August 2011 Number 169 www.worldbank.org/enbreve A regular series of notes highlighting recent lessons emerging from the operational and analytical program of the World Bank‘s Latin America and Caribbean Region (LAC). Fostering Inclusive Rural Innovation: 65100 The Case of INCAGRO in Peru by Ana Francisca Ramirez, Erwin De Nys and Maria Elizabeth Dasso Both women and indigenous peoples face key Competitive Fund provided co-financing to research and barriers that limit their capacity to access and benefit extension sub-projects as well as to training workshops, from development projects. In a country like Peru pre-professional internships and local forums. It brought where women and indigenous peoples represent together small producers and service providers to ensure a large share of the rural poor, integrating proactive that services offered responded to producer demands. The measures into project design is crucial to reach these Project benefits included agricultural services to provide populations. The Peru Agricultural Research and training, advisory and networking services to farmers on Extension Program (“INCAGRO�) gave great emphasis production, commercialization, marketing, organizational to designing financing instruments that would give and leadership issues. To make the Competitive Fund equitable opportunities to indigenous peoples and more accessible to the indigenous peoples and women’s women’s organizations. This “en breve� will describe organizations, INCAGRO set up specific financing terms, how INCAGRO integrated indigenous peoples and eligibility criteria and selection processes. women’s organizations into its activities to strengthen the market for agricultural services. Financing terms The Competitive Fund adopted proactive measures Agriculture plays a dominant role in the Peruvian to overcome common access barriers for indigenous economy: about 80 percent of the rural poor are employed and women producers. Flexibility was introduced in in agriculture and fishing. Over the past several years, the size of subprojects financed, where women and government policies have led to an opening of the economy, thereby increasing pressure on the agricultural sector to be more competitive. The INCAGRO Project (2000-2010) aimed at contributing to the expansion, strengthening and institutional development of the rural innovation system to make it pluralistic, decentralized and demand driven. INCAGRO focused on two main issues: strengthening the market for agricultural services, and consolidating the national agricultural research system by co-financing collaborative research activities and capacity building. INCAGRO’s Competitive Fund INCAGRO established a Competitive Fund in order to strengthen both the agricultural services supplied as well as the articulation of the demand for these services. The 1 indigenous producers building workshops for putting together project often presented sub- concepts, personalized advice for proposal preparation projects smaller than and direct negotiation of financial terms with the other producers. Sliding selection committee. Unlike for the regular sub-projects, scales were used for co- indigenous communities had the option to reformulate financing percentage their project concepts and proposals as needed before requirements – where the final deadline. women and indigenous projects were only IMPACTS required to co-finance a minimum of 15% of These proactive measures led to the creation of the total amount of the 155 business plans from these groups, of which 117 sub-project in contrast agricultural extension projects came from indigenous to 25%- 35% for other producers and 38 from women’s organizations1. For producers. In addition, the vast majority of participants this was their first time more intensive support elaborating a business plan or in managing public sector was offered for project grants and handling their related requirements. preparation in sub-projects presented by women’s organizations and/or indigenous producers (see below). For women and indigenous peoples to take advantage And finally, if indigenous communities and/or women’s of new consumer demands for agricultural products organizations wished to apply to larger sub-projects they require access to organizational, technical and with larger co-financing requirements, their proposals management skills in order to be able to compete were allocated extra points during the selection process. with other producers2. Learning to create and manage a small project helped to build capacities amongst Eligibility criteria women’s organizations ranging from crafts, commodities like coffee, milk and meat, to medicinal plants and The Project established eligibility criteria to target gastronomy. indigenous peoples by ensuring that beneficiary producers who applied to the special funding scale Creating a culture of payment for agricultural services were active members of peasant or native (respectively like training and technical advice is known to help make Andean or Amazonian indigenous) communities or of services more client-oriented and to better identify women’s organizations. Eligible service providers could demand and manage quality control of services3. be individuals or institutions (public or private, national INCAGRO showed that poor rural communities are or international) that were actively engaged in providing willing to pay for services. Indeed, 77% of the producers capacity building and technical assistance services. surveyed said they are likelier to pay for services since Producers could then select their desired service providers who supported them in the formulation and execution of projects. Other public or private entities with an interest in contributing to the success of the sub- projects were also given the possibility of collaborating with time, funding or advice. Selection process To overcome economic, social and cultural barriers related to participating in a competitive selection process, a differentiated process was designed for indigenous communities and women’s organizations. Simplified competition and negotiation processes included: local demands identification fora, capacity 1 Agricultural Research and Extension Project Phase II, Adaptable Program Loan (APL) II, Implementation Completion and Results Report, ICR # 1961, 2011 2 The World Bank, Gender in Agriculture Sourcebook: Module 7, Gender in Agricultural Innovation and Education, 2009 3 The World Bank, Gender in Agriculture Sourcebook: Module 7, Gender in Agricultural Innovation and Education, 2009 2 their participation in INCAGRO. Through INCAGRO, LESSONS LEARNED AND 37% of producers observed changes in the numbers of CHALLENGES women hired in productive activities with a convergence between remuneration for men and women. Elsa Laureano de La Cruz For both indigenous communities and women’s organizations, about 80% of the demand for innovation “We are 115 partners grouped in 9 committees in the and agriculture services was geared towards training districts of Satipo, Rio Negro and Rio Tambo. We have workshops on commercialization and organizational an executive committee organized by women in each capacity issues. Beyond productive and commercial committee. We produce coffee. Through the feminine gains, field interviews indicated that the increase of coffee project co-financed by INCAGRO we received self-esteem gained through learning to manage a technical training achieving production from 10 to project was priceless. The confidence that this created 15 quintiles. We learned to manage our productive among women’s groups and indigenous communities units’ agronomy and administration. Our commercial is key to strengthening entrepreneurship. Most production is important because there is great demand projects focused on how to develop capacity, gather from the market of coffee produced by women. With existing knowledge and access it – not on technology INCAGRO’s financing we were trained and learned how to development. A study on indigenous peoples and manage a business, leadership and accounting. We feel women in INCAGRO (see table below) showed that like business women because we manage our own farms. INCAGRO’s support to livestock, agribusiness, and The training workshops are attended by men and women handicrafts proved to be a successful strategy. For because we all need to be trained.� instance, handicrafts in the regions of Huancavelica and Puno have offered an important alternative in the face of decreasing alpaca fiber prices and became the only activity sustaining family income. Feedback from Producers Innovation 76% adopted technology, practices or knowledge through the Competitive Fund Competitiveness 60% attribute the increase in incremental productive capital to the Competitive Fund Services 81% say they are likelier to better link up with knowledge agencies since participating in the Competitive Fund Sustainability Returns on investment reached 24%4 for the Three factors play a role in securing access to project Competitive Fund projects resources and successfully managing them: ownership, self-esteem and cultural identity. Ownership of the project proposals contributed to the success of the However, training is not sufficient to foster sustainable projects. Indeed, applicants who formulated their changes. In order to be sustainable, women and proposals without involving women’s organizations indigenous entrepreneurs need to have access to were less successful than the ones who had. Indeed, comprehensive agricultural services packages that sub-project implementation was easier in the cases include training, technical assistance, monitoring and where women had participated in the sub-project coaching. Nevertheless, very few agricultural services design. Self-esteem consists of valuing one’s self image providers offer this complete range of services. In this which generates a self-confidence that is crucial to sense, creating linkages and partnerships between personal and professional growth. This is very relevant different agricultural service providers through the for rural and indigenous women, especially illiterate form of business incubators would help increase the women who have expressed their lack of self-esteem sustainability of rural entrepreneurship. was a considerable barrier for being able to compete in 4 For projects with counterpart funding 3 Defining indicators that can show whether women and indigenous peoples’ needs were addressed by the project is important to measure the level of inclusion achieved by a project. To achieve this, project design should differentiate between target beneficiaries, i.e. women, indigenous peoples, other beneficiaries, from early stages and thus allow for improved tracking of inclusion and benefits. Below are examples of questions that can be used to differentiate information on women and indigenous people from the rest of the beneficiaries. Generating information Generating information on women on indigenous peoples equal terms with men. INCAGRO integrated the gender Differentiating “who does what�, Identifying which community approach in its training sessions which included the “who has access to what�, “who customs and local knowledge will issue of self-esteem and leadership. Cultural identity is a decides what� be most valued economically prevalent reality in a multi-cultural country like Peru. The Identifying in the social group Integrating indigenous peoples’ richness and variety of the regional customs and practices concerned the % of men and demands, needs and roles into has strong potential for creating associative strength women project design between producers, generating local development and overcoming poverty. Identifying a project impact that is Identifying a project impact favorable to women that is favorable to indigenous A study on indigenous peoples and women in INCAGRO communities showed that the majority of indigenous peoples and women’s organizations demands focused on improving In the last five years, the Ministry of Agriculture and the capacity development, accessing knowledge and Ministry of Women and Social Development showed building collaborative environment (creating producer increasing interest in integrating women and indigenous associations and partnerships with public or private peoples in development projects through innovative entities). In addition, a survey showed that projects that financing mechanisms. The challenge now is to find new targeted a greater population managed resources more sources of funding to support this effort in a sustainable efficiently and reduced transaction costs. For follow-up way that fosters equitable opportunities and stimulates projects the challenge will be to overcome the mistrust rural entrepreneurship and agricultural productivity. that hinders most producers to organize on a larger scale. In this sense, mechanisms should be established to For more information on INCAGRO please contact Erwin encourage larger-scale association of indigenous groups De Nys edenys@worldbank.org and Maria Elizabeth and women’s organizations. Dasso mdasso@worldbank.org or visit www.bancomundial.org.pe About the Authors Ana Francisca Ramirez is an International Relations Specialist, Junior Professional Associate in LCSAR, Maria Elizabeth Dasso is a Senior Social Development and Civil Society Specialist in Peru and Erwin De Nys is a Senior Water Resource Specialist in LCSEN and the project TTL. This “en breve� benefited from great comments from Dianna Pizarro and Willem Janssen. Disclaimer: The findings, interpretations, and conclusions expressed herein are those of the author(s) and do not necessarily reflect the views of the Executive Directors of the International Bank for Reconstruction and Development / The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. About “en breve�... “en breve� is produced by the Knowledge and Learning Team of the Operations Services Department of the Latin America and the Caribbean Region of The World Bank – http://www.worldbank.org/lac. Visit the entire “en breve� 4 collection at: www.worldbank.org/enbreve.