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The World Bank Group in Madagascar

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Baobab alley, Madagascar. Photo Credit: Shutterstock/ sunsinger.
This evaluation assesses the development effectiveness of the World Bank Group’s engagement with Madagascar during Fiscal Years 2007–21. This evaluation assesses the development effectiveness of the World Bank Group’s engagement with Madagascar during Fiscal Years 2007–21.

Building inclusive, productive, and sustainable agrifood systems

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Fruits and vegetables at the local market in India.
Well-functioning agrifood systems play an important role in increasing food and nutrition security, reducing poverty, especially in low-income countries (LICs), and meeting climate and environment goals for sustainable development. They are especially important now in the face of rising prices and food insecurity. The World Bank Group uses a variety of instruments to help develop effective Show MoreWell-functioning agrifood systems play an important role in increasing food and nutrition security, reducing poverty, especially in low-income countries (LICs), and meeting climate and environment goals for sustainable development. They are especially important now in the face of rising prices and food insecurity. The World Bank Group uses a variety of instruments to help develop effective agrifood systems, so they are more productive, inclusive, and sustainable. A new evaluation from the Independent Evaluation Group (IEG) looks at a decade’s worth of Bank Group support for agrifood system development and identifies lessons for the future. Agrifood systems comprise three components: the actors involved in the agriculture sector, the activities that these actors engage in, and the larger enabling environment. The actors cover the full range from farmers, agribusiness firms, processors, distributors to consumers. The enabling environment includes the policies, standards, and investments that affect sustainable production and market access. IEG’s report finds that the Bank Group’s interventions in developing agrifood systems in the period between 2010 and 2020 were broadly relevant. But, gaps remain in scaling up and better targeting support to countries that need it the most. The report also found that the interventions were effective overall in improving the productivity, inclusion, and sustainability of agrifood systems. However, this was less so in LICs, particularly in West and Central Africa. This was partly because of the limited capacity, climate shocks, and other challenges that these countries face, especially those in fragile, conflict, and post-conflict situations. In addition, World Bank support for improving productivity was insufficiently diversified toward higher-value products that offer multiple benefits. The agribusiness investments of the Bank Group’s private sector arm, the International Finance Corporation (IFC), faced challenges in meeting environmental and social (E&S) standards, especially in LICs. The report offers the following recommendations: Combining production and market approaches: Production activities are poorly integrated with markets in many countries, especially LICs and countries at early stage of agrifood system development. Many LICs experience low agricultural productivity, which undercuts their efforts to reduce poverty and improve food security. Given their low productivity and limited access to markets and value chains, smallholders, and small producers in LICs remain poor and vulnerable to various shocks. Many of them struggle to shift from semi-subsistence agriculture to more market‐oriented agrifood enterprises. The Bank Group can help reduce this weak market integration and fragmentation of smallholder production by exploring synergies between interventions that aim to support production activities with those that aim to support improved market access of producers. Interventions aimed at supporting production, i.e., on the supply-side, include improvements to technology, innovations including of digital technologies, delivery of inputs, and irrigation systems. Support for increasing market access, i.e., on the demand-side, includes identifying buyers, developing the needed market infrastructure (for example, storage and aggregation, logistics and cold chains) and facilitating value-chain linkages between smallholder farmers and small and medium enterprises (SMEs) with potential buyers in local, regional, and global markets. Access to finance is also key for supporting both production and marketing activities of farms and SME firms. Such a mix of supply and demand-side interventions is particularly important for LICs and countries at early-stage of agrifood system development. The Bank Group can pursue such a  combined approach through multiple avenues, including leveraging synergies across the Bank Group using parallel or sequenced interventions, through partnerships with other agencies, or through coordinated client actions. Diversifying production and cultivating behavioral changes towards sustainable practices and standards: Where conditions allow, the Bank Group should support farmers and agribusiness firms in diversifying their production to also include high-value and more nutritious food products, such as fruit trees, vegetables, food legumes, fish, poultry, and livestock in addition to the traditional staples. Sustainable diversification should benefit smallholder farmers and SMEs, who often find it challenging to diversify their production or agribusiness to include high-value products. This will not only increase their agricultural productivity, but also provide nutritious foods that currently remain undersupplied or largely unaffordable to low-income consumers. Supporting the successful production and marketing of such products will require the Bank Group to provide adequate financing and help producers pay attention to food safety and quality standards so that they can access competitive, regional and global markets. At the same time, it will be important to ensure that the Bank Group also supports farmers and agribusiness firms in adopting sustainability practices. The Bank Group should encourage producers and value-chain actors to adopt climate-smart practices that use less resources, such as land and water, maintain biodiversity, and reduce environmental footprints. Supporting Environmental and Social (E&S) Performance Standards in private sector investments: For private sector investments in agrifood systems supported by the IFC, the report found that when clients possessed the capacity and commitment to address E&S issues, or received support from IFC to do so, there was greater progress in improving their performance on E&S. Clients in LICs, especially, need assistance on recurring challenges (such as in wastewater management and occupational health and safety) and to support the implementation of E&S action plans and the Bank Group Environmental, Health, and Safety Guidelines. IFC could support these clients through loan covenants, tailored advisory services, or blended finance. The above lessons will help the World Bank Group better support its clients in developing agrifood systems that are more productive, inclusive, and sustainable and that can contribute to addressing the current global food crisis. See also: Complementary Interventions for Agrifood System Development – Insights and Lessons

Complementary Interventions for Agrifood System Development – Insights and Lessons

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Farmer feeding chickens in the farm.
Agrifood systems are key towards achieving the Sustainable Development Goals, including ending hunger and malnutrition, poverty, and addressing climate change. Yet, despite their importance, agrifood systems face multiple challenges, including low productivity, inadequate market access for small farmers and producers particularly in low-income countries (LICs) and vulnerability to climate change Show MoreAgrifood systems are key towards achieving the Sustainable Development Goals, including ending hunger and malnutrition, poverty, and addressing climate change. Yet, despite their importance, agrifood systems face multiple challenges, including low productivity, inadequate market access for small farmers and producers particularly in low-income countries (LICs) and vulnerability to climate change. The World Bank Group aims to address these challenges through holistic interventions that increase the productivity, inclusion, and sustainability of agrifood systems. A recent evaluation by the Independent Evaluation Group (IEG) of the World Bank Group’s support for agrifood system development over ten years (2010-20) found that when market access is constrained, complementary interventions that pair support for enhancing sustainable production on the supply-side with that to improve market access on the demand-side can increase productivity and the overall effectiveness of interventions.    Low productivity remains a  major challenge for small farmers, especially in sub-Saharan Africa. For example, staple crop productivity in sub-Saharan Africa and LICs is about one-third of the level in upper-middle-income countries. Smallholders and small producers, especially in LICs find it challenging to increase productivity because of their limited access to markets, including agri-finance to invest in modern inputs and technologies. Low yields and weak market integration lead to fragmentation of production, low incomes, food insecurity, and pervasive poverty. When markets are underdeveloped and poorly integrated, low productivity also leads to higher food prices which, in turn, leads to a high cost of living for the rural and urban poor. Underdeveloped markets perpetuate subsistence production and undermine the ability of producers to respond to market signals or diversify production into higher value products with growing demand – limiting opportunities for inclusive growth in the rural sector.   Complementary interventions that helped increase productivity included access to finance to buy better inputs, such as fertilizers and feed, invest in small-scale irrigation and farm equipment, or in new technologies, such as improved seeds or crossbred cows.  It also included improved access to services (e.g., extension in the form of knowledge, research, or technology support such as artificial insemination or provision of market information), and support to improve access to and participation in markets and value chains. Investing in sustainable irrigation and productive climate-smart practices helped amplify these benefits to producers and increased productivity through higher yields and multiple harvests during the year. The evidence across countries showed that improving complementarity of supply and demand-side interventions was key to maximizing benefits from Bank Group interventions. Two examples from the evaluation illustrate the significance of complementary interventions. In the first example, the Ethiopia Agricultural Growth Project (AGP I) supported farmers using a complementary approach. The project helped them access crop and livestock technologies, and climate-smart practices, including small-scale irrigation. It also helped them access markets for their produce. The project supported improved irrigation on over 10,000 hectares of farmland and increased the marketed surplus of crops that benefited more than 58,000 farmers, including over 12,000 women and 6,000 young people. In the second example, the Malawi Irrigation, Rural Livelihoods, and Agricultural Development Project focused on supply- side interventions and had a limited impact on productivity. Smallholder farmers struggled to find sustainable market outlets for their maize and rice produce, leading to greater volatility in producer prices. As a result, while productivity of both maize and rice improved initially, it stagnated or became more volatile over time. Supply side interventions may succeed when market access is not constrained. For example, the Integrated Agricultural Productivity Project in Bangladesh helped increase productivity by supporting technology development and adaptation, including improved practices for conserving water and making irrigation more efficient. The project helped build the capacity of farmers and provided extension support, which led to adoption of better varieties of crops, livestock, and fish breeds. The improved technologies benefited about 51,000 farmers. Milk productivity more than doubled, milk consumption increased by 96 percent, milk sales increased fourfold, and milk sales earnings increased fivefold. The interventions significantly increased the seasonal earnings of beneficiary farmers from sale of crops, thereby, enhancing inclusion. The project also improved sustainability by putting over 27,000 hectares under better irrigation practices. Producer organizations play a key role in improving the access of smallholder farmers to markets and services by connecting them with other input providers and more organized buyers. Producer organizations come in several forms, such as common interest groups and cooperatives in Kenya and Ethiopia, farmer groups in productive alliances in Peru and Bolivia, and dairy and livestock cooperatives in India and Vietnam. IEG also found that most projects that aimed to increase inclusion also supported such producer organizations to help farmers access inputs, technologies, services, and markets. Strengthening the capacity of producer groups for better targeting and inclusion also increased the participation of women and youth. Making the transition from informal groups into producer cooperatives or enterprises can, however, be more challenging for producers, who are engaged in low-value commodities.  In Kenya, only about one-third of the newly established cooperatives supported by the Agricultural Productivity and Agribusiness Project were active after the project closed, except for the few involved in high value products such as dairy. Similarly, in Ethiopia the newly established cooperatives were more successful when they were able to connect with processors and were able to benefit from value chains.   When farmer groups face multiple challenges to succeed in accessing markets, timely support to help them transition to producer cooperatives and enterprises can be effective. IEG found that the Ethiopia Agricultural Growth Project helped connect three producer groups – Guguma Buraro, Guguma Buko, and Guguma Wube – in Meliga woreda in Oromia region - with the Assela Malt Factory. This provided the groups an incentive to invest in inputs and increase their productivity. Their supply of malt barely increased by over ten-fold from 62 tons in 2015 to 730 tons in 2017. This allowed the groups to become formal producer cooperatives and expand their access to finance and services. Targeting bottlenecks on both the supply (production) and demand (market) sides of the malt barley value chain, facilitated the transition from informal groups into market-oriented producer cooperatives. The above lessons can help the World Bank Group better support its clients in addressing the challenges of low yields, weak market access and inadequate integration of smallholder production into markets and value chains which often leads to low productivity. Providing complementary support is vital in transitioning toward more productive, inclusive, and sustainable agrifood systems and can contribute to finding viable solutions to the current global food crisis. See also: Building inclusive, productive, and sustainable agrifood systems

How the Wapenhans report came to change the World Bank 30 years ago

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Interview with Mr. Willi A. Wapenhans, left and Mr. P. Karieti, right.
Thirty years ago, the Wapenhans report sounded the alarm over the World Bank’s worsening portfolio quality and sparked changes in how the Bank manages the quality and results of its projects. This two-part blog series takes stock of where the World Bank is 30 years after this influential evaluation. The 1992 Wapenhans report – formally known as “Effective Implementation: Key to Development Show MoreThirty years ago, the Wapenhans report sounded the alarm over the World Bank’s worsening portfolio quality and sparked changes in how the Bank manages the quality and results of its projects. This two-part blog series takes stock of where the World Bank is 30 years after this influential evaluation. The 1992 Wapenhans report – formally known as “Effective Implementation: Key to Development Impact” – was arguably the most influential evaluation ever at the World Bank. Many of the institution’s core quality assurance instruments and processes were created in response to the report’s findings. Although many newer staff today have not heard of it, the report was part of the induction of new Bank staff for many years. The context of Wapenhans The report was written by a team formed for just this purpose called the Portfolio Management Task Force, led by Willi A. Wapenhans, Vice President of the World Bank. The Operations Evaluation Department (OED) – precursor to the Independent Evaluation Group (IEG) – contributed but did not get to write the report. The report’s inside history, documented in the archives, makes for fascinating reading 30 years later as it captures how the report came to be so influential. Lewis Preston, who was new as President of the World Bank wanted an unvarnished view of the quality of the portfolio of projects under implementation. The Bank did not have a good measure of its development impact at the time. In the 1970s, World Bank President Robert McNamara had led the transformation of the Bank into a development institution; he created the Operations Evaluation function to begin assessing the institution’s development effectiveness, but the Bank did not yet have a full view of how well its projects led to sustainable development in client countries.   Wapenhans identifies a steady decline in portfolio performance The share of projects with major problems nearly doubled from 11% in Fiscal Year (FY)81 to 20% in FY91. Some 30% of projects in their fourth and fifth year of implementation were reported as having major problems. The Wapenhans report placed much of the responsibility for weak portfolio quality on overly optimistic project approval by the Bank, driven by an “approval culture” and inadequate attention to risk and implementation planning. Wapenhans also identified a bias for complex projects with many components and co-financiers as contributing to weak quality at entry. Further, Wapenhans advised that the Bank figure out how it should support project implementation. The division of labor with borrowers was unclear at the time, and there were major issues with procurement. Country assistance strategies did not factor in portfolio performance. Bank projects did not systematically address country and sector specific obstacles to implementation. Lastly, the report concluded that the Bank’s evaluation system did too little to assess project outcomes and their sustainability once projects had closed, weakening the Bank’s ability to learn about what works and to ensure accountability for outcomes. The findings resonate across the institution Although some of the responses from Bank management were defensive, the extensive consultations that Wapenhans had caried out across the Bank and with its borrowers had created a strong head of steam for the report’s findings. Many operational staff and managers agreed that there were deep problems in project quality and implementation. Reading through the responses to the report, there is a palpable sense that the process of producing and consulting on the report opened the floodgates for staff to share concerns that had been known for a long time but not openly acknowledged. Wapenhans used OED project ratings and other data on operational quality to make a compelling case that the portfolio was not in good shape. The takeaways are still relevant for the World Bank Group today. The Wapenhans report was a watershed moment in how the Bank manages its portfolio. In response to the report, the Bank and OED created metrics of quality at entry, quality of supervision, and quality of M&E that are still in use today. It created a Board Committee on Development Effectiveness (CODE), Development Effectiveness units in the Regions, and eventually also the Quality Assurance Group, since disbanded. The Bank also strengthened its country assistance strategy process and linked it to assessment of portfolio quality. Evaluation as a catalyst for change All organizations face internal challenges from time to time. An organization like the World Bank with its smart, reflective, mission-driven people has the capacity to identify and correct organizational challenges from within. All the while, improvement processes need a catalyst. In this case, the catalyst was Wapenhans’ comprehensive evaluation backed up by Preston’s firm support. Today, it is the role of IEG to produce evaluations of the World Bank Group’s development effectiveness. We see a reflection of our own experience in the story of the Wapenhans report: that evaluation based on solid data often helps organizations, by providing a firmer diagnostic underpinning to internal discussions about results and effectiveness that would otherwise be more anecdotal. Evaluations provide a solid ground of evidence to support organizational change and strategy development. In conclusion, the Wapenhans report led to sustained changes in how the World Bank Group manages for quality and results. This was possible because Wapenhans got many things right: the report was timely, full of credible data and solid analysis, informed by extensive engagement, and followed up by changes in management practices. These have all become essential elements of evaluation good practices that IEG adheres to.   First photo: Interview with Mr. Willi A. Wapenhans, left, and Mr. P. Karieti, right, in 1983. Photo credit: World Bank.