TRANSFERRING TRANSFERRING DECISION-MAKING POWER DECISION-MAKING POWER

TO THE RURAL POOR TO THE RURAL POOR

INNOVATIVE EXPERIENCES OF INNOVATIVE EXPERIENCES OF IFAD PROJECTS IN PERUIFAD PROJECTS IN PERU

IMI Workshop IMI Workshop

What are the Innovation Challenges What are the Innovation Challenges for Rural Development? for Rural Development?

Rome, 15-17 November 2005Rome, 15-17 November 2005

Pietro SimoniPietro Simoni

IFAD projects in IFAD projects in PeruPeru

Transferring responsibility, power and financial resources to the organizations and beneficiaries

Projects based on demand and auto-implementation Development of local markets for goods and services

These concepts have been consistently applied during almost 15 years involving more than 60,000 poor rural families (4 projects) and obtaining very positive results (*)

The three pillars of IFAD strategy in The three pillars of IFAD strategy in PeruPeru

(*) IFAD (OE )and other sources evaluations

THE TRANSFER OF DECISION-MAKING THE TRANSFER OF DECISION-MAKING POWER TO FAMILIES AND COMMUNITIESPOWER TO FAMILIES AND COMMUNITIES

The central axis of the innovative The central axis of the innovative experiences experiences in Peru is:in Peru is:

The Andean CommunitiesThe Andean Communitiesengine for developmentengine for development

The Communities are similar to local mini governments. They have a political, regulatory, guidance and facilitating roles

The Communities are responsible for the management and administration of the common goods and interests (irrigation, land, common services, etc.) and institutional relations

Some communities have land and common goods, others don’t, some have big extensions of land, others don’t

Conceptual premise -1-Conceptual premise -1-

The farmers, as well as their communities and The farmers, as well as their communities and organizations, have their “own” plans, aspirations organizations, have their “own” plans, aspirations and social and economic strategiesand social and economic strategies

THE CENTRE OF THE DECISION-MAKING THE CENTRE OF THE DECISION-MAKING PROCESS SHOULD BE UNDER THE PROCESS SHOULD BE UNDER THE

FAMILIES AND THEIR COMMUNITIES CONTROLFAMILIES AND THEIR COMMUNITIES CONTROL

Projects conceived as Public Investment toProjects conceived as Public Investment toaccompany farmers private initiativesaccompany farmers private initiatives

• Projects do not subcontract services (outsourcing)This responsibility is transferred to beneficiaries

organizations

• Projects do not co-executeBeneficiaries organizations have the responsibility

of making the decisions and executing them

• Projects do not propose initiatives or “packages” to which the beneficiaries “participate”

The initiatives are identified and prioritized by the farmers and their organizations

To achieve empowerment of farmers and their communities, outsourcing, co-execution and participation are not enough. Therefore, it was proposed that:

Conceptual premise -2-Conceptual premise -2-

• Communities empowerment• Services privatization (creation of a market in which

the Communities have the power to contract)

In Peru IFAD aimed to modify the power In Peru IFAD aimed to modify the power relation betweenrelation between::

•Farmers and Communities

•Farmers and Communities

the public sector(State, Municipality, etc)

the private sector(services suppliers and markets)

HOWHOW ??

IFAD has captured, applied and created strategic, methodological and instrumental activities that conform an evaluated and validated “box of tools”

Communities actively participate in project design and a continuous process of consultation is put in place

Demand-driven approaches

Transfer of financial resources to make demand effective

Use of competitive awards

Flexibility in project design: - additional innovations included during implementation

PROJECT DESIGNPROJECT DESIGN

FINANCING DEMANDSFINANCING DEMANDS (demand-driven system)

The Technology Transfer to the Peasant Communities The Technology Transfer to the Peasant Communities in thein the Highlands ProjectHighlands Project (FEAS)(FEAS) -1992 -1992

From a traditional system for the provision of goods and services by institutions or projects (a supply-

driven extension service) to

Strengthening capacities for generating demand and transferring funds directly to communities for them to contract services and acquire goods

The Starting PointThe Starting Point

The Management of Natural Resources in the The Management of Natural Resources in the Highlands Project (MARENASS) Highlands Project (MARENASS) --19961996

• Emphasis in strengthening social structures and community empowerment

• Farmer to farmer training • “Pacha Mama Raymi” competitive methodology

The Puno-Cusco Corridor Project The Puno-Cusco Corridor Project - - 20002000

• Rural-urban linkages• Micro entrepreneurial activities• Use of Business plans • Development of local markets

• Aggregate value to the knowledge and cultural assets of the rural poor

• Insures the participation of migrant associations y furthering local initiatives

Southern Highlands Project - Southern Highlands Project - 20042004

Stakeholder Assets - Stakeholder Assets - Project Under PreparationProject Under Preparation

• Values physical, technological and cultural assets• Mobilizes or leverages additional resources of the public

sector, mining companies and migrant associations

Conditions for effective Conditions for effective empowerment of Communitiesempowerment of Communities

Implementing simultaneously activities in three complementary ambits with demand focus as the principal intervention

Strengthening capacities for generating demand and provision of funding to materialize it

Strengthening private supply of services

Improving market conditions

Ensuring a leadership role to Ensuring a leadership role to Communities and FamiliesCommunities and Families

Demand•Make demand effective•Expand potential demand•Transfer financial resources

Supply •Expand and improve services supply

Markets•Linkages and pre-financing•Reductions in transaction costs•Access to information

THE DEMAND and THE THE DEMAND and THE COMMUNITY PLANCOMMUNITY PLAN

– Incentives and awards for the best demands or plans

– Awards for the best plan and sub-plans implementations

Demand identification processDemand identification process:: responsibility ofresponsibility of organizations and organizations and

familiesfamilies

Training on auto diagnosis and micro planning Simple methods of participatory planning (graphic

planning tool known as “Speaking Transects”) Identification and prioritization in community meetings

without intervention or presence of third parties Definition of a community plan and group sub-plans Transfer of resources for a methodology of demand

identification and development of plans

Business plans as another “format” of Business plans as another “format” of community demandcommunity demand

Prioritization of linkages (present and potential) between communal economy, family economy and markets

Opportunities to develop urban/rural relations

Community planning Families and/or interest groups prioritization

Business plans are identified by:Business plans are identified by:

Financing approval is at community/organizations level: local committee, users (beneficiaries) plus local authorities through a selection of proposals in a public act

RESOURCES TRANSFER AND SELECTION RESOURCES TRANSFER AND SELECTION OF PROPOSALSOF PROPOSALS

Transfer of fundsTransfer of funds

The project transfers co-investment funds so that the Community

Contract services and support business plans

howwho what for when for how long

The Communities define

• open and maintain a bank account• prepare a status of expenditures• supervise and evaluate

• services • competitive resources to award success • competitive resources to finance business plans (CORREDOR)

The communities are responsible for

Financing

Communities and familiesCommunities and families(the case of Technical Assistance services demand)

•Internships•Training•TA farmer to farmer•Professional suppliers

Select service suppliers Define terms of reference Negotiate services costs Establish terms and modalities

Chose the methodologyChose the methodology:

Sign the contract Supervise and control Pay for the services

Competiveness and competitive Competiveness and competitive awards: the role of Community awards: the role of Community

organizationsorganizations

Competitions are managed and organized by the Communities themselves allowing for

Strengthening the role of the community responsible for organizing competitions

Using clear equity and transparent rules by the Communities

Using mechanisms to avoid exclusion of beneficiaries with less capacities and resources

Using efficient mechanisms for evaluating results of services with the use of graphic tools (Speaking

Transects)

Development of market relations Development of market relations

“Markets to be understood as a system of monetary and non-monetary transactions, relationships, exchan-ges, access and flow of information and valuing knowledge as well as physical, social and relationship capitals. Insertion in local and regional and national goods and services markets, allows the poor to have a larger and active presence in the social and economic fabric”

Empowerment overcomes dependency and Empowerment overcomes dependency and asymmetric market relationsasymmetric market relations

Services markets

• Rigorous selection process• Contractual obligations • Negotiated costs • Reduced fixed costs in contracting and supervision • Use of adaptable technologies • Diversification of service providers • Equilibrium between family and communal interventions

Goods markets

• Identification of business opportunities • Capacity to generate supply volumes• Assurance of quality through contracting of services • Negotiating capacities

CONCLUSIONSCONCLUSIONS

Lessons learnedLessons learned

• Small-scale farmers and their organizations have their own strategies and are able to identify their demands

• Empowered organizations play a strategic role in relations between beneficiaries, the project and other institutions

• Strengthened communities are able to administer public funds efficiently

Good practicesGood practices

• Planning and prioritization of demands led by small-scale farmers and their organizations

• Delegating decision making, administration and supervision to the communities

• Using contractual instruments regulate relationships between the project and beneficiaries

• Transferring sufficient funds for co-financing through the formal financial system (opening of bank accounts)

• Requiring commitment of counterpart funds on behalf of the beneficiaries

• Using competitive incentives mechanism based on results

Conclusions and Recommendations Conclusions and Recommendations

TRANSFERRINGTRANSFERRINGDECISION-MAKING POWER DECISION-MAKING POWER

TO THE RURAL POOR TO THE RURAL POOR

INNOVATIVE EXPERIENCES OF INNOVATIVE EXPERIENCES OF IFAD PROJECTS IN PERUIFAD PROJECTS IN PERU

IMI Workshop IMI Workshop

What are the Innovation Challenges What are the Innovation Challenges for Rural Development? for Rural Development?

Rome, 15-17 November 2005Rome, 15-17 November 2005

Pietro SimoniPietro Simoni