IFAD grants: an overview

Introduction

In IFAD, grants have always been a key instrument to eradicate rural poverty. Since 1978, excluding grants within the Debt Sustainability Framework (DSF), IFAD has committed approximately US$700 million in grants to support research-for-development and capacity-building programmes. Through these programmes IFAD has been able to  test and disseminate new pro-poor agricultural technologies; develop new organizational approaches at the community level and beyond and influence policies. Through its support to the global agricultural research system, IFAD has succeeded in drawing attention to the priority concerns of poor rural people. It has also furthered understanding of the difficulties faced by people who live in poor rural areas and who produce traditional crops and commodities under adverse conditions.

In December 2003, IFAD's Executive Board approved a Policy on Grant Financing which was updated in September 2005. In December 2009, IFAD Executive Board approved the Revised IFAD Policy for Grant Financing. In May 2011, IFAD Executive Board approved the Corporate Strategic Workplan for Grant Financing and the Procedures for Financing from the Grants Programme.

The main purpose of the revised grant policy is to promote successful and/or innovative approaches and technologies, together with enabling policies and institutions that will support agricultural and rural development, thereby contributing to the achievement of IFAD’s overarching goal of empowering poor rural women and men in developing countries. The revised policy also aims to assist IFAD, its partners and other rural development stakeholders in improving their knowledge and understanding of such elements.

IFAD grant proposals are either country-specific, regional or international, depending on the nature of the potential innovation and impact. IFAD has also joined the larger international aid effort by adopting the Debt Sustainability Framework to address many countries’ debt problems by providing assistance on grant terms rather than through loans.

IFAD's grant policy

Following the approval of the Debt Sustainability Framework by IFAD’s Executive Board in April 2007 the grant programme represents up to 6.5 per cent of the proposed IFAD Programme of Work. The Revised IFAD Policy on Grant Financing has recently been revised and approved by the Executive Board in December 2009.

The goal of the revised grant policy is to promote successful and/or innovative approaches and technologies, together with enabling policies and institutions that will support agricultural and rural development, thereby contributing to the achievement of IFAD’s overarching goal – that poor rural women and men in developing countries are empowered to achieve higher incomes and improved food security.

The objective of the policy is that IFAD, its partners and other rural development stakeholders improve their knowledge and understanding of what constitutes successful and/or innovative approaches and technologies, enabling policies and institutions that promote the interests of poor rural women and men.

The revised policy aims specifically to:

• promote innovative activities and develop innovative technologies and approaches to support IFAD’s target group;
• further awareness, advocacy and policy dialogue on issues of importance to poor rural people promoted by this target group;
• strengthen capacity of partner institutions to deliver a range of services to support poor rural people; and
• increase lesson learning, knowledge management and dissemination of information on issues related to rural poverty reduction among stakeholders within and across regions.

As under the previous policy, eligible partners in implementing grant-financed activities include: developing Member States; intergovernmental organizations in which such Member States participate; civil society organizations, including NGOs; and IFAD-hosted initiatives. Additionally, however, for-profit, private-sector entities are now also eligible to receive grant financing for specific, agreed grant-financed activities aimed at enabling poor rural women and men to achieve higher incomes and improved food security. All grant proposals need to have an IFAD staff member as focal point/champion who sponsors the grant, which would include to facilitating the grant processing to approval and providing implementation support/supervision as required.

Core principles

IFAD’s grant strategy focuses on promoting successful and/or innovative approaches and technologies, together with enabling policies and institutions that will support agricultural and rural development, thereby contributing to the achievement of IFAD’s overarching goal – that poor rural women and men in developing countries are empowered to achieve higher incomes and improved food security.

The objective of the policy is that IFAD, its partners and other rural development stakeholders improve their knowledge and understanding of what constitutes successful and/or innovative approaches and technologies, enabling policies and institutions that promote the interests of poor rural women and men.

Activities eligible for country-specific grants are directly aligned with country strategies, as articulated in Results-based Country Strategic Opportunities Programme, and they support and complement IFAD’s loan portfolio while responding to issues deriving from country assessments under the Performance Based Allocation System (PBAS). Country-specific grants strengthen IFAD’s capacity to: (a) engage in strategic and catalytic activities at the national level, in the areas of knowledge management, policy dialogue and analysis, and partnership; and (b) pilot innovative approaches to rural poverty reduction that can then be scaled up through investment projects. These grants are strongly linked to IFAD’s country programmes, and contribute to the country programme approach, supporting linkages among all activities within the country. The issues these grants tackle are mostly in the area of organizational and institutional development in non-agricultural areas, and they include rural finance, market linkages and pro-poor policy development. They involve mobilization and strengthening of the institutional capacities of both national and civil society organizations to address national and local issues and to support partnership formation, establishment of policy-dialogue platforms and pro-poor institutional transformation.

IFAD’s role in supporting the Global Agricultural Research System

Through the agricultural research programme and its link with the International Agricultural Research Centres (IARCs) mostly within the Consultative Group on International Agricultural Research (CGIAR), IFAD has played an important policy and advocacy role in promoting pro-poor agricultural research and in addressing crucial poverty issues. The grants programme has produced a number of successes in pro-poor international agricultural research, established effective partnerships with IARCs and strengthened national agricultural research systems (NARS) and institutions.

 In 2003, IFAD became a co-sponsor with the World Bank, Food and Agricultural Organization of the United Nations (FAO) and the United Nations Development Programme (UNDP) of the CGIAR. During 2009, the CGIAR concluded an extensive reform process that promises to change the way the entire global agricultural research system operates. IFAD co-led the Change Steering Team and was a member of the Working Group for the new funding mechanisms.

In 2007, IFAD formed a strategic alliance with the European Commission to support the CGIAR and in 2008 the Fund entered into a multi-year agreement. As a result of this strategic alliance, more than US$150 million has been channelled through IFAD so far to support research activities for sustainable reduction of rural poverty.

IFAD also continues to support the Global Forum for Agricultural Research (GFAR), which promotes worldwide collaborative research partnerships. GFAR, in collaboration with the recently formed CGIAR Consortium, organizes the Global Conference on Agricultural Research for Development (GCARD), which is more than a Conference - it's a multi-year process of learning and continuous updating of the global agricultural research for development system. The aim of the GCARD is to create new ways of working together to enhance the development value of research. GCARD strives to develop a new global agricultural research system, driven by tangible development outcomes and bringing together all those involved in agriculture research for development. The GCARD replaces the GFAR Triennial Conferences and the Annual General Meetings of the CGIAR. IFAD is a member of the Task Force for the GCARD.

Knowledge management and learning

IFAD’s role in knowledge management in relation to grants is epitomised as that of a knowledge broker, and involves: (i) developing research evaluation methodologies; (ii) forging strategic research and capacity-building partnerships; (iii) developing tools and systems for dissemination of research results, including links with the IFAD Knowledge Managament strategy; and (vi) building expertise in emerging and innovative research areas with selected incubating partnerships, e.g., on bio-energy, adaptation and mitigation of climate change, pro-poor biotechnology etc.

IFAD continues to strengthen the research agenda by promoting higher performance in pro-poor impact achievement and measurement. Using the outcome of the programmes, IFAD supports knowledge sharing through the development of technical advisory notes (TANs). TANs are designed to introduce new, pro-poor technologies to a wider development community in the form of ‘good practice’ advice matched with specific socio-economic and agro-ecological settings, addressing also the policy and institutional environment. TANs provide development workers with technical and institutional options validated and verified through community participatory research - options that may provide replicable solutions to problems under similar socio-economic, cultural and biophysical conditions elsewhere.

Debt sustainability framework   

The Gleneagles Agreement, and the increasing awareness of the international community about the need to address debt, has brought about a rethinking of financing mechanisms to support poverty alleviation in member countries. The Debt Sustainability Framework (DSF) is part of the architecture of the support that multilateral financial institutions (MFIs) provide for debt relief and management in the poorest countries. The DSF is designed to ensure that the poorest countries’ development efforts are not compromised by the re-emergence of unsustainable debt levels. It ensures that new development assistance is provided to them on terms consistent with achieving and maintaining sustainable levels of debt, and it supports debt management at the country level.

IFAD uses the DSF to decide the form of the organization’s financial assistance to countries eligible for highly concessional lending. To assess the debt status of a given country, IFAD uses the classification of countries in terms of debt sustainability that is produced by the World Bank and the International Monetary Fund in their country debt sustainability analyses. On this basis IFAD extends financial support to programmes and projects governed by the performance-based allocation system (PBAS) in countries eligible for highly concessional loans. The organization extends support on the following basis, in line with the International Development Agency (IDA) and the African Development Fund (ADF):

• countries with low debt sustainability: 100 per cent grant
• countries with medium debt sustainability: 50 per cent grant and 50 per cent loan
• countries with high debt sustainability: 100 per cent loan