A. Background

The Office of Evaluation (OE) undertook a country programme evaluation (CPE) in Brazil in 2007. The main objective of the CPE was to assess the performance and impact of IFAD operations, and to generate building blocks that would serve as inputs for the preparation of the new IFAD country strategic opportunities programme (COSOP) document for Brazil.

This Agreement at Completion Point (ACP) summarizes the main findings and recommendations from the CPE. It also benefits from the main issues emerging from the CPE national roundtable workshop held in Bahia on 22-23 November 2007.

The ACP has been reached between IFAD (represented by the Programme Management Department) and the Government of Brazil (represented by the Ministry of Planning, Budget and Management), and reflects their understanding of the main findings from the CPE (see section B below), as well as their commitment to adopt and implement the recommendations contained in section C of the ACP.

B. Main Evaluation Findings

The four priority areas identified by IFAD's strategy in Brazil, that is, focus on the North-east, promoting access to land; policy dialogue and support to the small holder sector were and remain by and large relevant. However, the evaluation also found that the country strategy did not pay adequate attention to promoting access to market linkages and in supporting indigenous peoples of the Amazon.

IFAD-funded projects achieved good results in promoting water security, developing fodder production and hence a decrease in animal mortality, enhancing agriculture development¹ and natural resources management, building grassroots institutions, and involving non-governmental organizations in project activities. Off-farm activities were promoted through the support to traditional handicrafts and other artisanal industries and services.

In general, the operations supported by IFAD have contributed to the increase of welfare of the rural poor in the North-east, and have facilitated their participation in rural development processes. Benefits include access to education, infrastructure (e.g., rural roads, electricity, fresh water supplies), and support services, such as rural finance through rural credit cooperatives and the facilitation of access to PRONAF loans. Achievements in the empowerment of women may also be highlighted, for example, through the provision of identity documents and their participation in development initiatives.

On another issue, IFAD-assisted operations have contributed to introducing some location-specific innovations, concerning both the general approach to rural development on the one hand, and innovations related to low-cost, easy to adopt technology and infrastructure on the other. The participatory approaches promoted through IFAD-funded projects have contributed to the sustainability of benefits. However, the provision of technical assistance on issues such as productive development, marketing, or organizational strengthening is still largely dependent on IFAD-financed projects, mainly due to the lack of resources allocated for the purpose by local institutions. Non-project activities were by and large marginal components of the IFAD country programme in the past. Policy dialogue was limited, partly because of the few resources allocated, and the lack of a systematic policy agenda and permanent country presence. There are, however, some more recent important policy dialogue initiatives such as the sub-regional grant funded programme related to the Commission on Family Farming (REAF), which provides a platform of dialogue and negotiations between farmers' organizations and governments within MERCOSUR.

With regard to partnership, IFAD established useful cooperation with ministries and institutions both at the federal and state levels. It is particularly noteworthy the good dialogue and cooperation existing between the Fund and two key ministries: the coordinating Ministry for IFAD, namely the Ministry of Planning, Budget and Management; and the Ministry of Agrarian Development. At the project level, there have been some efforts to establish links with agriculture research institutions, such as EMBRAPA. Partnerships with international financial institutions and United Nations organizations were generally weak.

Although there have been some activities related to knowledge management, there have been very few systematic efforts to document IFAD's experiences in Brazil or to capture relevant learning from experiences in other countries. The potential of FIDAMERICA – as one of IFAD's main knowledge management instrument in the region - has not been adequately exploited so far in the Brazil country programme.

In spite of the relatively limited resources invested by IFAD in Brazil (compared to the magnitude of government programmes contributing to rural poverty alleviation) the Fund has an important role to play in the country. However, given its upper middle income status, the requirements of Brazil are significantly different from the priorities of low income countries. By and large, Brazil's interest in engaging with the Fund is largely motivated by the desire to promote innovative practices and acquire knowledge on family agriculture and rural development know-how. Policy dialogue, regional integration, and south-south cooperation are also key areas for further collaboration.

C. Recommendations

Strengthen innovation promotion and knowledge management. IFAD's future country strategy and operations in Brazil should be built around two central elements, namely the promotion of replicable innovations and knowledge management. Policy dialogue, undertaking through initiatives such as REAF can provide a main tool by which IFAD-promoted innovations and knowledge are promoted and disseminated in the MERCOSUR region.

With regard to promoting innovations and policy dialogue (both at the national and regional level), it is crucial to ensure that the Fund devotes enhanced attention to scouting innovative solutions from different sources, including the rural poor and their organizations, the private sector, NGOs, research institutions and others. Greater use needs to be made especially of country-specific grants, but also regional grants, for this purpose. Grant-related activities need also to be more appropriately linked to loan-funded projects and programmes. Likewise, a more systematic approach, additional resources and larger efforts should be devoted to partnership building and knowledge management. These are essential components towards ensuring the replication and upscaling of the innovative approaches promoted through IFAD operations, which is in essence the ultimate test of IFAD's capacity to promote innovations.

IFAD can and should become an important partner for knowledge management on rural poverty reduction issues in Brazil. More systematic efforts and greater funds need to be allocated to documenting project experiences and sharing them among key actors involved in supporting the IFAD-funded programme in Brazil. These would not only contribute to improving the performance of the portfolio in general, but also inform the Fund's policy dialogue and partnership building activities, as well as contribute to the promotion of innovations. The knowledge acquired based on IFAD operations in Brazil can also prove of value to other developing countries. In this regard, IFAD can facilitate the collaboration and knowledge sharing between Brazil and Africa, in the Lusophone, and also other countries. Furthermore, the FIDAMERICA network's coverage should be expanded in the Brazil country programme, and periodic exchange visits between project staff, government officials and other partners from Brazil to other countries with IFAD operations should be organized.

Finally, IFAD could provide valuable support to strengthening Brazil's monitoring and evaluation capacity by, inter-alia, promoting a more active involvement of PREVAL in the country.

IFAD would take the lead in implementing this recommendation in the framework of the development of the new Brazil COSOP, which will be presented to the Executive Board by December 2008.

Partnerships to support the IFAD country programme. It is important for IFAD to intensify its collaboration with the federal and state governments, with national and state research and knowledge institutions (e.g., EMBRAPA), and with civil society organizations. Additional efforts should be devoted to expanding IFAD's outreach to states, municipalities and other actors involved in its activities. Opportunities for direct lending to state governments, in consultation with relevant federal agencies, should be explored. At the same time, the Fund must devote sufficient attention to maintaining close dialogue and communication with the federal government on strategic directions, policy issues and all aspects of the Fund's relations with the country. Finally, IFAD should enhance partnerships with multi-lateral and bi-lateral agencies.

IFAD and the Government of Brazil would be responsible for implementing this recommendation, which would also be reflected in the new COSOP and operations funded by IFAD in the future in Brazil.

Expand geographical focus and targeting options. In addition to focusing on the North-east, the Fund should consider the possibility of expanding its geographic outreach to cover the rural poor living in the Northern areas of the country, which also show high levels of poverty. In view of the wide experience of IFAD, especially in the Latin America region, in assisting indigenous populations, it is recommended that IFAD seeks ways and means to support indigenous peoples in the Amazon in consultation with governmental agencies for indigenous peoples, such as the FUNAI (National Foundation for the Indigenous Peoples). For this purpose, the Latin America division might also consider mobilizing resources from the indigenous people grant facility available at IFAD.

IFAD should implement this recommendation, while developing the COSOP, in consultation with the Government of Brazil and its concerned agencies.

Redefine priority areas of operations. IFAD should continue working in the provision of support services for small farmers, such as financial services, technical assistance and applied research. A key new priority area should be further cooperation in the enhancement of market linkages, including access to markets, market infrastructure and market information. For this purpose, greater partnership with the private sector should be sought. The overall enhancement of access to markets should gain prominence in the new COSOP.

While IFAD's experience has been positive in providing direct services and capacity-building to communities in resettlement areas (asentados) the Fund should not engage directly in enabling access to land. It should however pay deeper emphasis to strengthening of rural financial services at the grassroots level. Through loans, IFAD could cooperate in creating or strengthening microfinance entities capable of providing a variety of financial services, including savings and non-agricultural loans. In addition, there are good opportunities to expand outreach to the rural poor through retail partnerships. For example, "correspondent banks" could be used, which allow banks to use retail shops for providing financial services, such as deposits and order payments, in remote locations at a much lower cost compared to opening a branch.

IFAD should take the lead in implementing this recommendation by seeking the support of the Technical Advisory Division, and in consultation with the Government of Brazil and other IFIs operating in Brazil. These issues would also be covered in the new COSOP for the country.

IFAD's operating model. As a means to enhancing IFAD's development effectiveness, it is recommended that the Latin America and Caribbean Division (PL) explore the possibility of enhancing its country presence in Brazil. The options for using Brazil as a sub-regional office covering the MERCOSUR countries (and others) should also be explored. On a related issue, it is recommended to initiate the necessary dialogue and actions to bring under direct supervision and implementation support the last two projects approved in Brazil. New projects funded to Brazil should also be under direct supervision² and implementation support. Finally, it is important for IFAD to increase (within the overall framework of the PBAS) the level of resource allocated to Brazil and to increase attention and resources to non-project activities.

IFAD should implement this recommendation in close consultation with the Government of Brazil by December 2008.

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1/ For example, by the introduction of pest resistant varieties of cassava and pineapples.

2/ PL may like to explore alternative options for undertaking the supervision of fiduciary aspects, including the possibility of performing the duties from IFAD or sub-contracting this task to another institution, as was the case in the Direct Supervision Pilot Programme. The crucial aspect is to ensure that IFAD is solely responsible for the implementation support function as part of the overall supervision process.