Systematic review on effectiveness of innovation grants to smallholder producers

1. Giel TonLEI Wageningen UR 3rd PSD-Platform Meeting The Hague 15 June 2012 Systematic review on effectiveness of innovation grants to smallholder producers

2. AusAid’s Review Question “the effectiveness of innovation grants to smallholder agricultural producers in facilitating agricultural innovation, particularly in ways that benefit the poor and women in developing countries” • Fuzzy Concepts • Innovation grants: different treatments • ‘To’ smallholders: direct / indirect • Agricultural innovation: array of outcome indicators

3. Systematic Review Approaches

4. Generalizing in complexity and diversity: realist synthesis • “Context-Mechanisms-Outcome Configurations” • Interventions can trigger mechanisms • Mechanisms are the ‘incentives’ that influence/structure the behaviour of the stakeholders involved in the value chain

5. Refinement of interventions: If theRIGHTprocesses operate in theRIGHTconditions then the programme will prevail (Pawson and Manzano-Santanella, 2012) • How did we use it: • Rephrase evaluation question: “Does it work?..... for whom, under what conditions?” • Exploring literature on specific innovation grant systems within a initial typology to get a more refined typology, each associated with a set of ‘good practices’

6. Initial typology and coding tool

8. Inclusion/exclusion criteria Title-Abstract • Exclude on country [developing country] • Exclude on group of intended beneficiary [small holder agricultural producers, or agricultural service providers] • Exclude since no specific innovation grant, except farmer-driven research and extension [vouchers, matching grants, competitive grants. FFS, Not: credit-only interventions) • Exclude on sector [agriculture, agro-forestry. Not: fishery, forestry, tourism, non-agricultural service provision] Full-text • Exclude since no information on at least one characteristic of the grant system [grant governance, institutional setting, poverty context, complementary activities within project] • Exclude since no information on innovation context [system imperfections the grant wants to address] • Exclude since no information on outcomes [innovation context, smallholder livelihoods] Additional for Type C: • Exclude since no decision making by beneficiaries on innovation grant system

12. Evidence on impact pathways(key assumptions)

16. Key assumption in impact pathways • B1: Competitive grants trigger value-adding business activities by (organized) farmers as a way to facilitate innovation processes with smallholder farmers in markets. • B2: Farmers’ livelihoods improve as a result of social activities and economic returns derived from the new value-adding business activities.

17. Table 3 - Summary of the evidence on outcomes and impact for the impact studies of business plan support grant for smallholder innovation

18. B1 -Grants trigger value-adding business activities by (organized) farmers • The studies on business support grants show that in the grants indeed translates into investments in technology or support services to business proposals of organized farmer groups. • Initial organisational social capital of the groups is a necessary precondition to develop these proposals and to handle the grants. • Grants tend to be a minor factor in a wider constellation of factors that make the business proposal successful. Therefore, outcomes of the grant system on organisational social capital and institutions that provide the context for further development of these business are important. • The necessary transparent and sustained procedures needed for business support grants places high demands on the governance system. Participation of farmer organisations in the governing body is valued positively by most authors.

19. B2 - Farmers’ livelihoods improve as a result • The three studies that analysed the impact of the business proposals supported by these grant systems documented positive impacts on producers. • The changes in income through the grant supported business proposals is not necessarily attributable to the grant, and definitely not to the grant alone. • The methodologies used to measure most indicators suffer from the absence in research design of comparison groups or other ways of counterfactual reasoning. • The only study covered in the review with a counterfactual did report a neutral effect on farmer incomes

20. ‘Lessons learnt’ • Competitive grants • Risk of antagonism between (scarce) service providers in the same region • Low cost preference leads to low quality support packages • Oligopolistic behaviour and corruption in relation to fund managers • Need for independent institutions versus long-term sustainability: transparency and donor-control • Contract governance, conflict resolution and different levels of farmer influence: the role of federations • Business plans • Approved business plans in dynamic markets: need for transparent adaption mechanisms • Concentrate on areas/clusters where more expert knowledge is available on market dynamics: multiplicity of experiences and more developed market of service providers • Better suited for innovation by farmer groups in higher end markets and with comprehensive support (Chile) • Beware • Grants may undermine credit culture: ‘smart subsidies’ • Economic farmer organisations: need for threshold levels of trust and commitment of members

21. Improving the initial typology

23. High importance of outcomes on human/social capabilities Business support grants Prolinnova Low dependence on existing human/social capabilities CIAL NAADS High dependence on existing human/social capabilities FFS Inputvouchers Low importance of outcomes on human/social capabilities

24. High importance of FOs in governance CIAL FFS Prolinnova NAADS High importance of FOs in outcomes Low importance of FOs in outcomes Business support grants Inputvouchers Low importance of FOs in governance

25. Large amounts Business support grants NAADS Inputvouchers Prolinnova CIAL Fixed package Free choice FFS Small amounts

26. THE STRENGTH OF A GRANT-FUND LIES IN ITS CAPACITY TO REJECT BUSINESS PLANS NOT THE CAPACITY TO APPROVETHEM THANK YOU!