The European Commission’s Philip Mikos looks back at the EU’s track record in rural development in LDCs — and forward to ways of strengthening local authorities there.
Opportunities in decentralisation
Head of the Environment and Rural Development Unit, DG DEV, European Commission, Brussels
Drafting guidelines was “a pretty good example of donor harmonisation”
Italian agro-economist Philip Mikos started his European Commission career 20 years ago as a development worker in Ethiopia, followed by stints in Burundi and Uganda. Since 1995, despite frequent trips to the field, he has settled at Commission headquarters in Brussels, where he zips to work on a bright red Vespa motor-scooter. Far more cumbersome is his job steering a clear course through the Commission bureaucracy, where he oversees environment, food security and rural development in DG DEV, the Directorate-General for Development. DG DEV formulates the Commission’s development policy, though spending — some €7 billion a year, on 150 countries and territories — is handled by EuropeAid, a separate department of the Commission. Along with many senior rural development experts at donor headquarters elsewhere, Philip Mikos must grapple with the changing paradigms of world trade and economic cooperation, evolving governance structures in developing countries, the knotty issues of donor harmonisation and alignment and new ways to empower rural development workers on the ground. He spoke with Timothy Nater in Brussels.
Nater: You recently coordinated an EU task force that produced the EU Land Policy Guidelines. To what purpose?
Mikos: Land is the main material asset, the very basis of farming. It’s an obvious area for a common EU view. Securing access to land is crucial. Tenure is what makes the difference between a passive farmer with no future and a farmer with plans and ambition. The EU guidelines were designed to start a political discussion in the European Council and Parliament on a common, effective, coherent approach by the Commission and the EU Member States to land reform in developing countries.
Donors have pushed for Western-style land privatisation while often ignoring existing land tenure systems based on customary laws. In Africa, for example, after 40 years of donor effort, the amount of land under ownership title is still minimal. A title deed doesn’t mean much to an African smallholder. He’s not likely to risk it for a loan, even if banks are willing to lend the money, which they usually are not.
That’s not to say titling isn’t important and useful, especially in peri-urban areas where the rule of law is strong, where land is scarce and changes hands more frequently, where farming is done on a more industrial scale and where cadasters exist to ensure that transactions and ownership are properly registered.
But what an African smallholder usually needs is an enforceable right to farm, and secured access to land. Customary tenure systems, based on traditional authorities at local level, can provide that security. The essence of the EU proposal is to help draft laws that respect customary tenure systems and empower local communities and traditional authorities to manage the land.
“Customary land tenure systems, based on traditional authorities at local level, can provide security to small farmers.”
Drafting joint EU guidelines must be a laborious business.
No, things went rather smoothly. The rural development officials of EU Member States got together in January, 2002, with counterparts in the Commission. The idea was to proceed in parallel with the World Bank’s own Land Policies for Growth and Poverty Reduction report and develop our own specific policy and define a common understanding on how EU donors and other multilateral and bilateral donors would approach partner-governments in developing countries in a coordinated way. We commissioned a Task Force that in early 2004 produced a draft that was ready for civil society consultation through the International Land Coalition, and published the final version in November of that year. All in all, I’d say that the guidelines are a pretty good example of donor harmonisation.
What sort of reaction do you expect from developing countries?
That’s more of a challenge. We’re not having a dialogue on land reform with many governments yet. Unfortunately, donors tend to request a dialogue with governments on land issues only once they’ve become an urgent problem, a source of conflict, as in Namibia, for instance, or Zimbabwe, Côte d’Ivoire or Uganda. And once that happens, it’s difficult for governments to speak openly: land is very political, very sensitive, a matter of national sovereignty.
No more squabbling over pencils and motorcycles
Nater: What was your first experience with donor coordination?
Mikos: I’d say it was the PROAGRI programme in Mozambique, which was tabled in 1996 and finally got underway in 1999. That was one of the first attempts to put together a coordinated agricultural development programme, what you would call a SWAp today. I was involved with it for about five years, shuttling between Mozambique and my headquarters here in Brussels. PROAGRI was launched right after the end of the Mozambique civil war, so the programme had to deal with a devastated sector and a very complex set of issues. Though the main drivers on the donor side included the World Bank, the EU and USAID, there were a very large number of other donors present, many trying to promote different agendas, plus about 120 NGOs. Also, at the time, about 80% of Mozambique’s national budget was aid money, and almost half of all spending was beyond the government’s direct control.
But what made all the difference was the new Mozambican government. It was tough and clear-minded and simply not willing to deal with 200–300 different projects and 15–20 separate donor missions a year. And the human chemistry was strong, as well, especially with the then vice-minister of agriculture, a very forceful woman called Isidora Faztudo.
And the lessons learned?
One: a government that knows what it wants — and the Mozambicans were very positive that they wanted a sector-wide approach — can bang donor heads together to good effect. Two: early consultation with the finance ministry in RD programmes is very important. When you’re drawing up a sector-wide programme with a technical partner like the agricultural ministry, their tendency is to go for a mega-plan: the bigger, the better. Initially, PROAGRI was scheduled at €300 million over five years. But the Mozambican Minister of Finance and Planning came on board early and asked his colleagues from agriculture, “Are you sure you can spend that much? How much will that generate in additional recurring costs?” The result was that PROAGRI was scaled down to about €200 million.
“A government that knows what it wants can bang donor heads together to good effect.”
What was the effect on donor behaviour?
Our thinking evolved considerably. Remember, ten years ago, structural adjustment programmes still meant pages and pages of minutely-detailed donor conditions. In Mozambique, the temptation among donors to go that way was still very strong. In fact, PROAGRI before 1999 was all about extremely detailed planning. For example, instead of donors discussing extension policy with the Ministry of Agriculture and Rural Development, there would be squabbles over the cost and allocation of pencils and motorcycles, department by department. After about three years of that sort of micro-management and piles of documents and draft legislation that no-one could enforce, our choice was either to fail, or to change our approach.
Good M&E and reliable data remain elusive
Nater: So after the first three years, PROAGRI almost collapsed. What happened next?
Mikos: The World Bank and European Commission people came up with a suggestion that said, in essence, “Instead of discussing programme details, why don’t we agree on some basic principles that government must respect, sign a five-year contract with them and then regularly monitor the programme and agree on budgets year on year?” Sixteen donor organisations, some of whom had started from very different positions, gradually came together in this common vision. We thrashed out the new system with government during a two-day marathon meeting in 1998 and PROAGRI was finally launched.
In retrospect, I think that all the donors involved shared a feeling that they were doing something new. They made a real impact on government decentralisation, for example. For our part, the European Commission was the first to finance PROAGRI with budget support. We defined the basics of the common implementation system. We organised the first outsourcing operations for agricultural services. We also provided a technical team to improve accounting, auditing and financial management. Internally, the Ministry of Agriculture and Rural Development in Mozambique has benefited enormously, in terms of morale and overall professionalism.
“There’s a huge role for government to play in agriculture.”
How has PROAGRI improved the lives of Mozambican farmers?
That’s the big question mark still hanging over the entire undertaking: how to measure the impact on the farmer and on the rural poor? One of the major stumbling blocks with PROAGRI Phase I was finding agreement with government on a system of proper, independent monitoring and evaluation, and on the provision of data on which government could base its decisions. I believe that PROAGRI Phase II, which got underway in 2004, focuses more strongly on the field. But the reasons for the initial resistance to monitoring may have included government fear of donor interference and also an old central-planning mindset that said, “We don’t need data. We know what’s best for the farmer.”
Some say governments can play only a minor role in agriculture, given that it’s essentially a private-sector undertaking.
I disagree. Governments fail to promote agriculture because they haven’t understood their proper role. It’s not just about providing fertiliser, extension and veterinary services. It’s not just about inputs and marketing boards. There’s a huge role for government to play in other fields, from encouraging research through education and information campaigns to ensuring production norms and quality standards. Too many ministries of agriculture are stuck in old-fashioned thinking, and aren’t playing this forward-looking role. Of course, little can happen without the private sector, but I believe that governments have a vital role in steering agriculture towards where its future lies.
Our next job: bringing rural development down to the local level
Nater: What are European Commission priorities in rural development today?
Mikos: Following on from our 2005 report, EU Strategy for Africa, we’re developing a specific agricultural strategy for Africa, working with the World Bank, DFID and others. This will build on what some donors and Member States are already doing, and it should be ready in time for the 10th European Development Fund cycle, which gets underway in 2008. Another extremely interesting topic is the actual, practical implementation of rural development. Much of the work we’ve done on it so far has been theoretical. That’s been helpful in gaining a better understanding of rural development, but it hasn’t greatly increased the actual impact. We know rural development is very complex but we’re not very good at simplifying and implementing it. We need to pass the message down to our economists, desk officers, programme managers and others that there are simple ways of tackling rural development, without investing in complex strategies that try to cover all eventualities. That’s our next job, bringing rural development down to the local level.
Other donors seem to be doing the opposite, trying to pull rural development know-how up from the local level into headquarters.
The problem for me is not listening to the rural development experts in our offices and delegations. It’s more about increasing their relative weight and importance in the eyes of their colleagues and, of course, in the eyes of the partner-government contacts with whom they discuss policy. The changes going on now in donor-government practices offer us a new opportunity.
There’s one area where developing-country governments have changed substantially, and that’s decentralisation. But although a large number of countries in Africa are now decentralised, their tax collection is not. The result is lots of new local administrators with no resources. That’s a recipe for disaster, because staff quality stays low and there is temptation to take money from whomever you can get it.
“Until local administrations have a transparent system for allocating funds, they will get no substantial budget from central government and there will always be failure at the local level.”
This is where we need to work. We can reinvent rural development here, based on this new scenario. What we must do is to help cultivate systemic links between local administrators and their intended local beneficiaries, to work out together how local administration will plan its activities and spend its budget. Until local administrations have a transparent system for allocating funds based on priorities agreed with local communities, they will get no substantial budget from the national finance ministry or treasury, and there will always be failure at the local level.
But how can donors help local administrations, when the trend is to go the other way, withdraw from the field and work with central government on top-down planning and general budget support?
This isn’t an area where donors can intervene directly, because it’s at micro-management level. But we can help local and international NGOs to play a huge role here, building the awareness of local communities about decentralisation, helping to ensure effective communications between civic groups, local administration and central government, and training local officials in effective administration.
What we donors must ensure, through our work with central government, is that planning, financing, accounting and monitoring are reliable at the local level. This way, we’d create significant new absorptive capacity for funds. And by reinforcing decentralisation, we’d also be giving local administrators a real role in the construction of civil society. And, by the way, this change will allow donors to provide systemic funding through the central budget to local territorial development. That’s a financing tool which is expanding rapidly and which, for the moment, cannot be applied to support rural development.
WTO-compatible EPAs “offer great opportunities to strengthen regional markets”
Nater: How has DG DEV managed to help shape EU trade policy?
Mikos: For example, we worked together well with the Commission’s Directorate-General for Trade to help developing countries adjust to the new EU sugar regime, which has been quite radically reformed and came into effect on July 1, 2006. There’s now a restructuring programme proposed by the Commission for sugar-producing ACP countries worth $40 million in 2006, rising to $178 million per year on average, over the next seven years. We’ve also been advocating on behalf of ACP countries on the future of the Economic Partnership Agreements, or EPAs. These are WTO-compatible agreements to replace the unilateral Preferential Trade Agreements in the EU-ACP Cotonou Treaty that expires in 2008. We’re convinced that EPAs offer great opportunities to strengthen regional markets and boost economic growth and investment.
ACP countries are afraid that free trade will swamp their markets with goods, including agricultural products, at prices that will smash local producers. We’re working with DG Trade to heighten understanding of these issues and permit either a slower phase-in of certain products or some protective measures for developing-country markets, At the same time we’re working to reinforce the supply-side capacity in ACP countries to ensure they can reap the benefits of greater trade.
Do you share the view that trade liberalisation means smaller developing countries will be the losers?
Who’s to say? How much of the new open markets will the big emerging nations like Brazil really be able to capture? Yes, trade agreements do have winners and losers and our job is to maximise the number of developing-country winners. On the other hand, agricultural trade patterns are changing so rapidly that it’s hard to get a clear picture of where this process is going. Supply chains, supermarkets, the growth of niche markets, more direct producer-buyer contact and person-to-person relationships, more trade liberalisation, less paperwork — there are a number of trends underway now that I think will encourage investment in many types of developing countries, including least developed countries that already have well-established, historical trade links with Europe. The key in a globalised market will be for developing countries to anticipate trends and have the capacity to adapt. This is what we are working for.
“The Global Donor Platform can help create the necessary culture of collaboration: it has the means, the mandate and the focus.”
And the role of donors in this process?
The relative weight of rural development experts in a donor delegation or field office will grow only if they can work creatively together, both with each other and with colleagues from other sectors and disciplines. They must be helped to put out messages and a credible plan that not only get reflected in partner-government policy but also win them a seat in general budget support negotiations with government. Negotiating that sort of agreement in our sector needs not just economists but people specially versed in the particularities and specificity of agriculture and rural development, with the tools and training to influence the balance of power in their favour. The Global Donor Platform can help create the necessary culture of collaboration here: it has the means, the mandate and the focus.
The Platform also has a big role to play in advocacy upstream. We’re only rural development people and are talking mostly to each other. What we haven’t done yet is convince our bosses. The more often we say that agriculture and rural development are important, the better. Our bosses listen to one message out of ten, so the more messages we put out, the more likely we will be heard.
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