Agreement at Completion Point

Background and Introduction

IFAD's Office of Evaluation (IOE) conducted a country programme evaluation (CPE) in Argentina in 2009/2010. The CPE had two basic objectives: (i) to evaluate the performance and impact of IFAD's operations in the country; and (ii) to generate lessons and recommendations to inform the next country strategic opportunities programme (COSOP) for Argentina.

The agreement at completion point (ACP) reflects the agreement between the Government of Argentina (represented by the Ministry of Agriculture, Livestock and Fisheries [MAGyP]) and IFAD Management (represented by the Latin America and Caribbean Division) on the main evaluation findings (see section B below), as well as the commitment to adopt and implement the recommendations included in part C of this document. The ACP contains inputs gathered at the national round-table discussion held on 1 and 2 July 2010 in Buenos Aires. It is noted that IOE does not sign the ACP, although it facilitated the process leading up to its conclusion.

Main Evaluation Findings
In general, the projects are responsive to the priorities of the Government of Argentina and the needs of poor rural people. However, some objectives in important areas, such as the inclusion of small-scale producers in commercial banking and the initial model put forward for the provision of technical services¹ through the creation of markets, were not realistic in the rural context and not fully shared by the Government. Moreover, IFAD did not sufficiently take into account institutional constraints in the country context. The programme was designed and implemented in a relatively standard manner, from Rome, with consultative processes that in some cases were inadequate at country level and did not sufficiently take into account differences among the operating regulations and procedures of the three parties involved (IFAD, central government and provincial governments). Furthermore, the country experienced high levels of political and economic volatility during the review period, including a serious financial crisis and multiple changes in ministries during the early 2000s.

Portfolio performance has been inferior to that in other countries in the region, as a result of significant delays that have affected both effectiveness and efficiency. Nevertheless, the projects completed have contributed to achieving important objectives, especially with regards to raising family incomes. Technical assistance has promoted profitable and appropriate technologies. Support for vulnerable populations, including young people, women and indigenous peoples, although small in scale, was also satisfactory. On the other hand, access to financial services by small rural producers continues to be a challenge in a context of limited capacity in the rural financial sector, although some successful experiences exist. The allocation of IFAD ordinary resources to Argentina has been affected by poor portfolio performance and possible underestimates of the country's rural population. As a result, allocations have been very low.

IFAD-supported operations have contributed to introducing important innovations. From an institutional point of view, the decentralized model has promoted ownership of the programme by the provinces and has contributed to building new institutional capacity and improving central-provincial relations. Moreover, a participatory policy has been generated in support of rural development and family farming. In addition, small-scale producers have come up with many ideas that are replicable and innovative in the Argentine context. Nevertheless, the practice adopted in promoting innovations was poorly focused and did not follow a systematic, strategic and priority-driven approach.

Non-lending activities (policy dialogue, associations and knowledge management) financed mainly by grants have together constituted one of the most successful instruments of IFAD's support for rural development and family farming in Argentina. In particular, policy dialogue – a key area for IFAD – has contributed to achieving deep-seated institutional change. IFAD has supported and promoted policy discussions at the subregional level in the framework of the Commission on Family Farming (REAF) of MERCOSUR facilitated the participation of poor rural organizations in policy dialogue and supported knowledge generation and dissemination on rural development and family farming policy. These activities contributed to generating debate on rural poverty in Argentina and raised the sector's profile in a country that has traditionally been oriented towards agroindustry for export. On the other hand, a stronger nexus is needed between grants and investment projects. Knowledge management has produced positive results, especially through project dissemination, REAF-MERCOSUR and FIDAMERICA. In addition, bodies and institutions devoted exclusively to serving the needs and demands of small-scale and family producers were created – highly significant in a country like Argentina based largely on large-scale agroindustry. Finally, partnerships and associations with other bilateral and multilateral financial institutions operating in the country have produced limited results, and this is reflected in low cofinancing levels. Nevertheless, the Government of Argentina provides significant cofinancing.

Despite the challenges faced by IFAD in Argentina and the limited resources invested, IFAD is considered a strategic and important partner for the country in view of its experience, flexibility and uniqueness as an institution devoted exclusively to eradicating rural poverty. Through its operations, IFAD has played an important role in supporting Argentina through a broad process of change in favour of rural development and family farming.

Recommendations Agreed by the Parties
IFAD's Role in Argentina

Resource levels and lending terms. The resource amounts allocated by IFAD in Argentina are quite small relative to the country context, and administrative costs for projects are high in proportion to total costs. Given the conclusions drawn by this CPE about IFAD's important potential role in Argentina, the Government and IFAD should jointly consider options to increase resource allocation, whether within the framework of the performance-based allocation system (PBAS) or through other sources, including cofinancing from the private sector and multilateral agencies with rural lending programmes. In particular, this would be based on a commitment to improve portfolio performance (by significantly reducing delays) and considering alternative definitions of rural populations to those used in official statistics to determine the percentage of rural population, one of the variables included in PBAS calculations. In this sense, IFAD, in collaboration with regional partners (e.g. the United Nations Economic Commission for Latin America and the Caribbean, and the World Bank) and national partners (the National Statistics Institute [INDEC], MAGyP and the National Agricultural Technology Institute [INTA]), can contribute to opening a debate on statistical criteria for identifying rural population.

IFAD and the Government of Argentina would be responsible for implementing this recommendation, which should necessarily be framed in operations on a larger scale.
In parallel to the foregoing, the national counterpart mobilization policy initiated with PRODEAR should continue, whereby the Government of Argentina finances more than 50 per cent of the project, as well as ensuring – where feasible and advantageous in terms of operating efficiency and generating synergies – a higher level of cofinancing by other cooperation agencies.

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

Strengthen technical support, focusing on innovation and knowledge management. IFAD should, first of all, ensure the highest quality in technical support during project design and implementation to accelerate the achievement of results and overall portfolio execution. In addition, it is recommended that IFAD reduce its thematic area of action and concentrate efforts on promoting and implementing a smaller number of activities with high innovation content. IFAD needs to show success in these operations in order to raise its profile significantly and promote replication or scaling up by the Government of Argentina or other financing agencies. It is recommended that a dialogue be undertaken with the Government and other key actors in the subregion to identify such innovations.

IFAD would be responsible for implementing this recommendation and the Government of Argentina should be actively involved in the technical support received and the proposed dialogue.
IFAD should also continue to develop knowledge management (a vital area in terms of scaling up), both through projects and in coordination with IFAD regional programmes. The Government of Argentina has expressed interest in supporting IFAD in South-South cooperation to promote an exchange of experience and knowledge on family farming and rural development between Argentina and other countries, in the region or elsewhere.

IFAD should lead the implementation of this recommendation, in close collaboration with the Government of Argentina, which would be reflected in the new COSOP and in future IFAD-funded operations in Argentina.
Further pursue successful ways of providing financial services. IFAD should intensify its interaction with the Government of Argentina in connection with financing for the small-holder farming sector, which the Government is tackling in terms of access to resources. Based on work done through horizontal cooperation between Argentina and Brazil and Argentina and Chile – both with IFAD support – the search for institutional innovations in support for small-holder agriculture could be pursued further. Two experiences in the Argentina rural context warrant consideration through a dialogue, exploring options with the private sector as well: (a) loans granted under trust funds managed by public or semipublic agencies to provide technical, commercial and financial assistance to small producers; and (b) loans granted to producers' cooperatives.

IFAD would be responsible for implementing this recommendation with support from the Government of Argentina.
Geographical coverage of programmes. In view of the scarce resources available to IFAD at the moment, priority should continue to be given to areas where poor rural people are concentrated, including under national programmes such as the National Rural Areas Development Programme (PRODEAR).

IFAD and the Government of Argentina would be responsible for implementing this recommendation – with due respect for equal rights and opportunities for the target population throughout the national territory – which would be reflected in the new COSOP.
Strategic use of grants and closer connections with projects. IFAD should continue to allocate grants in Argentina to promote non-lending activities that are highly satisfactory in terms of policy dialogue and knowledge management. Also, in supporting its innovation agenda, IFAD should deepen its partnerships using grants with research institutions in the agriculture sector, and ensure connections with IFAD-funded projects in Argentina.

IFAD would be mainly responsible for implementing this recommendation, which would be reflected in the new COSOP.

Programme Design

Programming activities in coordination with all government agencies involved in the programme. IFAD should program and design its activities in Argentina with the active participation of all those government agencies involved in the design and implementation of IFAD-funded projects, both federal and provincial. In addition to its traditional partners, IFAD should ensure that consultative processes include, early on and systematically, the Ministry of Economy, the Chief of the Cabinet of Ministers and production ministries in beneficiary provinces.

IFAD and the Government of Argentina would be responsible for implementing this recommendation, which would be reflected in the new COSOP and in future IFAD-funded operations in Argentina. Coordinating consultations with ministries of production in the provincesl would be the responsibility of the federal government.
Decentralized mode of execution for IFAD projects. The CPE recommends decentralized execution for the projects funded by IFAD, by means of a model combining strong coordination at the national level with substantial provincial management supported by capacity-building where needed. The CPE recommends that the coordination of federal, provincial and IFAD operating rules and procedures be an integral part of initial project design (prior to signing loan contracts) and that programmes and projects be designed and managed with broad participation by all provincial and federal stakeholders.

IFAD and the Government of Argentina would be responsible for implementing this recommendation, which would be reflected in the new COSOP.
Active and effective IFAD presence. Although this CPE found that IFAD's supervision management has been positive in recent years, attention is drawn to the lack of a closer country presence given the difficulties inherent in the complex country context of project portfolio implementation, and the high cost of managing the programme from Rome. The ongoing consultative process needed for programme implementation calls for more continuous management than is possible from Rome. Such a presence could help provide momentum to and consolidate progress made on institutions and policies, providing more visible and closer support to the Government of Argentina in its work to promote rural development. It is recommended that IFAD and the Government, in reviewing their long-term relationship and in the context of a significant increase in the portfolio, undertake a discussion on ways of achieving a country presence.

IFAD, in close collaboration with the Government of Argentina, would be responsible for implementing this recommendation, which would be reflected in the new COSOP.

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1/     More recent projects call for technical assistance to be provided by public and private technicians, with positive results (see para. 4).