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         The Aga Khan Rural Support Program in Pakistan: Is it Succeeding? Is it Replicable?
  

The AKRSP was conceived as a unique approach to fostering the development of rural people. Its purpose is to involve the people of three remote districts of Northern Pakistan in their own self-sustaining development, and to provide a model of rural development applicable in other settings. Now in its ninth year, the program was established and is run by the Aga Khan Foundation. AKF requested and funded an independent evaluation of the program from the Bank's Operations Evaluation Department, which issued its second report on the program this year. The report documents an impressive record of performance. It also discusses future directions that the program might take, offers recommendations for the future, and discusses replicability.

Goals, resources

The building of the Karakoram Highway, and its related road network, enhanced the prospects for transforming village life in the backward, desolate, and once isolated Northern Areas of Pakistan. AKRSP supports the commercialization of previously subsistence villages in Gilgit, Chitral, and Baltistan Districts by creating village-level organizations (VOs), helping the VOs to build physical infrastructure that will enhance farm productivity, establishing savings deposits to facilitate credit, providing production and marketing support systems for their output, and organizing training (Box 1).

Total program cost from 1983 through 1988 was $13 million, provided by the Aga Khan Foundation network and an unusually large number of other donors including CIDA, Alberta Aid, MDC (Netherlands), USAID, ODA, the EEC, Oxfam, and the Ford Foundation. AKRSP now reaches about 54 percent of the rural households of the three districts, or about half a million people, and continues to expand its coverage.

Costs per beneficiary household are relatively modest. Based on present trends, one can expect a total program cost per beneficiary household of about $500 over the life of the program--probably 12 years. For World Bank-financed rural development projects begun in the 1970s, the equivalent costs are double this figure, usually spread over 6-8 years.

AKRSP's annual costs and the number of village organizations both doubled between 1985 and 1988, while the number of member households grew by only 44 percent. The largest element in the cost increase was the quadrupling of staff costs, which rose from 11 percent to 25 percent of total program costs as the program became more comprehensive.

Achievements, current issues

Growth has been consistently strong with respect to the creation of VOs, identification and completion of infrastructure projects, savings deposits, marketing participation, and the number of VO members trained in production techniques (Box 2). AKRSP has shown superb competence in getting village organizations formed and functioning reasonably democratically.

Agricultural production program

AKRSP has been responsible for a great increase in the availability of improved seeds and planting material and for much of the rapid growth in the 1980s of fertilizer use in the Northern Areas, through credit and supplies. Its experience shows that village organizations are an excellent vehicle for technology transfer.

At first, production-expanding activities under the program were less well thought out than the institution-building and infrastructure activities and seemed to lack their sense of direction and thrust. This was partly for lack of technical packages, and partly, perhaps, because production is a private household activity, more diverse technically than institution building, and involving the adoption by individuals of new technologies, through thousands of individual decisions. Subsistence farmers or near-subsistence farmers must be concerned not only that crops might fail but that yields might decline at least somewhat if modified production processes prove unreliable.

Agricultural research and development. Filling a gap in government services, AKRSP has done a creditable job with limited resources in assembling and testing new agricultural technologies, but progress has been costly, difficult, and slow. More research and development specifically for the Northern Areas is urgently needed. AKRSP will need to continue in its role as the main technology broker until government line agencies can adequately fulfill their appointed roles.

Lack of adequate technology for introduction at the farm level, and insufficient effort to develop technology, are among the commonest problems in rural development. Some of the projects that the Bank has financed have relied almost exclusively on technical aspects, neglecting the incentives for farmers' participation. The broader-based AKRSP model is more balanced, but it needs improved technology as much as any rural development program.

Land development. Virtually all crops and agroforestry production in the program area depend on irrigation, and about 60 percent of the AKRSP-sponsored infrastructure investment has been to increase the irrigation water supply. But with the completion of a large number of these investments comes the need for large-scale land development. Irrigation methods need to be refined to realize the full benefits of the engineering investments.

Cereal cropping is a major farm activity; wheat is grown on about half the farm area. AKRSP has had a big impact on wheat production by promoting the adoption of the new variety PAK81. More attention to maize, and to barley and triticale, which are grown in high-altitude single cropping areas, is now likely to be worthwhile.

Livestock play a vital role in the local economy and farming system, especially at higher altitudes, but grazing populations are increasing along with human populations, degrading the grasslands around villages. Animal health was rightly the early focus of AKRSP's livestock efforts; many village specialists have been trained in animal health care and villages are now willing to pay for prophylactic treatment. Vaccination programs have covered many animals, but leave scope for further effort; much investment in breeding improvements has come to little. Progress will depend on villagers recognizing that a smaller number of better-fed animals can increase production and income and reduce pressure on the environment. As nutrition levels improve and management systems change, it may then be worthwhile focusing again on breed improvement.

Marketing. At present, only those products already in surplus are marketed under the program or being actively considered for marketing efforts.

In future, marketing and production strategy will need to be planned together, so that production expansion takes into account market opportunities, and marketing plans are based on realistic projections of marketable surpluses.

Women's activities

Women in the Northern Areas are substantially involved in crop and livestock production, and are key actors in many aspects of natural resource management. Their status and living conditions are worse than in Pakistan as a whole (a country whose social indicators for women are very poor). This is partly because of women's heavy work burden, the lack of government interest in women's issues, and the small share of government budgets used for education and health programs.

AKRSP activities for women are designed to increase their productivity, reduce their work load, and strengthen institutional capacity for their self-development. Progress has been remarkable, in view of the initial conditions and the difficult working conditions for AKRSP's female staff. A major achievement has been to provide women, for the first time, with agricultural credit. AKSRP's efforts have been welcomed enthusiastically by the women of the Northern Areas.

The program's labor-saving production packages for women--nutcracking machines, butter churners, and spinning wheels--largely failed. Generally the technologies introduced turned out to be unsuitable for the work to be done, or inadequately adapted to the conditions in which they were to be used. The original packages, discontinued after 1987, have not been replaced. This issue urgently needs attention.

Distinctive features

Institution building first; production increases later: AKRSP's early and almost exclusive emphasis on institution building is notable. Unlike many of the rural development projects supported by the Bank, this approach does not concentrate on increasing output in the early years. (Output did start increasing significantly in the fifth year of the program, and is expected to grow at an increasing rate in future.)

The program horizon of 10-15 years is much longer than the typical five to six year cut-off of most Bank-supported projects in rural areas. In some respects the first four years of AKRSP correspond to the frequently found "delays" in getting such projects implemented.

Flexible organization: AKRSP is a small independent NGO relatively free of fixed procedures, hierarchical clearance, or internal constraints on action. This flexibility facilitates the working method of experimentation, adaptation, and trial-and-error innovation that is the hallmark of the program. Government agencies cannot function with the same flexibility or single-minded effort. AKRSP staff can spend more time in the field and less time in reporting upward than in a government program.

Area characteristics: Institution building by the program proceeds without competition, in something of a political and administrative vacuum left by the decline of feudal authority in the Northern Areas. Villagers have a tradition of cooperation, consistent with the VO approach. And, though only about a fourth of the population in the program area are Ismaili Muslims, the high proportion of Ismaili villages in Gilgit District, favorably disposed toward an Aga Khan-supported program, gave an invaluable initial impetus.

Popular participation: Village programs supported by AKRSP are selected by the VO and planned with the villagers. This contrasts with many aid-assisted projects in which standard "packages" are prepared and offered to villagers with little if any prior consultation. Village organizations are beginning to take on the functions of local government in the valleys. The fact that they are independent local entities, at least in practice, is not well understood outside AKRSP. Effective use of the VO network by other agencies and programs can only strengthen the VOs' role and effectiveness.

The program is people-intensive: Its staff in general are of high caliber; most are drawn from local families and thus are familiar with the area and speak the local languages. The VOs are fostered by social organizers, most of whom have higher degrees, supported by a central term of engineers, agriculturalists, economists, and other subject specialists. Salaries are comparable with those in government, but support facilities are more generous. The facilities are used to advantage.

AKRSP made great effort to recruit properly qualified technical staff; shortages here are of concern, and ways must be found to attract and retain such staff. Even so, a core of high-quality, long-serving professional staff has been retained intact. This, a source of considerable strength in the program, is a credit to program management.

Level of funding: The level of expenditures and features such as the payment, from grants, of villagers who work on PPIs may be infeasible in government-funded rural development efforts on a broader scale. Nonetheless, AKRSP's costs per beneficiary are well within the range typical of most aid-assisted rural development projects.

Conditions for replication

Within Pakistan, AKRSP has been successfully spread over three districts under separate day to day management, and its replication has begun in two adjacent districts with support from the Asian Development Bank and the government of Pakistan. Outside Pakistan, the AKRSP approach could be replicated fairly widely if certain conditions are met.

Villages that are socially well integrated by virtue of kinship and cultural factors, but are poor, ill-educated, isolated, lacking in physical infrastructure, unorganized, and poorly served by government agencies are characteristic of many subsistence communities in developing countries. The demise of old institutions, leaving a tradition of cooperation, is typical of agrarian societies. Also typical is a need for cooperative management of resources and cohesion in dealing with government agencies, merchants, and expanding neighbors.

Prospects for replicating the AKRSP model on a broad scale depend partly on the macro and sectoral policy environment--including the regulatory system for finance, natural resources, and commerce, as well as the state of support services--research and development, education, health care, and family planning.

Gaps in government services. AKRSP has had to involve itself in fields-especially in agricultural research and development--that are normally the responsibility of government. Few NGOs anywhere are likely to find the money, experience, or time to mount such a substitute program.

Input subsidies. When inputs such as fertilizer and pesticides are highly subsidized and their prices kept low, demand exceeds supply and normal market channels are squeezed out. This has been the case in Pakistan. AKRSP, with its superior resources and excellent management, has done well to compensate for supply shortages so far, but a government-run rural support program is unlikely to compensate for such difficulties.

Choice of implementing agency. Rural development following the AKRSP model needs an implementing agency with substantial independence and flexibility. Experience over the past 50 years (for example in Brazil; Kenya; Korea; Malawi; Malaysia; Taiwan, China) suggests that the most successful government-sponsored rural development programs have been run by autonomous yet accountable parastatal bodies with carefully crafted institutional development strategies.

To sum up, once a government decides to support local-level programs of rural development, AKRSP can provide a proven approach, complete with a workable model and effective implementation method.

Box 1: Program Concept, Approach

AKRSP is designed to promote equitable and sustainable development in the program area, and to be self-liquidating after 10-15 years, leaving in place local organizations and institutions that facilitate continued progress.

The implementation model has evolved from the cooperative model used in the 1960s and early 1970s in Comilla (Bangladesh), via other experiences in Daudzai (NWFP, Pakistan), Mahaweli Ganga (Sri Lanka), and elsewhere, under the guidance of Akhtar Hameed Khan and Shoaib Sultan Khan, AKRSP's General Manager.

Institution building: Program activities in AKRSP begin with the establishment of a village-level organization (VO). Once established, the VO enters a formal partnership with AKRSP, which provides it with technical and financial assistance.

Infrastructure building: The VO selects a productive physical infrastructure project (PPI), usually for the construction of irrigation channels or link roads. AKRSP gives grants for one such project per VO. Projects are engineered and costed by AKRSP jointly with villagers. The VO is responsible for executing the project, receiving the grant in installments. Part of the grant is used to pay villagers for working on the project. The grant-assisted PPIs greatly increase, and often double, the financial return to subsequent farm expenditures. This gives subsistence farmers the incentives needed to risk participating in the production-enhancing activities under the program.

Regular savings deposits by members: Villagers are expected to save a large proportion of their wages from work on the PPI in the VO's savings account, to be used as the collateral for loans--short-term for production and medium-term for land development.

Production activities follow the institution- and infrastructure-building phase. AKRSP has promoted packages for cereal cropping, livestock improvement, and cash crops such as apples and apricots.

Marketing: AKRSP's initial marketing operations mainly involved bulking up and direct marketing down-country; they had mixed results. Marketing now concentrates successfully on a few products perceived to have real potential and on exploiting market niches. The volume marketed through the program is small in relation to the growth in production and to the larger and increasing volumes marketed outside the program.

Box 2: AKRSP's Salient Features Summarized

Concept

- Proven concept and approach

- Paying attention to both institutional and technical issues

- Balancing efficiency with equity criteria

- NGO-funded and managed, allowing independence of action

- Building local institutions first

- Respecting the sovereignty of local institutions, even when newly formed

Management

- Exceptional leadership and staffing

- Providing incentives to attract high-quality staff

- Iterative, trial and error approach, rather than following predesigned plan

- Making program staff highly mobile

- Fostering open communication and information flows

Funding

- Variety of donors supporting different areas and activities gives funding flexibility

- Rolling funding program avoids stop-go problems of conventional "projectized" funding

Program area

- Initial sectarian link with NGO which already had long-term health, housing, education programs in area

- New highway; other rapidly improving infrastructure

- Most families have mixed income sources

- Long local tradition in main technologies used in program to date

- Generally apolitical implementation environment

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