• Prologue
• Introduction
• Achievements
• Advisory Services
• Projects: the building blocks
• FFP: Funding & Expenditure
  • Introduction
  • Funds available in 2009
  • Expenditures
• Conclusions and recommendations
• Download Activity Report 2009

FFP: Funding & Expenditure

Introduction

The Farmers’ Fighting Poverty programme started in 2007 with a deficit of € 36 million. This was not considered a problem at that point as it offered opportunities for other back donors to step in and broaden the support base for the innovative approach to strengthen farmers’ organisations through the Farmers Fighting Poverty programme. Initially, the programme base comprised a € 50 million contribution from the Dutch Government through Agriterra and commitments obtained from four other agri-agencies (AFDI, UPA DI, FERT and TRIAS) up to € 28 million for the period 2007-2010. This €78 million formed the funding base at start, subsequently another € 40 million has been raised from different sources.

As table 13 shows, the funding raised between 2006 and 2009 still falls short on mainly two issues: core funding and funding through co-funding (the so-called heat map). The first issue will be explained extensively in the first section of this chapter. The second issue indicates that we have not been able to use the funds entrusted to us to convince more parties to ally with us and fund projects. Yet, from the fact that contributions of farmers’ organisations were higher than expected, one could conclude that through direct negotiations between third parties and farmers’ organisations the projects were (partly) funded, but through another channel.

The agri-agencies (1.b) also proved to be more successful in mobilising funds for their regular programmes, parts of which contributed to the objectives of Farmers’ Fighting Poverty. The activity report on 2008 showed the over-compliance of the ‘other’ agri-agencies in their contribution to the programme. This was partly brought about by SCC because they also started contributing to the programme.

Contribution of agri-agencies

To highlight the importance of the contribution to the programmes of the ‘other’ agri-agencies we refer to the activity report of 2007 and 2008. It turned out that in 2007 the agri-agencies actually raised 92% of what was planned (see table below). Yet, their contribution in 2008 went above and beyond what was expected. Again in 2009, the contribution of the agri-agencies was higher than expected. This is largely thanks to SCC and Finland. The support from SIDA through SCC started in January 2008, as well as the support from IFAD to AgriCord. The Finnish Government supports AgriCord since November 2007. And not even all realised amounts could be included for 2009. UPA DI for instance finalises the contract years with their organisations at 31 March of 2010. After that all contributions will be reported on. These contributions will therefore be included in the 2010 report. When we add up the first three years, we see that the agri-agencies mobilised an overall 32% more than expected for these three years.

Agriculture back on the agenda

Despite of the successes achieved in raising funds, after two years of implementation the gap of € 36 million was still by no means closed. At the start of 2009, however, it was felt that the Farmers Fighting Poverty programme should continue as originally planned. Agriterra increased disbursements from the DGIS budget to € 21 million that year, a line of action that was approved by AgriCord. From a budgetary point of view, 2009 proved to be a very important year. The increase in project demands from farmers’ organisations in developing countries, underlined the need for more funding.

The risk of depleting the available funds had been taken, because agriculture in developing countries had become a point of international attention. All this international attention seemed to indicate that the real danger for our endeavour was not the lack of funds, but the lack of convincing results. Agriterra decided to continue supporting its organisations as if there was no risk of not obtaining the required contributions. It seemed to be more important to be able to show that AgriCord could scale up its approach build up in decades of sustained attention and cooperation with farmers’ organisations. One witnessed an increasing demand for support that was estimated to imply a sustained growth from € 35 million in 2010, to be doubled by 2015. This overall need of € 340 million for the period 2009-2015 could easily be fulfilled with a mere 0,2% of the 22 billion dollar support announced during the G8 in L’Aquila. We felt that the times were changing.

In addition to this, AgriCord initiated, maintained and broadened relations with interesting back donors, such as the European Commission, the Bill & Melinda Gates Foundation, the Governments of Spain, Italy, Belgium and Finland in 2009. These efforts were further supported by the department for Sustainable Economic Development of the Dutch Ministry of Foreign Affairs. In many fora and meetings, government officers plead for increasing support through AgriCord and its agri-agencies. These developments strengthened our belief that the international expressions of support to agriculture could in fact be made real in programmes like the ones in negotiation. When all were approved the amounts available would even surpass the projected needs of our client farmers’ organisations.

New support for “Farmers Fighting Poverty” was in fact mobilised in 2009. The first agreement with Finland of for the two-year period 2007-2008 was continued with another € 1.6 million (2009-2010). This funding agreement with Finland (Ministry of Foreign Affairs) was officially signed at the EESC (European Economic and Social Council) in Brussels on 18 May, 2009, by the Finnish Minister of Trade and Development upon invitation by MTK, the Central Union of Agricultural Producers and Forest Owners.

The federal Minister of Development Cooperation in Belgium approved a first funding to Farmers Fighting Poverty for 2009 and 2010, with a further perspective for 2011. The total budget considered is € 1.65 million. A joint press meeting was organised 16 December, 2009, with Boerenbond and Trias as its agri-agency and the FWA (Fédération Wallonne d’Agriculture), and CSA as its agri-agency.

Financial crisis

However, at the time of the G8 meeting, the funding situation of AgriCord grew increasingly tense. Half-way 2009 we still did not have any substantial contract signed to cover the funding of projects in 2010. This was clearly due to the global financial crisis and resulting cuts in budgets for development cooperation. The disappointing outcome of Agriterra’s talks with the Gates foundation contributed to this tension. Agri-agencies started to alert their clients on the possibility that no additional funds were to be expected through Agriterra in 2010.

In the activity report on 2008 we already called the donor community to suit the action to the word and indeed invest their money in Farmers Fighting Poverty. The Italian farmers’ organisation CIA supported this appeal and approached the Italian Government and the Italian officers in Brussels. Also the Spanish Minister of Foreign Affairs had showed himself very much in favour of our line of action. During a meeting in the Ministry in Madrid he expressed his support to the foundation of an agri-agency in Spain and co-signed the agreement of the Spanish farmer organisation UPA with AgriCord and Agriterra. In view of the planned increase of support from Spain to agriculture in the developing world, this lead looked very promising. Due to unforeseen circumstances, no decisive action could be taken.

This also induced Agriterra to inform its clients on the probability that there would be no funds for their projects in 2010. By the end of the year, it became clear that a very promising receipt of our proposals in the European Commission was blocked, because of procedural and administrative reasons and no contribution was to be expected for 2010. Agriterra started to lobby for a additional contribution to those urgent cases that would suffer too much form the absence of project funds in 2010. This led to an additional contribution from the Dutch government with € 1,05 million. In spite of this contribution, the coverage of the projects in 2010 still only covered 43% of the project and institutional financial needs.

Overview of actions taken:

• IFAP and AgriCord met with ACDI/CIDA (Ottawa, January 2009).
• ACDI/CIDA prepared, with UPA DI, funding for Farmers Fighting Poverty 2010-2011.
• AgriCord presented Farmers Fighting Poverty to the European Commission and to EuropeAid (Brussels, March 2009).
• A contribution of the AFD (Agence Française de Développement) became operational mid 2009.
• An AgriCord delegation met with the Minister of Foreign Affairs of Spain (Madrid, July 2009) at the invitation of UPA (associated member of AgriCord in Spain).
• Farmers Fighting Poverty was also discussed with Italian development officials (Rome, September 2009) at the invitation of CIA (associated member of AgriCord in Italy).
• With the Bill & Melinda Gates Foundation (Seattle, August 2009) different perspectives for improvement of farmers’ advisory services have been examined, within the framework of Farmers Fighting Poverty and involving AgriPool. DGIS (The Hague) supported this initiative.

Sign the petition

The agri-agencies agreed to launch a political lobby. A joint statement was issued at the occasion of World Food day “Look again on how to tackle poverty” signed by several farm leaders from OECD countries. Letters and messages were addressed by agri-agencies to development ministers in Austria, Belgium, Canada, France, the Netherlands and Sweden.

Additionally, and at the request of its clients, like the Palestine Farmers’ Union, Agriterra launched a campaign with the aim to ask attention for the situation in the world of agricultural development. As part of the campaign a website was launched (http://www.farmersfightingpoverty.org) where people could sign the petition to express their astonishment about the gap between the billions pledged and lack of support to farmers’ organisations.

The website gathered thousands of signatures in a short period of time, from farmers all over the world as well as the general public. Yet, not enough to hand over during an upcoming summit in 2010, for which purpose we will need at least 500.000 signatures. In spring 2010, Agriterra started developing plans for the launch of a broader campaign. The Dutch government introduced the programme in high level meetings, for instance during the meeting of the Heads of Agricultural Departments of EU member states (HARDS).

Funds available in 2009

In this section we zoom in on the details on the funds available for projects in 2009 and the sources. When adding up the funds entrusted to Farmers Fighting Poverty by DGIS (92% of the planned amount) and the funds of the other back donors, we see that almost 98% of the 2009 budget was accounted for. On top of that the producer organisations’ invested part of their own resources (€ 3.171.485) and received another €6.145.464 through third parties. The grand total available for projects in 2009 amounted to € 38.368.670. All the projects are registered on agro-info.net in 2009.

Besides the contribution of DGIS, we see a large contribution by SCC. Without the Swedish contributions, the total contributions raised by the four originally involved agri-agencies would have fallen short of expectations this year. UPA DI for instance, only realised 40% of the planned commitment in this year. However, this can be explained by the fact that UPA DI could not report on all contributions yet.

Support trough the agri-agencies is provided by the following back donors:

• UPA-DI through their back donor ACDI/CIDA;
• FERT through FERT/Unigrains and European Commission, France Export Céréales, Conseil National de l’Enseignement Agricole Privé (CNEAP);
• AFDI through Afdi’s own funding, Collectivités Territoriales Françaises, the French Ministry of Foreign Affairs; the French Ministry of Agriculture and the EU
• IVA/TRIAS through the Belgian Government
• SCC through SIDA
• AgriCord through IFAD and the Finnish Government

Rice – Indonesia

Comparing operations of 2009 with 2007 and 2008
It is also worthwhile to compare the volume of our operations over three years. The availability of funds increased with more than 100% when comparing total expenditure of 2007 (19 million) with 2009 (38million) as can be seen in chart 5. Although the programme had a slow start in 2007, in the two years that followed the increase is apparent.

The comparison learns that the total volume of operations of Farmers Fighting Poverty had an average yearly increase of 39% between 2007 and 2009. The average increase in operations with DGIS funds was 37%, while the expenditure of farmers’ organisations and other parties increased yearly with 4-6%. But again, the relatively biggest leap forward came from the other agri-agencies, whose involvement in Farmers Fighting Poverty grew with an average 135% over the three years.

Expenditures

Table 16 below shows the total planned and realised expenditures for the amounts obtained through the different back-donors of the agri-agencies. Funds obtained from DGIS were planned to be partly used in projects of other agri-agencies. These projects funds do not pass through the accounts of these agri-agencies, but are disbursed directly by Agriterra to the farmers’ organisation in most cases. These amounts were 30% higher than expected after revision of the budget. The funds used in Agriterra projects were 83% of what was expected. Towards the end of 2009 Agriterra decided to limit allocations to new projects in addition to the already downscaled year budget in view of the expected lack of funds in 2010.

The total costs of Agriterra’s own projects (€14.346.643) and those of other agri-agencies (€4.964.704) amount to € 19.311.347 in 2009. Agriterra received an advance payment of DGIS of € 12.600.000 (20-02-2009) and at the end of 2009 another € 4.697.540 (21-10-2009). This means that Agriterra/AgriCord still had a positive balance of € 1.275.631 (receivable) by 31 December 2009.

Agriterra annual financial statement 2009

Table 17: Claimed expenses and balance DGIS

Statement of expenses for DGIS	2009	2008	2007
Total costs	19.828.002	15.864.903	10.275.434
Received interest	-131.491	-97.293	-75.494
Funding third parties	-279.450	-135.515	-49.216
DGIS (IOB evaluation)	-118.863
Administration costs capital (ten % of profit from interest)	13.149	9.729
Expenses to be claimed	19.311.347	15.641.824	10.150.724
Balance statement
Balance previous year	-738.176	-964.276	0
Expenses to be claimed	19.311.347	15.641.824	10.150.724
Advance payment by DGIS	-17.297.540	-15.415.724	-11.115.000
Balance	1.275.631	-738.176	-964.276

Source: Agriterra annual financial statement 2009

When looking at the expenditure per agri-agency, as shown in table 18, we see that all agri-agencies except SCC have been depending more on DGIS funding than on funding from their own back donors as far as programme expenditures are concerned. In 2010 this will be the opposite. TRIAS for instance will support its projects approximately with the same amount, now with back donor funding from The Belgium Government (DGOS).

Table 19 below divides expenditures between the main spending categories. It shows the planned and realised amounts as well as the relative percentage per budget category in 2009. Comparing the percentages, four aspects are especially worth mentioning.

Table 19: Planned and realised expenditure 2009

	farmer farmer missions	advise missions	advise days	consultant missions	consult. days	events	projects	admin. costs	total
PLANNED
Plan FFP 2009	1.904.352	548.656	2.502.101	496.150	750.000	376.520	23.222.913	3.369.308	33.170.000
Percent	5,7%	1,7%	7,5%	1,5%	2,3%	1,1%	70,0%	10,2%	100,0%
REALISED
DGIS	711.347	804.459	1.743.119	401.855	105.019	161.533	13.519.330	1.864.684	19.311.347
Agri-agencies	115.766	130.941	1.963.093	175.582	506.429	24.222	6.600.766	223.575	9.740.374
TOTAL Realised	827.113	935.400	3.706.212	577.437	611.448	185.755	20.120.096	2.088.259	29.051.721
Percent	2,8%	3,2%	12,8%	2,0%	2,1%	0,6%	69,3%	7,2%	100,0%

Source: http://www.agro-info.net

First of all the percentage of resources spent on farmer-to-farmer missions is lower than the planned percentage. This could also be observed in the previous years, whereas we actually would like to put more emphasis on this type of expert exchange. In Farmers Fighting Poverty the farmer-to-farmer missions are mainly North-South missions. The amount spent is € 827.113 which is much lower (43%) than the budgeted amount. This means that in theory the available budgets would have allowed for far more missions.

In practice, we already concluded in the Chapter on missions, the actual volume of these missions did not fall short of expectations. For 2010 we could adjust the parameters of our planning according to our improved efficiency. Alongside the expected increase in AgriPool mission, we also want to increase the quality of these missions. Therefore, Agriterra decided to express an ambitious long term goal for AgriPool (ambition 2015): “The pool of experts will be improved and arranged in such a way that for every request for advice from a farmers’ organisation somebody can be found. The international exchange will be more between farmers and other development organisations will request support from AgriPool experts” (priority 9 in Year Plan 2010). Secondly, the percentage spent on own advisory deskwork (by agri-agency personnel) is much higher than planned. This can mainly be explained by the fact that all agri-agencies, except Agriterra, have staff placed locally. Thirdly, project expenditure, which means the total amount transferred to the farmers’ organisation, is lower than planned. The total amount transferred is € 20 million (91%), which is lower than the budgeted amount of 23 million. However, when looking at the bigger picture, we see that the share used for direct project support is almost the envisaged 70% of the total expenditure.

Expenditures per continent

The distribution of the expenditures over the continents by agri-agencies and farmers’ organisations (PO) followed the plans very closely. The target of 60% of the funds to be spent on projects in Africa has been reached. When looking at the expenditure for all contributors, this percentage even amounts to 65%. Throughout the programme, Africa was clearly the most important recipient. During 2007, 55% of the total expenditure was directed at Africa and in 2008 this percentage reached 59,4%. This increase is the result of measures taken, such as the recruitment of new, specifically Africa-oriented, liaison officers to intensify efforts on the continent.