Introduction

Objectives. In line with the decision of the Executive Board of the International Fund for Agricultural Development (IFAD) at its 98th session on 15 December 2009, the IFAD Office of Evaluation (IOE) undertook an interim evaluation of the IFAD-financed Sustainable Development Project for the Agrarian Reform Settlements in the Semi-Arid North-East – the Dom Hélder Câmara Project (DHCP) – in Brazil. The objectives of this evaluation were: (i) to assess the results and impact of the project; and (ii) to generate findings and recommendations that will inform a possible next phase of the project.

Project background. DHCP was conceived in answer to the lack of technical assistance and opportunities for social development and income generation for newly settled farmers and communities in the semi-arid North-East under the agrarian reform process. The initial project cost was US$ 93.0 million, including an IFAD loan of US$25.0 million. No cofinancers were included at project design, but the project management unit (PMU) was able to mobilize further funds from international and domestic partners. The objectives of the project were to develop a culture of co-existence with the semi-arid conditions of Brazil's North-East region and to ensure that families living in agrarian reform settlements and neighbouring rural communities could lead dignified lives and become models for sustainable human development. The target group consisted of 15,000 families in federal agrarian reform settlements and neighbouring communities in selected territories in the states of Ceará, Pernambuco, Paraíba, Rio Grande do Norte, Sergipe and Piauí.

DHCP distinguished itself by institutionalizing bottom-up participation in planning through its territorial committees, which consist of representatives of communities, trade unions, technical service providers, municipal councils and DHCP; they take decisions each year on proposals to be submitted for financing. In particular, DHCP established a self-regulating working relationship of three major actors: (i) beneficiaries and their organizations; (ii) social mobilizers – rural trade unions; and (iii) providers of technical assistance, mainly non-governmental organizations (NGOs). DHCP invented a compelling and easily communicable concept – Conviver com o semi-árido – to promote the idea that it is possible for family farmers to establish a sustainable relationship with the environment of the semi-arid North-East and at the same time develop their technical and entrepreneurial skills.

The loan to the Government for financing DHCP was approved by the IFAD Executive Board in December 1998. The project was under the direct supervision of IFAD. According to the original loan agreement, the project was expected to close in June 2007, but after approval of two extensions the actual loan closing date was December 2010.

Implementation results

The introductory phase of DHCP was challenging. DHCP was required to establish partnerships with state authorities, NGOs and civil society organizations for implementation of the proposed approach. The innovative nature of the concept and resistance by some potential partners affected the uptake of the strategy. The years 2003–2005 saw the conceptual maturation of the DHCP strategy in line with the commitment by the Government to support initiatives to reduce rural poverty and address the needs of family farmers. The years after 2005 saw the full application of DHCP strategy for the benefit of the target group: it introduced new activities in response to new demands from the Government and private actors, and devoted greater attention to the search for international partners interested in supporting and cofinancing activities in line with DHCP principles.

Organization for social development. DHCP supported 346 associations of beneficiaries. Social organizations trained by the project – mainly trade unions – had an important role in this component. The project trained a network of 113 social mobilizers, who became responsible for motivating community members to participate in project activities, providing information about opportunities available under government programmes, helping to organize initiatives for interest groups, promoting linkages with technical assistance providers and supervising activities to ensure correct use of DHCP financial resources.

Development of production and commercialization. The project contracted 65 NGOs to deliver technical assistance, extension and advisory services, and involved them in capacity-building initiatives in a range of technical areas. DHCP organized 372 demonstration units for agricultural capacity-building, and financed 511 production and social initiatives submitted by beneficiaries' associations under the Fundo de Investimento para Projetos Sociais e Produtivos (FISP). The proposals for demonstration units and FISP were formulated by beneficiaries' associations and reviewed by the territorial committees. If approved, the funds were transferred to beneficiaries' associations for the purchase of inputs and implementation of activities. DHCP helped family farms to create opportunities for access to markets through two main sales channels: (i) the institutional markets that constitute the Government's food-acquisition programme; and (ii) the creation or expansion of 36 agro-ecological markets.

Financial services development. By training professionals in NGOs and credit cooperatives, DHCP addressed a major bottleneck in the delivery system for PRONAF loans – lack of qualified personnel to help clients to formulate acceptable credit proposals. The Banco do Nordeste disbursed R$43.0 million (US$25.0 million) in 9,780 credit operations promoted by DHCP, but this was less than the US$40.0 million allocated in project design. The main reason for this was indebtedness among DHCP target beneficiaries resulting from previous participation in credit programmes. The DHCP facilitated the provision of bottom-up financial services by supporting the enhancement of five Cooperativa de Crédito Rural e Economia Solidária (ECOSOL).

Education and training. DHCP included various initiatives for capacity-building for agricultural families aimed at enhancing understanding of the environment and improving living conditions. A range of context-related educational activities for children, young leaders and professionals, teachers, farmers and adults were undertaken. DHCP used an innovative method for adult literacy activities that featured results-based incentives to teachers. Context-specific training was also provided for quilombola communities. Under this component, DHCP financed the programme Escola Familia Agrícola, which applied the alternancia pedagógica (half classroom, half applied learning) method. Technical training of young men and women was conducted with a view to facilitating their employment in social organizations.

Gender, age and ethnicity. DHCP mainstreamed gender, age and ethnicity issues as cross-cutting matters in all its components, including demonstration units, FISP and credit schemes. The main objectives were to promote the participation of men and women of different ages, increase the role of young people and promote the development of quilombola communities. With regard to gender an important action was the campaign for women's identity documents, which involved 14,257 women that was later scaled up across Brazil by the Ministry of Agrarian Development.

The Sertão Project. The Sustainable Land Management in the Semi-Arid Sertão Project is one of 32 projects financed by the Global Environment Facility (GEF) in Brazil.The project has a budget of US$15.5 million, of which US$5.8 million is provided by GEF through a grant and US$10.0 million through the Government of Brazil. The project builds on the strategy adopted by DHCP, to which it added a cross-cutting environmental dimension aimed at generating a model for tackling the causes and negative impacts of land degradation on the caatinga ecosystem through sustainable land use. The project finances a range of activities involvingexperimental learning, environmental incentives, the introduction of environmental education in schools, biological production methods and the monitoring of environmental effects in targeted territories.

The Elo Project. This project was financed by the Syngenta Foundation with the objective of creating employment opportunities in rural areas through access to appropriate production technologies, support for agro-processing, access to markets and certification of products. The project promoted the establishment of 19 processing facilities for a variety of market products such as honey and cashew nuts, helped to introduce eight product brands and facilitated the installation of ten agro-ecological market places.

Project performance

Relevance

DHCP was aligned with the IFAD country strategy, but it remains the only IFAD-financed project whose loan is administered at the federal level. This contrasts with the 2008 results-based country strategic opportunities programme (RB-COSOP), which favours state-based administration of IFAD loans. DHCP went beyond simple alignment with government policies in that it saw itself as a facilitator for a number of public policies focusing on poor farming families. DHCP succeeded in working with different segments of society in a differentiated manner. It adopted a pragmatic approach to the empowerment of rural women by identifying their needs and gathering them in interest groups focused on production or income-generating activities. The correct sequencing of activities contributed to the relevance of the project: DHCP initially targeted the immediate development of human capital and living standards; the succeeding work on developing production aimed to increase food security and gradually promote participation in markets. The water infrastructure financed by DHCP also addressed a major need among the rural poor.

Some of the difficulties faced during implementation can be related to specific features of project design: the inclusion of six states, although justifiable in view of project objectives, increased the complexity of implementation, supervision and monitoring. The administration of the DHCP loan at the federal level, however, largely freed DHCP from bureaucratic restrictions and allowed it to engage in a range of partnerships and to experiment with new mechanisms for supporting family farmers. The negative aspect was that the strategic orientation from the federal government level was not strong, and at times the implementation of DHCP activities was delayed by insufficient and delayed allocation of counterpart funds.

Effectiveness

The DHCP was characterized by satisfactory performance in terms of effectiveness. The project had positive effects on the capacity of family farmers to organize themselves into autonomous associations. Before the project, many beneficiaries' associations existed only on paper and were not perceived as an instrument for empowerment or access to the opportunities available under government development policies. DHCP invented a compelling and easily communicable concept – Conviver com o semi-árido – to promote the idea that it is possible for family farmers to establish a sustainable relationship with the environment of the semi-arid North-East and at the same time develop their business skills. Another great merit of DHCP was its contribution to easing one of the main constraints to agricultural development in the semi-arid North-East – access to water. In many communities, however, water continues to be scarce: the management of limited water resources should be improved.

The adult literacy campaigns produced good results as a consequence of an innovative learning method inspired by one of the NGO partners that provided incentives for teachers to deliver results. Although project actions for promoting education were effective at the individual level, they have not yet generated changes in official school curricula. Significant progress was made in terms of promoting the idea of contextualized education. Leadership training for young women and men led to employment opportunities and improved the management of associations and rural institutions. The project also attempted to promote market-oriented, bottom-up financial services suitable for the rural poor. Given the objectives of the project, however, a major knowledge-sharing initiative would be required to promote DHCP as a model for future development policies.

Efficiency

DHCP experienced a 24-month delay in becoming effective and required extension by three and a half years to compensate for the late start and the initial disbursement delays. Such prolonged duration inevitably brought about an increase in IFAD and government expenditure on management and supervision. The operating cost of DHCP was primarily a result of the wide geographical coverage established in its design, but this was essential to achieve the objective of applying the proposed model in a range of contexts. The expansion of DHCP into other territories toward the end of the project did not contribute to efficiency.

The resources available were efficiently administered thanks to the effective application of a self-steering system in which social mobilizers, grassroots associations and technical assistance providers supervised each other to ensure optimal use of available resources. With regard to the cost of the technical assistance model piloted by DHCP, the average cost per family targeted was in line with national standards, but the services offered by DHCP were broader and more effective in generating results.

Impact on rural poverty

The impact of the project on rural poverty was satisfactory. Most significantly, the project had a strong impact on empowerment and self-esteem among the target groups, including women and rural young people. This resulted from factors such as direct management of financial resources for development activities and increased participation in local markets and decision-making processes. With regard to women, DHCP enabled an extension of women's social functions by promoting their participation in productive and income-generating activities, in combination with activities to promote their education and citizenship rights. DHCP also targeted young people with a view to offering them prospects for building their future in the rural North-East.

The evaluation found evidence of increased agricultural productivity and diversification of farm production in the targeted territories.

Improved access to water was a major driver of these results. DHCP promoted the participation of agrarian reform beneficiaries and family farmers in local markets with positive consequences on income and self-esteem. The partnership with Syngenta Foundation and the ELO project improved the market orientation of DHCP and favoured the establishment of agro-processing units and agro-ecological fairs. DHCP also partnered with the government food acquisition programme, which constituted a secure source of income for family farmers. Evaluation data show that after the project DHCP beneficiaries increased their incomes to four times the average real income before the project. DHCP contributed significantly to these results, because a major share of the increase derives from the income-generating activities that it supported. There is also evidence of increased household and productive assets.

Positive results were achieved in terms of promoting environmentally friendly technologies and inputs. The principle of conviver com o semi-árido was an essential element of DHCP human, social and economic development strategies. The project nurtured in family farmers a new way of thinking: considering the environment and natural resources as partners for long-term development that require care and comprehension. The partnership with GEF helped to increase the impact of DHCP on the use of natural resources. In terms of impact on policy and institutional development, the project helped to enhance the capabilities of rural institutions such as NGOs and rural trade unions and participation by the poor in policy-making processes.

Sustainability

The social and economic effects of DHCP at the family farm level have a good chance of being sustained. DHCP actions were oriented towards a production system adapted to the capabilities of family farmers and targeted products in high demand in local markets. At the same time, DHCP fostered a mutually reinforcing linkage between environmental and economic sustainability. The project also proved that family farmers have good business prospects if they are provided with the necessary skills, information and capabilities. Solidarity principles in local markets and subsidized purchases from state companies currently protect the competitiveness of family farmers and favour the gradual development of their production and marketing skills. A necessary condition for continuation of the benefits, however, would be further consolidation of the production capacities of family farmers, upgrading of the quality of farm produce and integration with other markets including small and medium-scale agribusinesses companies operating in targeted territories.

DHCP adopted a timeline for ensuring sustainable results that went beyond the planned lifetime of the project. In 2006 new areas and territories were included, even though in these areas sustainable changes could not be generated before the closing date. The lack of an explicit strategy of disengagement inevitably affected the assessment of project sustainability. Indeed, the strategy of DHCP was to create the conditions for a second phase of the project that would lead to sustainability. This was, however, a risky strategy because an unexpected political change could halt the process.

Innovation

The design of the project was characterized by various innovations that were successfully applied: these included the adoption of a territorial development strategy and a multi-dimensional approach to poverty reduction, and involvement of a wider range of partners such as social organizations and rural trade unions. None of these constitutes an innovation in absolute terms, but the combination of innovations and their application to agrarian reform beneficiaries and communities in the North-East region clearly distinguishes DHCP as an innovative programme.

This evaluation identified two other important innovations: (i) the clear differentiation between the roles of social mobilizers and technical assistance providers, which fostered specialization and the capacity to reach the rural poor; and (ii) the concept of the project as an instrument to enable the rural poor to access opportunities available under government development policies. The evaluation also acknowledged various small-scale innovations applied at the local and community levels through the partnerships with NGOs. In this case, DHCP acted as an instrument for scaling up small-scale innovations.

With regard to replication and scaling up, DHCP became an example for other development project in the North-East and was used as a reference for the design of a territorial development policy in 2003.

Evidence is available of initiatives implemented by DHCP (such as the campaign for providing women with identity documents) that have been scaled up and replicated in other parts of Brazil. DHCP approach can be replicated and scaled up in other poor semi-arid areas of Brazil or in other countries, but this requires further evaluation and adaptation to the new contexts. A strong social entrepreneurship function with sufficient means to combine different actors and public policies would be required, particularly in territories with weak institutional environments.

Performance of partners

All DHCP partners performed satisfactorily. The evaluation provides a positive assessment of IFAD's performance in direct supervision: IFAD was a responsive partner in terms of clarifying aspects of project design and facilitating the adaptation of project approaches to the changing development context. Thanks to the partnership with IFAD, DHCP benefited from the status of international project, which gave it significant space for experimentation and innovation. IFAD also responded promptly when supervision requirements increased.

The quality of technical assistance provided by IFAD had a modest impact on implementation performance.

The Government of Brazil played an important role by providing a favourable economic and policy context for rural poverty reduction.

Government partners complied with major loan covenants, but allocation of counterpart funds delayed implementation early in the life of the project. The performance of the PMU contributed significantly to DHCP achievements: the evaluation recognized in particular the capacity of the PMU to mobilize domestic and international resources and to establish partnerships with a range of stakeholders. The PMU also ensured that financial management and accounting were sound.

Conclusions

The evaluation provided a positive appreciation of DHCP performance and impact. The main reasons for positive performance were:

• The favourable political and economic context in which the project was implemented and the Government's commitment to reducing poverty and inequality.
• The organization of DHCP, which enabled a decentralized working modality that increased operational costs but freed the PMU from political and bureaucratic constraints.
• The considerable capacity of IFAD and the Government to adapt to new situations and their flexibility in modifying the initial preferences and strategies as required.
• The outstanding performance of the PMU, which was a major factor in the success of DHCP, especially its capacity to establish fruitful partnerships with a range of stakeholders and to mobilize additional financial resources at the domestic and international levels; and
• The correct sequencing of activities, whereby early actions aimed to address major constraints and enabled the project to gain credibility among beneficiaries and institutional partners.

DHCP Ratings*
Core performance criteria
Relevance	5
Effectiveness	5
Efficiency	4
Project performance	4.7
Impact
Household income and assets	5
Human, social capital and empowerment	6
Food security, agricultural productivity	5
Natural resources and the environment	5
Institutions and policies	5
Rural poverty impact	5
Other performance criteria
Sustainability	4
Innovation, replication and scaling up	5
Overall project achievement	5
Performance of partners
IFAD	5
Government of Brazil	5
NGOs	5

* *  Ratings are assigned on a scale of 1 to 6 (6 = very satisfactory; 5 = satisfactory; 4 = moderately satisfactory; 3 = moderately unsatisfactory; 2 = unsatisfactory;1 = very unsatisfactory).

 

Recommendations

In view of the positive achievements of DHCP, this evaluation recommends to IFAD and the Government of Brazil the financing of a second phase of the project. The evaluation recommends IFAD and the Government of Brazil to take note of the main lessons learned, especially with regard to geographical coverage, the strategy for sustainability and the emphasis on knowledge sharing.

Institutional set-up. The RB-COSOP prepared by IFAD in close consultation with the Government of Brazil in 2008 establishes that "the state governments will be the partners of preference to carry out investment projects" and that "new loans will be agreed between IFAD and the state governments with the guarantee of the Federal Government". Considering the positive results of the DHCP and being this a multi-state project with IFAD loan managed at federal level, a second phase of the project would require IFAD and the Government of Brazil to reach a clear agreement on the institutional organization of DHCP-II and the level of administration of project loan. This would include a commitment from the Government of Brazil to carry out, jointly with IFAD, the project design and the procedures for negotiations and signature of the loan agreement. In the new project, opportunities to reduce administrative and management costs by making use of decentralized structures should be identified.

Likewise, in line with the rationale of the RB-COSOP, opportunities for cooperation and involvement of state-level governments should be included in order to maximise the potential influence of the DHCP-II at state-level.

Policy linkages. Define the links between DHCP-II and public policies at the federal, state and municipal levels to clarify existing and possible further connections for more effective channelling of development policies to the family farming system.

Knowledge generation and dissemination. Incorporate in project design a strategy for knowledge generation with a view to increasing the knowledge captured from experience. This requires a results-oriented M&E system that will enable the project to measure the progress in implementing the proposed approach and the results achieved at various levels (gender, ethnicity, age, households and institutions). The new phase should incorporate instruments for extracting information about the DHCP experience with a view to disseminating knowledge in national and international fora. In this context, IFAD should increase and facilitate opportunities to transfer DHCP experience at the regional level and in forthcoming initiatives for South-South cooperation.

Support for rural income generation. The project should include strategies for income generation through agricultural and non-agricultural activities. With regard to agricultural activities, support should be provided for upgrading products with high value-added and facilitating linkages of family farmers with value chain and markets. These activities should be implemented in line with the principle of environmental conservation that was a distinguishing feature of DHCP. The project should also identify instruments and strategies for the expansion of non-farm employment opportunities, especially for young people. In both contexts, the project should continue its support to initiatives aimed at facilitating access of beneficiaries to bottom-up financial and non-financial business development services.

Managing for sustainability. Define at the outset the strategy for engagement with settlements and communities, and its duration.

This includes the type and length of support and the indicators triggering the termination of project support – the exit strategy. The design should specify the institutional features and conditions expected at the time of project completion to ensure the continuation of benefits after the end of project financing.

Maximize synergies with the IFAD country programme. Where applicable, look for complementarities among DHCP actions and experience with IFAD programmes operating in the same states and territories.