managed and outsourced. This would complement the functions of MACO. Innovation, Replicability and Scaling-up Sustainability and Ownership Targeting SHEMP still requires a further period of deepening and consolidating the practices of SHEMP-type activities. There is therefore need for bridging finance to sustain and consolidate the fledging activities that have higher prospects, but still require to be nursed till they are safely off-the ground and are self-sustaining. SHEMP is both political and socially sustainable. It enjoyed support from all stakeholders, most of whom were represented at the SCC and at the FARGs and sub-fargs. With regard to the smallholder farmer groups, it appears that those groups that were already in position when SHEMP was initiated, were grouped around more clearly defined activities and they have a higher chance of sustainability than those smallholder groups formed by SHEMP, with shorter period of training and hardly any exposure to implement what they have learnt. Institutional sustainability is weak, mainly due to the non-institutionalization of SHEMP farmer groups into structures of MACO at the camp level. SHEMP activities concentrated mainly in five Focal Areas (FA), located in five provinces. The choice of the area was based on the strong presence of trading and agricultural activities. The targeting approach to deliver services to smallholders was the use of groups (be they single interest or multiple interest groups). This had been intended to reduce individual transaction costs and enhance the farmers' financial

5 returns. The approach was appropriate, although groups are not universally appropriate for all activities, as some activities are better handled at individual household level. Gender At the beginning of SHEMP implementation, there had been special attention to support women focal groups. Following the TTR-1 of 200, this support was withdrawn and emphasis was put on the general integration of women in all aspects of the SHEMP activities. While the mainstreaming of women in all project activities was a good idea, the women focal groups served a particular purpose, as women have their own distinct problems associated with the many family functions they perform. In this regard, the gender strategy had not been ideally appropriate. In addition, SHEMP capacity building for women had not been as favourable as it was for men, since the procedures adopted in running the trainings were time bound and not flexible enough to meaningfully accommodate the involvement of women in the trainings. Women have become more active in community activities due to training in HIV/AIDS and gender issues and they are now participating more actively in household and family plans which traditionally have been the preserve for men. On the other hand, men have become more understanding and allow women to undertake economic activities. Overall Performance Estimated number of beneficiaries PCR Quality Scope Quality Lessons Approximately 20,000 smallholder householders. PCR overall in line with the guidelines but some annexes are missing (project costs; physical progress; financial and economic analysis; environment). Good analysis of the project's main achievements and shortcomings. However, there are some inconsistencies. Some important issues raised by the PCR were not adequately reflected in the lessons learned. A deeper reflection could have been useful.