1. Indonesia Country Programme Evaluation Recommendations National Roundtable Workshop Jakarta, 21 March 2013 Independent Office of Evaluation

2. Main CPE Recommendations Make small agriculture development the primary goal of the IFAD country programme Focus on core agriculture activities of small farmers in regard to food and cash crops. Implement strategic partnerships for this. Next country strategy (COSOP) should explicitly respond to the requirements of Indonesia’s MIC status. This includes wider attention to non-lending activities and south-south cooperation Strengthen country management and country office Secure enhanced Government support for programme, particularly on managing capacity deficits and monitoring and mitigating risks. Align next COSOP time frame with Government’s planning cycle. This CPE therefore supports new Indonesia COSOP in 2014, including all agreed CPE recommendations 2

3. Strategic Focus with agriculture at the core Focus on over 25.5 million poor farmer households who grow food and high value crops. 40% of these are considered very poor. 20% are headed by women. Seize the opportunity provided by gap in donor funding in this area. Use IFAD’s comparative advantage to build a brand name. Thus fulfill IFAD mandate by reducing rural poverty frontally. Focus lending on parts of both Eastern and Western Indonesia but only where there is a concentration of such small farmers. Reach a critical mass of poor farmers to make projects viable and doable in constrained funding and capacity context. Focus partnership efforts mainly on small farmer projects and programmes. Leverage knowledge and capacity of other donors, civil society, academia and private sector to strengthen IFAD’s own efforts and help wider scaling up and replication of IFAD results. 3

4. Programme Design Focus both on empowerment of poor small farmers and their agricultural production and productivity. Seize the opportunity for synergy between empowerment and raising productivity by connecting demand to supply. Focus on synergy between lending and non-lending for small farmer agriculture. Responding to requirements of Indonesia’s MIC status, step up knowledge activities and south-south cooperation. Ensure increasing value-added from IFAD, particularly through capacity building and transfer of global experience and technological advances. Adopt a two tier structure for the IFAD programme in Indonesia: (i) A national non-lending initiative for small farmer poverty reduction through agriculture and (ii) a series of lending operations for the same purpose but impacting in the viable areas where there is a large congregation of small farmers 4

5. Programme Instruments First, a grant & partnership-supported IFAD Small Farmer Non-lending Initiative (SFNLI), that would: provide the umbrella framework for individual IFAD investment projects in different areas supporting better project and risk management, national & project level dialogue, sharing of experience, knowledge activities, south- south exchanges, partnerships and capacity building; assist in the sustainability of successes of closed IFAD projects and help promote scaling up and replication of IFAD successes; and provide momentum to spread of ICT to connect small farmers to sources of prosperity such as markets, credit, technical support, marketing opportunities and inputs, let alone raising their awareness about opportunities available. Second, a series of small individual projects to provide the modality for financial, technical (including access to global experience) and capacity building support for small farmers in selected areas with density of poor small farmers. And the rebooting of ongoing projects to sharpen their focus and improve their impact on small farmer agriculture. 5

6. Programme Effectiveness To improve IFAD effectiveness: Sharpen by reducing sub-sector coverage and geographical focus Focus IFAD limited technical and implementation support to reach and impact on small farmers Build efficient strategic partnerships with other donors, civil society and the private sector to connect small farmers to sources of prosperity and removing impediments, particularly those caused by capacity constraints Use the PNPM as a platform for funding small farmer empowerment, rather than fund the equally laudable purpose of broader community empowerment 6

7. COSOP Effectiveness COSOP is not just a printed document. It is a living mechanism that should constantly respond to changing policy, institutional and ground level signals This calls for strong management of the preparation and implementation process by IFAD with adequate accountability for results. The decentralization of IFAD needs to be in sync with the demand for better technical and operational support by IFAD IFAD’s budget and skillls constraints impose severe constraint on its ability to deliver. Unless this issue is addressed in the COSOP and the programme adjusted to the level of available resources, the programme may be set up for failure. The next COSOP should be more prescriptive in laying out the boundaries of the IFAD programme and the details of the national and project level interventions proposed 7

8. Improve country response to IFAD Programme Limit the number of central agencies involved with IFAD just as IFAD focusses its activities to a sharper core of agriculture and small farmer issues Promote a small farmer bottom up approach to project design and provide greater support on sub-national capacity development Provide greater support to efforts to link small farmers to knowledge and technology and connect them to sources of prosperity through ICT Make a stronger effort to overcome the hurdles faced by the private sector in their efforts to service the small farmers (More MARS type activities) Provide clearer GoI guidance to IFAD on the risks faced by projects after gaining a better appreciation of IFAD’s strengths and constraints Promote a more intensive GoI involvement with the monitoring of COSOP implementation 8

9. Start now and accelerate current progress Since 2012 there has been remarkable progress on streamlining IFAD programme. An immediate COSOP update is recommended, building on the mid-term review and some of the CPE findings. However this CPE has been prepared to serve COSOP 2014 which synchronizes with the country’s planning cycle. The COSOP update could cover retrofitting projects with focus on core agriculture. Three or four new projects may be indentified with at least one in Western Indonesia. A National IFAD Small Farmer Initiative may be speedily prepared and funded and strategic partneships initiated To kick off SFNLI, IFAD may organize in 2014 two workshops; one on “Small Farmer Poverty-Agriculture Nexus” & another on “Identified opportunities from Indonesian projects for country-wide replication or scaling-up” IFAD decentralization in Indonesia should be implemented through the COSOP update so that the COSOP 2014 recognizes the constraints that will be faced. Internal IFAD reforms need to precede the COSOP 9