The Open Quality Standards Initiative
(OQSI) recently completed meetings of their first International Workshop on Analytical Tools (IWSAT) with an emphasis on agricultural and renewable natural resource applications. The objective of the workshop was to improve OQSI's level of knowledge of details of relevant procedural analytical methods of importance to project design in the fields of sustainable food production and security. The linkages to the reduction of inequality related to health and nutritional status, income levels and the distribution and real disposable incomes were also reviewed.CURRENT STATE OF AFFAIRS
1. Early reports on the progress of Agenda 2030's Sustainable Development Goals indicate that there has been an inadequate response when measured by the relative improvements in indicators. There has appeared an inverse relationship between "economic growth" and the issues of inequality, genuine development of sustainably responsive consumption and production leading to an insipid impact, if any, on climate change parameters.
2. It is important to separate the higher level statistical details of the more than 230 indicators issues by the UN under Agenda 2030 and to concentrate on the ways and means of introducing change strategies at the project level where most immediate effects of well designed project will have impact.
3. The notion that income growth is inversely related to sustainability raises questions concerning macroeconomic frameworks, the policy targets and instruments applied. In very low income countries there seems to be correlation between conventional demand management and prejudicial outcomes in the form of depressed income levels and distribution inequality between higher and lower income segments. The common policy-related inflation in unit prices, even at low levels of inflation, exacerbates the ability of low income families to purchase their needs over time.
4. The notion that poverty can be defined in terms of a daily income of $1.45-$1.95 is arbitrary. Recent studies at SEEL show that in some cases these daily income references need to be updated every 6 months in most low income countries because of the varying levels of inflation and real purchasing power of these reference nominal incomes.
5. Besides the income inequality and inflation constraints on development, the significant differences in birth rates and natural population growth rates in different countries can create an additional constraint which result in projects requiring a realistic dimension in order to have any impact on the status of wellbeing as determined at the national level.
6. Reviews of projects have shown that although they have had a relative impact at the "local" level on a defined and quantified set of beneficiaries, this "impact" has been overtaken by the national inflation levels and growth in population numbers during the course of these projects, resulting in no national impact and, indeed, in some cases, a decline in the performance of per capita indicators.EMERGING ISSUE 1
Focus on the land question and the sustainability of small production units
7. FAO, OQSI and others have estimated that there are roughly 600 million agricultural units in the world although only around 570 million have been accounted for in formal and informal surveys in 161 countries. Of these something like 95% are less than 2 ha.in area and it is estimated that approximately 65% are of less than 1 ha. in area.
Lowder, S.K., Skoet, J. and Singh, S. 2014. What do we really know about the number and distribution of farms and family farms worldwide? Background paper for The State of Food and Agriculture 2014. ESA Working Paper No. 14-02. Rome, FAO.
8. A perennial and constant problem facing agricultural sectors worldwide is that trends in inflation and likely levels of production associated with sustainable production systems, lead to an eventual marginalisation of smaller farming units for a general lack of income and food security issues associated with poor production years. This has been a constant driver of the rural-urban migration experienced worldwide. OQSI has estimated that the family members dependent on the output of these production units is between 1.50 billion and 2 billion individuals entering a potentially precarious state of existence. This is equivalent to 19%-26% of the global population.
9. The OQSI IWSAT Report, "The role of land in agricultural economic development", "Implications for agricultural analytical tools & information systems"
reports in some detail on the problem of the declining viability of small units and emerging trend towards "land grabs". These have led to millions of people becoming economically marginalised within their own countries as a result of policy inaction. The evidence taken from the experience of several higher income countries provides ample evidence of the real economic implications for low income country agricultural communities.
10. There are multiple ways and means to bring environmental and ecosystem sustainability to small production units. However, the evidence shows that with economic development and the trends towards larger farms creates a real challenge of returns to scale even under sustainable production systems. As a result they will be able to compete more on the basis of unit prices and from the ability to gain input price reductions because of their size. With time the terms of trade between industry, services and agriculture tend to disfavour smallholders whose relative real disposable incomes tend to decline.
11. There are cases of agricultural output in the form of feedstocks destined for industrial complexes such as oil and bio fuels can result in local food producers being marginalised as the corporations concerned become more assertive in attempting to purchase land at unrealistically low prices from smaller land owners so as to consolidate the land and benefit from the windfall of significant rises in land values as an asset.
12. Unfortunately, the historic evidence shows that it is difficult for both governments and local communities to gain a control over these processes which can advance through both legal and illegal means. In many cases the claims on land both legitimate and illegitimate have resulted in violence and disruption of smallholder communities.
13. This report contains proposals for ways to reduce the economic and budgetary stress that can arise from the situation and recommends a coherent system for land consolidation that strengthens, rather than weakens the economic status of small land owners. This system depends upon specific data collection under an agricultural information system and projects created in support of this process can benefit from specific analytical tools to ensure the design of feasible consolidation projects.
14. Besides the consolidation process the way in which this is carried out facilitates collaborative value-added actions related to post-harvest processing, storage and marketing infrastructures to moderate the flow to market while maintaining better unit prices. Shared strategic reserves can feature as an assurance against poor production years and cooperative seed banks can help reduce operational costs.
15. The complex nature of land consolidation and the rising urgency of this problem was the reason for this topic being one of the themes of this first IWSAT. An example of a consolidation analytical tool was demonstrated (an upgrade of the ALCC model, first shown at the 2nd DAI (Decision Analysis Initative) meeting in 2010). A new design making use of different programming techniques and design configuration will be developed by SEEL. This will involve a high degree of functional integration so as to create a singe action tool that generates a comprehensive output, including fully costed projections. The prototype will be circulated for online reviews in September, 2019.
EMERGING ISSUE 2
"The State-of-the-Art and future of Decision Analysis": ISBN: 978-0-7833-21-5
SEEL will complete a review of decision analysis applications which will be released as a report in September 2019, and will be available at the inauguration of the online Boolean Library.
This report explains the basics of decision analysis and explains the changes in technology that have contributed to making decision analysis more effective. It covers relevant logic and technological development since the mid 19th Century and covers fields of relevance to agriculture such as remote sensing, land parcel identification, traceability and the impact of 5G technology.
This report explains the potential contribution of 5G to assisting smallholders, in particular, take decisions that protect their interests. The leadership of China in 5G technologies and China being the country with the largest number of smallholders who need to transition effectively under the changing conditions of the developing economy, make this publication of relevance to possible Chinese change strategies that avoid disruption in the lives of those who currently survive on small production units.
Essential reading for agricultural planners, development finance organizations and policy makers in low income countries.
Innovation and Agenda 2030
16. A recent SDGToolkit addition is a series that explores innovation options to maximise the impact of projects on SDGs. A report on the scope and content of this tool series was submitted but no demonstration provided. The purpose was for the workshop to review the concept to ensure that it covered what are considered to be all essential factors.
17. The tool provides an extension to constraints analyses that explore conventional production systems such a rainfed, protected, irrigated and shifting clearance and use production options based on bench marked good, average and poor yields associated with production seasons. These tools calculate areas of production required and potential producer gross margins. A proposed "Alternative Production Systems
" tool enables the combination of several complementary sustainable innovations such as genotype changes, mulching, rotations and post-harvest procedures so as to enable analyses to compare areas required and the gross margins achieved. Scales of operation can be changed to reflect large projects or multi-project programmes.
18. One of the simulation analyses is to assess the minimum operational production unit areas required to provide feasible sustainability to family-based production in the light of trends in economic parameters. This is linked to the consolidation model approach mentioned in the previous section, but provides an option to the ALCC approach. The lesson here is that for the innovation alternative production system to remain economically and financially sustainable over the following 15 years, often sometimes requires an upward adjustment in the operational land area.
19. Several SDGs refer to innovation in a generic sense with no distinction between in situ innovation and technology transfer involving state-of-the-art technology and techniques. In terms of Agenda 2030 there needs to be a prioritization that distinguishes between research leading to innovation and innovation occurring as a result of technology transfer associated with adaptive research. Technology transfer is referred to indirectly as knowledge sharing in SDG 17.
20. Specific tools to support decision analysis to identify the most effective and efficient routes to increased productivity are needed to ensure that maximum impacts are secured within the timeframes available.EMERGING ISSUE 3
Extension & dissemination services
21. An important role of agricultural extension services is the dissemination of information and demonstrations of technology and techniques for improvements in agricultural productivity and sustainability. Within the political domain it is of some importance that the contribution of extension to agricultural productivity and the welfare of the rural population is made apparent. One of the main problems is that with short governance and electoral cycles there is a pressure for more immediate outcomes for policy initiatives, often within 5 years.
22. During the last 30 years the sums invested in agricultural extension systems in low income countries has declined in real terms. There is also the problem of there being too few extension personnel to provide an effective cover of the existing number of farms. Some extension services have invested more effort in supporting larger export-orientated farming enterprises than smaller farms. Private services have tended to err on the side of becoming agents for the sale of specific products, technologies and techniques leading to a imbalance in services offered. One tendency is for private support agents to only visit larger farms who have the cash flow to pay for services. The example of Mozambique was discussed where extension services were taken over by externally funded NGO services which terminated at the end of funding programmes. This led to a worsening of the situation for farmers because the government extension personnel had left the service to secure alternative work. Private services can in fact be assisted through the work of extension services through the organization of farm field trials and advice on farm plans to avoid over-reliance of higher cost production systems that carry with them the risk of unsustainable debt in years with poor harvests.
23. Extension costing models were discussed with a view to introducing a series of analytical tools that generate analyses of the quantitative impacts and value of changes in production systems brought about by uptake resulting from extension efforts.
24. These analytical tools procedures ranged from simple costing models to more elaborate models that include traceability of origins of innovation and the inclusion of intellectual property rights of those who have developed innovations that can be applied on a beneficial basis. Some of the economic and financial formulae were developed in work for the Mozambique Agricultural Research Institute.
25. Economic growth models based on the extension costing models showed promise as project design models by combining innovation (state-of-the-art) based on transfer and recent local applied output to various schemes for accelerating the rate of introduction. Although the per farm impact of changes in technology can be significant, the overall rate of sector impact depends upon the rate of take up. Extension systems and demonstration trials do involve additional resources and time but normally they result in a significant build up of confidence on the part of farmers to adopt the more productive technologies.
26. The combination of costing models with economic growth models provide a basis for demonstrating the positive role for extension services and can help quantify the necessary financial resources needed to overcome national constraints in order to achieve agricultural performance objectives within the context of Agenda 2030. This can also provide evidence to justify higher government outlays for extension.
27. Quite often the closing of gaps in provisions involves particular crops and livestock so the ability of analytical models to trade-off project level input-output relationships with aggregated programmes of several projects to address national level indicators can help identify specific priorities in terms of production. Such exercises can help identify extension strategies to support change and the assignment of funding which together can maximise the desired impact on the national need.EMERGING ISSUE 4
Economic and financial appraisals
28. As a result the range of sustainable options can be dimensioned and compared in terms of benefits and costs. The decline in application of cost-benefit analysis (CBA) and cost-effectiveness analysis (CEA) and even internal rates of return (IRR) now signify that something like 75% of projects do not have an adequate economic and financial appraisals. The World Bank Evaluation Group reported in 2010 that even those projects containing CBAs, few had been carried out correctly.
29. The OQSI IWSAT Report,"Improved project economic and financial analysis tools"
, proposes transparent single strike systems to facilitate CBA, CEA and IRR assessment of any form of project generating fully comprehensive results including narrative reports that help avoid misinterpretation of results.
30. SEEL will complete these analytical tools and circulate the prototypes for online reviews in September, 2019.
EMERGING ISSUE 5
Data quality and analytical tools
31. Calculation errors are a common problem in project design and the number of errors tends to increase with the number of separate calculations required to complete an analysis. There is also the added issue that most project cycle manuals and guidelines are not accompanied by standardised analytical tools and often team members do not have the appropriate training to complete analyses in the correct fashion.
32 In the case of more complex calculations involving the analysis of several result-determining variables there can be difficulties in interpreting the significance of outputs. Demonstrations of several ways to reduce errors and misinterpretation were demonstrated. The most interesting demonstration was for complex narrative report generation by the analytical tools which consist of process-generated text in natural language and plain expression which provides a baseline interpretation of the results.
33. One data quality issue relates to the correlation of information in a project proposal to the detailed information used in designing a project. This is an important topic for project proposal assessors and monitoring and evaluation personnel. In the case of the SDGToolkit all source data used can be regenerated by assessors and M&E personnel to check the coherence between evidence collected and proposals made. The narrative reports have an important role in helping assessors and others check on the procedures used in developing a project. EMERGING ISSUE 6
Refining the analysis of global constraints in analytical tools
34. SDGToolkit introduced three critical constraints analyses that apply to all SDGs. These are highlighted because reference to them in SDGs, indicators and operational means details they are not addressed directly or effectively in Agenda 2030. These are:
- Population numbers, structure, growth rates and sizes of families
- Income levels and distribution
35. Having reviewed how the quantification and measurement of the impacts of these constraints have a significant impact of the shaping of gaps and represent a real challenge to proposed solutions, it was concluded that these analyses represent and important contribution to gap and needs and analysis as well as to national and project level constraints analysis, thereby assisting in the identification of feasible and effective solutions.
CONCLUSIONS & PROPOSALS
36. Following a broader review of aspects of Agenda 2030 it was concluded that there is a need for a more detailed analysis that goes beyond statistical measures of national indicators to carry out analyses to quantify national needs both in terms of the geographic distribution and concentration of communities in need. This is an important basis for dimensioning the required response in terms of the whole target community as actions and resources. The required actions can often be rendered impossible because of the common practice of donor or government capping of individual project budgets according to the type of initiative.
37. In terms of effectiveness and efficiency in the allocation of financial resources there is a need to determine the optimal size and number of projects required to serve a country's transformative needs. In this way the decision to support fewer projects can be assessed in terms of the opportunity costs associated with each scale of operation.
38. The necessary analysis leading to feasible change strategies is a community level detailed project design issue, leading to a prototype project design to establish the quantities and values of resource requirements per head of the target community. Locational factors, especially in the case of agriculture, can have a significant impact of the efficiency of response to resource inputs.
39. Project design needs to be related to on-the-ground circumstances within the most affected communities; very often the lowest income segments in low income countries. The involvement of these stakeholders (those supporting and those against initiatives) is an essential requirement for effective project development.
40. When dealing with specific communities the measurement of local conditions uncovered through household surveys and market surveys can provide locally-relevant information of importance to a project. This is an essential step in the development of a feasibility envelope bounded by all identified constraints. Invariably national statistics on inflation, price indices and income levels are of limited utility in projecting the likely circumstances for specific low income groups.
41. The global constraints of:
- Population size, structure and growth
- Income levels and distribution
Have a major impact on the purchasing power of the nominal incomes of the lowest income segments. Therefore it was reconfirmed that project design needs to take the likely quantitative impacts of these constraints fully into account in project performance projections and dimensioning. Failure to apply this discipline can result in projects that fail achieve objectives, such as accessible output unit prices for the target communities. The outcome of inadequately designed projects is for unit costs of production systems selected resulting in costs that impose a need for higher output prices. Under such circumstances project output is might be diverted to higher income communities or to export, leaving the original target community in a worse state.
42. The global constraints help orientate subsequent analysis towards either taking action to raise community real incomes or productivity of production to facilitate lower unit prices. Projects can attempt to address both aspects and the policy dimension can contribute through appropriate incentive instruments.IWSAT 2020?
43. The unanimous conclusion was that as the first IWSAT it turned out to be extremely informative and productive.
44. It was also the general opinion that with the rate of advance of analytical tools and the importance of this topic, the next IWSAT should take place early next year (2020).
45. OQSI and SEEL representatives proposed that the next IWSAT should also involve remote contributions and online presentations so as to save money on travel and accommodation so as to benefit more practitioners from an increased number of countries.
46. It was further proposed that before any such future encounter all relevant documentation should be sent out at least 30 days before to allow participants to come up to speed on the topics of interest to them and thereby improve the quality of discussions.
47. The George Boole Foundation representative (Chair) proposed that the next proposed "venue" will be located in the UK for administrative and financial reasons while accepting that the event might be largely attended online as a move towards increasing "attendence" by international particpants.
48. The Chair also expressed the view (to be reviewed) that a decision needs to be taken on the media used for online presentations because in some cases timing issues have been noted as causing a considerable amount of "dead" time while attendees await the resolution of some technical issues; one solution is Power Point type presentations, videos and pod casts all sent in advance so the Foundation and OQSI can include these in the workshop documentation sent out.