Examination of Witnesses (Questions 107-119)
PROFESSOR JOHN
FARRINGTON AND
DR CAROLINE
DYER
15 SEPTEMBER 2004
Q107 Chairman: Thank you very much for
coming. I am sorry you have been kept waiting. For the record,
just tell us a little bit about yourselves so that those of us
reading the record will know what weight to give to your evidence
and where the problems exist. John, would you like to tell us
a bit about yourself?
Professor Farrington: I am an
agricultural economist by training, a PhD in agricultural economics
from the University of Reading with which I am still associated.
I have been working on India for about 15 years, principally in
the states of Andhra Pradesh and Madhya Pradesh. I know a little
bit about West Bengal and Orissa as well. It is some time since
I did any formal agricultural economics, I have branched much
more into broader rural development issues.
Dr Dyer: My PhD subject was on
the implementation of educational policy in India and that was
some 12 or 13 years ago now, and since then I have been very interested
in questions of implementation policy. I have also worked on adult
literacy with Nomads in India for three years doing field work
with them, and most recently on a DFID-funded research project
working with teacher educators to look at the question of capacity-building
around teacher educators and teacher training in particular. I
have just moved to a job at the University of Leeds in Development
Practice from the Faculty of Education in Manchester.
Q108 Chairman: Do you think that DFID
has got the balance right between governance reform support and
direct pro-poor projects, in other words, livelihoods support,
on the one hand, and support to health and education, on the other,
perhaps?
Professor Farrington: There are
two dimensions to this response, I think. One is the question
of where are the people who are poor: 60% are in rural areas.
From the figures we have been given in Annex A of DFID's recent
response[4],
I can only relate 7% directly of expenditure to rural areas. There
seems to be something wrong there. That is one point. The second
is between, if you like, the broader governance and programmatic
support, on the one hand, and project work, on the other hand.
I think there is a lot more that can be done on project work,
I do not think the balance is right. I am not persuaded that programmatic
support of the kind that DFID has been giving has had effects
or that effects indeed can be traced and attributed to DFID, or
to anybody else, of support given, that aid is such a small part,
it is the equivalent of 0.36% of GNP, I think, in India, it is
very, very small. It is quite high in specific niches, but even
so I think it would be very hard to trace impacts, and I think
a lot more can be done at a project or, if you like, something
slightly bigger than a project level. That does not mean necessarily
that one has to go into the field and start doing rural development
projects of the kind that have been done so far, I think there
are other interesting and exciting possibilities which have not
really been considered yet. I do not accept DFID's view in its
recent response that it is hard and virtually impossible to find
useful things to do in agriculture. Agriculture is complex because
its management is divided between the centre and the states, but
then so are almost all subjects, in one way or another. I can
think of three or four things that DFID could do quite usefully
in agriculture which do not involve big rural development projects,
for example.
Q109 John Barrett: You mentioned DFID
support at the central level and state level, they also work through
civil society. What is the most effective way for DFID to tackle
sectoral policies?
Professor Farrington: As far as
agriculture and rural development are concerned, which are my
specialist areas, I think, if one is going to work with government,
it has to be a combination of central government and state government.
What I have been somewhat disappointed not to find any evidence
of so far is the promotion of lesson-learning among states. Though
there is quite a bit of individual work with the states there
is no mechanism in India, as far as I am aware, for the chief
ministers of states to sit together and learn from each other,
and I think some effort from DFID to promote learning across states
could have been undertaken quite effectively. On top of that,
the very big gap that I perceive is that nothing has been done
with the private sector. The private sector actually is very big
in agricultural development in India, it is doing a good job in
many ways. It could do a better job in other ways, and I think
some DFID support and DFID working with the private sector could
help to correct some of the things that are going wrong. I can
give a couple of examples very quickly if you like. One is that,
as you have probably heard, there have been a huge number of farmer
suicides in Andhra Pradesh; it is a very hot political issue,
linked with cotton farming largely but going beyond cotton, something
like 3,000 or so recently. A lot of that is associated with the
wrong kind of agricultural inputs, inputs that do not actually
work, they do not do the job that farmers purchase them to do
and so they are being mis-sold or they are being misrepresented
or mislabelled or wrongly formulated or adulterated, or whatever,
and it is a massive problem. It sounds very prosaic but it is
a huge problem and it is resulting in suicide, to some extent.
One thing that happens in other countries is that the producers
and manufacturers of those kinds of products form an association
and they self-monitor, they self-police their own industry. They
try to set up mechanisms to ensure that products are correctly
labelled, that they are not adulterated, that they contain what
they are supposed to contain and that they are not sold to do
something that they are incapable of doing. I would have thought
that DFID working with a Chamber of Commerce of agricultural,
insecticide producers, for example, or seeds producers, would
help to build up that kind of capability and move something forward
in that industry. That is one example.
Dr Dyer: I would like to endorse
very much the question raised earlier about the lesson-learning
across states and how DFID could be involved in that kind of thing.
If you look at how the District Primary Education Programmes (DPEP)
moved into the Sarva Shiksa Abhiyan, there are plenty of opportunities
to learn lessons about how the DPEP had worked in different states,
and perhaps not enough of that happens. I think, in the forthcoming
policy dialogues, DFID might well look at lesson-learning across
states and at how they could promote platforms for interstate
comparisons of progress and how it has been made. There is an
enormous amount to be learned from Madhya Pradesh and decentralisation
of education, for example.
Q110 John Barrett: Equally, is that one
of the disadvantages of centrally-sponsored schemes, in that there
is such a wide variety between states that working from the centre
can be appropriate in one area but inappropriate in another area?
Dr Dyer: Indeed. During the enforced
recess we were all discussing this question of centrally-sponsored
schemes and there are several things that I would like to draw
to your attention to, about centrally-sponsored schemes in education.
Scheme design traditionally has been very, very centralised with
little contribution from the states and there has been a `one
size fits all' design in terms of scheme parameters. That can
act as a constraint on creative uptake of the ideas reflected
in the scheme. There has often been quite poor stake holding at
the state level in the centrally-sponsored schemes and they are
not necessarily integrated properly into state-level policy. I
think there is a need to think more about the sharing and the
lesson-learning that can be done about different states' take-up
of centrally-sponsored schemes and whether the central allocations
make it easier for states to do the things that they want to do
or whether they are constrained by the schemes' parameters.
Professor Farrington: I think
DFID has a huge amount of homework to do on centrally-sponsored
schemes. The Government of India set up its own review of that
four years ago by its own Comptroller and Auditor General on centrally-sponsored
schemes, a very, very hard-hitting review and I think well worth
your while to take a look at, if you have the opportunity[5].
It brought up all the problems of corruption, it brought up the
problems of uniformity, the kind of `one size fits all' approach,
which does not work. What it did not really bring up are the differences
between different kinds of schemes in terms of robustness in the
face of endemic corruption; some are quite robust, some are very,
very prone to corruption. I noted a question earlier on that and
with some schemes one might expect 10 or 15% of rake-off, with
others 40 or 50%, depending on the characteristics of the scheme.
That has been documented quite clearly in more recent work, and
again I can provide the reference for that[6].
I think there is a lot out there. We know a lot about how centrally-sponsored
schemes perform. I think DFID would be ill-advised simply to put
money into those in general, it needs to be really quite selective
and perhaps use leverage to get the implementation mechanisms
of some of those schemes changed to make them more robust in the
face of what we know about how corruption works at local level.
I think centrally-sponsored schemes offer potentially a very interesting
mechanism for working in states where there is a lot of poverty
where DFID does not yet work, such as Bihar. This might be an
unusual example but, if I may, let me for a minute give one example.
There is a disproportionately high concentration of poverty among
the very elderly, widows and the disabled, and all of those under
centrally-sponsored schemes are entitled to pensions of various
kinds. The pensions are very seriously underfunded. They are supposed
to be funded partly by the centre and partly by the states but
only about a quarter, or even less than that, of the total potential
amount is funded, certainly for things like old-age pensions.
That offers an opportunity for topping-up that, if you like, in
financial terms, and DFID could quite easily put in £30 million,
£40 million or £50 million a year to fill that gap.
The really interesting thing about something like the pension
scheme is that it can be, and is in many states, administered
through central government instruments, such as the Post Office,
one gets one's old-age pension cheque from the Post Office, or
whatever, or the banks, and that avoids the need to go through
state-level mechanisms that do not work in some of the poorly-performing
states. To strengthen those delivery methods and to flesh those
out to develop models of getting things out that way, I think,
potentially is quite interesting.
Q111 Mr Battle: DFID makes a virtue out
of the fact that it deals directly at state level and that this
could have an impact on service delivery. Do you think DFID does
have an impact on reform and improving service delivery?
Dr Dyer: In terms of education
delivery, the largest work that has been done has been one of
the District Primary Education Programmes perhaps. In terms of
DPEP, I think it would be very difficult to attribute anything
directly to DFID because there have been a lot of excellent donors
working together, so whether one could say something has been
specifically down to DFID would be really very difficult.
Professor Farrington: I cannot
think of examples in agriculture and rural development where service
delivery has been much improved by DFID.
Q112 Mr Davies: I think it would be a
mistake to pass over a couple of things that Professor Farrington
just said which seemed to me very significant and certainly very
germane to our agenda. I think you said that the aid flows tend
to get lost in the large volumes of public expenditure in India
so it is very difficult to determine what the outcomes of those
expenditures have been and how effective they have been. The implication
was that budgetary support perhaps is not the right way forward
in India; then you said it would be better to adopt a more project-based
approach. That is an interesting criticism of the whole of DFID's
strategy in India. I have understood you correctly, have I?
Professor Farrington: Yes.
Q113 Mr Davies: Then you said that you
actually had some interesting ideas as to what might be done in
the project field, so I think you had better tell us what they
are?
Professor Farrington: I think
there is difficulty in providing sectoral support in the way in
which sectors are defined in India, which are very rigidly defined.
If you provide support to agriculture, for example, as it is defined
in India, and you are interested in reducing risk and vulnerability
as poor people face it in agricultural enterprises, you might
get an improved crop insurance scheme, you might get a livestock
insurance scheme, probably you will not get insurance for any
other productive assets because it is outside the remit of agriculture.
Q114 Mr Davies: And you will line the
pockets of a lot of people along the way. You can take that message
too?
Professor Farrington: You might
do. There are interesting models, I think. What I am getting round
to saying is this. There are interesting models of reducing risk
and vulnerability for poor people and the agriculture component
is one. What we know is that money is fungible and so if there
is a crisis in the household, if someone is sick or dies, the
money flows out of agriculture to cover that need. The implication
is that you need to handle domestic risk and vulnerability coherently
with agricultural risk and vulnerability. Also you need personal
insurance schemes, for example, health insurance, life insurance
and that kind of thing. It might sound rather high-flown but there
are a few examples on the ground in which women's groups have
been putting their money, instead of buying a new sewing-machine
for a market that is already flooded with handicrafts, into buying
personal insurance, health insurance and life insurance, which
is, I think, terribly interesting but it is outside the mandate
of any particular sector at the moment you see. If you take a
sectoral approach you will not catch that, it kind of falls between
the cracks.
Q115 Mr Davies: I am missing what you
are trying to tell us. Are you trying to tell us that DFID, or
some other donor, could provide that kind of insurance product
which is not being provided currently? Is that what you are saying?
Professor Farrington: There is
hardly anyone providing it. There are one or two isolated examples
on the ground and I think it represents an opportunity for someone,
such as DFID, to pick up the principles, to work with the private
sector or the government banks or government insurance companies
who could potentially provide this and work up models of doing
it and support them in doing it over a wider scale.
Q116 Mr Davies: Are there any other ideas?
You mentioned you had two or three.
Professor Farrington: The one
on producers' associations I mentioned a moment ago in relation
to agricultural inputs. There is another one at the other end
of that production scale which is on agricultural marketing. There
is a private company, the Indian Tobacco Company, which, despite
its name, operates in collecting and marketing a very wide range
of agricultural products and it is doing this through electronic
information systems. It is getting together a group of farmers,
giving them a little computer terminal, connecting it through
e-mail to their own office and they can e-mail and find the price
of the product delivered by ten o'clock next morning to such and
such a market, and that price is guaranteed. To begin to pick
up that kind of thing and expand it, again, I think is something
that DFID could give some support to in working with the private
sector.
Q117 Mr Davies: The private sector is
doing it?
Professor Farrington: No, it is
a very isolated example.
Q118 Mr Davies: You think it cannot be
replicated or expanded on the basis purely of private sector incentives?
Professor Farrington: I think
it needs a bit of help on the way.
Q119 Mr Davies: Another aspect of DFID's
policy in the agricultural area is a focus on these rural livelihood
projects. Can you tell me what you think of rural livelihood projects
and how the programme is working?
Professor Farrington: I think
they have been very successful in a narrowly-defined mandate,
which is to improve the livelihoods of the people within that
geographical perimeter in which they operate. I think they have
been less successful in generating wider lessons or, let us say,
having wider lessons taken from them and disseminated into the
Indian public service so that then they can be incorporated into
agricultural extension services or credit services, or whatever
the case may be. I think that wider promise has not really been
fulfilled.
4 Ev 73 Back
5
Government of India (1999), Report of the Comptroller and Auditor
General, New Delhi. Back
6
ODI Natural Resources Perspectives Paper, Number 87, June 2003,
Post Offices, Pensions and Computers: New Opportunities for
Combining Growth and Social Protection in Weakly Integrated Rural
Areas?, John Farrington, NC Saxena, Tamsyn Barton and Radhika
Nayak, http://www.odi.org.uk/nrp/87.pdf. ODI Working Paper 175,
September 2002, Reaching the Poor: The Influence of Policy
and Administrative Processes on the Implementation of Government
Poverty Schemes in India, Radhika Nayak, NC Saxena and John
Farrington, http://www.odi.org.uk/publications/working_papers/wp175.pdf. Back
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